[Congressional Record Volume 147, Number 46 (Monday, April 2, 2001)]
[Senate]
[Pages S3277-S3278]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Ms. COLLINS (for herself and Ms. Landrieu):
  S. 674. 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.
  Ms. COLLINS. Mr. President, I am pleased to join with my colleague 
from Louisiana, Senator Landrieu, in introducing bipartisan 
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 insurance for all Americans. 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

[[Page S3278]]

children nationwide, including nearly 10,000 in Maine's expanded 
Medicaid and CubCare programs.
  Thanks to these efforts, coupled with an increase in employer 
coverage fueled by our strong economy, we are making some progress. For 
the first time in twelve years, the number of Americans without health 
insurance actually dropped from about 44 million to 42.6 million. While 
this is good news, it by no means minimizes the problem. There are 
still far too many Americans without health insurance. Clearly, we must 
make health insurance more available and affordable.
  Since most Americans get their health insurance through the 
workplace, it is 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: 
85 percent of the Americans who do not have health insurance are in a 
family with a worker.
  Uninsured, working Americans are most often employees of small 
businesses, the backbone of the economy in Maine. Some 60 percent of 
uninsured workers are employed by small firms. If we want to reduce the 
number of uninsured Americans, we need to consider how we can help more 
small businesses afford health insurance for their employees.
  According to a recent National Federation of Independent Businesses 
survey, 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, 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. Small businesses want to provide 
health insurance for their employees, but the cost is often just too 
high.
  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 15 to 30 percent or 
more. This can cause them either to drop their health benefits or to 
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.
  According to another survey of small businesses, two-thirds of small 
business owners said that they would seriously consider offering health 
benefits if they were provided with some assistance with premiums. 
Almost one-half would consider doing so if their costs fell 10 percent.
  To respond to these findings, we are introducing the Access to 
Affordable Health Care Act, which will help small employers cope with 
these rising costs. Our bill will provide new tax credits for small 
businesses to help make health insurance more affordable. It will 
encourage those small businesses that do not currently offer health 
insurance to do so and will help businesses that currently do offer 
insurance to continue coverage even in the face of rising costs.
  Under our proposal, employers with fewer than ten employees will 
receive a tax credit of 50 percent of the employer contribution to the 
cost of employee health insurance. Employers with ten to 25 employees 
will receive a 30 percent credit. Under the 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 we are introducing will 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 will 
provide an above-the-line tax deduction for individuals who pay at 
least 50 percent of the cost of their own health and long-term care 
insurance. Regardless of whether an individual takes the standard 
deduction or itemizes, he or she will be provided relief by the new 
above-the-line deduction.
  The bill also will 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. Our 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.
  The Access to Affordable Health Care Act, which has been endorsed by 
the National Federation of Independent Business, will help small 
businesses afford health insurance for their employees, and it will 
also make coverage more affordable for working Americans who must 
purchase it on their own. I urge my colleagues to join us as cosponsors 
of this important legislation.
                                 ______