Bush, Democrats prescribe it as political medicine Bush eyes a way to bring in more small businesses.


January 15, 1992|By Los Angeles Times

WASHINGTON -- As a key component of his administration's health-care plan, President Bush intends to call for significant changes in federal law that would make it easier for small businesses to obtain lower-priced health insurance for their employees.

Administration officials say the proposed revisions of labor law and the tax code would encourage small businesses to band together, thereby gaining new bargaining power in what is now an often fruitless quest for affordable coverage.

The officials say Bush will unveil the plan either in his State of the Union address on Jan. 28 or in the federal budget proposal that will follow.

It is intended as part of a broad health-care proposal calling for tax credits to help people buy health insurance.

The White House has portrayed the health-care package as the most important element of the new programs Bush plans to unveil later this month. It also is expected to become a centerpiece of his re-election campaign.

Potentially, the small-business plan could affect millions of workers who now either do without health insurance or must pay extremely high prices for it.

Estimates now place the number of adults in the United States without health insurance at 35 million. About 18 million of them are employed, half in businesses with fewer than 50 workers.

Because the nation's smallest businesses have been plagued by limited options and what they consider an unfriendly tax code, officials who outline the Bush plan on condition of anonymity say it is designed to give the small business more "buying power."

Under the plan, small businesses would be permitted for the first time to form collectives to purchase cheaper, no-frills policies to which they now have little access.

At the same time, officials say, the administration would as much as quadruple tax deductions for health insurance expenditures as a new incentive for small companies to enroll in health plans.

"Right now, small businesses are basically excluded from the market," a senior administration official says.

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