[Congressional Record (Bound Edition), Volume 149 (2003), Part 15]
[Senate]
[Pages 20820-20822]
[From the U.S. Government Publishing Office, www.gpo.gov]




                        ASSOCIATION HEALTH PLANS

  Mr. TALENT. Mr. President, it is my pleasure to speak to the Senate 
today about a subject on which I have risen to speak before, a very 
important piece of legislation that I think has the potential to solve 
what is probably the No. 1 problem that small businesspeople and their 
employees confront today. I am talking about the bill which I have 
cosponsored along with Senator Snowe, who is the chairman of the Small 
Business Committee, and others. It is a bill to allow small 
businesspeople to create association health plans.
  This bill is not a Government program. In a time of great deficits, 
it does not require us to spend any money. It is going to take a long 
step toward solving the problems of the uninsured, reducing the number 
of the uninsured, and getting working people better health insurance at 
less cost. It does not cost the taxpayers anything because all it does 
is allow people to work together and do for themselves, as small 
businesspeople and employees of small businesses, what big companies 
and employees of big companies can already do.
  Most people in the United States who have health insurance are a part 
of a big national pool--almost everybody is. You are either in Medicaid 
or Medicare or the Federal Employees Health Benefits Plan or covered by 
a labor union plan or a multi-employer plan with a labor union or you 
work for a big company. If you are in any of those situations, you are 
covered by health insurance, and it is health insurance where you are a 
part of a big national pool.
  The only people who are not in that situation are people who work for 
small businesses. I define that very broadly. That includes farmers. It 
includes people who are self-employed consultants operating out of 
their own home. They are in the small group market. They have to buy 
insurance. If they own or run a small business or a farm, they are 
buying insurance for small groups of people, 5 people or 10 people or 
20 people or 25 people.
  Insurance works better when you spread the risk across as large a 
pool as possible. It doesn't take an advanced degree to understand 
that. All association health plans do--and it is very important what 
they do--is simply allow the employees of small businesses to get the 
same efficiencies and economies of scale that employees of big business 
already enjoy. All I would do is allow trade associations--the Farm 
Bureau, the NFIB, the Chamber of Commerce, the National Restaurant 
Association--to sponsor health insurance coverage nationally the same 
way the human resources side of a big company would do.
  Let's take a big company such as Emerson Electric, a great company in 
Missouri, or Sprint, or Anheuser Busch, all headquartered there. They 
have a human resources side, an employee benefits side. They contract 
with insurance companies nationally; they may have a self-insured side. 
Then their employees all over the country can enjoy an option in 
different plans as part of pools of 5 or 10 or 20 or 30,000 people. The 
administrative costs of such plans are much lower because they are 
spread across a much wider base of employees. They have much greater 
purchasing power and negotiating power when dealing with the big 
insurance companies. They have the competitive possibilities of self-
insurance. So insurance is better in that situation and it costs less.
  It doesn't mean they don't have problems, but you are a lot better 
off there than you would be and are right now if you are struggling as 
a small business owner or the employee of a small business.
  Of the 44 million people uninsured in the country, about two-thirds 
either own a small business or work for a small business or are 
dependents of somebody who owns or works for a small business. I am 
including farmers. Then there are tens of millions of other people who 
may have health insurance through a small business, but it is bare-
bones health insurance. It is not what it should be because the costs 
are so high, and they are going up every year.
  There is a human side to this. Senators who have not done this--I 
imagine most Senators have--go out and talk to people who work in small 
businesses or run small businesses. I guarantee you, they will tell you 
the No. 1 problem they are confronting, short and long term, is the 
rising cost of health insurance and increasing unavailability. This 
hits people where they live.
  We have had too many layoffs in Missouri. We have lost more jobs in 
Missouri in a 1-year period than any other State. There are a lot of 
bad results connected with the layoff, obviously. But I think maybe the 
first that hits a family when they lose a job or are concerned about 
losing a job, particularly if it is a family with kids, is: What about 
my health insurance? What do I do for that? It is as important as 
people's wages.
  Folks in the small business sector, employees of people in the small 
business sector have labored too long in a market that does not work. 
