Small Business and Health Care

SMALL BUSINESS AND HEALTH CARE -- (House of Representatives - July 12, 2005)

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Mr. KING of Iowa. Mr. Speaker, I thank the gentleman from Georgia (Mr. Price) for yielding to me. I appreciate the opportunity to speak here tonight, and I appreciate his organizing this Special Order so that we can further take a look into some of the things that we can do to improve the health care circumstances within this country.

Mr. Speaker, health care costs are escalating. And there are few options for small business owners to choose from when selecting insurance coverage for their employees. In order to keep and attract talented workers, sourcing affordable, quality health insurance is a top concern. As an owner/operator of a small construction business for over 28 years, I am well aware that the largest challenges here are access and cost.

But even though small business is the backbone of our American economy, over 60 percent of the estimated 43 million people without health care are small business owners, both employers and their dependents. Additionally, small businesses, which create two out of every three jobs in this country, continue to struggle with the high cost of offering health insurance to their employees. The structure of the current health care industry does not allow many small business owners and their employees access to affordable health insurance. As a result, uninsured figures continue to rise as the cost of insurance continues to skyrocket, pricing many small businesses out of the marketplace.

Many factors contribute to the overall cost of health care. Lack of competition in the small group market, litigation, and mandates are just some of the many culprits driving up costs. The problems facing small business owners, their employees and families must be addressed as part of the overall health care debate.

I support health savings accounts, HSAs, recently enacted under the Medicare Modernization Act, coupled with hide-deductible health care plans. They are a way for small businesses and individuals to lower their health care premiums. Along with HSAs, individuals should be allowed to deduct 100 percent of their high-deductible health plan premiums if they are not subsidized by an employer plan already. High-deductible health care premiums are defined as a minimum of $1,000 and up to $5,100 deductible for individuals and a minimum of $2,000 and up to $10,200 deductible for families. I have introduced a bill titled the Health Insurance Affordability Act, H.R. 37, which would allow for this type of deductibility for health insurance premiums.

Currently, large businesses are allowed to deduct employee health insurance premium payments, as are small businesses, for their employees as a business expense. Unfortunately, employees of small businesses that cannot afford to provide health insurance coverage are not able to deduct the cost of health insurance. This group of people includes waitresses in diners, workers in dry cleaners shops, temporary workers; and that is just a few. With the rising cost of health care coverage, many of the Nation's small employers are dropping coverage, which increases the number of uninsured Americans.

In the 2004 State of the Union Address, President Bush proposed that individuals who buy catastrophic health care coverage as part of our new health savings accounts be allowed to deduct 100 percent of their premiums from their taxes, President Bush's fiscal year 2006 budget request stating the following: ``Above-the-Line Deduction for Certain Health Insurance Premiums, under this proposal all individuals who purchase a high-deductible health plan in conjunction with a health savings account would be allowed to deduct the amount of the health plan's premium from their taxable income even if they do not itemize their deductions.'' That is the President's proposal. It mirrors my proposal on H.R. 37, the Health Insurance Affordability Act, which I drafted and dropped last year as well as this year. This new deduction would make high-deductible health plans more affordable.

We should follow the President's lead and continue to promote personal health care ownership and control of health care policies. H.R. 37 provides an above-the-line tax deduction of the health insurance premiums for those who buy their own HSA plan. Several HSA providers report that a high number of previously uninsured individuals are buying HSAs in the individual market. By allowing consumers to deduct the premiums, we are building on the benefits of HSAs and will make health insurance affordable for America's uninsured population.

Health savings accounts will also help reduce the number of uninsured Americans by allowing small businesses more choice in the current small group market. Additionally, individuals who have catastrophic health care coverage with a health savings account should be allowed to deduct 100 percent of their premiums from their taxes. HSAs, along with 100 percent deductibility, will provide small businesses with more accessible, affordable options in the health insurance market.

A government-run health care system is not the solution to the health care problems facing small businesses. A government-run health care system or mandates and minimum benefit packages forced upon small employers will deter or even destroy entrepreneurship and the growth of small businesses.

Mr. Speaker, the small businesses in this country lead in new jobs. They lead in employment. They are at a disadvantage today because the structure of health insurance premiums is wrong, and it is wrong because it lacks full deductibility for the people who utilize it. And this goes back in history to World War II when we had wage and price controls and when that order came out, employers were looking for a way to compete in a shrinking labor market because much of the labor put on a uniform and went overseas to fight World War II.

So in keeping with the freezing of wages and prices, instead they gave health care benefits to their employees; and it was not really circumventing a raise, but it was keeping with the freeze, but it was benefits to compete for that shrinking labor supply that was there.

That tradition now has been in place over 60 years, and in this 60-plus years, we have watched it get more and more distorted every year. So if a large corporation or a government employer can offer a health insurance benefit that is fully deductible and especially to large corporations and there sits a ma-and-pa operation, a family farm, a gas station, a convenience store, a company that is hiring part-time labor, these people that are disadvantaged from the current structure, when they are disallowed from full deduction of their health insurance premiums, should be allowed that deduction. That is what the Health Insurance Affordability Act does, H.R. 37. It is one piece of the whole puzzle that we need to do.

The gentleman from Georgia (Mr. Price) is bringing forth a more comprehensive discussion here tonight. I have targeted on H.R. 37 because I think it is the one thing that we can do to bring deductibility to the employees who are not able to deduct their health insurance premiums. But I believe that if a Fortune 500 company can deduct a full coverage insurance plan and every dime that they put into that full coverage insurance plan is an above-the-line deduction, a Schedule C deduction, on their income tax, then that also should be available for every citizen whatsoever in the United States of America.

H.R. 37 takes us down that path. It gets us closer. It does not get us all the way. We will not get this done overnight. It has been over 60 years to get in the condition that we are in.

I thank the gentleman from Georgia for organizing this Special Order tonight and for bringing his professionalism in the health care industry and his experience as a doctor that actually sees how this works in the lives and minds of patients to the floor here tonight and to everything he does here in this Congress. I thank the gentleman from Georgia (Mr. Price) and appreciate his yielding to me.

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