Health Care Reform

Floor Speech

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Ms. CANTWELL. Mr. President, I come to the floor to join my colleagues to talk about the rising cost of health care on small businesses. I thank the chair of the Small Business Committee, Senator Landrieu, from Louisiana. She has been an outspoken and articulate advocate for small business. She is constantly focusing on what we are going to do to help small businesses in America, and she wants to make sure any health care legislation that is passed out of the Senate focuses on that.

That is very important because we know that when we talk about small businesses in this current environment, they are at a disadvantage when it comes to our health care system. That is to say they have long been the backbone of the American economy. Small businesses employ about 40 percent of our workforce. Even in a downturn, the job creation we are going to see is going to come from small businesses. If we can address their concerns in health care reform about the rising cost of health care, then we are going to be doing ourselves a favor because they are going to be able to grow more jobs and grow the economy.

I applaud the Senator from Louisiana for her efforts and join with my colleagues, Senators WARNER, UDALL, and SHAHEEN, in coming down here to describe why we think it is so important that we get health care reform and that we do something about this because we really do want to get our economy going, and we certainly want to control costs so that small businesses can grow jobs.

Why is this so important? We have seen a 120-percent increase in premiums over the last 10 years. That is to say, from 1999 to 2009, insurance premiums have increased 120 percent--120 percent. What family in America can sustain the constant increase in insurance premiums every year? The fact is, they cannot.

In my State, we have seen a sharp rise in those who are without health insurance because the premiums keep going up. More and more small businesses have to make choices between keeping employees on the rolls or cutting back on their health insurance. And they are making those choices. It puts all of us at a disadvantage.

What should we be doing instead about the rising costs of premiums in health care? We should be doing something to bend the cost curve. You will hear many of my colleagues, as you did this morning, talk about bending the cost curve and why it is so important. Right now, if we look at what is happening with health insurance, as I said, it already increased 120 percent over 10 years. The next 10-year period, it is supposed to increase in the same way, double in cost, increase about 7.9 to 8 percent a year. So that means if we do nothing, small businesses are going to continue to see this escalator of costs keep going up for, and that means they are going to employ fewer and fewer people because they cannot afford the health care coverage.

We see that general inflation is about 2 percent, but this increase in premiums is about, as I said, 7 to 8 percent. Why are we seeing this huge increase in the cost of premiums if general inflation is only about 2 percent? This, in my opinion, is what the health care debate should be about. This difference between general inflation and health care cost increases should be the entire debate. What are we going to do to drive down the costs so that health care costs are kept more in pace with inflation?

Why are these statistics so important? The issue is that, according to the National Small Business Association, only 38 percent of small businesses provided health insurance last year. That is down 61 percent from 1993. So we are continuing to see that shrinkage in people offering coverage. Of those who do offer coverage, 72 percent say they are struggling to continue to offer coverage to their employees.

An MIT study shows that the cost of health care to small business will more than double in the next 10 years, just as it has in the last 10 years, and that small businesses pay up to 18 percent more than the same coverage for larger firms. What that means is small businesses are being disadvantaged. They are being disadvantaged because they do not have the same clout in the marketplace as a large employer to negotiate benefits and drive down costs.

What do we want to do about that? What we want to do is give small businesses the same kind of negotiating power large companies have to negotiate for benefits. In fact, health care reform and helping small businesses should be able to negotiate with insurance companies to drive down the costs of their plans.

This is something that is already part of the underlying bill we passed out of the Finance Committee. I am sure that when we see legislation coming to the Senate floor this Friday, we will see the same kind of provision, at least with the basic health plan, a provision I helped coauthor in the legislation that would allow States to negotiate on behalf of the uninsured, allowing those who are employed in small businesses to help lower the costs. In our State, this plan has driven costs down 30 to 40 percent lower than what those individuals would be able to get in an individual market. That is amazing, the fact that they have been able to pool together 40,000 to 60,000 people, go to the marketplace, and say to insurance providers: If you want access to our insurance business, you have to give us a discount. I call it the Costco model. I don't know how many people here this morning understand the Costco model, but the Costco model is something where you buy in bulk and you make large purchases. You should get a discount. That is what we are saying. We want to give small businesses the same kind of purchasing power large businesses have so they can drive down costs. That is going to be a critical component of this legislation, and this Senator, along with my colleagues who are out on the floor today, is going to make sure that negotiating power exists in a final bill for small business.

