Small Business Health Fairness Act of 2005

SMALL BUSINESS HEALTH FAIRNESS ACT OF 2005 -- (House of Representatives - July 26, 2005)

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Ms. VELÁZQUEZ. Mr. Speaker, in every State and every district when we meet with small business owners, their number one concern is rising health care costs. Even as we sit here, the cost of health care continues to rise.

Today's legislation will help address this problem. Association health plans will provide an employer-based solution to help the sector of the economy that is being hit the hardest: small businesses. Critics of the bill will come forward today and tell you how association health plans are going to lead to a devastating impact on small businesses and the insurance market. Well, from where I stand, it is hard to imagine that it could get any worse.

We have 45 million Americans without health insurance and over half are small businesses and their employees. This includes up to 7 million children that have family members working for small firms. And for the last 5 years, small businesses have seen insurance costs increase by over 60 percent. These are statistics that are so often stated in this town that we forget what the real impact is. When an employer has to spend an additional $3,000 a year for coverage per employee year after year, it is easy to understand why some are dropping coverage all together.

We have a modest solution before us today that no one can claim will address all of the problems, but it can provide some help in a market that needs it. I think it is important to talk about what association health plans are and what they are not. These plans will be under the same set of rules that apply to corporate and union plans. In fact, the requirements for association health plans are even more strict. It will require that an association health plan have sufficient reserves to pay all claims. It includes protections against cherry-picking to prevent adverse selection. It provides a structure to ensure that the DOL can monitor these plans.

Critics will cite an outdated CBO study that does not even examine the legislation before us today. Will association health plans cure all of the problems when it comes to health insurance in the small group market? Absolutely not. But will it bring some elements of affordability and competition in these markets? I think so.

By some estimates, this bill is estimated to provide as many as 8 million Americans with insurance, no small sum. One of the best indicators as to whether AHPs will increase competition is the strong opposition from insurance companies. They are worried that they will lose their stranglehold on the small-group market. These insurance companies with highly paid lobbyists from Blue Cross/Blue Shield, for example, that hold monopolies on State markets are worried that they will have to start negotiating premiums rather than dictating them.

I rise in strong support of this legislation. I ask my colleagues to do the same. Just as important, I call on the Senate to act on this legislation and the administration to put its full backing behind this bill. This Nation's entrepreneurs deserve it.

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