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THE WHITE HOUSE
MAR 25 REC1t
WASHINGTON
March 24, 1994
P
MEMORANDUM FOR CABINET CHIEFS OF STAFFS
FROM,
DANA HYDE
SUBJECT:
"Health Reform: How It Works"
Enclosed are two copies of our newest packet "Health Reform: How it Works." This is a black-and-white
version of the packets you received at the Chiefs of Staffs breakfast on Tuesday. March 22. and that
members of your staff received at the 5:30pm briefing also on Tuesday.
Due to the costs involved, we are unable to make many more copies of the color version. However, we
strongly urge you to duplicate and circulate this version to members of your staff.
In addition, several of your Deputy and Assistant Secretaries requested Small Business Talking Points and a
Transcript from the President's Small Business event on March 22. Copies are enclosed.
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CLINTON LIBRARY PHOTOCOPY
�Health Reform:
How It Works
�HEALTH REFORM:
THE PRESIDENT'S APPROACH
Here's how the President's health reform works:
•
Guaranteed private insurance. We want to guarantee private insurance
coverage to every American. Comprehensive coverage that can never be
taken away.
•
Choice. We want everyone to have the right to choose their own doctor and
their own health plan. We want to make sure you get high-quality care by
giving you the choice, not your boss or insurance company.
•
Outlaw unfair insurance practices. We want to make it illegal for
insurance companies to: drop coverage or cut benefits; jack up your rates if
you get sick; use lifetime limits to cut off your benefits; or charge older
people more than younger. That's how you'll ge,t affordable insurance you
can depend on.
•
Preserve Medicare. We will protect and strengthen Medicare. Older
Americans have a right to count on Medicare and. choose their doctor. We
also want to cover prescription drugs under Medicare, and give new options
for long- term care in the home and community.
•
Health benefits guaranteed at work. Every job should come with health.
benefits. Most jobs do today. And yet 8 out of 10 Americans who have no
insurance are in working families. We want everyone to have health benefits
guaranteed at work. The government will provide discounts for small
businesses and help cover the unemployed.
�THE PRESIDENT'S HEALTH CARE REFORl\1:
How It Works
I. Introduction: The Health Care Crisis
II. A Vision of Health Security
1. Guaranteed private insurance for everyone
2. Choice of doctor and health plan
3. Outlaw unfair insurance practices
4. Preserve Medicare
5. Health benefits guaranteed at work
III. Conclusion: The President's Reform ·Works For You
�Introduction: The Health Care Crisis
1. They say there's no crisis, but they're wrong. [Chart 1]
A. Even if you have good insurance today, you can lose
it tomorrow.
58 million Americans go without insurance at some
point during the year. 2 million Americans a month
lose their insurance.
B. Your benefits are threatened by insurance company
fine print.
81 million Americans have "pre-existing conditions"
that insurers can use to raise rates or deny coverage.
3 out of 4 insurance policies -- that's 133 million
people -- have lifetime limits that cut off benefits
when you need them most.
C. You're paying more, and your choices are declining.
The President's refonn will protect you and your
family from a future of being squeezed -- getting
lower-quality care, fewer choices .and higher bills.
2. America faces 3 choices: [Ch~rt 2]
• government insurance
• guaranteed private insurance (the President's approach)
• no guarantee of coverage
3. The bottom line: the President wants to strengthen what's
right about our health care system and fix what's wrong.
�A Vision of Health Security
Here's how the President's health reform will work. [Chart 3]
Guaranteed private insurance
The President's proposal will guarantee every American
private health insurance. Comprehensive coverage that can
never be taken away.
Under the President's approach, everyone will get a Health
Security card that will guarantee: [hold up card]
•
Benefits as good as what America's biggest companies
offer and as good as what members of Congress get.
Your benefits will include prescription drugs and
preventive care - things often not covered today.
•
Protection against the devastating .costs of serious illness .
That means a low deductible and no lifetime lim its on
your benefits •.
�Choic"e of doctor and health plan
You will: [Chart 4]
•
•
choose your doctor
and
choose your health plan.
We want to make sure you get high-quality care by giving you
the choice, not your boss or insurance company ..
lfwe do nothing, rising costs will force more and more
employers to limit your choice ofplan and doctor.
With your Health Security card, you'll be able to follow your
doctor to any plan you choose:
•
•
•
a plan where you can see any doctor in your community
-... they call ~hese "fee for serVice" plans
a network of doctors and hospitals
or an HMO
Let's be clear: we're against forcing people into HMOs. That's
why the President's approach expands your choices.
�Outlaw unfair insurance practices
We need a system of coverage that guarantees affordable
insurance people can depend on.
That's why the President's reform makes sure that insurance
company premiums don't continue to skyrocket. [Chart 5]
And it will be illegal for insurance companies to:
1) drop coverage or cut benefits
2) jack up your rates if you get sick
3) use lifetime limits to cut off your benefits
4) charge older people more than younger
Ifwe do nothing, you will continue to be at the mercy of the
insurance companies. And continue to pay more and get less.
Insurance ought to mean what it used to mean. You. pay a fair
price for security, and when you're sick, your health care is
there for you -- no matter what.
�Protect Medicare
The President believes very strongly that the true test of health
reform is ·whether it's good for older Americans. That's why
his proposal preserves and protects Medicare. [Chart 6]
The American Association of Retired Persons (AARP) says
that the President's approach is the "best option for senior
citizens. "
Older Americans will have:
•
the right to choose their doctor
•
new prescription drug coverage
•
some long term care protection
The President wants to make sure that every penny of
Medicare money is used for seniors. But others want to take
Medicare money away from seniors.
�Health benefits guaranteed at work
We want everyone who works to get health insurance at work,
with employers and employees each paying part of the cost.
This is the easiest, simplest way to make sure everyone has
coverage because:
•
That's where the vast majority of Americans with private
insurance get it today.
•
Eight out of ten people without insurance are in working
families.
Today people on welfare get guaranteed health insurance,
while people with jobs mayor may not be covered. That's
wrong. People who work should have health insurance.
[Chart 7]
So anyone who works will get coverage at work. Employers
will be asked to contribute, as will employees. Small
businesses will get discounted insurance. The government will
cover the unemployed, and will continue to cover older
Americans with Medicare. That's how we make sure that
everyOlJ.e is covered.
�Conclusion: The President's Reform Works For You
1) The President's reform works for you and your doctor.
That's why the doctors, the nurses, the people on the front
lines _. including America's largest associations of family
physicians, pediatricians, nurses and pharmacists -- support it
and believe it will work.
\
2) Opponents will try to confuse the issue by making it seem
more complicated, but it's really pretty simple:
•
You'll get a Health Security card, you'll pick any doctor
you want, fill out one form, and know exactly what's
covered. And your health security can never be taken
.away.
3) So that's how the President's reform works. [Chart 8]
•
•
•
•
•
Guaranteed private insurance.
Choice of doctor and health plan.
Outlaw unfair insurance practices.
Preserve Medicare.
Health benefits guaranteed at work.
4) The insurance companies don't like the President's reform.
But the President didn't design h~s reform for the insurance
companies -- he designed it for you.
5) Now it's up to us to stand with the President against the
special interests. This is the right thing to do, and with your
help, it's going to happen this year.
�HEALTH CARE SPEECH
introduction
President Clinton has been in office for Just over a year now, and we have already
seen him move our economy in the nght direction. start to restore our sense of security and
begIn to rene\\' Amenca's spirit.
This President is dedicated to the proposition that people that work hard and play by
the rules should be rewarded for their work.
That's why he introduced a reemployment initiative to help people get good jobs with
growing incomes. That's why he passed the Family and Medical Leave Act so good workers
can be good parents. That's why he expanded the earned income tax credit to reward work
over wei fare.
And that's why he's dedicatmg himself to fixing this health care system -- to provide
hard-working families v,.;th the health secunty they deserve.
This year we have a magic moment After 60 years of false starts and obstruction, we
have an opportunity to give every American health security. This is an opponunity we must
seIze.
Opponents of reform are trying to teIl you there's no health care crisis, but they're
wrong. [Chart I]
The fact is: Even if you have good health insurance today, you can lose it tomorrow.
Two million Americans a month lose their insurance. And fifty-eight million Americans find
themselves without insurance at so"!e pomt during the year.
Your benefits are threatened by insurance company fine print. Eighty-one million
Americans have "pre-existing conditions" that insurers can use to raise rates or deny coverage.
And three out of four msurance policies -- that's 133 million people -- have lifetime limits
that cut off benefits when you need them most.
Even if you've got insurance, you know you're paying more and getting less. And your
choices are declining. I'm here to tell you how the President's reform will protect you and
your family from a future of being squeezed -. getting lower-quality care, fewer choices and
higher bills.
[Chart 2]
America faces three choices: government insurance for everybody, no guarantee of
coverage for anybody. and guaranteed private insurance _. which is the President's approach.
And the President has told the Congress he will veto a bill which doesn't cover everybody -
because without guaranteed private insurance for everyone, it's not real reform.
�The bottom line is this: the PresIdent wants to strengthen what's right about our health
care system and fix what's ""Tong.
We kn.ow the system is broken. We know that aU of us are at risk of losing our
coverage at any time. Here's how we want to fix it.
We want to guarantee private health insurance for every American;
.We want to protect your right to choose your own doctor and health plan. and
improve the quality of your health care;
We want to outlaw insurance company abuses;
We want to protect and dramatically improve Medicare;
We want to guarantee health benefits through the workplace. because that's the
best way to cover everyone.
Guaranteed Private Insurance For All
[Chan 3]
The President believes that everyone must be covered. Always. That's the only way
to guarantee security. As long as any of us at any time can be denied coverage or dropped
from coverage -- none of us is secure. And as long as Americans who have insurance pay the
price for those who don't have insurance, we'll never get costs under control.
He's also said that the benefits package must be comprehensive. [hold up Health
Security card] Under the President's proposal, every American will get a Health Security card
that \ViII guarantee benefits as good as what America's biggest companies offer -- as good as
what members of Congress get Plus preventive care -- immunizations, mammograms,
physicals -- and prescription drugs. We must keep our people healthy, not just treat them
after they get sick.
And Americans must have protection against the devastating costs of serious illness.
That means low deductibles and no lifetime limits on your benefits. People must have the
peace of mind of kno\Ving that no matter what happens, their health care can never be taken
away.
�Choices Preserved and Expanded
(Chan 4]
The Pr~sident wants to preserve and expand your choice of doctor and health plan,
because that's the best way to guarantee high quality health care.
But choice and quality are threatened today. If we do nothing, rising costs Vvill force
more and more employers to limit your choice of plan and doctor.
Under the President's approach, your Health Security card guarantees your choice of
doctor. Once you get your card, you -- not your boss or insurance company -- choose your
doctor and health plan. It can be a plan that lets you use any doctor or hospital that you
want Or it can be a plan that lets you use a network of doctors or hospitals. Or. you can
join an HM:O. It's your choice.
The special interests are trying to scare you on this issue in order to block reform. But
remember that they're trymg to preserve their profits. And don't let them stand in the way of
your health security.
Outlaw Insurance Company Abuses
[Chart 5]
We want to guarantee affordable insurance that people can depend on. The President's
approach would make it illegal for insurance companies to raise your rates unreasonably ... to
drop your .coverage or take away your benefits... to increase your rates if you get SICk... to use
"lifetime limits" to cut off your benefits... or, to charge you more simply because you are
older or have a pre-existing condition.
If we do nothing, or worse, pretend to do reform, you will continue to be at the mercy
of the insurance companies. And you'll continue to pay more and get less.
Insurance ought to mean what it used to mean. No more fine print. No more insurance
company abuses. You pay a fair price for securi ty, and when you're sick. your health care
benefits are there for you -- no matter what.
3
�Protecting and Expanding Medicare
[Chan 6J
,
The Pr~sident believes very strongly that the true test of health reform is whether it's
good for older' Americans. That's whv his proposal, dramaticallv improves
. preserves and
Medicare. And the American Association of Retired Persons (AARP) says that the President's
approach is the "best option for senior Citizens."
Under the President's approach, if you get Medicare you keep it. You keep your
doctor if that's your choice. PI us, your benefits are expanded. People receiving Medicare will
get coverage for prescription drugs, which costs older Americans more than anything today.
And we also begin to provide coverage for long term care at home or in your community.
The President wants to make sure that every penny of Medicare money is used for
seniors. Some want to take Medicare money away from seniors and spend it on other things.
That's why we must fight with the President for health care reform that protects Medicare and
older Americans.
Insurance Through The Workplace
Finally. if we're going to cover everybody, the best way to do it is to guarantee health
benefits at work. Every job should come with health benefits. Most jobs do today. And yet 8
out of 10 Americans who have no insurance are in working families.
[Chan 7]
We want everyone to have health benefits guaranteed at work, with the government
providing discounts for small businesses and the unemployed. This approach builds on what
works. And it's the easiest and simplest way to accomplish our goal of guaranteed private
insurance for everyone.
Providing health benefits at work not only makes sense; it's also the right thing to do.
Today people on welfare get guaranteed health insurance while people with jobs mayor may
not be covered. That's Mong. People who work should have health insurance.
If we are to guarantee this, we must prot.ect small businesses -- and the President's
approach does just that. The President wants to provide discounts for small businesses, and
full tax deductibility for people who work for themselves.
That's how we make sure that everyone is covered. Anyone who works will get
coverage at work, Employers will be asked to contribute, as will employees. The government
will cover those between jobs, and will continue to cover older Americans with Medicare.
4
�Conclusion: The President's Reform Works For 'You
The President's reform works for you and your doctor. That's why the people on the
front lines -- America's largest associations of family physicians, pediatricians. nurses and
pharmacists --. support it and believe it Vvill work,
Opponents are trying to confuse the issue by making it seem more complicated. but it's
really pretty simple. You'll get a Health Security card, you'll pick any doctor you want, fill
out one form, and know exactly what's covered. And your health security can never be taken
away,
[Chart 8]
Guarantee everyone private insurance. Keep your choice of doctor. Outlaw
unfair insurance company abuses. Protect Medicare. And guarantee health benefits at
work. That's the approach. ' And this is our opportunity.
No wonder the special interests -- the people who profit off today's crazy system -- are
out in full force, One group of health insurers has already spent $14 million -- money from
your insurance premiums -- on TV ads to scare you about reform.
But the President didn't design health reform for the insurance companies -- he
designed it for you. And we must not let the insurance companies stand in the way of real
reform,
Presidents from FDR to Harry Truman to Nixon to Carter have tried to guarantee
insurance to every American, but none have succeeded -- because special interest groups have
been just too powerful to overcome, But this time, if we work together, I am convinced things
Vviil be different.
This time, we will make history and guarantee private insurance to every American, I
ask you to join with me and help do what is right for America~ Thank you.
�QUESTIONS Alvn AiVSWERS
1) Doesn't the Clinton plan add more layers of government·
bureaucracy?
No. The President specifically rejected a government-run system in favor
of guaranteed private insurance. America basically faces 3 choices:
.. government insurance for everybody
• guaranteed private insurance (the President's approach)
o
leaving people without insurance
The President's approach is guaranteed private insurance. Everyone will
have comprehensive coverage that can never be taken away;
2) But what about these so-called "alliances"?
The purpose of them is very simple -- to give bargaining power to small
businesses and individuals and take it away from the insurance companies.
Today, the deck is stacked against small businesses and individuals. Small
businesses are paying 35 % more than big business for the same insurance,
and individuals pay even more.
So we have these consumer-controlled alliances to allow people and small
businesses to band to!Zether and !Zet more consumer clout in the
marketplace. Consumer-controlled -- that's the President's idea, not·
government~controlled.
Now, Congress will figure out exactly how they should be structured, but
this is an idea that has bipartisan support. The insurance companies don't
like it because it means they have less power, but that's what alliances are
intended to do. And ·that's why the insurance industry is spending millions
to weaken or destroy the idea.
3) One of those TV ads says that the President's plan will limit my
choice of doctor. Is that true?·
No, it's not. You'll be able to choose your own ·doctor and health plan.
In fact, to make sure that you get the high-quality care you deserve, the .
President's approach actually increases the choices most consumers will
have. Because you will choose your doctor and health plan -- your boss
�won't and the insurance company won't. So you can choose any doctor
and health plan in your community. Remember who's paying for these
ads: the insurance companies -- who are try'ing to scare you and preserve
their profits.
4) Won't this plan mean that I'll pay more and 'get less?
