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. SCHAKOWSKY. Mr. Speaker, I rise today in support of the Kind/Andrews substitute and in strong opposition to H.R. 525, the Small Business Health Fairness Act of 2005. We have the opportunity to give small business owners and employees meaningful access to affordable and comprehensive coverage by adopting the Kind/Andrews substitute. Or, by passing H.R. 525, we can give access to cheap, flimsy insurance policies that will not provide meaningful protection and leave those who need better coverage far worse off.

All of us are concerned about the high cost of health insurance, particularly for small businesses. We all agree that we need to allow small businesses to band together to achieve economies of scale in purchasing coverage. The Kind/Andrews substitute would give small businesses the ability to pool together through a Small Employer Health Benefits Plan. It would provide premium assistance to make coverage affordable for small business employers and employees. The Kind/Andrews substitute will guarantee that insurance policies are not worthless paper but provide meaningful access to benefits.

What the Kind/Andrews substitute will not do is preempt State consumer protection laws--laws that have been enacted by State legislatures on a bipartisan basis in response to real-life problems in the insurance market. The Kind/Andrews approach would benefit employers and consumers. The so-called Small Business Health Fairness Act of 2005 would not. In fact, this ill-conceived bill would make the current situation worse--adding to the ranks of the uninsured, reducing benefits, and leaving small business workers with insurance policies that do not provide the care that they and their families need.

There are three fundamental problems with this bill--all of which stem from the decision to preempt State laws and leave no other protections in their place. First, the bill will not significantly reduce the number of uninsured and may actually make this crisis worse. It would preempt State insurance regulation--allowing association health plans to cherry pick healthy small businesses. Small businesses with older workers, persons with disabilities or chronic conditions, and women of child-bearing age would face higher premiums. The nonpartisan Congressional Budget Office estimates that only 620,000 uninsured workers would buy these new, barebones policies but that 75 percent of currently insured small business employees--20 million--would see their premiums increase. National Small Business United--a group whose reason for being is to promote the interests of small businesses--opposes the bill because it would increase health ``insurance premiums for small employers by up to 23 percent and cause some to drop coverage altogether. A Mercer Consultants study in 2003 found that it would actually increase the number of uninsured by 1 million. The CBO says that up to 100,000 of the most medically needy workers--those with chronic, ongoing conditions or disabilities--would be among those losing coverage.

Second, the bill would take away protections from consumers victimized by fraud and abuse. All 50 States and the District of Columbia have passed tough laws to stop abuses in the small group health insurance market. Again, these laws would be preempted. The U.S. Department of Labor is not going to have the will or the resources to respond when consumers are injured by benefit denials, AHPs go belly-up, or fraud is committed. AHP policy holders and health consumers would be left in a regulatory blackhole--with no place to turn if they are defrauded, cheated, or denied benefits. That's why the National Association of Insurance Commissioners and 41 attorneys general oppose this bill.

Third, the bill would preempt basic benefit requirements and patient protections, allowing AHPs to drop coverage for preventive services, screening, mental health and other critical services. CBO estimates that 8 million workers with health coverage today would lose benefits under H.R. 525.

In Illinois, we have enacted benefits that include mammograms, pap tests, minimum mastectomy stays, colorectal screening, diabetes education and supplies, pre- and postnatal care, mental health parity that goes beyond inadequate federal requirements, and access to cancer drugs. We have a prudent layperson rule to ensure access to emergency services, direct access to OB-GYNs, and a ban on HMOs ``gagging'' doctors in their communications with patients. We have prompt payment rules for providers and fair marketing requirements. We require that insurance companies cover newborns. Those protections would be preempted under H.R. 525.

Many of us who previously served in State legislatures fought for those benefits because private insurance policies refused to cover items like mammograms, maternity care, diabetes education, prosthetics, or chemotherapy. We had constituents whose insurance companies refused to cover their babies, arguing that conditions developed in the mother's womb were ``preexisting.'' Dropping those critical benefits will not make health care more affordable; it will simply shift costs to employees and their families. And, despite having so-called insurance, if workers cannot afford to pay those costs on their own, they might as well be uninsured. That is why groups from Consumers Union to the American Diabetes Association, from the National Mental Health Association to the NAACP oppose this bill.

I also want to point out that women have a tremendous stake in this debate. Nearly all women-owned firms are small firms, most with fewer than five employees. Women are half of all workers at very small firms. And women are the beneficiaries of many of the State benefits enacted because private insurers refused to cover critical services--mammography, pap smears, reconstructive surgery following mastectomies, contraceptive services, breast and cervical cancer screening, direct access to OB-GYNs and nurse-midwives, and osteoporosis screening. A bill that raises premiums to women-owned small businesses and cuts women's health services is no solution.

Finally, I want to respond to the arguments of the proponents of H.R. 525 that something is better than nothing. As I have mentioned, for at least 8 million people, the something that would be provided under this bill would be a policy with lower benefits than they have today, for at least 20 million it would be a policy with higher premiums than they pay today. That is hardly a good deal. But there is a more important issue at stake here. H.R. 525 says that we owe small business owners and employees nothing better than barebones coverage, an insurance policy that may be affordable but that doesn't provide access to needed medical services and is stripped of consumer protections. I believe that we can do better and that is why I support the Kind/Andrews substitute.

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