Increasing costs are forcing small business owners to drop health care coverage and embrace sweeping health care reform, a new study finds.

Unease about the economy’s future (42%), the cost of health insurance (39% and lack of available capital (31%) led the list of small business concerns, according to the National Small Business Association, Washington, which sponsored the study.

While 58% of small business owners offered health insurance to their employees 10 years ago, that number declined to 41% in 2007, NSBA found.

Yet when asked which benefit they’d most like to offer their employees, 77% chose health insurance.

“Business owners are now willing to embrace health care reforms to a degree that will surprise many people,” said Todd McCracken, president of the NSBA

Although many business owners have a dim view of today’s economy, 81% have a bright outlook for their own prospects. An increase in gross revenues over the next 12 months was projected by 68%, while 65% expected net profits to rise.