No. In fact, the indepeFldent Congressional Budget Office (CBO) analysis
that the Republicans praised said that the President's plan would cost
Americans less money and give them more health benefits, Young,
healthy people may pay a little more _. but that's because we're
prohibiting the insurance companies from charging older people more than
younger people.
Under the President'S approach. you'll be guaranteed affordable insurance
you can depend on. We'll make it illegal for insurance companies to jack
up your rates or drop you if you get sick, use lifetime limits to cut off
your benefits, or take away your benefits. The insurance c.ompanies won't
be allowed to bleed you dry.
And the President's proposal calls for comprehensive benefits, including
preventive care and prescription drugs. Under the President's approach, no
one _. not your boss, not your insurance company -- can take those
benefits away.
5) Won't your emplover mandate cause massive job loss and cause
thousands of small businesses to go bankrupt?
There is no credible evidence to support that claim. The independent
Congressional Budget Office (CBO) analysis that the Republicans praised
said that the Clinton plan would not result in the loss of jobs, and would
benefit all small businesses ..
Studies predict that there will, in fact, be job gains as a result of the plan.
The Economic Policy Institute predicts 258,000 manufacturing jobs
created over the next decade, Lewin-VHI, a widely-respected, bipartisan
finn, predicts over one million jobs created by providing long-tenn care,
and the Employee Benefit Research Institute predicts that the President's
proposal could produce as many as 660,000 jobs.
�The President specifically designed his proposal to help small businesses
- the biggest victims of today's health care crisis. Small business owners
will be able to get rock-solid, comprehensive coverage for their families
and employees. And no longer will they be subject to insurers jacking up
their rates: or dropping their coverage when one employee gets sick.
Because those insurance company abuses will be illegal.
6) Why do we need an employer mandate anyway?
If we want to guarantee every American health insurance, we've got to
figure out how to achieve that goal. The President believes every job
should come with health benefits. Most jobs do today because most
employers accept this responsibility to provide worker health benefits.
And yet 8 out of 10 Americans who have no insurance are in working
families. We want everyone to have health benefits guaranteed at work.
And under the President's approach, the government will provide
discounts for small businesses, help cover the unemployed, and continue
Medicare for older Americans. That's how we'll cover everybody.
7) When you try to cut costs and limit the amount premiums can
rise, won't that just lead to rationing?
Absolutely not. The key to this is insurance c0II!pany premiums can't
continue to rise unchecked. Your money will go to buying you the highest
quality of care and service, not padding the insurance company red tape.
That's why there's a limit on how much insurance companies can raise
your rates. In fact, it will be illegal for insurance companies to drop your
coverage or take away your benefits. You'll be guaranteed affordable
insurance you can depend on.
The President'S approach is all about keeping you healthy. You'll have the
right to choose your own doctor and health plan. We want to make sure
you get high-quality care by giving you the choice, not your boss or
Insurance company.
8) I've got good insurance. What's in this plan for me?
First -- and most important -- you'll get something that no amount of
money can buy in today's insurance market: guaranteed private insurance.
Comprehensive coverage that can never be taken away. Second, you, not
�your boss or insurance company, have the choice of doctor and health
plan to make sure you get the high-quality care you deserve.
Third, unfair insurance company practices will be outlawed. 3 out of 4
insurance 'policies -- that's 133 million people -- have these lifetime limits
which mean that your coverage could be cut out just when someone in
your family is sickest. No more. No more jacking up prices when you get
sick. You'll have affordable insurance you can depend on. Fourth, we
protect Medicare. We'll cover prescription drugs under Medicare, and give
new options for long-term care in the home and community. And fifth,
everyone will have health benefits guaranteed at work, with the
government providing discounts to small businesses and the unemployed.
Even if you lose your job, you will never have to worry abQut losing
benefits or being forced to change doctors.
9) Is it true that my doctor can be fined S10,000 for treating me
outside the system?
A: No, that's not true. You can see any doctor you want and pay for any
procedure or treatment. The $10,000 fine refers to the President's
crackdown on insurance company fraud. Fly-by-night insurance companies
will be fined if they try to dupe you by selling you "supplemental"
benefits that you're already guaranteed by law.
.
[Note: By law, you'll be guaranteed the right to pay to see any doctor in
the country, even if you are in an HMO.]
10) What's going to bappen to my l\fedicare benefits?
A: Older Americans who receive Medicare will continue to receive all the
benefits you do today. And you'll keep the doctor you now have. In
addition, we'll strengthen Medicare by adding pre~cription drug coverage.
Older Americans will also benefit from new long-term care options in
their homes and communities, where they want to receive care .
. 11) What happens if the money runs out?
A: Today, when insurance companies go out of business, patients get
struck without health care, and doctors. don't get paid. The President's
approach prevents that. It bans fly-by-night insurers, forcing the insurance
industry to set aside funds to protect against bankruptcy or failure.
�THE CRISIS
People Without Insurance Each. Year
58 million
People With Pre-existing Conditions
81 million
People With Lifetime Limits On Coverage
133 mil]ion
�TEED PRIVATE
.. INSURANCE
- Comprehensive Benefits
-No Lifetime Limits
_. Insurance That Can't Be
Taken Away
�CHOICE
• You choose your doctor
• You choose high-quality plan
• Employers won't pick your plan
;
.
• Insurance companies can't deny
you coverage
�REAL INSURANCE
REFORM
lllegal for insurers to:
• Drop coverage or cut benefits
• Increase your rates if you· get sick
• Use lifetime limits to cut off
your benefits
• Charge older people more
�.e
��HEALTH BENEFITS
Gu
TEED AT WORK
• Employed: Covered at Work
• Small Business: Discounts
. on Insurance
• Unemployed: Help from
Government
�How REFORM WORKS
• Guaranteed Private Insurance
• Choice of Doctor
• Real Insurance Refonn
• Medicare Preserved
.
• Health Benefits Guaranteed
·AtWork·
.
�BACKUP FACT SHEET
People \Vithout Insurance Each Year
58 Million
THE FACT:
"The Bureau of the Census calculated that 50 million Americans
lacked health insurance for at least 1 month during 1987.
Lewin/VHI updated the census estimate, calculating that 58
million people were uninsured for at least 1 month in 1992."
THE SOURCE:
"Dynamics of People Without Health Insurance: Don't Let the
Numbers Fool You," Journal of the American Medical Association
(JAMA), January 5, 1994
People With Pre-Existing Conditions
81 Million
THE FACT:
An estimated 81 million Americans under age 65 have medical
problems for which insurance companies can charge higher
premiums, exclude coverage or deny coverage altogether.
THE SOURCE:
"Health Insurance at Risk· The Seven Warning Signs", Citizens
Fund, June 1991 [with data from National Center for Health Statistics
"Health Interview Survey", further data from the Health Insurance Association
of America" Source Book", and the latest Department of the Census "Current
Population Surveys'1
People With Lifetime Limits on Coverage
133 Million
THE FACT:
The Bureau of Labor Statistics 1991 Survey of Medium and Large
Private Establishments reports that only lout of 4 people have
insurance policies without lifetime limits.
THE SOURCE:
Table 45 .- Medical Care Benefits: "Employee Benefits in Medium
and Large Private Establishments", Bureau of Labor Statistics,
1991
CALCULATION: In 1992, 177.5 million .A.mericans had private insurance, according
to the Employee Benefit Research Institute analysis of the March
1993 CPS. Seventy-five percent of 177.5 million is 133 million.
�"
THE WHITE HOUSE
ottice of the Press Secretary
March 22, 1994
For Immediate Release
REKARKS BY THE PRESIDENT
AT SMALL BUSINESS HEROES HEALTH CARE EVENT
Room 450 ,
Old Executive Ottice Building
10:46 A.M. EST
THE PRESIDENT:
Ladie. and gentlemen, tir.t let me thank
allot you tor coming here. W. have .everal me~er. ot the united
State. Congre•• up here in the tront. We're very glad to .ee allot
them and we thank them tor their pre.ence. And we have small
businesspeople here trom allover AlIIerica, and we thank you tor your
presence. We're here primarily to hear trom the sm.ll businesspeople
who are here on the pan.l, and p.rhape .om. othar it tim. permits.
I just want to make a coupl. ot comm.nts.
First ot all,
I very much appreciate the work that Er.kin. Bowl.. has done a.
Director ot the Small Bu.in... Adaini.tration. I . . proud ot the
tact that I was able to appoint .om.on. to this job who w•• not just
someone who had run un.ucce••fully tor ottic. or was otherwi••
looking tor a patronage appointment. Thi• .an has .pent 20 y.ars
h.lping to tinanc• •m.ll bu. in••• cr.ation. and .xpan.ion.. And
theretore, h. has a clear.r und.r.tanding and gra.p ot what small
businesses are r.ally up again.t and the ditt.r.nce b.tw••n the
rhetoric ot supporting .mall bu.in••• and the r.ality ot it than
perhaps anyone who has held this job in a v.ry long tim••
S.condly, I want to thank my good tri.nd, Congr.ssman
laFalce, tor hi. l.ad.r.hip on small bu. in••• issu•••
Finally, l.t me .ay that ev.rybody, I think, understands
that one ot the rea.on. that the Unit.d State. has not .ucc.eded in
providing h.alth s.curity tor all it. p.opl. while ev.ry oth.r
advanced economy has done
i. the ditticulty po••d by the gr.atest
strenqth ot our .conomy, which i. that an inordinate p.rcentag. ot
our work.rs work tor .mall bu.ine••peopl. -- v.ry small bu.iness -
and increasingly, more and more ot,th. n.w job. are creat.d by small
businesses.
.0
I
So that pr•••nt. us with a dilemma. How.v.r, w. also
know it we look at the r.al tact. that almo.t all the job cr.ators
among small bu.in••• are making .om• • ttort to provide h.alth
insuranc., and that tho•• that do t.nd to have more .tabl. work
torce. and higher productivity and gr.at.r .ucc••••
Ju.t this we.k I had a good tri.nd ot .in. up here with
his tamily. He'. a car d.aler in my haae .tat. and he va. talking
about how he'd alway. in.ured allot hi• •mploy••• and non. ot his
competitors had. And in the laet 20 year., thr•• ot them had com.
and gone and he was atill ther.. And on. rea.on va., he nev.r had
any employ.e turnover becau.e h. alway. took car. ot hia employees
and their health care probl.... But how th.y atruggl.d to get a
bigger pool of insured people ao that he could get hi. insurance cost
down was a continuing on. tor him.
Anyway, that just bringa me to thia point: Thi.
could not in good coneci.nc. have advocated, and I
adm~nistra~ion
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could not support a plan that I thought would be, on balance, bad fer
small business. I believe this plan is, on balance, good for small
business. If I didn't, I wouldn't be supporting it. And I will not
sign any bill passed by the congress that I do not believe is good
for the small business economy because we have to create more jobs in
this country.
Our plan builds on the system we have now; guaranteed
private insurance. It provide. more choices to .mployees than they
now have under mo.t h.alth car. plan., at lea.t thr•• a y.ar, ev.ry
y.ar. It contain. r.al in.uranc. r.form. that ~re very important to
small bu. in••••• -- no di.crimination. tor pre.xi.ting conditions, or
ba.ed on the age ot the work torce. It prot.cts M.dicare. It does
provide tor both M.dicar. people and tor the work torc. and their
tamili•• , pr.scription. ben.tit and a pha••d-in, long-t.rm care
b.n.tit tor .ervice at hom., for .xample, tor di.abl.d p.opl. or
eld.rly people, a. well a. in institutional setting.. And it does
have an .mployer mandat., but with .trong di.counts tor small
bu. in••••• with mod••t payrolle and mod••t protit margin•.
Now, th.r. will b. countl••• di.cu•• ion. about what the
proper d.tails ot that should be, but it .e.m. to me that that is the
only approach that has a r.a.onable chanc. ot b.ing .ucce.stul in
this environm.nt. And a. I .aid, th.r. are p.opl. who will propose
variation. on it, but that, it •••m. to m., i. what w. ought to be
doing.
My purpo.. today i. to .how that th.r. i. a great
ditterenc. in the rh.torical pronounc.m.nt. ot .om. organiz.d groups
and the r.al lit• •xp.ri.nc•• ot a lot ot bU. in••• p.ople. And we
have her. p.opl. who have b••n att.ct.d by the pre••nt h.alth
condition., and I am trank to .ay that wbile mo.t ot the people who
are on this panel who are providing health in.urance today would
actually pay 1••• under our plan. Soae would pay more, and they know
it. But they al.o know that tor the tir.t ti.e th.ir competitors
would as w.ll, putting them on a more even tooting.
So l.t'. get in to the paneli.t., hear their stori.s,
and give them a chanc. to comment.
Q
Thank you, Mr. Pre.ident. We are a 22-y.ar-old
company and through the year., I have .ought out the be.t ot the best
.mployee. and have competed with majority companie.. By that I m.an
I have cov.red our employ••• 100 p.rcent a. an attractive package to
work witb us. Rowever, in the la.t tew year., we'v• •ncount.r.d some
probl.m., and the problem. are that two ot our .mployee. ar
uninsurabl.. Why? On. i. over the w.ight .cale according to the
insuranc. companie.. And I have gotten in.urance policies that are
-- tor six month., renewed them a .econd time and then at the third
time they're dropped. And .0, ther.tore, I have two wond.rtul
.mployee. that are unin.ured.
And what'. happening, th.y teel di.criminated against.
OUr payroll
-- it tak•• about 15 percent ot our payroll, which i. a lot tor a
.mall company. We want to grow. Wh.re do we get the money? As you
all know, .mall bu.in••••• -- the ditticulty i. getting
capitalization tor running your company.
,
I want to continue inauring them, but how can I do it?
So, Mr. Pre.ident, I t ••l that this i • •om.thing that
your program. would hopetully re.olve ~nd would benetit our .ituation.
MR. SOWLES: Mr. Pre.ident, Setty RaIl i. al.o her.,
trom the Hall Manutacturing Company in N.w Hamp.hire. And I think
you've experienced .om. ot the.e .imilar problem.. I think you've
also been ~ropped trom your insuranc. a couple ot times.
8etty, would you like to comm.nt on it?
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.
Q
Yes, I would. Thank you, Mr. President, for giving
us this oppor~unity. I've been in business for 43 years. When my
husband and I started our business we just assumed that we would
provide health benefits tor our employees and tor ourselves. And we,
very shor~ly thereatter, start.d with Blu. Cross-Blue Shield. That's
back in the 1960s. And wh.n the Matth.w Thornton Health Plan HMO
came on board, we also ott.r.d that group to our employees.
'
And th.n about thr.e y.ars ago, both of those companies
decided that th.y couldn't otter health insurance groups to companies
aa small aa mine. Under 25 employees -- they don't even think you're
a business at all. And so, I was very disturbed. I tried to
convince them that they should continue to insure my employees
because I t.lt I was willing to pay my .har. ot their in.urance and I
ought to be allowed to do that.
So Blue Cro••-Blue Shield was unmoved, but Matthew
Thornton did continue to cover my employ.es. But 80me ot them don't
want to be cover.d by Matthew Thorn~on, they want.d to stay with
their own doctors. And ultimately, they had to go oft ot the group
plan that was dissolved and go into a nongroup in.urance.
And I think it'. -- my employe.s have b••n around tor 43
years with me, and I think one ot the r.ason. th.y .tayed with me so
long was because ot otterinq h.alth insuranc.. And I think that's
very, very important to allot u••
So I hop. we can r ••olve thi. problem, and those of us
who want to do it can do it. I think the Clinton health plan will
probably cost m. le•• than what I'm payinq riqht now with my Matthew
Thornton and helpinq tho•• nonqroup . .ploy••• to have insurance.
MR.. BOWLES: And probably ot .qual importance, Mrs.
Hall, is that your . .ploy.e. will g.t choic. and th.y'll have choice
among many ditter.nt providers in thr•• ditter.nt types ot plans.
And they'll be able to tollow th.ir doctor and the hospital they go
to, to the plan that th.y b.lonq to. So that this will really bring
the doctor and the patient clo.er toqeth.r. And many, many people
have said that.
I think w. al.o have here today Sp.nce Putnam, who, Mr.
President, i. head ot the V.rmont T.ddy Bear Company up in vermont.
He was the 1993 winner ot the NFIB award tor company ot the y.ar.
THE PRESIDENT:
(Laughter and applaus•• )
I hope they don't take it back trom him.
MR.. BOWLES: Sp.nce, I think you 'v. experi.nc.d some of
the same problema ot rieinq co.t and lack ot raal mark.t mu.cle out
th.re.