It is dominated by a few companies, and they are acting more and more 
like monopolists, raising prices higher and higher, providing fewer and 
fewer services, less and less quality insurance. We need to do 
something about it. We can do it, if this Senate will pass association 
health plans. It passed in the House by 100 votes last month--strong 
bipartisan support. It has passed several years in a row in the House. 
The President supports it. We in the Senate ought to pass it.
  I fought on the floor of the Senate for it. I will continue to do so. 
It is a great bill. We have great sponsors. We will take up the debate 
again in the fall. I am very hopeful we can pass it.
  It is no secret--and Senators know this because I have been talking 
to them and I know how strongly they are being lobbied on both sides, 
lobbied in opposition to association health plans--who is at the core 
of the lobbying effort against association health plans. It is the Blue 
Cross Insurance Company. It is no secret why. Blue Cross is dominant in 
many States. It is one of the few big insurance companies in almost 
every State that currently provide health insurance to small 
businesses. They have a big stake in not having association health 
plans enter the market to compete. It would be a huge competitive 
force. It would take business away from them or cause them to lower 
their prices in order to keep the business.
  I don't begrudge them or anybody else their opportunities or rights 
to lobby on legislation that comes before this Senate. They have 
lobbied. They spent $4.3 million last year on lobbyists. I don't know 
how much of that was spent on association health plans. We do know this 
is the No. 1 priority for that company--to stop this bill. We can all 
infer why. I don't begrudge them that. But the debate ought to be done 
honestly, and it ought to be done within the limits of fair play. That 
is not happening. I want the Senate to know about it.
  First, I said it is not being done within the limits of honesty. The 
No. 1 charge being brought against association health plans is not only 
not true,

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it is exactly the inversion of the truth. It is exactly the opposite of 
the truth. If you want to fool somebody, tell them something that not 
only isn't true but is the opposite of the truth. Try and sell them on 
that.
  The No. 1 charge against association health plans is that they would 
result in cherry picking; that is, that small businesses that are 
healthy would want to go into the association health plans; small 
businesses with employees who are sick would not want to go into 
association health plans. That is the exact opposite of the truth. I 
think everybody who currently is trapped in the small group market is 
going to want to be a part of an association health plan. Who would not 
want to get insurance through a big national pool as opposed to a small 
group of 5 or 10 people, if you could do it? It is simply economics. It 
operates more efficiently. It operates better. It is going to lower 
costs for everybody. By our estimates, it will lower costs for small 
business, on average, 10 to 20 percent and reduce the number of 
uninsured by millions. It will provide good quality health insurance to 
others who right now are laboring with bare-bones insurance because the 
market is so difficult. Everybody is going to benefit. The people who 
will benefit especially are people who are trapped in small groups 
where somebody has become sick.
  I have talked about this subject and toured scores and scores of 
small businesses. I have brought up this charge of cherry picking. I 
say to people: If you had a history of medical problems and you had a 
choice of working for a big company which provides health insurance the 
way an association health plan would or, on the other hand, working for 
a small company which is trapped in this small group market and that 
was all you knew about the two opportunities--big company, national 
pool; small company, small group market--and you were sick, for which 
one would you want to work? I have never had a single person say: I 
want to work for the small business; I think I am going to get better 
health insurance there.
  One of the big competitive advantages big businesses have over small 
businesses is that generally they offer better health insurance. 
Everybody in the job market knows it. I have had a lot of small 
business people tell me: We have lost employees to big companies on the 
health insurance issue. We have not been able to hire people we want to 
because they went to work for a big company because they thought they 
would get better health insurance.
  I don't begrudge the larger companies. But why should small 
businesses and their employees not have the same opportunities? This 
will benefit everybody in the small business market, but it is going to 
benefit most the people who are ill, or employers who are struggling 
along with people who are ill and are doing the best they can to 
provide good health insurance.
  Here is another reason it is not association health plans that will 
cherry-pick. The legislation requires that they take everybody, all 
comers. Must offer/must carry. Join the association and you get the 
health insurance. They cannot screen you out because you have somebody 
who has cancer or heart disease or something like that.
