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White House releases health care study

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WASHINGTON (AP) -- President Barack Obama, citing a new White House study suggesting that small businesses pay far more per employee for health insurance than big companies, said Saturday the disparity is "unsustainable -- it's unacceptable."

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"And it's going to change when I sign health insurance reform into law," the president said in his weekly Internet and radio address.

A new study by the White House Council of Economic Advisers said small businesses pay up to 18 percent more to provide health insurance for their employees. As a result, fewer of them do so and the number has been shrinking further in these hard economic times.

It was released Saturday as part of the administration's aggressive campaign to build public and congressional support for Obama's health care efforts

Obama had called for Congress to vote on health legislation by the August recess, but when it became clear this week lawmakers would miss that deadline, he said he expects a bill by year-end.

Separately, congressional budget scorekeepers say one highly touted idea for saving money from Medicare to finance a health overhaul would only yield modest savings. In a setback for Obama, the Congressional Budget Office says that creating a powerful commission to recommend Medicare cuts would produce only about $2 billion in savings over 10 years. Cuts the commission agreed on would go into effect unless Congress overrides them.

White House budget director Peter R. Orszag said the commission's new powers would take effect in 2015, and therefore its proposed long-term savings would take more than a decade to fully materialize. The goal "was never to generate savings over the next decade," Orszag said in a statement, but the proposal could be "a game changer" in the long run if enacted.

On the issue regarding small businesses, the White House study said only 49 percent of businesses with three to nine workers and 78 percent of companies with 10 to 24 workers offered any type of health insurance to their employees in 2008. In contrast, 99 percent of companies with more than 200 workers offered health insurance.

Small companies pay proportionately more than big ones because they lack bargaining power and face higher administrative costs, the study found. It said that effectively levied a "heavy tax" on small businesses and their employees.

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