As the health care reform debate heats up on Capitol Hill, corporate interests are beginning to openly put their money behind efforts to kill off this arm of the Democratic agenda. Not surprisingly, the U.S. Chamber of Commerce has emerged as a key player, spending $7.4 million on lobbying last quarter, which will soon be followed up with an aggressive ad campaign. But is the Chamber really a proxy for small businesses, as they like to paint themselves? A survey released by the Illinois Public Interest Research Group (PIRG) yesterday suggests otherwise.

PIRG surveyed (PDF) 309 small business owners, a handful of whom are from Illinois, and found that a mere 24 percent felt confident that the business groups lobbying on their behalf in D.C. have their interests at heart. As corporations, who've tended to be more monolithic on the issue, dig deep into their own pockets to shape the health care debate, the self employed and smaller-scale entrepreneurs told PIRG researchers that they see their clout, even collectively, paling in comparison. Ironically, it's that same lack of bulk power that's kept them at a disadvantage in the private insurance market.

Large corporations have the power to negotiate better pricing at bulk rates, for example, while small businesses are relegated to small group or individual insurance markets that provide less coverage for more money. (For a look at what that costs Illinois business owners, check out Northbrook businessman David Borris' testimony before the House Ways and Means Committee in April.)  PIRG has more:

Overall, the smallest businesses and their employees pay an average of 18% more than larger businesses pay for the same policy. To make matters worse, these high costs aren’t stable. Rather than moving towards parity, health insurance premiums for small firms have increased by 113% since 1999.

To make matters worse, those benefits packages are fraught with loopholes designed to discourage people who need coverage from enrolling. It's no wonder that more than half of the 46 million uninsured in this country are small business owners, employees, or their dependents, as Families USA pointed out last year.

Encouragingly, a series of PIRG's recommendations for bringing parity to the system are moving through Congress.

Yesterday, an amendment to the House tri-committee proposal authored by Illinois Rep. Phil Hare, which would create an insurance exchange for small businesses and the self employed, passed out of the House Education and Labor Committee. The bill now reflects three of PIRG's four recommendations, including the creation of a health care exchange and offering tax credits to small businesses, which would offset premiums by 50 percent. Families USA estimates that the proposal would add 862,000 Illinoisans to the ranks of the insured by 2013 and more than 1.3 million more by 2019.

Go read PIRG's full report here (PDF).

Image used under a Creative Commons license by Flickr user taberandrew.