Q
Ye., we have. And, Mr. Pre.id.nt, on. ot the
rea.on. that w. rec.iv.d that award i. that ev.ry Vermont teddy b.ar
comes with a lit.tim.health plan. (Laughter.) w. op.rate America's
only teddy b.ar ho.pital, and .hould any Vermont teddy bear need
rehabilitation, we do it tr•• ot charqe. (Lauqhter.) There i. only
on. insurance company. Ther. ia no paperwork. If it look. like our
teddy bear we will r.place limb., replace eye. -- do••n't matter how
old you are. We truly have universal acc••• tor teddy bears. And
it'. trustratinq that w. have ditficulty providinq that tor our
employ.es.
Our company was a struqglinq company only four -- a
little over four years aqo. We had l.s. than two dozen .mployees,
.and at that time, I would .ay the mo.t v.xing bu.ines. problems was
how to prov~de coveraqe tor our .mploy.... We now have over 200
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employees, and the most vexing business problem we have today, is how
to provide coverage for our employees.
We feel that health care is a national problem and it
needs a national solution. And that's why Vermont Teddy Bear is
supportive of the Clinton plan. (Applause.)
THE PRESIDENT:
Thank you very much.
Let me ju.t try to empha.ize a couple of the points that
were made h~re. Fir.t of all -- becau.e they are different issues.
Mr. PUtnam wants to in.ure all of hi. employee.: today can only
in.ure about two-third. of them. So he would actually pay more if
our plan pa••ed, but he'd get to in.ure of all of hi. employees and
they would al.o have more primarY and preventive care than they have
now and lower deductible.; But he would be, again, on an even .cale
with his competitors.
Betty Hall talked about -- I wanted to make sure you
understand what .he meant when .he talked about her .ituation in New
Hampshire, becau.e she doe.n't have Blue ero•• option. for her
business, but doe. have the matching Thornton option, she has an HMO
option. And the HMO has a very good reputation in New Hampshire and
throughout New England -- I think everybody would admit that. But
the individuals who work for her now don't have the choice that if
our plan pa.sed, every year her . .ployee. would get to choose either
the HMO or one of two other option.. And und.r our plan, she wou~d
pay the same no matt.r what. But if the . .ploy•• wanted to pay a
little more for fe.-for-.ervic•••dicin., the . .ploy•• would have
that right. So that'. how that would work.
If you go back to what Kona .aid about two of h.r
employe•• being unin.urabl., it'. iaportant h.r., I think, to
recognize a c.rtain truth about the insuranc. busine•• ita.lf. While
c.rtainly I have be.n critical of in.urance practic•• of which I do
not approve, I think it i. al.o iaportant or u. to understand that
given the organization of the in.urance bu.ine•• today, it i.
economically impo••ibl. for a lot of the.e health .in.urance companies
to do oth.r than they do becau.e they are dealing with a very small
pool of p.ople.
So if you in.ur., l.t' • •ay, an . .ployee unit the size
of her company and two of- th.. are r.ally .ick or th.y have two kids
who have b••n r.ally .ick, th.n that can double the co.t of whatever
your annual premium. are in a y.ar which i. why we have work.d.•0
hard to find a mechani.m -- and I'll .ay .ore about thi. in a minute
-- to let insurance companies in.ure p.ople the way groc.rie. .tore.
make money -- a little bit of money on a lot of p.ople. And that'.
what all thi. -- and I'm going to .ay more about thi. toward the end
of the hour becau.e I don't want to int.rrupt the flow of the people
talking -- but that'. the dil.mma we face about wh.th.r th.re .hould
or .hould not be a h.alth allianc., a buy.r'. co-op or .om.thing.
You 'v. got to have th••• folks abl. to go into big
.nough pool• •0 that the in.uranc. co.pani•• th••••lv•• do not go
broke. Th.y're in bu.in••• , too. And the .conomic. have to work
out. And the only way the .conomic. can work out i. if the riaks
which all .mall bu. in••••• are .ubj.ct to, can be vid.ly .pr.ad ov.r
a bigg.r pool. So v.'ll com. back to that.
Q
A. a pawnbrok.r, I r.pr•••nt on. ot the mo.t
mi.und.r.tood indu.tri•• in the country. (Laught.r.)
(Laughter.)
THE PRESIDENT:
Want to co.e to work up h.re?
Q
Fortunat.ly, our indu.try i. changing dra.tically.
People don't realize it, but a large p.rcentago ot Am.rican. have no
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credit and have no access to credit. and pa~rokers are the only
source of credit to them. And we try to provide lnsurance for our
employees. And I was one of those people who got a letter from my
insurance company that said, we are happy to say we are only going to
raise your rates 48 percent. And what we're having to do are things
like drastically increase our deductibles, switch companies to find
better policies, but the overriding problem is those employee. that
we have that are not insurable.
'fI1 .•
And we've got a very valued employee right now, an
assistant manager who has preexisting condition., and w. can't get
insurance. We've tried .v.ryt.hing. And" you know, w. don't lose the
employ... And w. sp.nd so much of our productive time, and he spends
so much of his tim. and our staft sp.nds tim. just d.aling with his
health care probl.ms that, you know, it he had insurance, those
problems wouldn't b. th.re.
And we've sat down and we've looked at the numbers and
with your plan, we would be able to insure all of our people which we
can't do now, we don't do, at almost the sam. co~t that w.'re
spending now tor halt of our employ•••.
THE PRESIDENT: Same thing -- 81 million Am.ricans have
preexisting conditions of some kind or other. This is not a small
problem: this is a big problem. Thos. who are in families that are
insured through gov.rnm.nt or larg.r .mploy.r. are okay .xc.pt that
most of th.m couldn't chang. job. and go to work tor any ot you or
couldn't start th.ir own busin.... You know, a lot ot p.opl., that's
a lifetime dr.am -- to .tart th.ir own bu.in.... It tak•••nough
courage, as all of you know, to do that it you don't have to worry'
about this.
So you've got 81 million American., some in the
situation of your .mployee who can't g.t in.uranc., others who pay
very much higher rate., and million. and millions -- no on. knows
exactly how many, but literally, ten. ot millions -- .who are locked
in the jobs they are now in b.cau•• they can't attord to give them up
and losing coverage. So it's a .igniticant i ••u.. Congr.ssman would
you like to say something about any of this. I hav.n't heard from
you sine. the b.ginning.
CONGRESSMAN LAFALCE: I think this is .0 important.
have town meeting att.r town m
••ting, and I go b.tore Chamb.rs of
Commerce all the time, and I usually a.k the bu.in•••men, w.ll how
many of you do provide coverage for your .mployee.? And, not to my
surpris., but maybe to the public' • •urpri.e, a va.t majority ot
small businesses do provide coverage. And the problem. they are
experiencing are their premiums are going up a.tronomically. It's
be.n double-digit intlation tor the la.t halt dozen y.ar. or
with
the possible .xception ot this pa.t year when we had this, sort of,
control. ov.r the head. ot the in.urance compani•• , drug compani•• ,
.t cetera.
T
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.0
They're limiting their choice., too. aetore, they u••d
to oft.r three or tour option. to their .mploy••• and now, th.y don't
otter an option they .ay, w.'ll cover you, this i. it. or, the co.ts
are getting .0 great that th.y'r• •aying, .orry, w. can't cov.r you
any more. Very often when th.y till job opening., they .earch for an
individual whose spouse gets coverage at a larqer place ot
employment. So tho•• who are di.advantag.dwho don't have spous.s
who are employed and cover.d b.com. more di.advantag.d.
~. o~.r ~hing I tind tha~ .mall bu.1n••• 1. d~lnq 1n
addition to subsidizing through co.t shifting, those small bu.inesses
that don't provide coverage, is they're shifting the taxation more
and more ~n the .mploy.... B.tor. th.r. u••d to bean 80-20 split.
Then it gets to b. 70-30: th.n 50-50 split. And the .mploye. has no
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choice but to pick it up. And these small businesses, too, there's
no negotiation, there's no bargaining power.
But then there's additional premiums above and beyond
the clear premiums that the employees of small businesses have to
pay. There is the deductibles that are increasing constantly.
Before it used to be $50 per person, and then $100, then $150, then
$250 per person. These are enormous. For a family ot four theY're
already at $1,000.
Th. copaym.nts are incr.a.ing. Th••• are the tin.
prints. Betor. it us.d to be, well, w.'ll cover 85 percent, then 80
p.rc.nt, th.n 75 p.rc.nt. And it's not ot whatev.r the charg. is,
it'. what the UCR i. -- what the u.ual customary r.gional t •• is.
And it you look at the tin. print ot the contract., the usual
customary regional t •• has b.en reduc.d while the te.s have gone up,
which means again, your copaym.nt increa••s astronomically.
And mo.t importantly, you're limiting coverag.. Again,
this is the tin. print of the in.uranc. contract, but your ability to
access a mammogram go•• down. Your ability to achieve X ray., CAT
scans, HRIs even wh.n n••ded goes down considerably.
I think w.'r. getting le•• and le•• health care at
gr.ater and gr.at.r co.t. And the chi.t casualty ot all this is not
big business that has a .trong union to n.gotiat. on behalt of the
employees. Th. Chi.f ca.ualty ot this i. both the s. .ll
bu.ines.p.rson and the . .ploy••• ot the ...11 bu.in•••p.rson.
THE PRESIDENT: W. have .om.on. hor. trom your hom.
state, Elaine Ston., of·~.rican Aviation in Nov· York, who has gone
to extraordinary .tfort. to cov.r h.r ..ploy••• at v.ry high co.t.
I'd like to a.k h.r to .xplain h.r .ituation and vhat the
cons.quences have b.an.
Q
Fir.t I would like to thank you, Mr. Pr••id.nt, for
putting the h.alth car. i ••u. right on the front burn.r of the
national agenda and k••ping it th.r., d••pit. the h.at.
w. are a ...11 bu.in.... w xport over••a. aircratt
••
hardware, .mall part. and compon.nt.. w. w.r. a tairly sub.tantial
sized firm and w. have b.en atf.ct.d not only by h.alth care but by
tho rece•• ion -- th. a.ro.pac. indu.try has b••n ••v.r.ly atfected.
But I fe.l that it i •••••ntial for all p.opl. to have ace••• to
health care coverag••
And in that light, v. have don. vithour incr.a.ing
costs, done evaluation.. We u.ed tob. tully in.ur.d through the
in.uranc. company, and aft.r ch.cking into pret.rr.d, into HMO. and
into other plan., ve decid.d to take what r.ally i. an .normou. risk,
but based on our .xperi.nc. rating at th. timo, w. t.lt it vould save
mon.y, and that va. to go into a s.lt-insur.d plan -- split funding,
vhereby the company would a••um. the ri.k ot$5,OOO in m.dical claims
b.tore the in.urance company kick.d in.
Now,
that i. an .normou. ri.k it you have a gr.at nu.mDer
l.n~y, debilitating illn•••••.
We were lucky in the begiMing, and our pr..iwu d.finit.ly have been
contain.d. But v. don't think in term. ot a pr••ium paym.nt, w.
think in terms of what i. it co.ting u. at the .nd ot the y.ar wh.n
w. count in the claia.. And v. have had ••v.ral illn••••• that have
gone -- fallen ov.r into the in.uranc. company, and, fortunately,
they have b.en spr.ad out ov.r the pa.t f.v. y.ar•.
ot p.ople coming down vith ••riou.,
How.v.r, ve are ·tacing new incr.a••• in Blu. Cross and
in our premiums, and v. have to evaluate again vh.th.r w. can .till
attord the plan ve have. I vould b. the la.t on., or I t ••l my
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company would be the last one to take a move of reducing the benefits
that we have. As it happens, our deductible is very low.
Congressman, you mentioned tiqures. We only have a $100
per individual, and $300 per tamily, which in today's marketplace ~s
very good, and we could not replace. We also undertake the 80-20
option, and in todayls marketplace, i t we were to change our plan, we
couldn't -- I mean to other than a Clinton-type plan, health care
plan -- we couldn't do it.
So that I teel that we must, we must continue to try to
reduce -- or to produce a health care plan that all, all people can
attord: that employers -- I also teel it should b. don. through the
workplace because it's something that we are us.d to. Most ot us,
trom the day we started working, have b••n covered through the
workplace. It's what we're us.d to. That would be the least
dramatic Change it th.r. are oth.r chang•• , and I strongly t ••l that
w •hould have univ.r.al h.alth car. op.rating via the workplac. tor
•
ev.ryone.
And, again, w. are v.ry grat.tul that you are taking
this issue to heart. (Applaus•. )
THE
PRESICENT:
Thank you very much.
Let m •ay b.cause ot the uniqu., .ort ot, se.i-selt
•
in.ur.d .y.t•• that Elain. ha., and b.cau•••h.'. had .0• •
signiticant illn••••• in h.r work torc., ah. would actually, at l.aat
baa.d on the last y.ar or two' • •xp.ri.nce, pay con.id.rably le.s
than ah. ia paying b.cau•• ot the ••It in.uranc• •ch•••• kick.d in.
It's works, again, like .verything .1•• -- it .ay work very w.ll tor
large ••ployers, but tor .o••on. with a couple ot doz.n ••ploy••s, it
a vary high-risk atrategy that can work r.al w.ll until it do••n't
anymore.
, I'd like to now talk about p.opl. who are kind ot the
other side ot that .quation -- p.opl. who like to cover all th.ir
employees but can't, and th.retor., only cover a portion ot the., or
have had to give up cov.rage. And I'd like to b.gin with Judith
Wicks who own. the Whit. Cog cat. in Philad.lphia. Becaus., a. I'm
sure allot you know, the p.opl. in the re.taurant busin••• have been
among those .o.t conc.rned about this h.alth care plan b.cau•• there
are BO many people whO work tor r ••taurant. and d.li. and oth.r
.ating establishm.nts who are young, who are .ingl., who don't have
health insurance, and who are still willing workqrs th.r.. But th.re
are an awtul lot ot p.opl. whO want to cov.r tolka.
f
And the pr.s. will r •••mb.r, w. w.re in a .stablishment
in Columbus, Ohio, just a coupl. ot w••ka ago, wh.r. by accident -
w. didn't plan to go th.r. tor h.alth car., but wh.r. w. had a whole
health care seminar b.cau•• only halt the .mploye•• w.r. covered, and
the p.rson cov.ring th•• want.d to cov.r th••. all.
situation?
So, Judith, Why don't you talk a little bit about your
Q
Thank you, Mr. Pr•• id.nt, tor giving •• this
opportunity. I'v. b••n a little .urpri••d at the reaction trom the
restaurant community again.t the health car. retorm plan b.cause I'm
very much in tavor ot it. Th. Whit. Dog cat. i. a v.ry labor
int.nsiv. re.taurant. W. al.o have a little .hop n.xt door called
the Black Cat, and that'. our logo ov.r th.r.. (Laught.r.) And.we
buy directly fro. local tarm.r., so w. have a lot ot p.opl. in the
kitchen picking little l.av•• ott tr••h h.rb., and .aking our own
desserts and our own ic. crea••.
that's the
So we employ 96 peopl., consid.ring part-ti•• p.ople
ot 75 tull-tim• •mploy.... W. cannot attord to
equ~valent
MOR.!:
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8
provide health insurance for all those employees. It would be
impossible for us to do so. We do provide health insurance for
around 15 employees.
The thing that really exc,ites me about the health care
plan is that under that plan we would b. able to provide for all of
our employees without that much of an increa.e. My health care costs
would double, but I am very happy about that because if you look at
the whole picture, we would only have to rai•• our pric•• no more
than around two percent to make up that ditterence b.cau.e of the cap
that this program put. on the p.rc.ntage ot payroll that w. would
have to pay that prot.ct. bu.ine•••••uch asr••taurant. that are
very labor-intensiv., that hire
many peopl., esp.cially entry
level positions.
.0
So the way I tigur. it, it all the re.taurants together
raise th.ir pric•• about two p~rc.nt, w.'r. not an indu.try that's
going to 10•• our custom.r. to'M.xico. (Laught.r.) So I think this
is a grand opportunity. I think the r.mtaurant bu. in••• in g.n.ral
is on. that's b.en und.rvalu.d<by our .conomy. I think that we don't
really now charg. the g.n.ral population what it ~.ally co.ts to run
a restaurant, which should includ. cov.ring h.alth in.uranc. for
every worker. I don't s.. whyl; h.alth in.uranc. is not available to
restaurant workers wh.r. it is'availabl. to mo.t oth.r industries.
