Help small business handle health care

September 18, 2004

Thank you for The Sun's insightful article "Health plan costs jump 11%" (Sept. 10), which discusses the struggle small businesses face in light of continued increases in the cost of health care.

Small business drives the economy, both nationally and in Maryland. Consider statistics from the U.S. Census Bureau for 2002:

Maryland's small businesses constitute 97 percent of all employers in the state and employ 52 percent of Maryland's workforce. They employ more than 1 million workers and generate an annual Maryland payroll of more than $30 billion.

According to the Micoroenterprise Council of Maryland, 65 percent of small businesses in the state are microenterprises, which are characterized by the U.S. Census Bureau as establishments with five or fewer employees, capital of $35,000 or less and a net worth of no more than $100,000. These microenterprises employ more than 97,000 Marylanders.

Despite the difficult economy of the last few years, Maryland has experienced growth in the numbers of women and ethnic small business proprietors. The U.S. Small Business Administration calculates that Maryland has more than 66,000 self-employed women. Minority-owned businesses represent more than 20 percent of the state's total businesses.

But soaring health care costs threaten Maryland's entrepreneurial vitality and, by implication, the future of its economy. If they are left unaddressed, the contributions of small business to our economy will be substantially diminished.

Sadly, it is not unusual for small business to spend one-third or more of an employee's salary on health care. For the typical business, this limits profitability, new hires, investment and tax revenue generation.

No one benefits from this situation, so we should all care about the issue.

There is no simple answer to surging health care expenses. Nevertheless, there are a series of legislative and policy initiatives that, if adopted, could put us back on a proper path.

For instance, by banding together through advocacy and outreach to our elected officials, we can address rising rates of medical malpractice, which directly result in increasing health care costs.

In addition, we must educate small businesses on Health Savings Accounts and their ability to minimize health cost pressures.

Finally, passage of state or federal legislation in connection with association health benefits plans is desperately needed.

Such an opportunity would permit small business to come together and create larger purchasing pools with more leverage and competition in hopes of obtaining reasonable health care at a price conducive to entrepreneurship and small business expansion.

Aaron J. Greenfield

Baltimore

The writer is executive director of the Maryland Business Council.

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