[Congressional Record Volume 150, Number 56 (Wednesday, April 28, 2004)]
[Senate]
[Pages S4502-S4503]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. REID:
  S. 2359. A bill to amend the Internal Revenue Code of 1986 to provide 
a refundable tax credit for small business health insurance costs, and 
for other purposes; to the Committee on Finance.
  Mr. REID. Mr. President, I rise today to introduce the Healthy 
Employees, Healthy Small Businesses Act of 2004. This legislation 
addresses a number of fundamental problems: the fact that millions of 
hard working American families have no health insurance, they live in 
fear that financial ruin is just one illness away, or that a family 
member will need medical treatment that they simply can't afford; the 
fact that small businesses in this country are facing health care costs 
that are skyrocketing far beyond the rate of inflation, and that as 
much as many small business owners would like to provide health 
benefits to their employees, it is becoming more and more difficult for 
them to afford these costs; and the fact that this health care dilemma 
is damaging our Nation's competitive position internationally.
  In 2002, 44 million Americans lived without health insurance for the 
entire year. 85 percent of these uninsured people belong to working 
families.
  Think about that. The vast majority of the people in the United 
States of America who have no health insurance work.
  These uninsured workers are trapped in the middle--in fact, most of 
them are middle class families. They do not receive health coverage 
through their jobs. They are too young to qualify for Medicare. They 
earn too much to qualify for a public health insurance program.
  Yet they cannot afford private insurance plans.
  For each one of those 44 million people, and each one of those 
millions of families, living without health coverage causes real and 
serious problems.
  Living without health insurance is difficult for anyone. It is 
especially hard for parents with children. In addition to the constant 
worry about whether their child will have an accident or get sick, 
there are serious long-term consequences for kids who grow up without 
health insurance.
  Uninsured kids have a higher rate of acute and infectious diseases 
than children who are covered by health insurance, and uninsured kids 
actually have a higher number of hospitalizations, because their 
problems don't get treated until they become serious.
  Uninsured children are: four times as likely to have necessary care 
delayed; five times more likely to use a hospital emergency room as 
their regular source of care; and six times as likely as other children 
to go without the care they need.
  But having no health care is a problem even when kids are not sick. 
It forces parents into the kinds of choices that none of us would want 
to make, and that nobody in America should have to make.
  When your daughter is uninsured, you have to think twice about 
signing her up for a youth soccer league, because she might break her 
arm.
  When your son has no health coverage, maybe it is not safe to let him 
ride his bike through the neighborhood, or try out his friend's new 
rollerblades.
  Accidents happen to everyone, especially to active children. But when 
your family has no health insurance, a simple fall requiring a few 
stitches, a broken bone, or a minor sports-related injury could result 
in hundreds or even thousands of dollars in emergency room fees.
  In the end, in a lot of families, living without health insurance 
sometimes means that kids do not get to do very much living at all.
  In her book The Betrayal of Work, Beth Shulman asked Flor Segunda, a 
working mom with no health insurance, about how her family's uninsured 
status affects her kids. Segunda says:

       Doctors require immediate payment before they will see you, 
     but many times I don't have the money. Right now, [my son] 
     Luis has a temperature. But I try to take care of it myself 
     because I can't afford to take him to the doctor every time. 
     It is one of the reasons I don't like my children to play 
     outside. They will get sick and I can't afford it.

  A lack of access to health care can destroy a family's financial 
security in a heartbeat--that is certainly true. But it can also deny 
uninsured kids some of the most basic and simple pleasures of being a 
child: going outside to play, joining a tee-ball team, riding a bike.
   Surely we can do better.
  Living without health insurance is a terrible problem. So why are so 
many families forced to do it? Who are these families trapped in the 
middle--earning too much to qualify for free care, but not enough to 
pay for private insurance?
  It turns out that more than half of the uninsured people in our 
country live in a family supported by someone who works for a small 
business--meaning a company that employs fewer than 100 workers.
  This is not because small businesses are less committed to their 
workers than larger employers. On the contrary, the small business 
owners in my State seem to care a great deal about their employees. 
Most small business owners work closely with their employees, and they 
understand that the success of their enterprise depends on the loyalty 
of the people who work for them.
  The reason small businesses are less likely to provide health 
insurance is simply a matter of economics.
  At a small business, where people are delivering a product or service 
with just a handful of employees, the margin between revenues and costs 
can be pretty slim.
  That does not leave much room for error--or for rising costs. But 
health care costs are spiraling out of control.
  Every year for the last several years, we have seen double-digit 
inflation in health care prices. With health care costs rising out of 
sight, small business owners are rightly concerned about whether these 
uncontrolled prices represent too much of a risk to their overall 
business health.

  My legislation would create a Federal refundable tax credit to 
reimburse small employers for part of the costs they incur for 
providing health insurance coverage to their employees.
  The HEHSB tax credit would operate on a sliding scale, providing a 
large tax credit to all businesses with fewer than 50 employees, but 
giving the greatest tax relief to the smallest enterprises.
  Last year, the average health insurance plan for a single person 
costs $3,383, of which the employee paid an average of $508 and the 
employer paid an average of $2,875.
  For a family policy, the average cost totalled $9,068, with the 
employee bearing $2,412 and the employer shouldering $6,656.
  Under my bill, companies with fewer than 10 employees would be 
eligible to claim a credit of 50 percent of the cost of each eligible 
employee's policy, up to a limit of $1,500 for an individual policy or 
$3,400 for a family policy.
  Companies with 25 to 50 employees would be eligible to claim a credit 
of 35 percent of the cost of each eligible employee's policy, up to a 
limit of $750 for

[[Page S4503]]

a self-only policy or $1,700 for a family policy.
  I believe that this legislation will give more small business owners 
the ability to do what they want to do in the first place: provide 
their first-rate employees with first-rate benefits.
  It will shield them from the worst risks associated with rising 
health care costs.
  And I hope that it will eventually result in families like the 
Segundas feeling a little more security and happiness.
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