  Mr. President, it is the big interest companies now who are cherry-
picking. Just talk to people who run small businesses. When somebody in 
their business gets sick and files a claim, their rates get jacked up 
or they get canceled. Everybody knows it. I could give a lot of 
examples. One example is Janet Poppen, a small business owner from St. 
Louis. Like many small business owners, she wants to do right by her 
five employees, so she tries to provide them health insurance. How many 
hours and hours does Janet and people like her spend just on the 
administrative details? It is hours they need to spend running their 
small business.
  If we had an association health plan, they would join the trade 
association, and the trade association has done all that work. It just 
sends them the papers and they sign up their employees. She had health 
insurance through Blue Cross/Blue Shield, and one of her employees had 
the temerity to get sick with non-Hodgkins lymphoma. As soon as she 
started getting treatment for the cancer, Janet's premiums increased by 
16 percent. That is on top of the substantial premium increases that 
had occurred the year before. Her premiums had gone up 35 percent over 
2 years.
  This is not an uncommon story. Everywhere I go, small businesses say 
that premiums are going up 15, 20, 25 percent a year, doubling over 3 
years, going up by a third over 2 years. That happened to Janet Poppen, 
and she is insured by Blue Cross. They are the ones cherry-picking. 
Association health plans are the remedy, and to say otherwise is the 
exact opposite of the truth.
  One other point, and then I will close. I have trespassed on the 
Senate's time enough. We ought not to turn this debate, which is one of 
the most important ones we are going to have in the Senate, into a 
sweepstakes. Blue Cross is doing that. They have sponsored a Web site. 
There are other problems as well, but on that Web site they have a 
sweepstakes. You can enter the sweepstakes to win a trip to Washington 
for four people, and they will give you $300 cash on top of it. Do you 
know what you have to do to enter the sweepstakes? You have to click on 
the place where you can send an e-mail to your Congressman and Senator 
opposing association health plans. Then you get in the sweepstakes. 
Then you get a chance to win a trip to Washington--if you will just 
click on the e-mail and send a letter to Washington opposing 
association health plans. You don't get anything if you send in a 
letter supporting association health plans. I will show the Senate 
where it says enter to win.
  Here is a chart, and this is the Web site now. It says that you can 
make your voice heard by sending a free fax to Congress. That is what 
they tell people. They don't tell you what the fax is about, that the 
fax has to oppose association health plans and support their business 
interests. Then they have some misrepresentations about association 
health plans.
  Go to the third chart. This is what you get if you do it. At least 
you have a chance at this. It is a drawing. The grand prize is a trip 
for four to Washington, DC, including round-trip coach class air 
transportation at the U.S. airport nearest the winner's home, double 
occupancy, standard hotel accommodations, two rooms, a 4-hour 
Washington, DC, bus tour, shuttle bus airport transfers, and a total of 
$300 in spending money. It has an approximate retail value of $4,000.
  All you have to do is join Blue Cross, sending in an e-mail opposing 
the association health plans. You don't get to join if you decide you 
want to support them. You don't get a chance at the sweepstakes then.
  I always encourage people to contact their Congressmen and Senators. 
I like it when people contact me, even if they disagree with me on 
something. That gives me a chance to write back and explain my 
position. I have had great exchanges with constituents that way. But we 
ought not to give people a monetary incentive one way or another 
because that means the opinions we are getting are not unnecessarily 
unbiased, are they?
  I don't blame anybody who wants a shot at a $4,000 trip and 
participates in a sweepstakes in order to get it. But I sure blame the 
people who have sponsored that Web site and are distorting the debate 
on this serious issue before the Senate. And this is a serious issue.
  There are millions and millions of people in this country who don't 
have health insurance and who need it. Most of them are stuck in a 
market that isn't working and is dominated by a few competitors, and we 
have a chance to change that. It doesn't even cost the taxpayers 
anything. I hope we can do it. They have done it in the House with a 
bipartisan vote. I hope we can do it in the Senate. At the very least, 
we need a debate that is conducted honestly, conducted fairly, and that 
doesn't turn health care into a sweepstakes. I hope after this we will 
have it.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from New Jersey is recognized.

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