So this is a gr.atchanc. tor the r.staurant industry to
really be in comp.tition with oth.r.. So I thank the Pr•• id.nt tor
coming up with thi.. I think it'. a qr.at id.a. (Applaus•• )
CONGRESSMAN LAFALCE: I!d like to just int.rj.ct a tsw
comm.nt.. What you had to .ay" Judy, was au.ic to ay .ars. It .hows
that you're .ocially con.ciou. in addition to being .conomically
consciou••
I think the two chi.t oppon.nt. to h.alth car. r.torm
tor the buSin••• co.-unity ha~e been the N7IB and the National
Restaurant A••ociation. We were able to talk quit. r.a.onably for a
while with the National A••ociation of Manufacturer., the Unit.d
States Chamber ot Commerce, et cetera. I a.an, they chang.d their
rhetoric totally -- th.y talked about shar.d re.pon.ibility of all,
including all employer.. And th.n wh.n pu.h cam. to .hov., they had
their own political con.ideration. dealing with other bu.ine••
associationa, there was .Om. backtracking.
i
But I have the greate.t re.p.ct tor the NFIB, but you
have to und.r.tand, th.y not only oppo••d an incr.a.e in minimum
wage, they oppO••d the concept ot a minimua wag.. Th.y'd like to see
the minimum wage r.p.al.d. And when it co••• to the National
Restaurant As.ociation, again I have nothing but the highest r.gard
tor th.m. But the tact ot the matt.r i., i. that what thi. law would
do is put all r ••taurants in the Unit.d Stat.. in the ....
competitive po.ition. And right now the good guy. are di.advantaged.
The good guys are trying so hard, a. you are doing, to provide tor as
many ot your employ••• a. you can. Oth.r. are not a• •ocially
conscious.
And a r.staurant,' "ould only be co.p.ting against another
re.taurant on .qual tera.. A::Ll r ••taurant. would have to provide the
exact sam. b.n.tit.: there would b. no di.advantag.. And with thia
cap on what you'd have to pay, mo.t r ••taurant., I b.liev., would
wind up paying 1••• or not mUch aore. And the incr•••• that those
would exp.ri.nc. who do get an incr•••• would be con.id.rably less
than a cost of living increa~. in the ainiaua wag. would b., and we
haven't witnessed that tor about thr•• y••r. now.
that?
THE PRESICENT:Co you think h. t ••l. strongly about
(Laughter.) Thank you.
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MR. BOWLES: Mr. President, we also have another
restauranteur here -- who runs the Burrito Brothers chain here.
They're three Mexican tast tood restaurants. tric'~ also experienced
some ot these same problems that small businesses tace in trying to
provide health care coverage. And, Eric, you might want to comment
on how you would react it it was a level playing tield and' you could
provide reasonable coverage at reasonable cost.
a First let me say that, what ~udy said
notwithstanding. I hope jobs are lost to Mexican tood. (Laughter.)
THE PRESIDENT: well. it I'm s.tting the pace, you've
got a good chance ot achieving that obj.ctive. (Laughter.)
a I should tirstmention that the r.staurant industry
has very small protit margin•. ' It mak•• it very ditticult tor us to
attord to insure our employees ,tully. W. d••perat.ly want to do that
because it's good torbusin••s and b.caus. it's the right thing to
do. currently, w. ott.r in.uranc. to our employ••• , but w. can only
attord to pay about SO percent ,ot the premium.. That mean. that most
ot th.m can't attord to go on the plan at all. Only about a third ot
our employees are insured at this point.
We want our employees to b. insur.d and the reason they
say it'. good tor bu.in••• i. that .mploy••• who are on health care
and have health car. in.uranc. ,mi•• t.v.r day. ot work, they are more
productive when th.y are at work, and al.o, it theirtamilies are'
insur.d, that's .v.n mora .0 tq. ca... Th.y ai•• t.w.r day. ot work
and they are more productiv. wh.n th.y are at work b.cau•• th.y are
not Worrying about tamily m.mber. who can't g.t tr.atm.nt.
I would ju.t add that the i ••u. ot rh.toric versus
employm.nt. I can a••ur. you ihat th.r.'. not going to b. a single
job lo.t i t the in.uranc. planrthat you are propo.ing go.s into
ettect. Th. tact is w. will pay mor.. And w.'r. willing to do that
because we want our .mploye•• insur.d. But und.r the plan you're
proposing, we'd still be paying halt ot what it would cost right now
to tully insure our employees.
THE PRESIDENT: Thank you. I just want to .ay that Eric
and ~udy represent an interest:~ng thing that w. have se.n basically
around the country with peopl.' who r.ally are trying to do the right
thing by th.ir employee.. I t ,you are in the r ••taurant business and
you insure part ot your employee., you are in the worst ot all
worlds. You're still at a competitive disadvantage to people who
don't in.ure anybody, and you ,te.l t.rribl. that you can't insure
everybody. That'. ba.ically ~~at th.y tac••
f
MR. BOWLES: Mr. President, untortunately, 80m. ot the
small businesses in this country have .xp.ri.nced such absolutely
skyrock.ting cost. and the cost ot h.alth care .xp.riencing these 20
to SO percent annual ris•• inllhealth car., that th.y simply just no
longer can attord it. Garth Sheritt is here trom Lo. Angeles. I
know h. has had to drop hi. cov.rag. a coupl. ot y.ar. ago when the
cost ju.t w.nt .0 high you couldn't attord it.
a On. point betore -- in the tood indu.try, chances
are your av.rage wag. p.r employe. i. going to b. about $12,000 or
lower. - And you would quality, tor the maximum sub.idy. So you would
prObably have a cap ot around'3.S perc.nt ot payroll, and that is an
unbelieVable bargain and prObably les.than you are paying now it you
are covering even a third ot your .mploy•••.
a I'm an architect in Los Angele., and I've had my
business tor 19 year.. And, Mr. President, tor 16 ot those 19 years,
! cover.d o!very on. ot my employe.s and th.ir .pou••• 100 percent
~rough thick and thin.
The ia.t three y.ar. a. the r.ce•• ion took
over 1.n Los Angeles, costs av~raged 30 p.rc.nt intlation p.r year
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"
until at the end ot that, my payroll percentage exceeded 13 percent
as my employees went from l2 to;6 and threatened to go lower in the
depths of the recession. And in 1991 I was faced with the following
choice: do I drop one more employee or health insurance? 00 I let
one family stay employed and have food on their table or do I provide
health care tor the other five.
So I kept my employee, and I dropped health insurance.
And it hurt me de.ply because I 'think that's a responsibility in this
country and I deeply am appreciative the .upport you've .howed small
business because we provide much ot the engine that drives job
creation in this country.
"
But we have a preexisting condition. It'. a silent
preexisting condition. It's not talked about in the media, and it's
seldom talked about in the corridors ot power. And lilY friend. here
trom the American In.titute ot Architect. and Architect., De.igners,
Planners for Social Re.pon.ibil~ty can tell you that it'. age~ We
have exactly the high technical, high-skilled kind ot po.ition. that
you, Pre.ident Clinton"and tha'Vice Pre.ident have talked about are
so critical for the 2l.t century, but with it co.es experience and
age and the technical skills to', do a job 11ke rebuilding after the
LoS Angeles earthquake or after, Hurricane Andrew in Florida.
The average age ot:my .taft over the years ha. been
between 3S and 60 -- the range :of my'.tatt -- and the average is over
40. The actuarial table. are like a la.er be. . in the in.urance
industry. They show no mercy, and when it got to over 13 percent ot
my payroll, I had no choice.
I would be delighted to have the Clinton health care
plan in eftect. It would cap lily co.t. at 7.9 percent. And 7.9
percent i. not the fiqure I think ot. Like Judy, I would like to
talk about a new figure, and it',. lilY two cent. worth, becau•• mo.t
service profe•• ional.' .alary i. one-third of their gro•• receipts.
And one third of 7.9 percent i~ really two percent of gr~s. and a
little bit more.
:1
So this i . lily two :'cent. worth in endor.ing the Clinton
health security act, and my group feel. the .ame way. We are 3,000
businesspeople strong, and la.t night the board of director. voted to
unanimously endor.e the Clinton health act. (Applau.e.)
.
THE PRESIDENT:
"
T~ank you.
Thank you very much.
I
I'd like to, tir.t of all, thank you and thank your
group and thank you for .haring your paintul experience with us. ,I'd
like to go on and .ort ot pur.ue this theme a little more and call on
Brian McCarthy, who own. the McCarthy Flower., a large florist in
Scranton, and a.k him to tell us a little about hi• • ituation.
Brian.
Q
Thank you, Mr. Pre.ident. I thank you for the
opportunity to be here today. The floral bu.ine•• attracts a great
number ot un.killed worker. in our econolllY, and our particular
metropolitan area where I hail': trom in the Scranton-Wllke.-Barre,
Pennsylvania, market, ju.t on la March 11th .urvey on USA Today,
ranked-tourth highe.t in the h'ighe.t percentage of un.killed workers
in the United State., behind cities that you might under.tand like
Miami and aome other more -- cities that attract more immigrants •.
The problem i. that it the tloral bu.ine.. is to truly
attract people and take them from the weltare roll., e.pecially those
that are un.killed, we have to be able to not .care people into
thinking they're going to be ible to lo.e benefit. to leave the
welfare rolls. That'. been a ,.ignificant problem for u.. We have
families where the head. ot thehou.ehold want to co.e to work for
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us. They have three or four l~vely children, and their problem that
they're constantly facinq is, ~Brian. I can't come to work for you
unless I can have full coveraqe for my children." And, of course, as
many of the other panelists have addressed here today, some of the
problems they are facinq are p:reexistinq conditions which make
matters even worse.
And i t we're truly qoinq to be a source ot job qrowth in
the future, i t the small busil'!ess sector truly is tilled with
talented people like I believe we have in this rOOm today -- and as
they say, if small bu.inesses lare just waitinq to be larqe buslnesses
with qreat idea. -- we bave to be able to qet the.e people to leave
the welfare rolls and come with us.
The other problem that see~ to be a siqnificant one tor
ours -- our company'ha. been in a qreat, qreat qrowth position in the
ratail flower businese -- we, too, have recoqnized the value of
becominq biqqer to qet better'buyinq power. The same principle that
President Clinton's plan is advocatinq today. He's sayinq let's bond
toqether and make small businesses one qroup to be able to qo out and
use 80me muscle in order to be able to employ better buyinq power in
the marketplace.
.
One of the problem. that we face i. that in order for us
to qrow as we've been qrowinq,-- we've qrovn 500 percent, our
company, over the last .even year. in particular -- if we're qoinq to
continue to qrow we have to att:act al.o talented people. And
there's a lot of dovnsizinq in this company, a. you know, so there's
a qreat deal of manaqement people, very, very skilled, seasoned
manaqer. out there, who we can very clo.ely .eet the .alarie. which
they lett in tho.e previous p'0.ition.. The qreatest problem
continues to be the health Caire issue. Once we finally sit dovn, we
match the dollar for dollar, -it COmes dovn to, well, in my last job
we were all covered -- we had: dental, we had eye qla•• , we had
prescription -- my.elf, my family. We can't do that.
First of all, w~ can't discriminate aqainst the rest of
our staff to otfer it 5inqly to one. And next, it would be
absolutely co.t-prohibitive for us to try to do that. So a company
like ours that's poised for qrowth -- McCarthy Flower. is poised tor
qrowth into the next century-- i t we're poi.ed for that type ot
qrowth, I think we nsed to be able to let that health care issue not
be a wall between my.elf and some very, very talented people. And as
I said earlier, I don't want',it to be a wall between those unskilled
workers who are dyinq to qet, into the marketplace and make themselves
skilled workers.
,
So I stronqly endorse this particular health care
security act. In fact, I think the stronqest word of the health
security act ia the word sec~rity. Thank you. (Applause.)
THE PRESIDENT: : Thank you very much. I just want to
emphasize one comment Brian made, and if I miqht, qo back to what our
restauranteurs also .aid there. One of the arquments that the
Restaurant A.sociation make. aqainat our doinq this i. they say,
well, we have a lot of younq sinqle worker. that are healthy, they're
strappinq. They don't want insurance, or if they do have it, they
ouqht to be Lble to qet i~ ~uch more cheaply than older workers.
Because younq s1nqle worker. will pay hiqher per person
premiums under our plan. That'. what community ratinq is all about.
If you put people in larqe pools with older people, and with families
with a lot of kids and the ~ids have been sick, you averaqe it out.
So they will pay a modeatlyqreater amount, and therefore, the
employer contribution tor them will be modestly qreater.
I'd like to make two arqument. in respon.e to that. One
is one Brian made. A lot ot the younq .inqle people we want to be
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workers in this country are on welfare. They all have health
insurance for themselves or their children through the Medicaid
program. which is as generous!as most health insurance programs. And
ye~. we want them to move from welfare to work and take jobs in our
small bUsinesses and give up health insurance for their children so
they can then s~art paying taxes to pay for the health care of people
who made the other decision to stay on welfare.
I mean, it'8 just a -- we cannot reform this welfare
system unles8 w. fix this problem. So th.r. are a lot of young
single potential workers out th.re w. cannot even get in the
workplace unle.. w. deal with;:this.
The second point!: that I'd like to make is that the
fastest growing group of people in AlIIerica are older AlII.ricans. And
people are going to working later and later and later in their lives.
Indeed, the gradual phase-up of the Social Security retir.m.nt age
start. in a coupl. ot years as a re.ult ot the Social s.curity Reform
Act of 1983, rai.ing retir.ment age by a month a year over several
years to go up to 67. And if., you don't want disc:rimination, if we
ne.d older people, it we know" th.y're very good employee. and they're
very reliable, and you don't want di.crimination against them in the
workplace, one sure way to avoid it is to make sure that their health
insurance premium. are not discriminatory.
i
I . . . a lot of older people who work in eating
establishment8, too. So thi. thing, I think, will balance out and it
ultimately fair. I ••p.cially thank Brian tor hi• •tatem.nt because
h. doe. cover all hi. employe•• today. And it ahow. you, I think he
really is thinkinq towards the tuture.
ADMINISTRATOR BOWLES: Mr. Pre.id.nt, we al.o have here
Chris Maa., who has experienc.d .ome ot th. . . . . . . probl... ot trying
to comp.te for labor with ab.olutely .kyrock.tinq co.t. in health
care.
j'
Chri., do you want to talk about it a ••cond?
Q
W.'r. a ••all comput.r con.ultinq tirm h.r. in
washington. W. do .o.t ot our work with Wa.hinqton area lawyers, and
we need prote••ional help. And the one competitive advantaqe that we
have as a little firm -- (laughter.)
THE PRESIDENT: !Ev.ryone ot you has a one-liner tor
that, don't youi (Laught.r.)
Q
W. need profes.ional help. (Lauqhter.) One of the
things that we tound-- I que•• you were .entioning, talking about
the older people -- and my tour partner. and I, w. need to be nimble.
We need to be able to hire people and g.t people and put them to work
tor us. That's our competitive strength. That,.'our only one, in
tact.
A ...11 ex_ple" we set out to hire a r.c.ptionist a
year or.o aqo, and we .et a l 60 year old .al. that we liked. We
spent 15 minute. intervi.wing him, decided we liked hi. and wanted to
hire him: and then w• •pent 'about tour hour. tiqurinq out how to get
him covered with the health ,care plan so it didn't me•• up the re.t
ot us. That's not riqht. And it ju.t .houldn't work that way. We
tound that our premiums were qoing to qo through the root. We still
hired him anyway, and we lov~ old Bob, but that'. qot to .top.
I
On the other end ot the .pectl"'Wl, we're pa•• inq up
bu.ine•• b.cau.e w. want to 'grow and there'. people we want to hire
and we can't hire them. W. :know a per.on in particular we'd love to
hire who's qot a couple of kids: and th.y've qot .ome conqenital
b.irth defects. We cannot t~'lk to this per.on b.cau.e we understand
that it's qOing to de.troy our ability to have h.alth care tor the
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whole company. And that's not right. That's hurting us and it's
hurting our business. And this stuff has got to stop.
'......
Our partners are allover the lot politically. Some of
them didn't even vote for you,iHr.President. (Laughter.) And we
don't see this as a political issue. We see this as a business
issue. And I don't care about this from a political standpoint. I
care about getting my business to run. And the quicker, in my mind,
that you can get this stuff through the political process and get it
back to business where it belongs, and w. can get on with our life,
and we get health car. off the table as an imp.dim.nt to my ability
to do busines., ·the happier I'm going to be and the happier our
bu.ines. is going to b.. (Applause.)
