[Congressional Record Volume 146, Number 100 (Thursday, July 27, 2000)]
[Senate]
[Pages S7858-S7859]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Ms. COLLINS (for herself and Ms. Landrieu):
  S. 2964. A bill to amend the Internal Revenue Code of 1986 to provide 
new tax incentives to make health insurance more affordable for small 
businesses, and for other purposes; to the Committee on Finance.


                  access to affordable health care act

  Ms. COLLINS. Mr. President, today I am introducing legislation, the 
Access to Affordable Health Care Act, that is designed to make health 
insurance more affordable both for individuals and for small businesses 
that provide health care coverage for their employees.
  In the past few years, Congress has taken some major steps to expand 
access to affordable health coverage for all Americans. In 1996, the 
Health Insurance Portability and Accountability Act--also known as 
Kassebaum-Kennedy--was signed into law which assures that American 
workers and their families will not lose their health care coverage if 
they change jobs, lose their jobs, or become ill.
  One of the first bills I sponsored on coming to the Senate was 
legislation to establish the State Children's Health Insurance Program, 
which was enacted as part of the Balanced Budget Act. States have 
enthusiastically responded to this program, which now provides 
affordable health insurance coverage to over two million children 
nationwide, including 9,365 in Maine's expanded Medicaid and CubCare 
programs.
  Despite these efforts, the number of uninsured Americans continues to 
rise. At a time when unemployment is low and our nation's economy is 
thriving, more than 44 million Americans--including 200,000 Mainers--do 
not have health insurance. Clearly, we must make health insurance more 
available and more affordable.
  Most Americans under the age of 65 get their health coverage through 
the workplace. It is therefore a common assumption that people without 
health insurance are unemployed. The fact is, however, that most 
uninsured Americans are members of families with at least one full-time 
worker. According to the Health Insurance Association of America, 
almost seven out of ten uninsured Americans live in a family whose head 
of household works full-time.
  In my state of Maine, small business is not just a segment of the 
economy--it is the economy. I am, therefore, particularly concerned 
that uninsured, working Americans are most often employees of small 
businesses. Nearly half of the uninsured workers nationwide are in 
businesses with fewer than 25 employees.
  According to a recent National Federation of Independent Businesses 
survey of over 4,000 of its members, the cost of health insurance is 
the number one problem facing small businesses. And it has been since 
1986. It is time for us to listen and to lend a hand to these small 
businesses.
  Small employers generally face higher costs for health insurance than 
larger firms, which makes them less likely to offer coverage. Premiums 
are generally higher for small businesses because they do not have as 
much purchasing power as large companies, which limits their ability to 
bargain for lower rates. They also have higher administrative costs 
because they have fewer employees among whom to spread the fixed costs 
of a health benefits plan. Moreover, they are not as able to spread 
risks of medical claims over as many employees as can large firms.
  As a consequence, according to the Congressional Budget Office (CBO), 
only 42 percent of small businesses with fewer than 50 employees offer 
health insurance to their employees. By way of contrast, more than 95 
percent of businesses with 100 or more employees offer insurance.

  Moreover, the smaller the business, the less likely it is to offer 
health insurance to its employees. According to the Employee Benefit 
Research Institute (EBRI), only 27 percent of workers in firms with 
fewer than 10 employees received health insurance from their employers 
in their own name, compared with 66 percent of workers in firms with 
1,000 or more employees. Small businesses want to provide health 
insurance for their employees, but the cost is often prohibitive.
  Simply put, the biggest obstacle to health care coverage in the 
United States today is cost. While American employers everywhere--from 
giant multinational corporations to the small corner store--are facing 
huge hikes in their health insurance costs, these rising costs are 
particularly problematic for small businesses and their employees. Many 
small employers are facing premium increases of 20 percent or more, 
causing them either to drop their health benefits or pass the 
additional costs on to their employees through increased deductibles, 
higher copays or premium hikes. This, too, is troubling and will likely 
add to the ranks of the uninsured since it will cause some employees--
particularly lower-wage workers who are disproportionately affected by 
increased costs--to drop or turn down coverage when it is offered to 
them.
  The legislation I am introducing today, the Access to Affordable 
Health Care Act, would help small employers cope with these rising 
costs. My bill would provide new tax credits for small businesses to 
help make health insurance more affordable. It would encourage those 
small businesses that do not currently offer health insurance to do so 
and would help businesses that do offer insurance to continue coverage 
even in the face of rising costs.
  Under my proposal, employers with fewer than ten employees would 
receive a tax credit of 50 percent of the employer contribution to the 
cost of employee health insurance. Employers with ten to 25 employees 
would receive a 30 percent credit. Under my bill, the credit would be 
based on an employer's yearly qualified health insurance expenses of up 
to $2,000 for individual coverage and $4,000 for family coverage.
  The legislation I am introducing today would also make health 
insurance more affordable for individuals and families who must 
purchase health insurance on their own. The Access to Affordable Health 
Care Act would provide an above-the-line tax deduction for individuals 
who pay at least 50 percent of the cost of their health and long-term 
care insurance. Regardless of whether an individual takes the standard 
deduction or itemizes, he or she would be provided relief by the new 
above-the-line deduction.
  My bill also would allow self-employed Americans to deduct the full 
amount of their health care premiums. Some 25 million Americans are in 
families headed by a self-employed individual--of these, five million 
are uninsured. Establishing parity in the tax treatment of health 
insurance costs between the self-employed and those working for large 
businesses is not just a matter of equity. It will also help to reduce 
the number of uninsured, but working Americans. My bill will make 
health insurance more affordable for the 82,000 people in Maine who are 
self-employed. They include our lobstermen, our hairdressers, our 
electricians, our plumbers, and the many owners of mom-and-pop stores 
that dot communities throughout the state.

[[Page S7859]]

  Mr. President, the Access to Affordable Health Care Act would help 
small businesses afford health insurance for their employees, and it 
would also make coverage more affordable for working Americans who must 
purchase it on their own. I urge my colleagues to join me as cosponsors 
of this important legislation.
                                 ______