Tom Kelly, owner of a cleaning company based in Gibsonia, told U.S. Labor Secretary Elaine Chao yesterday that he could not afford to buy health insurance for his part-time janitorial employees. Worse, he said, they earn too little to buy it for themselves.

	Bill Wade/Post-Gazette
	Secretary of Labor Elaine L. Chao meets with Pittsburgh area small businesses leaders.

Florist Jim Ludwig said his family business, Ludwig's Blumengarten, makes employees pay one-third of the costs and switches carriers every couple of years as premiums rise. His last premium bill rose by 30 percent.

Downtown restaurateur Kevin Joyce, owner of The Carlton Restaurant, told Chao he switched insurance plans covering his 77-member staff this year rather than pay a rate boost that would have increased his costs from $5,900 a month to $7,500.

"Every year what guys like me find ourselves doing is constantly lessening coverage,'' said Joyce, who pays 75 percent of the health care costs for salaried workers and 50 percent of coverage for hourly employees, some of whom forgo insurance altogether because they cannot afford to pay their share.

"No matter what, it's always an increase, and you're always finding yourself paying more for less," Joyce said. "That's a very disturbing thing for small business."

Joyce, Ludwig and Kelly were among 18 small business owners who shared their frustrations over rising health care costs with Chao at the Hyeholde Restaurant in Moon. Chao made the trip from Washington to promote legislation favored by the Bush administration that would allow small businesses to join together to form national insurance purchasing pools that would be exempt from state regulations.

The labor secretary said so-called Association Health Plans would allow small businesses to pool their buying power and spread the risk, putting them on equal footing with larger employers and labor unions. She estimated that such plans, if approved by Congress, would lower premium costs for small business by 9 percent to 25 percent and, by extension, bring coverage to many of the nation's uninsured.

"We've got 41 million Americans without health insurance and the majority of them belong to working families," Chao said. "Health care costs have reached such a level that people are demanding action, and the government has got to do something."

Opponents to the legislation include the National Governors Association, health insurance providers and health insurance trade associations including the national Blue Cross Blue Shield Association.

The Blue Cross Blue Shield Association, for example, alleges Association Health Plans could expose health-care consumers to higher costs, fraud and inadequate consumer protection laws.

The National Governors Association argues that insurers offering small businesses purchasing pool options would be able to "cherry pick" members, selecting younger, healthier employees, which would increase the costs for others.

Michael Weinstein, spokesman for Highmark Blue Cross Blue Shield in Pittsburgh, said his organization shared the concerns regarding state consumer regulations and the possibility that that existing providers would be financially harmed.

"These organizations would in effect look only for the healthiest folks and leave the Blue Cross Blue Shield companies with providing insurance for the less healthy, which would drive up health-care costs," Weinstein said.

Chao called the "cherry picking" argument a red herring and said both House and Senate versions of the legislation included protections against that possibility. She called the plan -- which would amend the Employee Retirement Income Security Act -- one of the president's priorities.

"We really do feel that the crisis in health care ought to be addressed, and we believe the association health care plan is a very responsible answer to increasing access to affordable, quality and timely health care."

Kelly, whose ServiceMaster cleaning franchise does work in the city, called the pending legislation a step in the right direction but said he did not know if it would be enough help for him to start offering coverage to his employees.

Kevin Shivers, Pennsylvania director of the National Federation of Independent Business, which sponsored yesterday's forum with other organizations including the Associated Builders and Contractors and the Pennsylvania Restaurant Association, left the meeting feeling optimistic.

He supports a state resolution introduced by state Rep. Jennifer Mann, D-Allentown, that urges Congress to pass the legislation. "I think everyone walked away from today's discussion with Secretary Chao feeling very encouraged that relief is in sight,'' Shivers said.