<
THE PRESIDENT: Good for you. S.lieve you m., nothing
would make m. happier than to 'do exactly what you've .aid. It should
not be a partisan political is.u.. And if you get b.yond the fog of
rh.toric to the hard facts of what p.opl.'s actual individual
circumstance. ar., it'. v.ry much .a.i.r for it not to b. a poli~ical
is.ue. Thank you v.ry much. That was v.ry impr.s.ive.
I want to talk a little bit by giving th••• folk. a
chance to talk about how w. g~v. small bus in••• p.opl. th.ability to
have comp.titiv. pric•• in the insuranc. mark.t.
Q
Thank you, Mr. Pr•• id.nt. And I'd like to .tart
out by .aying that having b••n in bu. in••• for about 37 y.ar., I':.
stood on a coupl. ot .hould.r., and I'd like to acknowledge and .ay
h.llo to you from my par.nt. <~- which I . . a ••cond g.n.ration
bu.in••••
W. start.d, and:a. a child, I gr.w up watching
••ploy.... W. w.r. not alway. in the ••dical ti.ld, w. w.r. not
alway. a durable m.dical equip••nt company, w. w.r. in the janitorial
business wh.n w •tart.d out. And w. gr.w into that bu.in••• to
•
wh.re at someti•• w. had up to lSO ••ploy.... On. hundred p.rcent of
them w.re not in.ur.d. Probably mo.t of th.m were te.t.r-tott.ring
between staying on welfare and working 20 -- 1••• than 40 hours per
week.
,
It wa.n't until: about, I want to .ay about 10 year. ago,
that we start.d d.v.loping our company to the d.gr•• that w. w.re
able to provide h.alth in.uranc. and at that point in tim. is when we
start.d to s.. a chang. in the type of p.opl. that w. w.r. able to
attract a. a bu.in.... And until that took plac., until w. were able
to off.r b.n.fit., w. w.re not able to g.t p.ople that would stay.
We w.r. not able to g.t qual:ity p.opl.. And our bu.in••• ju.t b.came
more and more co.petitiv. a.: we w.r. able to provide th••e typ•• of
insurance.
f
,
Now today, out of the 10 full~tim. p.opl. that w. have
that w. provide in.uranc., our in.uranc. i. running us ov.r 14
p.rcent of our payroll. And in addition to that, work.r.' comp is
about 4.S p.rc.nt, but that could b. a. high a•••v.n perc.nt in our
.tat•• And I know how hard: it i. for m. to ••et that in.uranc.
premium .very month, that i t w. had the opportunity to k••p tho••
employ.e. and provide thea the numb.r on. d.t.rr.nt right now being
h.alth in.uranc. -- and I can't .ay .nough that w.ltar. r.form and
h.alth insurance i • • 0 tiedtog.ther wh.n you look at part-tim.
p.opl. being able to leave one thing and go to the other -- I r.ally
f •• l that w.·ar. going to b. able to be aor. competitive becau•••y
couts are going to r.duc. und.r thi.h.alth car. plan. And I ••• it.
And at the .... time, .I . . going to b. able to giv. b.tt.r cov.rage
to cov.rage to my .mploy•••, and be able to attract b.tt.r .mployees.
And I really applaud you for looking at the big picture
·and not just being narrow ahd ju.t ke.ping on .urfac. thing. that
really don't make a diff.r.nce in p.ople'. like my.elt'. liv•• and my
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14 -
community, the African American; community, the people that I see that
are dOing without health insurance allover this country.
Thank you.
THE
(Applause.)
PRESIDENT:
I"d like to now to go to a smal·l family
business.
Q
Thank you, Pr.sident Clinton, and it'. good to be
h.r. in Wa.hington, D.C. today.
There have be.n so many important thing. said this
morning and what I would qu••• :all ot u. up h.r. ar. doing are being
.ponges. We're kind ot soakinq in all this intormation, th•••
comments trom all the various participant. and I r.ally am amazed
that ther.'s two tlorists her.; the v.ry big and the v.ry small.
Brian and I just m.t this morning, and h. has an out.tanding business
and was able to do 80mething we're not and that'. ott.r health care
insurance tor .mploy.... At on. tim. w. did. At the tim. w. had to
drop our benetit tor our employe•• -- w. have leGs than 10 .mployees
-- it waa approximately 20 percent ot payroll. Obviously, w.
couldn't compete in the tlow.r'market at that rat•.
Th. Small Bu.ine.. Admini.tration has b••n v.ry
proactive in the h.alth car. debate. And I think, trom our
viewpoint, what w•••• a. a ma••iv• •ducation probl. . to really
intorm and educate .mall bu.in••• p.opl. b.cau•• , a. I g.t out and.
visit with other p.opl., I u•• the Small au.in••• Adaini.tration torm
that was develop.d tor Congr••• , and wh.n p.opl. can .it down and
crunch their own numb.rs -- moat .mall bu.in••••• are like our.,
there are maybe 8 or 10 .mploy••• -- th.y will tind, I am sur., what
w. tound, that our tamily in.uranc. policy right nov i. 1••• than
$400 per month. w. could in.ur. allot our taaili•• with the Clinton
plan -- all tamili•• in our bu.in••• for 1••• than $400 a month with
the cap and b.cau.. ot the low.r incom. and the .mall.r number ot
employees.
So I would encourage p.ople who have que.tion. to
contact an SBA ottic., to contact th.ir congr•••ional offic. and to
work the number. because I really t ••l that when they work the
numbera they will ••e that this is a win-win .ituation tor amall
business.
r
B.yond that, what we p.r.onally appreciate and why we
have work.d
hard i. the Clinton r.torm legi.lation will do away
with litetim. maximum b.n.tit.. And w. happ.n to b. a faaily who has
a child with a lifetim. illn••• , and w. can actually anticipate the
point wh.r. w. will m.et our llifetim. maximUll b.n.fit and our child
will not be an adult at that tim.. So this i • •om.thing that is ot
gr.at concern to all famili... It your tinancial future i.
threaten.d b.cau•• ot the way :you are tr.at.d in the h.alth care
sy.tem, you will really b. wanting to ••• thi.pi.c. of l.gi.lation
pa•••d.
.
.0
Ther.'. two kind. of p.opl., I figur.d out, that don't
want to chang.. And tho•• are people who have .om.on• •1•• paying
the whole bill tor them, and p.opl. who have n.ver b••n .ick.
Oth.rw ise, pr.tty much acro•• I;th. board, p.opl. want chang•.
(Applau••. )
,
.
Y
••
THE PRESIDENT:
t.rday wh.n I Was in Miami, I m.t, as
I otten do When I'm trav.lingaround the country, with .om. childr.n
and t:he1r t'am111e. t'rom th••• lfak.-A-Wi.h program., wh.r. the kids
are desperately ill and one ot the thing. th.y want to do is meet the
President. And I m.t with a tamily, a v.ry impre•• iv. family ot
three children -- two sons and a daughter -- wh.r. both .on. had a
~ery rare and apparently g.n.~ically-tran.mitt.d prop.n.ity to have a
very rare form of canc.r. And this tamily has a lifetime limit on
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I
,
�'- 15
their policy, as three out of four Americans do.
Americans have lifetime limits~
Three out of four
And they're in a real pickle. Secause they are going to
run up against the limit long before the second child -- assuming
that both the boys survive, an~ they've done pretty well so tar, but
it they do both survive their illness and they're plugglng along -
then they'll run up against th.ir limit long before the second child
is out ot the hous.. And th.n'th.y have a third youngest child and,
thank goodne.s, the child .0 tar has not contract.d the disease, and
ot cours., they hop. sh. won't:. But if she do•• , th.n you can just
double whatev.r th.ir problem ts.
Again, I would .ay -- I want to empha.ize, though, the
only way this works with the private health insuranc. bu.in.s. is
that you have to tind a way not to bankrupt private h.alth in.urance.
And a lot ot th••• thing. -- I,,'v. had a lot ot employ.r. -- I had a
r ••taurant own.r I m.ntion.d in Columbu., Ohio, who wa. v.ry
complim.ntary ot h.r p.r.onal h.alth in.urer.. She .aid, th•••
p.opl. are doing the b.st th.y· can tor m. und.r the circum.tance.
giv.n the way th.ir bu.in•••. i . organiz.d and the way the mark.t ia
organiz.d. That'. why you have to r.organize the mark.t and put
p.ople into larg.r unit. and in.ur. p.ople on a community ba.ia.
On. ot the mo.t controv.r.ial thingo -- I ju.t want to
m.ntion thi. -- on. ot the m08t controv.r.ial asp.ct. ot our plan has
b••n the provi.ion tor ...11 and m.diua-.iz.d buain..... to b. in
th.s. big buying allianc... P.opl. have tr••t.d it a. it it w.re
some big n.w gov.rnment bur.a~cracy.
I have .een it, quit.th. contrary, a. a way ot
entorcing community rating. That i., you can -- th.r. are .om.
states -- New York Stat. has a lav mandating community rating. But
it you don't have the .yst. . within which the little quy. can buy
together, the law it••lt won't querant•• co.-unity rating.
,
And y••t.rday --;1 ju.t want to r.ad you aomething -
yesterday in Th. Lo. Ang.l•• Tim.s, th.r. i. this articl., "State
Allianc. Giv.s Work.r. H.alth" Clout. Forty thou••nd work.rs at small
California bu.in••••• will g.t an .xtraordinary pi.c. ot good news on
Tuesday" -- that'. today. "At a tim. wh.n h.alth in.urance costs in
the country are cli.m.blng at s'1x to .ight p.rc.nt a year, their
premiums will actually be r.duced, .tarting July l.t. Th•••
tortunat. t.w are maabar. ot the .tate'. unh.ralded health alliance,
a purchasing agency that give. compani•• with between tiv. and 50
workers an opportunity to band tog.ther to achieve the .... buying
clout the h.alth car. mark.t ~iv•• to giant corporation••
f
,
"!'V.n a. Pr•• ident Clinton'. propooal tor allianc•• is
being denounc.d in Wa.hinqton' a. a blu.print tor a m.nacing new
bureaucracy, a .tatt ot ju.t :,13 .tat. work.r. in Sacr...nto has put
together a working allianc., the fir.t in the nation, and the
customer. . . . . d.light.d."
,:
.
~d in Florida th.y'v. got now buying pool. ot .mall
bu.in••••s -- Congr.....n Gibbon. i. h.r.. And the Gov.rnor told me
la.t night that mo.t ...11 bu. in••••• had .xp.ri.nc.d -- that join.d
th... allianc.. -- had .xp.ri.nc.d d.clin.. in pr••ium co.t. ot
b.tw••n f i v. and 40 p.rc.nt. "
So I ••y this not to b. coabativ.,but ju.t to a.k tht.
A. thi. bill mov•• through the Congr••• , it th.y don't
like the way we reructur.d the allianc•• , you've got to tind .ome
ways to give the little quy. :'big buying pow.r.
qu•• tion:
'.
,
MR. BOWLES: Kr~ Pr•• id.nt, all th••• buying groups do
-- and I wi.h to goodn••• w.,id call.d th. . buying group. in.t.ad of
alliance., but all the•• buying group. do -MOllE
,
�-' 16
THE PRESIDENT: I do, too.
"'ATO an alliance. (Laughter.)
They liked it when we called
MR. BOWLES: -- is, truly, they shift the pow.r of the
marketplace. They change that s~pply and demand equation from
favoring the suppli.r of health car. to favoring us, the consumer and
the small business owner. It'. just id.ntical to what Mr. McCarthy
was here saying about what happen. in the tlow.r busin.s.. It gives
u., the .mall bu.in••• own.r, .om. mark.t mu.cl• •0 that w. can cut a
good d.al for our employ.... That's what it do•••
a Could I a.k a lqu••tion? On. of the big arqum.nts
that I have h.ard in talking to .oth.r bu.in..... i. that .v.rybody is
conc.rn.d about the quality of ~.alth car., what'. going to happen.
Th.y·re afraid -- right now th.y, may have choic•• , th.y have c.rtain
choic•• , and that'. sort of the unknown out th.r.. What is the -
how is the quality of h.alth care going to chang••
THE PRESIDENT: I think th.r. are two conc.rns about the
quality of h.alth car. that I'v. h.ard. On. i., are you gOing to cut
down on how much you .p.nd on health car. so much that th.r. won't be
enough for m.dical res.arch, tor t.chnology, tor thing. to progress?
The other is, if you d.priv. people of choices, i.n't that a back
door way of und.rmining quality?,
all lik.
quality.
don't do
her. and
chOice.
you will
I m.an, p.opl. -- in Am.rica I think people .quat. -- we
to make our own d.ci.ion•• So p.opl• •quat. choic.with
To that I would r ••pond in two way.: Numb.r one, if you
anything, if w. ju.t l.t this alon., if w. walk away from
don't do anything, you!will ••• druatic r.duction. in
And many of you in thi. room will contribut. to that b.cause
have no choic••
That'. what happenid to our fri.nd fro. N.w Hupshire
here. She wished to give h.r ."ploy••• the choic. b.twe.n being in
the HMO or insuring with f ••-for-••rvic. m.dicin. through Blue Cross.
Now she has only the HMO option.. She i. now in the majority of
employer. in Am.rica who cov.r th.ir .mploy.... NOW, a .light
majority do•• not provide any choic. for the employ•• but, in fact,
makes the choic. for the employ•• b.cau•• th.y have no choic.. You
know., on. of our pan.li.t. h.r.,; if h. w.r. able to g.t back into the
health insuranc. mark.t, would have -- probably would have to ju.t
make the be.t d.al h. could andth. employ••s would have to take it
or leave it.
'
So on th. qu••tion'; of quality in t.rms of choice, under
our plan, again b.cau•• of marketing pow.r, w. would give your
obligation aa an .mploy.r would b. conatant. You would pay the same
no matter what. But your .mploy••••v.ry y.ar, b.cau•• of the
cooperative buying pow.r, would b. able to choo•• from uong at l.a.t
three program..
'
And w•••timat. that in mo.t plac•• th.y would alway.
have acc.a. to an HMO. And a. ,I said, many of thea are v.ry good,
but they'll b. b.tt.r if th.y have comp.titiv. pre••ur.. Th.n,
probably there would b. a PPO -,- that i. a prof••uional qroup wh.r.
doctor. get tog.th.r and th.y organize h.alth care d.liv.ry, and
normally tho•• have many more doctor. and .o••ti••• l.t p.opl. in who
are willing to provide the s.~ic. for an approv.d pric., .0 you g.t
.v.n more choice -- andth. f ••-for-••rvic•••dicin.. And that would
com. up .v.ry y.ar. So that' • •y an.w.r.
And the .econd thing is, i t you 'do nothing, you will
continue to see a .qu••z. on the quality of m.dicin. in t.rm. of what
goes into the teaching ho.pital. and m.dical r •••arch. Why do I say
that? I was in Boston laat w••k, and I m.t with the h.ad. of all the
teaching hospitalsaft.r which they c.... out and .ndor.ed our plan.
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,
�- 17
And they said -- every one of the~ said, if we don't do anything,
we're going to get less and less money because the people who come
into our hospitals are increasingly in manaJ;ed care plans where they
put the squeeze on us and they cU,t down on the money' we get tor
patient care. So under our plan" we increase medical research, we
increase support tor teaching hOS,pitals, and that's what we have to
do.
So, my arqum.nt is quality will sutter it w. do nothing.
Choic. will be restrict.d if we do nothing. It w. mov., we can
increase quality and choice in a tair and balanced way.
I know w. got to wrap up. W. have on. more p.rson to
h.ar trom, and the Congr••sman w~nts to make a comm.nt.
CONGRESSMAN LAFALCE: I ju.t want to add to what ,you
said, Mr. Pr.sid.nt, about the quality ot car.. Not only would you
have tar more choic. und.r the Pr••id.nt ' • propo.al, but I think you
would have much b.tt.r quality car.. I don't thing w. have a h.alth
care system right now, I think we have a .ick car• •y.t.m. OUr
primary d.fici.ncy, it •••m. to me, is w. don't have primary car••
We don't have pr.v.ntiv. m.dicine. And the .mpha.i. of the
President's proposal is on preventive m.dicine.
