Health Care Reform

Floor Speech

HEALTH CARE REFORM -- (Senate - November 18, 2009)

Mr. WARNER. Mr. President, I rise today to once again join my colleagues in addressing the need for comprehensive health care reform. The Senator from New Hampshire, Mrs. Shaheen, earlier spoke on health care reform and its effect on small business. I know my colleague, Senator Udall from Colorado, is going to be speaking soon. And I know we are going to be joined, as well, a little bit later by Senator Landrieu, who takes a leadership role on the issues affecting small businesses, as chair of the Small Business Committee.

I rise today to stress how important health care reform is to the small business community. Currently, there are small businesses across America that have been hit very hard by the effects of the recession. Small businesses are struggling as they try to keep their doors open, with the enormous constriction of credit that is taking place. Small businesses are struggling to have the finances to expand; even healthy small businesses, as we have seen. Banks continue to draw back in capital and try to build up their own balance sheets. The people who have taken the hardest hit by the restriction on capital and the restriction on lending have been small businesses across this country.

So we have the enormous challenges small businesses have felt by the recession that has been exacerbated by the constriction of lending, and then we add on top of that the enormous challenges that small businesses face in the health care market. The only people who pay retail--who pay full price for their health care benefits in America today--are small businesses and those who purchase health care on the individual-based market. There is no group that will more benefit, or have more to gain from meaningful health care reform, than small businesses.

Small businesses currently lack the bargaining power of large firms and pay as much as 18 percent more for the same health insurance as larger companies. If you work in a large company you get the benefit of the larger pool, and you are better able to bargain for your health insurance rates. If you are poor and cannot afford health insurance, you get access to Medicaid. If you are a senior, you get access to Medicare. Small businesses are the group that falls through the cracks. They don't have access to this purchasing power, and consequently pay, on average, about 18 percent more for health insurance than larger companies.

As health insurance costs continue to rise, more and more small businesses can no longer even afford to offer health insurance to their employees. And if they do, their employees can't afford the co-payments to purchase health insurance. In fact, nearly one-quarter of the uninsured in our country works for small businesses. Between 2000 and 2009, the percentage of firms with less than 10 employees--the heart of small businesses--offering insurance coverage fell from 57 percent to 46 percent. Among people with employer-based coverage in January of 2006, one-sixth lost their coverage by 2008. Nearly three-quarters of small businesses that do not offer coverage to their employees cite high premiums as the reason. Small businesses want to offer health benefits to their employees, but are priced out of the market and cannot afford it.

Many small business employees are left uninsured and, in turn, rely on the health care system to pick up the costs when they get sick. It is these people who show up at emergency rooms and access the most inefficient part of our health care system. They are oftentimes not people who are unemployed, but employees of small businesses. Enacting market reforms such as creating insurance exchanges will finally give small businesses affordable options. Their employees will have a place to purchase insurance at large pool rates and, by insuring more people, reform will help drive down the cost of health insurance for all Americans. Insurance exchanges will also significantly reduce administrative costs for small businesses by enabling them to easily and simply compare the prices, benefits, and performance of health care plans.

I know a number of us are working on a series of amendments for when the health care bill gets to the Senate floor to try to make sure we add further disclosure requirements and more transparency to our health care system. Right now we don't have a free market in our health care system because nobody knows what the providers actually pay, and what the doctors and hospitals actually charge. Small businesses will benefit by trying to bring transparency to these health insurance exchanges.

Additionally, reform will enact consumer protections such as prohibiting insurance companies from denying coverage based on preexisting conditions and dropping people when they are sick. This is particularly a challenge to small businesses. If you only have a small group of employees and a few have preexisting conditions, those preexisting conditions drive up the cost of providing insurance for this smaller pool. Oftentimes this results in pricing small businesses out of the market. Reforms such as eliminating preexisting conditions will dramatically help small businesses and their employees obtain affordable health insurance.

These protections are vital for small business employees because they help level the playing field in the small group market. They guarantee the option of large pool rates, lower costs, and prohibit insurance companies from arbitrarily penalizing small businesses when one of their employees becomes seriously ill.

Lowering health care costs for employers is also key to our ability to compete in the global economy. If American business is going to come out of this recession and we can compete with countries around the world, we have to take on the cost of health insurance. American workers are more productive than any other workers in the world. But even with that increased productivity, if American businesses have to pay $3,000 to $4,000 more per employee because of higher health insurance costs than our competitors that puts American businesses at a dramatic disadvantage.

As health care costs continue to rise, other business investments are sacrificed. Forty percent of businesses say health care costs have a negative impact on other parts of their business. As I mentioned, with the great reduction of credit availability to small businesses and in this challenging economic climate, American businesses cannot afford to be at such a disadvantage. With health care reform, more of our Nation's dollars will go toward investments in our economy.

Health care costs also stifle productivity. Too many Americans end up staying in jobs simply because the employer provides health insurance. They aren't able to move around, or move into entrepreneurial startup firms where innovation and real growth potential takes place. Startup firms and, again, small businesses are often not able to offer health insurance. Consequently, we have good workers who are not able to move into these firms and help spur job growth because they are caught in dead-end jobs. They are constrained by the security of health insurance offered at their old jobs or perhaps because they have a preexisting condition and can't move to a new situation.

Again, if we do health insurance reform right, it will put in place reforms such as the elimination of preexisting conditions requirements that will allow more freedom of movement within the job workforce.

So, once again, I join my colleagues in making this case. We have made it time and again. Health care reform is necessary to make sure American businesses remain competitive. Health care reform is necessary because health care costs are the single largest driver of our Federal deficit. Health care reform is necessary because if we don't address rising costs, Medicare will be insolvent by 2017. If we don't reform the system, costs will also rise for families; an average Virginia family, for example, within the next decade, will be paying nearly 40 percent of their disposable income to meet their health insurance premiums.

I will close my comments with where I started. Small businesses are the only players in our market who still pay retail for their health care costs and are increasingly being priced out of the market. Reform is imperative for the small business community.

I know my friend, the Senator from Colorado, is about to speak, and our leader on small business issues, the Senator from Louisiana, who has been so diligent on leading these efforts and making sure that small businesses are protected in health care. We must get this right. We must get this bill to the floor. And we must provide needed relief to the small businesses that will generate the economic recovery that we're all hoping for.

Thank you, Mr. President. I yield the floor.

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