STATEMENT
of the
The Honorable Nydia Velazquez, Chairwoman
House Committee on Small Business
“Universal Coverage: Making Health Insurance Reform Work for Small Businesses” Thursday, September 18, 2008

 

Last month, the Census Bureau came out with what appeared to be good news for our nation’s uninsured. In the year between 2006 and 2007, the number of people without healthcare decreased from 47 million to 45.7 million. But while that would seem to be an encouraging drop, the reality is that it simply masks a growing crisis. In fact, the decline was the result of expanded government programs like Medicare and Medicaid, not increased access to affordable private insurance.
Despite a modest uptick in coverage, our country’s healthcare concerns are deepening. Within the entrepreneurial community alone, 20 million men and women are uninsured. Since the year 2000, small business premiums have jumped more than 80 percent. As a result, millions of entrepreneurs and their employees have been forced out of the market.

Clearly, healthcare remains a serious problem for the small business community. Already, this committee has held more than a dozen hearings on the issue. In July, I helped to introduce bi-partisan legislation called the CHOICE Act, which included a number of provisions designed to make healthcare affordable for small firms. In this morning’s hearing, we will continue to explore the various coverage challenges facing entrepreneurs, and discuss options for reforming the current system.

By definition, small firms have fewer employees and less capital than their corporate counterparts. Accordingly, they have less clout and bargaining power with big insurance companies. As a result, providers are not as compelled to offer competitive small business rates, leaving entrepreneurs with fewer options.

In addition to a lack of choices, small businesses are forced to foot the bill for insurance companies’ high administrative costs. Because of their unique nature, small business coverage tends to be more specialized. Providers pour a great deal of money and man-hours into micro-targeting entrepreneurs. These expenses are ultimately reflected in increased premiums.

These steep administrative costs and limited provider options have made healthcare a small business nightmare. A movement towards universal coverage would be the best way to ensure that every entrepreneur and small business employee is covered. That said, any overhaul of the current system will have to be carefully orchestrated. At present, there are a number of potential means for doing so. They include allowances for personal tax incentives, mixed private-public insurance groups and public coverage.

But in order for any of these approaches to be viable, they must take a number of key provisions into account. They must be capable of not only easing administrative burdens and creating more choices, but also of eliminating the current system’s complexity.

Any move to repair our broken healthcare system will have to strike a delicate balance. It must be cautious without being wavering. It must be resolute without being reckless. And-- most importantly-- it must be universal without being one-size-fits-all.
This is particularly true for our entrepreneurs, whose businesses represent 50 percent of the workforce and a myriad of diverse industries. But while small firms may be diverse in their unique interests, they are united in their need for healthcare. A need which must be met not just for the sake of our 26 million small businesses, but for the sake of America’s 45.7 million uninsured, and the country as a whole.