It you look to the .tat. of Havaii, Which about 20
years ago, mandat.d the h.alth car. b.n.tit. for all ••ploy••• ,
you'll s•• that bu.in••••• tlouri.h.d in Havaii. You'll al.o •••
that h.alth outcom•• flouri.h.d, too. By virtually any h.alth
statistic you could point to, Havaii i. doing b.tt.r than mo.t any
oth.r atat.. Thi. i. not b.cau•• of the cliaat. out th.r., too,
b.caus. you could compare Havaii'. climat. to Florida'., to Puerto
Rico's, at c.t.ra, .t c.tera. But vh.n you look to birth .tati.tic.,
w.ight statistic., life .xp.ctanci•• , .t c.t.ra, the preventive care
that they're able to g.t in Havaii b.cau•• of the fact that all
.mploy.rs mu.t provide coverag., for th.ir ••ploye.. has incr.a••d the
quality ot health car. imm.a.urably.
THE PRESICENT: I ':d lik. to hUlll.r that ho•• because a
lot ot people say, vell, Bill, :everybody go•• to Havaii on vacation.
It's a rich .tate. Havaii ha.,a v.ry, v.ry large percentage ot
people in it. h.alth car• •y.t•• VhO are lov incom. p.opl. -- native
islanders, people co•• in from .urrounding i.land.,~- about a 20
percent load th.r., quit. a high load. So the h.alth outcom•• tor
Havaii include a very large numb.r ot p.ople vhO have to be paid for
in traditional W4Y. vhO ar.n't.ven in the ••ploym.nt .y.t••• So you
just can't make that argument. I'. ju.t trying to r.intorc. vhat he
said.
I
Our la.t .peak.r '1. John Sor.n.on, fro. the Weco Supply
Company, in Fr••no, California. H. wrote to, •• about on. ot hi.
employ.es.
And I thought itvould be good to kind ot l.t hi. clo.e
becau•• ot the conc.rn that this e.ployer had for hi. employ.e, and
hoV it atfect.d hi. bu.in•••• ,;
.
Q
Well, tir.t,I'd like to thank you tor inviting me,
and thank you tor caring. I ~a. invited here b.cau•• of an ••ploye.
I have by the na.e ot Randy Walk.r. But betore I talk about him, I
wanted to thank the health ca#. industry and the in.urance industry.
Four years ago ttl. month, w. di.covered my fath.r had a
brain tumor about size of a b~ked potato, and it didn't look good.
In fact, if you've .v.r had anybody in your life like that, you'd
know hov scary that vas. About a month or so atter v. discov.red it,
they p.rform.d the operation"and he's tlne. A year later, they had
to do it allover again, and he va. fine again. In.urance paid tor
all of it, and Or. Brian Claiq in Fre.no was Absolutely a .arvelous
surgeon.
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,
�- 18
And with that in mind, when this situation happened with
Randy Walker, I was just angry., And what happened was that, as a
salesman for my company, he was !married, had two children, and one of
the children was born premature+y, and the insurance ~ills were 30
some thousand dollars. And they occurred right at the time where he
had left his previous employer and come to work tor my company, and
he thought he had a 60-day grace period that it was going to pay for
the coverage. It didn't, and w~ all advised him to seek advice. And
it came up that the best solution was to tile bankruptcy.
And two year. atter the second child was born, a third
child came along and we had just started a new in.urance plan. And
the new insurance plan -- because ot the co.t ot insurance, and
becau.e ot the complaints I get every time somebody at my company has
a health problem -- they come t'o me as it I wrote the policy -- I
advise them to .ee the inaurance man. And in this case I said, well,
I'm not going to step in the middle ot this,one -- we're going to
pick it collectively.
'
So the employees picked the insurance plan, and we voted
on it. And I repre.ented just~one ot -- at the time, I think it was
18 votes.
I told them that unless three-tourths ot us agreed to it,
we weren't going to pass it. So the employees were real curious:
they asked a lot ot questions/'they wanted to makG 8ure it would
cover certain situation..
i
Randy didn't have the money to go to the doctor, but
apparently his wite wa. already barely pregnant. And they hadn't
been to the doctor to tind out, although I'm .ure they prob~ly
su.pected it. well, the baby wa. born about tive month. atter the
coveraqe had atarted. The in.urance had taken the pr_iwu. The
in.urance company had .aid, ye., it'. covered. They paid tor, I
believe, some ot the doctor vi'.it.. But vhen the baby va. born
premature by tvo month., it incurred $150,000 in medical bill.; and
he was just deva.tated. He va. tryinq to tocu. on a nev baby that
was barely alive. He va. tryi'nq to tocu. on the re.t ot hi. tamily,
and try to do a job tor me and avoid creditor.. And it made it
virtually impo••ible.
So, ~out a year"aqo at this time, ve tried to qo buy
him a vehicle. And hi. credit wa• • 0 bad that the only vay he could
get one was vith .omebody'. help. And I decided that I prob~ly
stood the bigqe.t chance ot helpinq him ot anybody in hi. lite -- I
wa. his bos.. So we vent out;i to a car dealer.hip to try to buy him a
car with the idea that I would co-.ign on it becau.e .y credit was
okay. We picked it out, and we qot all the niceties out ot the way
at the car dealership; and then they looked at hi. credit report.
And his credit report 8aid ev~rythinq terrible that you could i.aqine
and every .inqle one ot the. was a health care expen.e that he
couldn't beqin to pay. We had told thea that ahead ot ti.e.
I
They treated u. ,like we had AIDS. And I had, never been
treated that way. I've never' been poor. I vent ho.e that niqht and
I was just anqry; I knev I c~uldn't help this guy. I've alway. been
~le to help anybody that I really .et torth to try to help.
So
~out 11 p.m. at night, I .tarted to write a letter to Hillary.
eLauqhtar. I
.
THE PRESIDENT:
(Lauqhter and applau.e.)
I've done that .y.elf a ti.e or two.
Q
It took .ei~out three hour. to write it, and I
the fir.t drat~ ott to 1600 Penn.ylvania Avenue vi~~ a :1p
code, tigurinqI'd probably never hear anythinq. And I va. almost
embarrassed that I'd written it becau.e it .ounded a little corny. I
talked about everythinq I've talked ~out today and then so.e: it was
about three page.. By the t,ime it was done, I tel t that I j u.t had
to at least show Randy that I'd written the letter. I thouqht, at
••ftt
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,
�•
,'- 19
least I wanted to show him I was trying. I figured I couldn't do
much, but I could try. And he:made me a batch of cookies the next
morning, so I guess I tOUChed him.
When I heard tromthe White House and actually heard
that it had been read, I was saddened because he had already quit.
He had been chased by people trying to collect trom him. And they
had attached his wages, and we; had tried to dodge that bullet by
calling him a selt-employed salesman and everything we could think of
to try to retain his income. And he finally couldn't take it, and I
can't say I blame him.
So, when the White Hou.e called, he was off in a place
where no one could tind him, avoiding creditors. And one of the guys
that works for me was still friends with him and did contact him.
And Ron Brown trom the Commerce Department came out and met me about
a month and a half ago. And we got Randy on the phone that evening,
and about 20 minute. betore we had that conference, I got a call trom
Randy's wite. And I thought it was icing on the cake ot this story
-- she said, are you aware that we've .plit up? And I thought that
we did everything possible to try to make this event work. We had
health care coverage. We had,-- we did everything we thought
possible, and it still tailed. And I thought that preexisting
conditions was the whole cau.e.
THE PRESIDENT:
It wa••
Q
And it you can accompli.h that, you've got my vote
tor the next 20 time•• (Laughter.)
THE PRESIDENT: Well, let me tell you what the votes -
the vote. that really matter h.re. Fir.t ot all, l.t·. give him a
hand. I think that was quite a moving -- (applau.e).
I want.d to end with that becau.e I was so moved by the
letter that he wrote to Hillary. And it .eemed to .ort ot capture so
many ot these thing. that we ,talk about in kind ot e.oteric terms -
preexisting condition.; people talling in between the gaps: why you
can't change jobs; all that kind ot stuft. And you hear a story and
you realize that this i. the'busin••• ot America.
But the vote. that really matter hore are the vote. ot
the members ot Congr.... So ':betore we leave" I'd like to ask the
members ot Congress who .at through this entire panel to please stand
and be recognized. I .ee Congre••woman DeLauro there and
Congresswoman l.hoo ther., who are .tanding, .0 they can't stand: and
Congres.man Serrano'. in the back. Would all the member. ot Congress
who are here plea.e .tand .0 you can see them.
(Applau.e.)
I
Thank you, Mr. Bowle.. Thank you, Congreesman. And
that you most ot all to the.~ tine members ot our small bu.ine••
tamily in America.
Thank you.
We',re adjourned.
END
(Applau.e.)
l2:00 Noon EST
,
�March 8, 1994
MEMORANDUM FOR THE CABINET
FROM:
GENE SPERLING
MEEGHAN PRUNTY
KIM O'NEILL
I
SUBJECT:
'
~orkplace
Coverage: Information Packet
Please find attached an information packet on "Guaranteed Coverage at Work". It
contains:
•
Guaranteed Coverage at Work: Talking Points
•
A Brief History of Employer-Provided Insurance in America
•
Employer Responsibility: The Hawaii Example
•
Health Reform and Am'erican Jobs
•
"Why Employer Mandate?", Roger Altman, Washington Post, 2/25/94
•
Possible Sites for
•
Guaranteed Coverage at Work: Questions and Answers
1.
Why workplace coverage?
2.
Won't this requirement result in huge job losses?
3.
What is the iID.pact of this requirement on small businesses?
4.
Why don't we just have an individual mandate?
5.
How dare the federal government tell me what I can and cannot do for
my own employees?
6:
Do you agree iwith the CBO decision to put the premiums from this
requirement the federal budget?
7.
Isn't it true that even Laura Tyson said that health care reform will
cost 600,000 jobs?
Aren't the caps to firms the same as a payroll tax on high-wage
8.
employees?
9.
Why do we need universal coverage anyway?
Even~s
on Employer-Provided Insurance
m
•
Possible Topics for Economic Health ,Care Op-eds
�,
;
GUARANTEED COVERAGE AT WORK
,
TALKING POINTS
SUMMARY: The President's bottom line is guaranteed private health insurance
for every Apterican. There are only three ways to achieve this:
government insurance, guaranteed coverage at work, or an
individual/family mandate. The President chose to build upon the
current system and ask all businesses to do what the most successful
American companies do today -- provide health coverage for their
employees.; The critics' claim that this will lead to job loss has been
disputed by independent economists -- and a number of credible
studies have concluded that the plan will actually create jobs.
,
ONLY THREE WAYS TO PROVIDE GUARANTEED COVERAGE:
•
There are only three ways to guarantee health coverage for all Americans.
One is to raise a broad-based tax to finance government-provided insurance.
The second is to require employers to contribute to the cost of coverage for all
of their workers. The third is to require all individuals and families to
purchase insurance for themselves. Whether it's the government, employers,
individuals, or some: combination ... for everyone to have coverage, someone
has to pay.
WHY NOT AN INDWIDUALI FAMILY MANDATE?
•
Some critics of our plan support an individual/family mandate. But, to date,
no one has proposed: an individual mandate that would provide health
insurance for every American without causing large disruptions to the
current system. For example, under the family mandate currently before
Congress, employers across the country would face incentives to drop
coverage -- forcing individuals and families to bear the full burden of health
care costs without help from their employers.
"
EMPLOYER CONTRIBUTION BUIWS ON CURRENT SYSTEM:
•
The best way to acHieve guaranteed coverage is to build on what we know
works. Right now, :hine out often people who have private insurance get it
through employers.'lEBRI with 1993 CPS data. 1/941
•
Excluding the smallest companies -- those with less than 5 employees -- the
vast majority of bm;,inesses (between 75 and 90%) provide insurance. Even
among the smallest companies, more than.halfprovide coverage and many of
the rest say they woul~ if they could afford it. And the most competitive
businesses -- includplg nearly every company on the Fortune 500 list -
provide medical cov,erage to their employees. [Jennifer Edwards et aI, Data Watch,
Spring 1992; NFIB 1990; Daily Labor Report. 3/1/941
�COVERAGE AT WORK: TALKING POINTS
Page 2
•
Eight out often people 'who do not have health insurance are in working
families -- workers or dependents of workers. [EBRI. 1994]
NO COST SHIFTING SAYES MONEY FOR FIRMS THAT NOW PROVIDE:
•
When all employers take responsibility, costs will be substantially reduced
for businesses that currently provide insurance. The CBO confirmed that:
"Universal coverage would mean that those firms that now offer insurance
would not longer need to pay indirectly through higher doctor and hospital
bills for the care giventd uninsured workers and their families. On the other
hand, firms that do not now provide insurance could not longer ride free.
/I
[Reischauer Testimony, Se~ate Finance Committee, 2/9194]
•
This is why the Wall S'treet Journal wrote: "For many small businesses,
saddled with escalating health care costs, President Clinton's health care
package comes as an unexpected windfall" and Henry Aaron of the Brookings
Institution said that" Successful implementation of health care reform is one
of the best pieces of news American business could receive." [Wall Street Journal.
"Small Business Sees Burdens Getting Lighter", 9/13/93]
•
A system of shared re~ponsibility, where all employers and individuals pay
their fair share, will stop the cost-shifting that goes on today when
businesses that provide coverage have to pay higher premiums to compensate
for those that do not. Today, 8 of 10 Americans without insurance are in
working families, and, firms that provide insurance end up picking up the bill
when these uninsureq. individuals go to the hospital and can't pay for it.
I
EVEN WHILE COVERING EVERYONE, BUSINESSES SAVE BILLIONS:
•
Even when new spending from those businesses that do not now provide
insurance is included, the non-partisan CBO concluded that American
businesses as a whole see dramatic savings under reform. "[The President's
proposal] would sharply reduce the growth of employer spending for health
insurance. By 2004, employers would save about $90 billion for active workers
and more than $15 billion for early retirees... I, ["Analysis of the Administration's
Health Proposal", CBO, 2(9194]
JOBS - EXPERTS SAY NEGLIGIBLE IMPACT OR NET CREATION:
•
The non-partisan CBP analysis states clearly that the President's approach
will have a negligible, net effect on employment. "The Clinton plan, [CBO]
concluded, would not significantly slow the economy or result in the loss of
jobs, as many critics have charged." [pearlstein and Broder, Washington Post, 2/9194]
�'.'
COVERAGE AT WORK: TALKING POINTS
Page 3
•
In fact, some experts say there will be job creation. Two independent
studies -- one from the Economic Policy Institute and one from the Employee
, Benefit Research Institute -- predict that health reform will cause a net
increase in American Jobs. The EPI projects that 258,000 manufacturing jobs
will be created over the next decade. And the Emplovee Benefit Research
Institute predicts that the President's proposal could produce as many as
660,000 jobs. [EPI, November 1993; EBRI, November 1993]
•
For example, the health care sector should produce a significant number of
new jobs. One health:,expert at the Brookings Institution predicted that the
plan will create 750,000 home health care jobs alone. [Reuters, 9/17/93]
•
Many small businesses -- those with less than 75 employees and an average
w:age of no more than';$24,000 -- will be eligible for substantial discounts on
the cost of the insurartce they provide their employees. In many cases,
contributions for health coverage will be approximately $1.25 a day per
employee for the small employer whose average worker earns minimum
wage. [Edie Rasell, Roll Call. 3/94]
'.'
HAWAII EXPERIENCE pkOVES MANDATES DON'T COST JOBS:
•
Hawaii's real world e~erience suggests that required employer contributions
do not necessarily have adverse employment effects. Since Hawaii began
asking all employers to provide insurance for their employees in 1974: the
unemployment rate has dropped to one of the lowest in the nation; small
business creation rates have remained high; and the rate of business failures
has been less than half the national rate. In addition, only 2% of Hawaii's
"rainy day" fund, which set up to assist the small businesses provide
insurance, has ever been used. [The Hawaii Department of Health, June 8,1993]
CONSERVATIVE APPROACH PROPOSED BY NIXON 20 YEARS AGO:
•
In 1971, President Nixon first proposed extending the employer-based health
insurance system to all employees. Nixon's proposal was one of shared
responsibility betweep employers and employees -- with the employer paying
75% of the premium and the employee paying 25% -- which is strikingly close
to President Clinton's approach. [8. 2970 "Comprehensive Health Insurance Act of
1974", Congressional Rec~rd (p. 2291), February 6, 1974]
Ii
•
In support of his emp,1oyer mandate, Nixon said: "In the past, we have taken
similar actions to assure workers a minimum wage, to provide them with
disability and retirement benefits, and to set occupational health and safety
standards. Now we should go one step further and guarantee that all workers
will receive adequate :healthinsurance protection." The costs would be
"shared by employers' and employees, much as they are today under most
collective bargaining pgreements. "
�A BRIEF IllSTORY OF EMPLOYER-PROVIDED INSURANCE IN AMERICA
Because A mericans have consistently rejected a government-ron health ccue system.
employer-based coverage has been the route to private health insurance for most Americans
for neculy a century. The President.'s approach is to extend that system to all employees.
