WASHINGTON – Labor Secretary Elaine Chao and Small Business Administrator Hector Barreto on Thursday endorsed a plan crafted by Sen. Olympia Snowe, R-Maine, to expand the health care options available to small businesses and those who are self-employed.

The endorsement by the Bush administration comes in the face of mounting opposition from the entrenched health insurance providers and some key interest groups, such as the National Governors’ Association, National Association of Insurance Commissioners and National Small Business United, a membership group made up of small firms.

In fact, lobbyists for the BlueCross BlueShield Association worked the back of a room reserved by Snowe on Capitol Hill Thursday to build support against the measure.

Snowe’s bill would remove barriers that block a health care provider in one state from operating in another. It would thus allow small businesses in one state to band together with associated small businesses from another state to negotiate lower prices on a health care plan for all their employees, according to supporters. By joining together nationwide to create Associated Health Plans, small businesses would gain the same economies of scale, bargaining clout, and administrative efficiencies as large employers or unions, Snowe said. Such AHP could save small businesses nearly a third of their current costs, she said.

But Blue Cross senior vice president Mary Nell Lehnhard said the Snowe-Bush administration plan was “not a real solution” because it would exclude small businesses as well as their employees from the safety net needed to access health care plans that work.

The Snowe formula is designed to add just such a safety net, Snowe said, helping those who are employed but can’t get proper health insurance, or those who are self-employed.

“AHPs are not a prescription for the uninsured,” Lehnhard said. “In fact, AHPs are a prescription for millions of dollars in unpaid medical bills and more uninsured.”

The endorsements for Snowe’s efforts were widespread. The Women Impacting Public Policy group, made up of businesswomen, said its membership experienced a 12 percent to 72 percent increase in health insurance premiums last year due to increasing administrative costs.

WIPP founding partner Karen Maples of Arlington, Va., echoed a theme of many of the participants at the event: “Small businesses want the same access, same options, same opportunities as large employers.”

Snowe, the chairwoman of the Senate Small Business and Entrepreneurship Committee, introduced the Small Business Health Fairness Act of 2003, S. 545, Thursday morning. She said objections raised by critics could be resolved through further modifications of the bill.

Among the other groups offering their backing for the Snowe plan are the U.S. Chamber of Commerce, the U.S. Black Chamber of Commerce, Association Health Care Coalition, Associated Builders and Contractors, National Association of Wholesaler-Distributors, National Retail Federation, American Association of Engineering Societies, Tire Industry Association, American Society of Mechanical Engineers and National Roofing Contractors Association.