News Release

Small businesses crushed by rising health costs

For Immediate Release

AUSTIN, TX— Small business owners are being crushed by rising health care costs, and feel left out of the current health care debate in Washington, according to a new report by Texas Public Interest Research Group (TexPIRG).


“In this economy,” says TexPIRG’s health care advocate, Melissa Cubria, “health care costs are killing small business owners. But instead of leading on this important issue, the national Chamber of Commerce and other inside-the-beltway groups are playing politics with a crucial issue and actively impeding reform efforts.”


The new report, The Small Business Dilemma: How Rising Health Care Costs are Tough on Small Business, makes clear that small business owners need health care reform.


Small businesses are the backbone of our economy. There are 27 million small businesses in America and those small businesses generate 2/3rds of the net new job growth in the US economy, with one study estimating that 76% of all new jobs created in this country are created by small businesses. Yet without reform, this job creation engine will shudder and seize up as high health care costs strip the small business sector of as many as 178,000 jobs by 2018.


According to Texas State Representative Jim Dunnam, who oversees federal economic stimulus spending in Texas and is Chair of the Select Committee on Federal Economic Stabilization Funds,  “Close to seventy-five percent of full-time workers in Texas are employed by small businesses, and the out-of-control costs of the health insurance premiums make it extremely difficult for small business owners to see that their employees have access to the health care they need.  More Texans go without health insurance than people in practically any other state – that is why it is so important that the politicians in Washington put partisanship aside and improve access to quality, affordable health care for all our families.”


U.S. PIRG, the federation of state Public Interest Research Groups, surveyed business owners and managers around the country to take a snapshot of small businesses and the way in which they are affected by the nation’s broken health care system. The results, documented in The Small Business Dilemma, find that the costs and administrative hassles associated with offering insurance weigh particularly heavily on small businesses.


According to the 14-page report:

  • Small businesses value health insurance as a key to business success because it allows them to attract better employees
  • 78% of small business owners surveyed who do not offer coverage would like to do so but face high affordability barriers


The health reforms being proposed in Congress will “rein in health costs for small businesses and save jobs for people across the nation and in the state of Texas as well,” says Cubria.


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