Health insunmce started io Dallas,'Texas io 1929.. Unpaid bills at Baylor University Hospital
were traced to school teachers who could not afford catastrophic expenses, so Baylor
instituted a plan in 1929 whereby 1500 teachers could prepay fifty cents a month for twenty
one days of hospital coverage a ye~. This plan is considered the forerunner of what later
became known as the Blue Cross plans.
lbat same year, Los Angeles was 'the site of the fint prepaid cootract betweeo employee
associations and physician groups.;'Employees of the Los Angeles Department of Water and
Power arranged with two physicians to provide comprehensive services for about 2000
workers and their families. Each subscriber paid $2 a month. plus some additional fees, and
the plan was unusual in that it provided for hospital as well as medical care.
Io 1932, the fint citywide, multi-hospital Blue Cross plan was tried out with a group of
hospitals io Sacrameoto, California. And a few months later, hospitals in Essex County, New
Jerrsey authorized a similar joint plan.The plans offered community rates (rates based on
average costs for large groups of people) and guaranteed payments to participating hospitals.
Blue Cross pioneered the sale of health insurance to employee groups rather than to '
individuals. Employer-based coverage helped the health insurance market grow because group
insurance limited risks, and automatic payroll deductions to guarantee payment of premiwns
cut collection costs.
1
Throughout the Great Depression, health insur.mce expanded through both public demand and
hospitals' eocouragemeoL With fewer and fewer patients able to pay hospital costs, hospitals
sponsored insurance plans as a way to guarantee steady revenue. Before the 1930's, 90
percent of medical expenses were paid out-of-pocket. Besides the nonprofit Blue Cross plans,
which offered insurance at community rates, a nwnber of private, commercial insurers
emerged in the 1930s and 1940s. These insurers used "experience rating;" basing rates on age
and medical history. By the 1950's and 60's, the Blue Cross plans were forced to also use
experience rating in order to compete with the commercial insurers.
I
During World War n, wheo wage and price freezes were io effect, the tmditioo of employe...
provided insurance took hold. Offering benefits became a good way for employers to reward
and attract workers, and it was a particularly attractive option because of the tax-exempt
status of health insurance. By the rrud.50's, health coverage through the workplace was
widespread, and commercial insurers dominated a market once ruled by the Blue Cross and
Blue Shield plans.
�Unions negotiated for better he~th coverage. In the late 40's, the Supreme Coun ruled in the
Inland Steel case that benefit plans were considered a pan of "conditions of employment."
This meant that wtions had gained the right to bargain collectively for health care. helping to
spur the growth of employer-provided coverage. The United Mine Workers led the way in
expanding health benefits, and between 1948 and 1950, the number pf workers covered by
negotiated health plans jumped from 2.7 to more than 7 million. In the 50's and 60's, as
wtions placed increasing emphilSis on demanding more untaxed benefits to increase "total
compensation." they successfully negotiated for more "first-dollar coverage': -- health
insurance where employees don't have to pay anything.
In 1971, President Nixon first Iproposed extending the employer-based health insunmce system
to all employees. He proposed: a more comprehensive proposal in 1974, but it failed when
wtions failed to rally around it~ and the President failed to push hard enough for it.
Nixon's proposal was one of shared responsibility between employers and employees -- with
the employer payim: 75% of the premium and the employee payin~ 25%. This proposal is
strikingly close to President Clinton's -- where employers pay 80% and employees pay 20%.
To justify the employer mandate. Nixon said. "In the past, we have taken similar actions to
assure workers a minimum wage, to provide them with disability and retirement benefits. and
to set occupational health and'safety standards. Now we should go one step further and
guarantee that all workers will receive adequate health insurance protection." The costs would
be "shared by employers and employees, much as they are today under most collective
bargaining agreements."
Nixon also made the case that there must be sufficient consumer protection as part of his
reform. He said: "Any time the Federal Government, in effect, prescribes and guarantees
certain things it must take the necessary follow-through steps to assure that the interests of
consumers and taxpayers are fully protected. Accordingly, legislative proposals have been
submined to the Congress within recent weeks for regulating private health insurance
companies, in order to assure' that they can and will do the job, and that insurance will be
offered at reasonable rates."
The passage of the Employee Retirement Income and Security Act (ERISA) in 1974 spurs the
growth of self-insurance by hu~e employers - meaning large employers are playing by a
different set of insurance rules than small employers.
The growth in employer-provided health insurance continued through the late 1970's. Since
then, the percentage of employed Americans who lack health insurance has begun to increase.
This reflects in part the changing job market -- as manufacturing jobs with generous benefits
have given way to service jobs with linle or no benefits during the 1980's. And recent
analysis by researchers at the Harvard School of Public Health predicted that 30% of small
businesses would drop coverage for their employees in the coming years because of rising
costs.
'
�EMPL,OYER RESPONSIBILITY:
THE HAWAII EXAMPLE
"
SUMMARY: Hawaii has moved closer to universal coverage than any other state by
reforming and ~trengthening its traditional system of private, employert
based health care coverage. Its required employer contributions have
leveled the play'ing field for all businesses, showing that universal
coverage can cr~ate a climate in which businesses grow and prosper.
i
•
In 1974, Hawaii passed the Prepaid Health Care Act requiring all employers to
make contributions towards health coverage for their employees. Under the Act,
all employers must provide a defined comprehensive package of benefits, with
costs shared between the' employer and the employee.
•
The majority of insurance is provided by private insurers and providers. The
insurers voluntarily use 'modified community rating to offer small businesses the
same rates as large busirtesses.
i
The Results:
•
Hawaii is a small busine'ss state, with 97% of its businesses employing less than
100 people and 94% employing 50 or less. After the state began asking all
employers to contribute to coverage:
•
Unemployment CJ.ropped: The unemployment rate dropped to one of the
lowest in the nation.
•
Hawaii's rate of business failures was less than half the national average.
•
Small businesses prospered: Small business creation rates remained high
-- with the numb~r of employers growing almost 200% from 1970 to 1991.
•
Only about 2% of the Premium Supplementation Fund -- Hawaii's "rainy
day" fund which was set up to help the smallest businesses provide
insurance -- has ever been used.
•
Hawaii achieved near-universal coverage: Only about 2% of the
population rema~ uninsured -- compared to estimates of 15.3%
nationwide.
•
Costs have been controlled: "Perhaps most surprising to many experts, the
near-universal a¢cess to health care has not led to soaring costs. YVhile
Hawaii ranks near the top of the states in cost of living, its average health
insurance premi~m is near the bottom. For example, a family in Hawaii
pays a premium of $263 a month, nearly half that of other states.
II
Sources:
The Hawaii Department of Health; "Hawaii: Setting an Example for the Rest
of the Nation", The New York Times, 11114/93
�HEAL TH REFORM AND AMERICAN JOBS
SUMMARY: Health reform will save the private sector tens of billions of dollars
that can be~used to create jobs, raise wages, and improve the
competitiv~ness,of American firms. Today's rising health care costs
are a hidden tax on America's employers, robbing firms of profits
that could go to wages for existing or new employees or to reinvest in
their companies. The President's approach will level the playing
field for American businesses by demanding responsibility from all
employers. This will prevent the cost shifting that now takes place
and lower costs immediately for many companies now offering
msurance.
I
RISING HEALTH CARE COSTS BURDEN AMERICA'S EMPLOYERS:
•
In 1990, GM spent $3.2 billion in medical coverage for its 1.9 million
employees and retirees. This was more than the company spent on
steel. Health care costs add $1,100 to the price of every car made in America
-- double the cost added to Japanese imports. [University of Michigan, 1990; TIME,
11125/92]
•
In 1992, American businesses paid almost $4,000 for health care for each
employee -- more than twice as much as they paid eight years before.
[Christian Science Monitor, 11/21191]
JOBS - EXPERTS SAY:'NEGLIGffiLE IMPACT OR NET CREATION:
•
The non-partisan CBO analysis states clearly that the President's approach
will have a negligillie net effect on employment. "The Clinton plan, [CBO]
concluded, would not significantly slow the economy or result in the loss of
jobs, as many critics have charged." [pearlstein and Broder, Washington Post, 2/9/94]
•
In fact, some experts say there will be job creation. Two independent
studies -- one from'the Economic Policy Institute and one from the Employee
Benefit Research Institute -- predict that health reform will cause a net
increase in American jobs. The EPI projects that 258,000 manufacturing jobs
will be created over the next decade. And the Employee Benefit Research
Institute predicts that the President's proposal could produce as many as
660,000 jobs. lEfLNovember 1993; EBRI. November 1993]
•
For example, the health care sector should produce a significant number of
new jobs. One health expert at the Brookings Institution predicted that the
plan will create 7qO,000 home health care jobs alone. [Reuters. 9117/93]
�HEALTH REFORM AND AMERICAN JOBS
Page 2
HAWAII EXPERIENCE PROVES MANDATES DON'T COST JOBS:
•
Hawaii's real world experience suggests that employer mandates -. such as
those proposed in the Health Security Plan do not have major adverse
employment effects. Since Hawaii asked all employers to provide insurance
for their employees in: 1974, total private employment in Hawaii increased by
90 percent, compared ,to 54 percent in the Unit~d States as a whole. [The
_w
Hawaii Department of Health]
•
In addition, the unemployment rate dropped to one of the lowest in the
nation (2.8% in 1991); small business creation rates remained high (the
number of employers grew almost 200% from 1970 to 1991), and the rate of
business failures in Hawaii remained less than half the national business
failure rate. [The Haw~ii Department of Health. June 8, 1993]
LEADING CEOS SAY REl!ORM WILL HELP COMPETITIVENESS:
•
CEOs of some of Ame,rica's leading firms - large and small - have sent
written statements of support for the President's approach because they
recognize that it pres~nts the best opportunity for American firms to deal
wit.q. escalating health care costs that threaten their competitiveness.
•
Prominent business ~eaders expressing support for the Clinton plan include
the CEO's of USX, Bethlehem Steel, American Airlines, Archer Daniels
Midland, Food For Less, Drummond and Company, Anheiser Busch, Ford,
Chrysler, McDonnell'Douglas, and General Motors.
REFORM WILL SAVE BILLIONS FOR AMERICAN BUSINESSES:
•
An end to cost shifting -- As much as 10.5 percent of premiums paid by
firms that now cover;.their employees goes to pay for coverage for the
uninsured. The Health Security Act will end the cost shifting of the current
system, immediately,: lowering costs for many businesses that now offer
Insurance.
•
No more corporate "free riders" - The Health Security Act will make
businesses more efficient by eliminating "corporate free riders" -- the millions·
of Americans who are insured through a spouse's policy. Employers of both
spouses will contribute to coverage, further lowering costs for business that .
currently provide coverage.
�HEALTH REFORM AND AMERICAN JOBS
Page 3
•
Slower growth in costs - Firms that do not provide insurance will pay
more, but at a much lower cost than they currently face when they try to
purchase insurance.!: While the implementation of universal coverage means
that aggregate busi~ess spending will initially increase under reform -- as
employers that do not currently provide begin to, the reduction in the growth
of health care costs:williead to lower aggregate business spending on health
care by the end of the decade.
•
The Congressional Budget Office (CBO) found that the President's proposal
"would sharply reduce the growth of employer spending for health insurance.
By 2004, employers would save about $90 billion for active workers and more
than $15 billion for :early retirees... " ["An Analysis of the Administration's Health
Proposal," CBO, 2/9/94]·
•
An independent stuHy by Lewin-VHI confirmed that the growth of business
spending on health care will be slowed dramatically by the President's
approach. [Lewin-VHI, December 8,1994],
INCREASED EMPLOYMENT IN HEALTH CARE SECTOR:
•
As many as 400,00q net new jobs will be created in the health care sector,
with more providers and fewer administrators and insurance workers,
according to the Council of Economic Advisers. Joshua Weiner at the
Brookings Institution predicted that the Clinton plan would lead to 750,000
home health care jobs alone. [Bureau of Labor Statistics, Council of Economic Advisers;
Reuters. "Health Care Reform Impact on Jobs", 9117/93]
AN END TO "JOB LOCK" AND "WELFARE LOCK"
•
Job lock occurs wh~n workers remain in a job just because they fear losing
their health benefits if they switch jobs. Studies show that as many as one in
five of America's workers stay in their jobs because of concerns about health
benefits. Job lock can create economic distortions if it impedes the ability of
workers to move to:jobs where they may be more productive. [Kaiser Family
Foundation]
•
Research by Brigit~e Madrian at Harvard has found that mobility rates for
married men are depressed by as much as 25 percent because of job lock.
["Employment-Based Health Insurance and Job Mobility", forthcoming Quarterly Journal of
Economics 2/94]
�HEALTH REFORM AND AMERICAN JOBS
Page 4
•
Universal coverage will also eliminate "welfare lock" which arises when
welfare participants do:not seek employment -- typically minimum-wage jobs
that do not offer health: benefits -- because they fear that they would lose
their Medicaid benefits~ Some research indicates that as many as 25% -- 1
million of the 4 million .welfare recipients -- would take jobs if continuous
health care benefits were available to them. [Robert Moffitt and Barbara Wolfe.
"The Effect of the Medicaid Program on Welfare Participation and Labor Supply"]
SMALL BUSINESSES WILL GET DISCOUNTS:
•
Small businesses are often priced out of the market under the current
system. They face disproportionately high premiums and they risk losing
coverage if even just one single employee becomes sick. Under the
President's plan, however, small firms will be able to purchase affordable
private insurance. And if the firm has 75 or fewer full-time-equivalent
employees and average wages below $24,000, it will receive significant
discounts on its premiums in order to make coverage affordable.
•
The CBO states that the President's plan "would benefit smaller firms that
typically pay much higher premiums than larger firms. This leveling of
costs could benefit all small businesses - not just those that provide
insurance today. With access. to more affordable insurance, small businesses
would be better able to attract workers who now demand health insurance as a
condition of employment. ["An Analysis of the Administration's Health Proposal," CBO.
/I
2/9/94, p.54]
•
Those small businesses that now' provide, and pay the highest rates, will save
most dramatically un<;ler reform. That's why the Wall Street Journal wrote:
"For many small businesses, saddled with escalating health care costs,
President Clinton's health care package comes as an unexpected windfall."
["Small Business Sees Burri-ens Getting Lighter". Wall Street Journal, 9/13/93]
�PAGE
1
LEVEL 1 - 1 OF 1 STORY
Copyright 1994 The Washington Post
~he Washington Post
February
SECTION: EDITORIAL; PAGE A21
25, 1994, Friday, Final Edition
I
LENGTH: 845 words
HEADLINE: Why Employer
Manda~es?
SERIES: Occasional
BYLINE: Roger C.
Altman
BODY:
Amid business complaints and fresh controversy over the health care numbers,
assorted commentators have deplared the president's health care reform plan
dead. This is ridiculous. The outlook is actually very good.
That's because the heart of our plan is guaranteed private health insurance.
Eighty percent of Americans want this. The entire congressional leadership says
it does too. But some self-styled reformers in Congress pay only lip service to
this concept. The central question is whether Congress will back a mechanism to
ensure it.
The president has propose4 building upon the present system through an
employer mandate. Businesses would be required to help pay for coverage, and
employees would have to pay their share. Today, nine of 10 Americans with
private coverage receive it this way.
There are only two other ways to do it.
One is a government progr~m in which government would raise the money to pay
all the bills. This is too much centralization, too much tax, and too much
government.
The second is an individual mandate. All Americans would be required to buy
coverage, but would be on their own in doing so, without the benefit of group
rates.
What those pushing an individual
would no .longer have an incentive to
their employees would end up with it
and that would undermine the: bedrock
mandate don't say is that many employers
provide coverage. Why should they, when
anyway? So, many employers could drop it,
of today's system.
It is also doubtful whether an individual mandate would bring a reduction
in health care inflation, which is vital to true reform. Our employer-based
proposal would have all companies buying in volume and benefiting from lower
prices.
