The S.C. Small Business Chamber of Commerce supports national health care reform to make health insurance and health care more affordable for our state's small businesses. Today, about 60% of our businesses with less than 50 employees cannot afford to offer health insurance to their employees. Those that do offer the benefit pay up to 18% higher premiums per worker for the same coverage provided by larger businesses. As a result, more small businesses every year drop their health insurance plans.

The question is then, what should reform look like. Are the plans under consideration in Congress on the right track or do the opponents of Congressional bills have a better idea?

We have looked at a health care reform proposal offered by South Carolina Senator Jim DeMint, since he has become a leader of the opposition. Our full analysis of Senator DeMint's plan can be found atwww. scsbc.org/view_press.asp?i d=301. Our conclusion on Senator DeMint's plan is that it is not a serious proposal to address the many problems in our current health care system.

His proposal to subsidize health care premiums for every American including the wealthiest would never see the light of day if offered in our state's Republican dominated state Legislature.

His reliance on traditional competition between insurance companies is a failed proposition.

He fails to understand that for small businesses to compete for workers they must offer health insurance benefits and not simply count on the workers having and paying for their own insurance.

He protects the insurance industry from being responsible for covering pre- existing conditions without raising premiums, something that the industry has already agreed to do under reform.

His plan to pay for his proposals would lead to dramatic increase in the federal deficit even if it could be put in place.

We have also looked at the several bills under serious consideration in Congress. While this is still a work in progress and no final bill is ready, these bills generally offer constructive changes to our health care system that will make health insurance more affordable for small businesses while protecting most from increased costs. Small businesses that today offer or do not offer health insurance will likely find lower premiums due to a combination of:

• Pre- existing conditions for employees not being used to calculate rates.

• The current "hidden health tax" in premiums to cover uncompensated care being largely eliminated.

• Insurance exchanges enabling small businesses to pool together with individuals to leverage large numbers to reduce premiums.

• Tax credits being available for small businesses to encourage providing coverage to low and moderate- income employ- ees.

At this time Congressional bills would protect the vast majority of small businesses from extra costs. About 85% of all South Carolina's businesses would be exempt from a mandate to offer health insurance. Most of the remaining businesses already offer the employee benefit. A proposed small income tax surcharge for families with net incomes above $500,000 to help pay for reform would affect only about 4% of tax payers nationally claiming some income from a small business. This number will be smaller in South Carolina. Many of these will not be the actual business owner- operators but instead passive investors. Some high- income partners in professional businesses (ex. law firms) will also more likely be impacted.

With the vast majority of small businesses to benefit from Congressional bills, it is unfortunate that bogus information is being spread to create fear over reform. False charges of death panels, rationing, government take over of health care decisions, across the board tax increases, etc. are distracting us from a real debate of policy and threaten to harm our small businesses by derailing necessary health care reform."

Contact: Frank Knapp, Jr. @ 803-252-5733 or 803-600-6874