Second, we need to make sure we also have provider reform, that provider payments reward not just volume but value. Right now in our health care delivery system, there is a lot of focus given to what I would say is the quantity of health care that is delivered, the fee-for-service system that basically ends up having insurers paying physicians for the number of patients they have seen or the number of tests they have ordered but is not generated or focused on payment to a physician based on the outcome of the patient. There are provider reforms in this legislation that will also help drive down the cost to small businesses because those providers will be focusing on what it takes to deliver health care to those individuals.

Third, we need to have better transparency on drug pricing because transparency of cost is something that will help us in negotiating, as a government purchaser, better health care benefits. Right now, there is a lot of unknown about health care costs in drug pricing because middlemen basically negotiate discounts on behalf of their customers but end up pocketing some of those benefits.

We want to make sure all three of these points are part of vital legislation to help drive down the cost for small businesses.

I have many small businesses come into my office. I met with some in the State of Washington. We are very proud of the diverse array of companies that exist in our State. A lot of people look at some of the major employers such as Boeing or Microsoft or, as I mentioned, Costco, Starbucks. Washington State is home to many entrepreneurs. There are many great companies that may be the big companies of the future but are the small businesses today, and they need our help and assistance.

Two of those, Kent and Linda Davis, run a technology consulting firm and pay $1,500 per month for health insurance--$1,500 per month. They just learned that in 2010 their premiums will increase by another $300 per month. This is the third substantial increase they have had in a row. They want to hire more employees, but they cannot because of the cost of health care.

Another successful entrepreneur who has come into my office, Gene Otto, is the owner of the San Francisco Street Bakery. You might think the San Francisco Street Bakery is in San Francisco, but it is actually in Olympia, WA, and it employs 20 people. Over the past decade, the increases in health insurance premiums have forced them to take dramatic reductions in the level of benefits and the number of employees they can cover. This is a company that wants to grow. They want to expand. They have great products and great services.

It is people such as the Davises and Gene Otto who are the economic engine of our economy. They are going to continue to depend on us to make sure that in this legislation and in this legislative debate, we are going to do everything we can to help small businesses grow.

Small businesses cannot grow if health care costs are going to rise 8 to 10 percent a year. It will hamper the ability of those small businesses to meet the demands and challenges of their workforce and keep them healthy, facing an economy that has been certainly challenged by this big downturn we have seen but that needs to go back to growth in the future. They want to be part of that. They want to be part of that growth, and they want to be part of helping our economy recover. But to do that, we are going to have to do something to control health care costs.

I applaud my colleagues who I know share these same issues and concerns: the Senator from Virginia, who has been very outspoken on the fact that we have to change our system to make sure we are bending the cost curve and focusing on driving down costs with provider reforms; my colleague from Louisiana, who is focused on making sure small businesses have clout and access to small business negotiations that large companies have; my colleague Senator Shaheen, who also has been a big supporter of making sure we have provider reform in the system; and Senator Udall, who comes from a State that knows health care costs are a key component. If we want our economy to grow, we have to drive down health care costs.

Two of our former colleagues have been on the floor in the last few minutes--the Vice President of the United States and the Secretary of Interior. We are glad they have come up to Capitol Hill to continue discussions with us about how important this legislation is. I thank them for that. I thank them for their service to our country and for their willingness to serve in the administration. We certainly miss them in the Senate. But I think it emphasizes the urgency of the health care legislation, that our economy is struggling, that we want it to grow, that we think small businesses are going to be a key component of that, but we have to give them negotiating power. We have to give them the ability to negotiate with insurance plans to drive down the costs, and we have to do better at reforming the system so we can see that growth happen in America.

I yield the floor.

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