[Congressional Record Volume 154, Number 71 (Thursday, May 1, 2008)]
[Senate]
[Pages S3653-S3654]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                     SMALL BUSINESS EMPOWERMENT ACT

  Mr. BROWN. Madam President, earlier this week, I spoke on the Senate 
floor about Cover the Uninsured Week and a bill I was introducing that 
would increase access to health coverage for small businesses and self-
employed individuals--a group we all too often forget about around 
here. Today I am formally introducing the Small Business Empowerment 
Act. I wish to discuss this bill in a bit more depth.
  First, why is it necessary?
  It is necessary because 82 percent--82 percent--of the uninsured work 
for a living. They have jobs. The overwhelming majority work in small 
companies--companies with 2 people, 5 people, 20 people--or they are 
self-employed.
  In Ohio, my State--whether you are in Steubenville or Lima, whether 
you are in Kent or Chillicothe--99 percent of firms with more than 50 
workers sponsor health insurance. So if you are at a relatively 
midsized or larger company, you have 50 or more workers, 99 percent of 
those firms offer some kind of fairly decent insurance for their 
employees. That is for companies above 50 employees.
  For companies under 50 employees, only 44 percent of those firms do. 
Many of them are self-employed. Many of them only have 5 or 10 or 15 
employees. Small employers who do offer coverage--and most of them 
absolutely try to--I have talked to small businesspeople from 
Springfield to Zanesville, from Bellaire to Delphos, and I hear 
repeatedly from small businesses they want to insure their employees, 
but it is getting harder and harder and harder. According to the well-
respected RAND Corporation--a nonpartisan group that dispassionately 
analyzes these kinds of things--small businesses saw the economic 
burden of health insurance rise by 30 percent between 2000 and 2005. 
And it is getting worse.
  The situation is even worse for the self-employed, who must contend 
with staggeringly high premiums for individual coverage--they don't get 
any group-rate break--if they can find an insurer even willing to cover 
them.
  In these small pools, if you have 3 employees or 8 employees or you 
are self-employed, and there is anybody in this small pool of 1 or 20 
who has some major preexisting condition, you probably cannot get 
insurance at all.

[[Page S3654]]

  In the meantime, health insurers have been living large, their 
profits increasing by more than a third over the last 5 years--not much 
different from the oil industry, where the public recoils from 
staggeringly high gas prices, and the oil industry is making record 
high profits. The public--particularly small business--is recoiling 
from higher health insurance premiums and higher copays and 
deductibles. Yet health insurance companies are doing better and 
better.
  Middle-class families are shouldering the burden of skyrocketing gas 
prices and ballooning food prices, even as the equity in their homes 
erodes and the cost of putting their children through college explodes.
  It would be ideal if they could afford to pay a king's ransom for 
health insurance. They cannot. And they should not have to.
  With those realities staring us in the face, inaction from this body 
is the same as indifference.
  My legislation attacks the issue of health coverage access from 
several different directions.
  To ensure widespread access, the bill would establish a national 
insurance pool modeled after the successful Federal Employees Health 
Benefits program. The FEHB, Federal Employees Health Benefits program, 
which enables enrollees to choose from a variety of health plans, with 
rates and benefits negotiated by the Federal Office of Personnel 
Management, has served Members of Congress and hundreds of thousands of 
Federal employees well for many years now.
  So understand, there are hundreds and hundreds and hundreds of 
thousands of Federal employees--whether they work in the Celebrezze 
Building in Cleveland, whether they work in the Office of Management 
and Budget in Washington, whether they work in Bethesda for the 
National Institutes of Health, whether they work at Wright-Patterson 
Air Force Base; any of these Federal jobs--Federal employees are in a 
huge pool that negotiates price. So it obviously works in a way that 
keeps rates in check.
  Under my bill, an independent contractor would manage a program that 
looks like FEHB, with a few modifications to accommodate the market 
segment it would serve. A few of those modifications are designed to 
hold down costs.
  The bill would establish a reinsurance program to pay claims that 
fall between $5,000 and $75,000. That is where small business gets hit 
the hardest. When 1 or 2 or 3 employees, in a company of 50 or 40 or 30 
or 100, get hit with a huge bill of hundreds of thousands of dollars, 
it affects the entire pool, and it affects everyone's premium and, in 
many cases, it makes insurance for the small business employer simply 
out of reach.
  This bill establishes a reinsurance program to pay claims that fall 
between $5,000 and $75,000. This approach minimizes premium spikes and 
it makes coverage affordable for companies regardless of the age and 
the health of their employees.

  The bill establishes what is called a loss-ratio standard for 
insurers. This means that insurers would be required to spend most of 
their premium income on claims, and hold down their administrative 
costs. We know what happens with small employers: the administrative 
costs the insurance companies take are typically huge and have a major 
impact on the per-employee cost of health insurance.
  The bill would identify and apply strategies to ensure that providers 
employ ``best practices'' in health care, which means they are 
providing the right care at the right time in the right amount.
  Finally, the bill would target price gouging by drug manufacturers 
and manufacturers of other medical products, including medical devices.
  Price gouging occurs in U.S. health care when a company exploits 
American consumers by charging them dramatically higher prices than 
consumers in other wealthy nations.
  Why are we paying so much more for prescription drugs in this country 
than the Canadians pay, when the Canadians often are buying drugs 
manufactured in the United States? It is the same drug, same brand 
name, same packaging, same dosage. Yet they are paying in Canada 
sometimes half as much.
  In fact, for years, I used to take--when I was in the House of 
Representatives--busloads of constituents to Canada, about 2, 2\1/2\ 
hours away from Lorain, OH, where I lived, to buy prescription drugs at 
a pharmacy in Ontario. The same drug, same dosage--everything was the 
same, except for the price.
  Other modifications in the bill are designed to ensure that health 
coverage is nondiscriminatory. Think about it this way: If your next-
door neighbor develops a mental illness such as clinical depression, 
and you develop a medical illness such as heart disease, why should 
your next-door neighbor be denied health benefits that you get because 
that is a mental illness versus a physical illness? We both have paid 
premiums. Your next-door neighbor and you have both paid premiums to 
cover your health care costs. You both need health care. Why is one 
condition--the condition of heart disease--more worthy of coverage than 
the condition of clinical depression?
  My bill charges a group representing providers, businesses, 
consumers, economists, and health policy experts with rethinking health 
care coverage to eliminate arbitrary differences in the coverage of 
equally disruptive, disabling, or dangerous health conditions.
  The bottom line is this: We have an opportunity to expand access to 
health coverage in a way that achieves fundamental goals.
  One, we reach populations who cannot find a home in the current 
insurance system because they are small businesses, typically, or self 
employed.
  We stand up for American consumers who are paying absolutely 
ridiculous prices in many cases for essential health care.
  We demand spending discipline on the part of insurers. They have 
chosen to play a pivotal role in the health of our Nation. They can 
live with reasonable limits on their administrative costs, as their 
profits go up and their executive salaries are in the stratosphere.
  We can clean up duplication and random variation in the delivery of 
health care services.
  We can end arbitrary coverage rules that turn health protection into 
a health care crapshoot.
  For the sake of small employers, for the sake of their employees, for 
the sake of self-employed entrepreneurs--whom we need so desperately in 
this country to compete globally--and for the sake of every American 
who did not request, did not sign up for a particular health problem, 
and should not be penalized for having it, I hope Members on both sides 
of the aisle will support my legislation.
  Madam President, I suggest the absence of a quorum.
  The ACTING PRESIDENT pro tempore. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mrs. BOXER. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER (Mr. Brown). Without objection, it is so 
ordered.

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