Rep. Graves: Essential-benefits policy too hard on small businesses

The "essential benefit" mandates in President Obama's healthcare law will drive up costs for small businesses, House Small Business Committee Chairman Sam Graves (R-Mo.) said Thursday.

Graves, in a letter to Health and Human Services Secretary Kathleen Sebelius, said the administration should revise the essential-benefits rule to better reflect the needs of small employers — including small insurance companies.

"Although the Department claims that the health care law and its rules provide 'flexibility,' any flexibility is provided within expensive and mandatory categories of benefits, which will increase the cost of premiums for small businesses," Graves said in his letter Thursday.

The healthcare law spells out 10 categories of essential benefits — services that insurance plans will have to cover, beginning in 2014. HHS plans to let each state fill in the details within those 10 categories, for fear that a prescriptive federal definition could raise costs across the board.

Nevertheless, any new coverage means at least some new costs, Graves said.

"There are many small business owners who will struggle to afford any coverage, let alone the comprehensive or 'supplemental' coverage envisioned by the proposed rule," he wrote. "Others will simply not be able to provide coverage and be forced to pay the penalty. Requiring policies to cover extensive benefits will only make health insurance more, not less, expensive."

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