Some sayan individual. mandate would be easier to administer. But in fact
it would involve refundable ,tax credits for much of America. This would have the
IRS seeking out millions who are not now on the tax rolls. Who wants that?
�PAGE
2
The Washington Post, February 25, 1994
Then there are the myths circulating about the impact of an employer
mandate. They should be exposed for what they are -- flat wrong, misleading,
or red herrings.
One is that it would cost, jobs. Numerous independent studies, including work
by the nonpartisan Congressional Budget Office, conclude the job impact would be
small.
I
Some claim the mandate would cost businesses money. For the majority of
businesses that already provide coverage for their employees, that is wrong. The
CBO has now affirmed that our plan would produce major savings in national
health spending -- as much as $ 150 billion annually by 2004. Since so much of
that spending is underwritten by businesses, they will realize particularly
large savings.
We're sufficiently confident of this to have proposed an outright cap on
business spending for health care. Most larger businesses today spend 10 percent
to 11 percent of payroll on: it. We would cap that at 7.9 percent.
A third myth is that the ': mandate would crush small busin.ess. Here, there is
an acute misunderstanding. rhose who oppose an employer mandate don't want you
to know that a majority of small businesses already offer coverage. That's
right. Approximately half of Americans employed by businesses with fewer than
500 employees are already covered.
These are the very busin~sses victimized by the present system. They don't
have the purchasing power of large firms, and must pay through the nose for
coverage; on average, they pay 35 percent more. Our plan gives them the volume
purchasing power of bigger businesses. Small business is one of the biggest
winners under the Clinton p~an.
What about those small businesses that don't cover their people now and would
have to do so in the future? Won't they be crippled? In a word, no. The average
wage among firms that don't provide coverage today is very low -- $ 7,.400 a
year. Under our plan, the co.st of covering that average worker would be 70 cents
a day. It's that low because we would sharply discount the cost of insurance
premiums to such small employers. This extra cost is surely not negligible, but
its not crushing either.
':
Another canard is that the required benefits package is a "Cadillac plan" -
too generous to employees. In reality, it's only slightly more generous than
what most large employers ~ow offer. Benefits will be slightly expanded for most
workers, and they will have, for the first time, the security only guaranteed
coverage can provide.
Finally, some sayan employer mandate amounts to a giant payroll tax. No
one in my memory has ever called a payment for private insurance between two
private parties a tax. CBOhas concluded it is not a tax but a miscellaneous
receipt like a fine, a penalty or forfeiture. We don't agree even on this budget
treatment, and these differences can be easily resolved by slight adjustments on
our side.
The employer mandate is the best approach to build on the present system,
ensure national and busine~'s savings, and avoid an administrative nightmare.
That's why we chose it and why we hope Congress will support it.
�The Washington Post, February 25, 1994
The writer is deputy sec+etary.of the Treasury.
LANGUAGE: ENGLISH
LOAD-DATE-MDC: February 25,;' 1994
PAGE
3
�possmLE SITES FOR EVENTS ON EMPLOYER-PROVIDED INSURANCE
Dallas. Texas (Baylor University Hospital) -- site of the first health insurance plan. (late
1929)
Los An~eles. CA -- site of the first health insurance plan between a physician group and a
group of employees. (Los Angeles Department of Water and Power -- 1929)
Sacramento. CA -- site of the first Blue Cross plan. (July 1932)
Essex County. NJ -- site of one of the first Blue Cross plans. (January 1933)
Inland Steel (Chjca~Q) -- the Supreme Court case in the late 1940's that bore its name allowed
unions to negotiate for health care; member of the recently fonned Chicago Business Group
on Health -- which may act as a purchasing alliance.
Yorba Linda. CA -- President Nixon's hometown. to point out the comparison in the two
proposals.
.
We might also have an event .at a small business that has provided insurance for many years.
•
.
�GUARANTEED COVERAGE AT WORK
QUESTIONS AND ANSWERS
Table of Contents
•
Why workplace coverage?
•
Won't this requirement result in huge job losses?
•
What is the impact of this requirement on small businesses?
•
Why are we p'utting the burden on employers? Why don't we just have
an individual..mandate, like we do with auto insurance?
•
How dare the federal government tell me what I can and cannot do for
my own employees?
•
Do you agree :with the CBO decision to put the premiums from this
requirement in the federal budget?
•
Isn't it true that even the Chair of your own Council of Economic
Advisers Lau'ra Tyson said that health care reform will cost 600,000
jobs?
•
Aren't the caps to firms the same as a payroll tax on high-wage
employees?
•
Why do we need universal coverage anyway?
�GUARANTEED COVERAGE AT WORK: Q & A
Page 1
Q:' Why workplace coverage?
A:
Let's start with the President's bottom line: guaranteed private insurance for
all Americans.
While there is more than one approach to universal coverage, building on the
existing employer-based system makes the most sense. Nine out of ten
people who have private insurance get coverage through employers. Except
for the very smallest firms -- those with 5 or fewer employees -- the vast
majority of firms in the U.S. offer their workers health benefits. And many of
these smallest firms say that they would provide if they could afford it. Our
goal is to bring those now getting a free ride into the system -- to lighten the
load of those now providing insurance -- and to aggressively control costs to
make insurance affordable for even the smallest firms.
Requiring all employers to contribute builds on what works and is a proven
means of reaching universal coverage through the private sector. The state
of Hawaii has had a near-universal system based on an employer mandate
for almost 20 years, and the results are impressive: the unemployment rate is
one of the lowest in the nation, small business creation rates have remained
high, and the rate of business failures in Hawaii remained less than half the
national rate.
Every other state that has passed comprehensive legislation calling for
universal coverage unanimously agrees that an employer mandate is the best
and most expedient ;route to full coverage. Two of the three states that
passed comprehensive reform legislation last year -- Oregon and Washington
state -- passed legislation based on an employer mandate. The third state,
Florida. passed a managed competition plan that set up alliances and health
plans, and Florida's governor Lawton Chiles has said that the missing piece
that will bring universal coverage to Floridians is a national system based on
the President's plan.
Combining the goal of universal coverage with the strong belief that
health care can and should 'remain in the private sector means
employers have t~ be involved in providing their workers' insurance.
Q:
Won't this requirement result in huge job losses?
A:
AbS!olutely not. In fact, the CBO refuted these charges, testifying that "The
Clinton plan . .. would not significantly slow the economy or result in the loss
ofjobs, as many critics have charged." [pearlstein and Broder. Washington Post,
2/9/94]
�GUARANTEED COVERAGE AT WORK: Q & A
Page 2
Today, the rising cost of health care is a hidden tax on American workers
and employers -- hurting businesses, limiting job creation, and threatening
,
our competitiveness. That is why we believe that comprehensive health care
reform is a necessary element in a strategy to increase long-term economic
growth, reduce the deficit, and create jobs.
People that make this job loss criticism sometimes cite a few, old studies that
don't take into accou'nt the significant discounts that the President's plan
offers small businesses. In fact, the lobbyist who paid for the most cited job
loss study calls it "outdated and not relevant to the President's plan.
II
The bottom line is this: health care reform will bring down the costs to most
businesses who pro'Vide insurance to their workers -- allowing them to create
jobs and increase wages. CEOs at some of the top companies in America -
companies like Chrysler, Ford, Bethlehem Steel and American Airlines -
have said that they support the President's plan because it will help them
become more competitive. And even a leading health economist who has at
times criticized our plan, Henry Aaron of the Brookings Institution, said that
"Successful implementation of health care reform is one of the best pieces of
news American business could receive."
Two independent studies -- one from the Economic Policy Institute and one
from the Employee Benefit Research Institute -- predict that jobs will be
created as a result of health reform. The EPI projects that 258,000
manufacturing jobs will be created over the next decade. And the Employee
Benefit Research Institute predicts thatthe President's proposal could
produce as many as 660,000 jobs. For example, there will be new health care
jobs created -- with:one health economist at the Brookings Institution
predicting that the ·plan will create 750,000 home health care jobs alone.
Q.
What is the impact of this requirement on small businesses?
A:
Today, small businesses -- the engine of America's economic growth -- are
threatened by a health care system that is stacked against them. Their
health coverage costs more and offers less than it does for large businesses.
Insurers charge them much more than large employers and then raise their
premiums or drop them altogether if even one employee gets sick. And,
administrative costs eat up as much as 40 cents of every dollar small
businesses spend on health insUrance premiums -- eight times as much as
large companies.
I
�GUARANTEED COVERAGE AT WORK: Q & A
Page 3
The CBO analysis said that all small businesses will benefit from the
President's approach:"[The proposal] would benefit smaller firms that
typically pay much higher premiums than larger firms. This leveling of
costs could benefit all small businesses - not just those that provide
insurance today. With access to more affordable insurance, small
businesses would be better able to attract workers who now demand health
insurance as a condition of employment. "
,
"
For the majority of small businesses that currently provide insurance to their
employees. the Wall Street Journal has said that the President's Health
Security Act will be "an unexpected windfall". These businesses will pay
substantially less in a: health care system that puts them -- not insurance
companies -- in the driver'S seat. These small businesses will now be able to
create new jobs and expand their businesses.
,
A lot of small businesses that don't provide insurance want to -- they just
can't afford it. The President's plan will provide discounts for small
businesses, depending on the firm size and average wage of their workers.
When they actually looked at the President's proposal, many small business
owners found that they will save more on their family'S policies -- which they
get today at the highest prices -- than the total amount that it will cost them
to insure all their employees.
When we look at the effect on small businesses, one interesting example is
Hawaii. Since 1974, ~hen Hawaii passed a plan that requires all businesses
to contribute to the cost of their employees' health insurance, Hawaiian small
businesses have continued to thrive. In 1991. Hawaii was the nation's third
fastest-growing state 'for small businesses, and Hawaii's unemployment rates
are consistently among the lowest in the country.
,
Q:
Why are we putting, the burden on employers? Why don't wejust have
an individual mandate, like we do with auto insurance?
A:
Two reasons: first, we don't want to undo something that's working well for
most people; second, we want real, achievable universal coverage.
Number one, the employer based system works well for 9 out of 10 people -
health care coverage comes with employment. That should be built upon, not
undone.
�GUARANTEED COVERAGE AT WORK: Q & A
Page 4
To date, no one has proposed an individual mandate that would provide
health insurance for ~very American without causing large disruptions to the
current system. For example, under the family mandate currently before
Congress, employers across the country would face incentives to drop
coverage -- forcing individuals and families to bear the full burden of health
care costs without help from their employers.
Number two, if you really want to get universal coverage, you need to make
sure the cost of health care is affordable, and you need to make sure everyone
is covered.
.
'
To make sure health'care is affordable under an individual/family mandate
system, there would have to be significant new government spending for
subsidies. We think/it's better for health care to remain in the private sector
as much as possible, ':but an individual mandate could mean millions of
American families relying on the government, not their employer, for h~lp
with health care costs.
We want to build on the system of coverage through work, keep health care
spending private as much as possible, and make sure universal really is
universal. An individual mandate doesn't do that.
I
Q:
How dare the fede'ral government tell me what I can and cannot do
for my own employees? {philosophical small government argument}
A:
The facts are: whenryoudon't cover your employees', other businesses are
forced to. We need to stop the cost-shifting that goes on today when
. businesses that take responsibility and provide coverage have to pay higher
premiums to compensate for those that do not. Today, 8 of 10 Americans
without insurance are in working families, and everyone else gets charged
when they go to the hospital and can't pay their bills. Insurance premiums
for businesses that provide insurance are 30% higher on average than they
would be otherwise because they also have to pay for the added cost of the
uninsured. '
�GUARANTEED COVERAGE AT WORK: Q & A
Page 5
'
Q:
Do you agree with t,he CBO decision to put the premiums from these
employer mandates in the federal budget?
;
A:
We believe that any Iponey the government spends -- whether for long-term
care or discounts for small businesses or whatever -- should be on budget and
fully paid for. Premi~m payments for health insurance, however, are not
government spending; they are payments between one private party and
another. Premiums for private health insurance should not be "government
receipts" any more than payments currently made by employers to private
insurance companies' on behalf of tens of millions of Americans are
government receipts: Thirty-nine states today have requirements that their
residents purchase auto insurance. The resulting payments -- bet\yeen these
people and their insurance companies -- are not counted as part of state
budgets, nor would anyone expect them to be.
Q:
Isn't it true that Laura Tyson said that health care reform will cost
600,000 jobs?
A:
This is a serious distortion of what Laura Tyson said. Her clear statement
was that health care reform, while leading to higher wages and greater
security for American workers. would not have any significant impact on job
creation. When asked what was the range of impact, she said that it was
likely to be negligible -- either down or .Yl! one half of one percentage point of
total employment. Some have translated this into a range between negative
600,000 jobs and positive 600,000 jobs. Therefore, the most accurate
,
description of Dr. Tyson's statement is that it would have a negligible impact
on jobs. Those who assert that this could mean 600,000 job lost must also
recognize that Dr. Tyson noted that it was equally likely that the plan would
create 600,000 jobs.
"
Q:
Aren't the caps to firms the same as a payroll tax on high-wage
employees?
A:
Under a system of universal employer responsibility, the 7.9 percentis not a
tax, but a guaranteed limit on the amount that any company will pay for
coverage. This is not the government requiring firms to pay 7.9 percent, it
the government ~aranteeing firms that they will not have to pay more than
7.9 percent oftherr payroll when they cover their employees. This is a
guarantee that cov.erage will always be affordable for all firms, unlike the
current system where costs can skyrocket from one year to the next.
I;
�·
.
GUARANTEED COVERAGE AT WORK: Q & A
Page 6
Q:
Why do we need universal coverage anyway?
A:
Two reasons. First, until everyone participates, those with health coverage
will pay the hidden co:sts of those without. When people without insurance
get sick and show up at the emergency room, everyone else is charged higher
premiums to compensate for this unpaid care. Second, the American people
have been cle~r that they want security from health reform -- coverage even
if they change jobs, lose their job, move, become ill, or have a pre-existing
condition. The President is committed to providing this security -- guaranteed
private insurance tha,t can never be taken away.
[i: \data\hlthcare\mandate.q&a;'03/08/94 11:29 AM]
�
Dublin Core
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Title
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Carol Rasco - Issues Series
Creator
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Domestic Policy Council
Carol Rasco
Issues Series
Is Part Of
A related resource in which the described resource is physically or logically included.
<a href="http://clinton.presidentiallibraries.us/items/show/36305" target="_blank">Collection Finding Aid</a>
<a href="https://catalog.archives.gov/id/7763322" target="_blank">National Archives Catalog Description</a>
Identifier
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2010-0198-S Segment 2
Description
An account of the resource
Carol Rasco's Issues Series collection consists of records relating to affirmative action, health care and reform, Medicare/Medicaid, immigration, disability, children, families and seniors, education, welfare reform, Middle Class Bill of Rights, and state and local economic issues. This collection consists of memos, letters, reports, schedules, itineraries, talking points, copies of legislation, and organizational material such as flyers and pamphlets.
Provenance
A statement of any changes in ownership and custody of the resource since its creation that are significant for its authenticity, integrity, and interpretation. The statement may include a description of any changes successive custodians made to the resource.
Clinton Presidential Records: White House Staff and Office Files
Publisher
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Clinton Presidential Library & Museum
Extent
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92 folders in 7 boxes
Text
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Original Format
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Paper
Dublin Core
The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/.
Title
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Health Care Materials [2]
Creator
An entity primarily responsible for making the resource
Domestic Policy Council
Carol Rasco
Issues Series
Identifier
An unambiguous reference to the resource within a given context
2010-0198-S Segment 2
Is Part Of
A related resource in which the described resource is physically or logically included.
Box 123
<a href="http://clintonlibrary.gov/assets/Documents/Finding-Aids/2010/2010-0198-S-IssuePapers.pdf" target="_blank">Collection Finding Aid</a>
<a href="https://catalog.archives.gov/id/7763322" target="_blank">National Archives Catalog Description</a>
Provenance
A statement of any changes in ownership and custody of the resource since its creation that are significant for its authenticity, integrity, and interpretation. The statement may include a description of any changes successive custodians made to the resource.
Clinton Presidential Records: White House Staff and Office Files
Format
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Adobe Acrobat Document
Publisher
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Clinton Presidential Library & Museum
Medium
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Reproduction-Reference
Date Created
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12/4/2013
Source
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2010-0198-Sb-health-care-materials-2