Posted: June 25, 2010

By Philip Newswanger

philip.newswanger@insidebiz.com

Health care reform has fractured many business groups, from those representing mom-and-pop businesses to those representing major corporations.

These groups have picked sides and marshaled their troops to lobby Congress and the American public.

On one side is the U.S. Chamber of Commerce, which, when the health care reform was signed, vowed to have it retracted.

Since then, the chamber, which represents major corporations, has retrenched, saying repeal of the law isn't practical. It has decided to advocate amending pieces of the legislation.

The National Federation of Independent Business, which has a membership of 300,000 and says it speaks for small businesses, opposes the law, saying the law will increase costs for businesses.

But NFIB is committed to helping small business owners plan for and comply with this new law, the group said on its website.

Just because there's a new health care law doesn't mean the fight is over and doesn't mean there isn't additional health care legislation it can and will be working on, the federation said. There are still opportunities to right this wrong, according to the site.

Virginia Atty. Gen. Ken Cuccinelli, as well as attorneys general from 20 states, filed a lawsuit against the federally mandated Patient Protection and Affordable Care Act, saying the law violates the Constitution under the commerce clause.

The NFIB joined the lawsuit.

At stake is the role of states and the role of the federal government. In general, federal laws trump state laws.

Cuccinelli's lawsuit followed immediately after Virginia's lawmakers and governor approved the Virginia Healthcare Freedom Act, a measure that opposed the federal mandate for health care insurance.

Virginia's law is symbolic, though it does give the state legal standing to challenge health care reform.

The U.S. Federal Court in Norfolk is expected to hear the lawsuit July 1.

The Hampton Roads Chamber of Commerce, acting independently of the U.S. Chamber, is neutral on the law and the lawsuit, concerned primarily with containing medical costs for its members.

"We didn't take a position on the AG's lawsuit," said Ira Agricola, vice president of the Hampton Roads Chamber.

Members were polled, Agricola said.

"They are worried about the cost, they are worried about the accessibility and they are worried about the competition," Agricola said, referring to the poll.

Of concern is that chamber member firms will have to compete against companies from other countries whose medical costs are less or are not subject to the same rules.

"Health care always has ranked very high as a concern of our membership, primarily in the areas of cost containment, access and the competitive cost of business issues," Agricola said.

"We took the position during the national health care debate that we would serve our members best by communicating their needs and concerns in the aforementioned areas to our elected officials.

"We have also communicated via our website a matrix of the health care reform bill that details as much information as possible in a condensed format. We do sense some frustration among our members in terms of truly understanding the bill and its eventual impact on their business.

"We supported meaningful health care reform that improved access, contained cost and allowed businesses to compete in the global marketplace," Agricola said. "There is, of course, much debate about how much the health care reform bill accomplishes these objectives."

Hold on, say two splinter groups, the Small Business Majority and the Main Street Alliance.

Both associations, which represent small businesses, have filed a friend-of-the-court brief, opposing Virginia's lawsuit against the law. Both groups base their policies on extensive polling of members and research.

Terry Gardiner, national policy director for the Small Business Majority, said he believes the law is constitutional. Gardiner said Congress had many lawyers review the law to ensure its constitutionality. The lawyers scrutinized not only the legal case but also the business issues.

"We see the bickering in court as a backward step for businesses," Gardiner said. "Small businesses want a solution. They want promises that someday we will solve this. They are frustrated with the politics in finding a solution.

"Lawsuits are another frustrating activity. The lawsuit is a backward step. A lot of money will be spent before this is over."

Gardiner said the lawsuit is an economic stimulus - for lawyers.

"Both organizations believe that repeal of the Patient Protection and Affordable Care Act, or any of its core provisions, would harm small businesses by forcing them back into the same unaffordable and ineffective system of the past," said Kate Evans, coordinator for the Main Street Alliance's Virginia chapter, which has 300 members.

"Small businesses are the heart of our communities and it is essential that we ensure they can get quality, affordable health care - both for owners and employees - so they can continue to be our country's primary job creators.

"The lawsuit attempting to repeal the act would undermine key elements of reform such as ending discrimination, promoting affordability, expanding choice and containing costs," Evans said.

"Small business owners want their employees to have health coverage - both because it makes good business sense and because small business owners see their employees as family."

Evans said the law will finally level the playing field for small businesses, hold insurance companies accountable, and give small business owners and their employees some real options when it comes to health care.

"That's good for our businesses and good for the communities they serve," Evans said.

Gardiner lauded attributes of the law, especially the exchanges, which all the states have to create.

"To us that's the guts of the health care exchange, Give small businesses an opportunity to pool together."

Eighty percent have 10 or fewer employees. Under the law, small firms can band together and have some market power, Gardiner said.

"The exchange is the foundation of health care," Gardiner said. "Without these exchanges we're really not going to reform anything. If the lawsuit succeeds, it would undermine health care reform."