Small Business:

SBA's Health Care Reform Activities

RCED-94-240: Published: Sep 6, 1994. Publicly Released: Sep 6, 1994.

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Pursuant to a congressional request, GAO reviewed the Small Business Administation's (SBA) efforts to produce and distribute a brochure on the Health Security Act and establish a toll-free health care hotline, focusing on: (1) whether SBA violated certain laws or regulations by distributing the brochure; (2) circumstances surrounding the brochure's issuance, authorization, and distribution to the Democratic National Committee (DNC); (3) whether the brochure accurately portrays the elements of the proposed Health Security Act; (4) the SBA Office of Advocacy's role in health care reform; and (5) the health care hotline's status and costs.

GAO found that: (1) SBA did not violate any statutory prohibitions on lobbying by preparing and distributing the brochure; (2) SBA has the authority under the Small Business Act to print and distribute the brochure; (3) there is no statute or regulation that prohibits the White House from working with SBA in developing the brochure; (4) the Office of Advocacy and other SBA staff offices had limited roles in the development of the brochure; (5) the SBA Chief of Staff authorized the development of the brochure, which cost $92,591, because of the desire to provide small businesses with information on the President's plan and its effect on health care costs; (6) SBA did not follow customary government procedures for distributing large quantities of agency publications when it gave DNC 10,000 copies of the brochure free of charge, although DNC later paid SBA $5,000 for the brochures; (7) in general, the SBA brochure accurately describes the Health Security Act and how it would affect small businesses, but some details of the act are inaccurate or missing because the brochure was published before the act was finalized; (8) as the government's chief advocate for small businesses, the SBA Office of Advocacy has monitored health care reform efforts in Congress, has provided small businesses and others with an overview of the major health care plans, and is sponsoring studies of health care issues; and (9) SBA has never activated the health care hotline and computer program because of its high cost but, as an alternative, SBA has developed a self-help worksheet for small businesses to compute their health care costs under the proposed act.

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