Assured Funding for Veterans Health Care Act of 2005

Mr. Speaker, I want to commend my friend and colleague, the gentleman from New Jersey (Mr. Andrews), for the leadership he has shown on this issue.

Here we are again, Mr. Speaker. Year after year after year it seems we continue to rise in this Chamber to debate the same issue. One of the reasons we have to do this year after year is because bad policy is tough to sell, and especially tough to sell in the Senate right now, which has refused to take this up and move it forward because it has been bad policy.

The chairman of the full committee, the gentleman from Ohio (Mr. Boehner), had a chart showing us a 93 percent approval of AHPs. That is not surprising, Mr. Speaker. There is such a craving throughout America for any type of legislative proposal that would bring price relief to the rising cost of health care, that I am afraid people will chase any proposal and even jump off a cliff without looking where they are going to land.

That is why, Mr. Speaker, especially under these conditions, it is more incumbent upon us here in this Chamber to be extra careful in regard to the policy proposals that we are proposing so we do not violate the Hippocratic oath, and that is: first do no harm to the current health care system. There is plenty of places where this legislation that is being offered today would do substantial harm.

We have had studies outside and inside this body that have come back explaining the true deficiencies of this legislation, but none probably summarize it better than the National Small Business Association that recently sent us a letter expressing their concerns. Now, this is an organization of some of the largest Chambers of Commerce and some of the biggest local and national organizations throughout the country, all of which see this AHP proposal for what it really is: an empty promise.

Mr. Speaker, I quote from this letter from the National Small Business Association in which they state, ``The biggest loser from the passage of AHPs would be small businesses. AHPs are not an answer to rising health care costs and would significantly worsen the state of health care for all businesses. More and more small businesses are realizing that despite the bumper sticker pitch in its favor, AHPs are, simply put, bad public policy.''

They go on to cite the Mercer study, saying that ``premiums for those outside the AHP market would increase an additional 23 percent, and an additional 1 million people would become uninsured as this policy plays out.'' They go on to state that ``the minimal price savings realized by some businesses through AHPs would come from attracting healthier participants and depleting benefits that are currently required by States. AHPs could create plans that manipulate benefits and are extremely unattractive to sicker, less healthy participants.

``Furthermore, the CBO found most of the enrollment in AHPs would come from businesses switching coverage. Only 1 in 14 would be newly insured. AHPs do nothing to solve the problem in rising health care costs to small businesses and their employees.'' And they conclude by saying, ``They simply shift the cost from the overall market to a more concentrated group of people. This is hardly a long-term solution.''

There is a better proposal, one that we will talk about in more detail when our substitute is offered. There is a way for us, I believe, to come together in a bipartisan fashion to address one of the most pressing issues of the day, and that is affordability and access to quality health care.

Businesses large and small, family farmers, individual employees are all suffering alike, and that is why it is important for us to come together and do something meaningful to relieve the health care pressures in this economy.

Mr. Speaker, I offer an amendment in the nature of a substitute.

Mr. Speaker, I yield myself 5 minutes.

Mr. Speaker, this morning we fortunately witnessed the successful take-off of the latest space shuttle mission into space, and I, and I know all my colleagues, our thoughts and prayers go with that crew and their families. We wish them a successful mission and a safe return here to Earth at the conclusion of that mission.

But, Mr. Speaker, ``Houston, we have got a problem'' right here on Earth today, and that problem we all can agree to is the rising cost of health care, the impact that it is having on businesses large and small, family farmers, individual employees. It is a crisis that has been building through a number of years, and there is nothing more heart-wrenching or gut-wrenching than to speak to young parents who have a young child in desperate need of emergency medical attention, having to take that child to the hospital knowing that they do not have adequate health care coverage to provide for their sick child.

Today, one of the major factors for individual and personal bankruptcies is health care-related costs. There is also nothing more disheartening than speaking to the multitude of small business owners throughout this country who would love nothing better than to be able to extend affordable health care coverage to their employees; but they cannot because it is too expensive.

I think we can all agree to the fact that this is something that we have to have focused attention to alleviate the high costs of health care and the growing ranks of the uninsured, which is roughly 45 million to 48 million today. When we think about who comprises these 45 million to 48 million uninsured, the vast majority of them are working Americans, working in small businesses who cannot afford to provide coverage. Again, it is something we all recognize, because we hear about it daily when we are back home traveling in our congressional districts. So, yes, action is needed; but there is a right way and a wrong way in taking action.

A wrong way would be doing more harm than good in passing legislation and, for the previous hour, we have had a discussion in regard to the deficiencies and the shortfalls of the underlying associated health plans bill. That is why over 1,400 organizations around the country have come out in opposition to it.

But today, the gentleman from New Jersey (Mr. Andrews) and I are offering the right way, an alternative way, another approach to dealing with the health care crisis that our small businesses are facing, one that we believe would extend health care coverage to millions of Americans, while keeping a lid on the rising premium costs.

What it does, in essence, Mr. Speaker, is it builds upon the successful framework that the Federal Employees Health Benefits Program has offered to countless Federal employees throughout the country. It is a purchasing pool concept that they can enter into, with the competition of the marketplace and different insurance plans competing for that business that has proven to be extremely cost effective in not only extending coverage to millions of Federal employees, but also by guaranteeing the State protections and consumer protections that have been passed by State legislatures throughout the country.

Mr. Speaker, it is one of the more amazing aspects of this debate that the party that claims to be for States' rights and tries to take political advantage of saying, listen, States, we stand for you and what you decide to do on a policy level, is so quick to jettison States' rights when it becomes politically inconvenient for their political allies, and that is exactly what is going on here today with the proposed associated health plans, which will preempt and trump the public policy decisions that have been made throughout this country by State legislatures.

Now, our plan also would offer a minimum guarantee of coverage, one that the Federal Employee Health Plan currently does. It does not preempt the consumer protections and the State laws that have been passed. And the reason those State laws have been passed throughout the years is because the free marketplace and the insurance companies competing for the business were not offering this type of coverage, and that is why the State legislatures, in working with the Governors, had to pass legislation requiring certain minimal safeguards of health care coverage. So if a State legislature has felt in the past that it is necessary to require prenatal care, for instance, or to prohibit drive- through deliveries, or to require screening for diabetes, autism, cancer, they have chosen to do so; and it has made sense for those States that have.

But, instead, this one-size-fits-all approach comes in and tries to preempt what the States have been doing for many, many years.

But what is also different with our substitute is it actually offers premium support payments to make it more affordable to small businesses to offer health care coverage to their employees, something that the underlying AHP plan is silent on. Again, an analysis of our bill would show that it would actually increase the coverage of the uninsured, help premium prices come down by building on this purchasing-pool concept, but also maintaining important and safe consumer protections. There is a reason why the National Governors Association and the States attorneys general have opposed the underlying bill. It is for all of these reasons, and we would respectfully submit the right approach is the substitute that we are offering today.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, at this time I yield 4 minutes to the gentlewoman from Colorado (Ms. DeGette), a person who certainly appreciates the role of States and consumer protection in this health care debate.

Mr. Speaker, I yield myself 1 minute to respond quickly, just to clarify a couple of facts.

Mr. Speaker, I have all of the respect and admiration for the chair of our committee, but a closer reading of the substitute bill would not, in fact, require a Federal-run program; rather the Department of Labor would contract out the State-licensed health insurance plans in order to administer these programs.

But we do feel that there is a requirement or a necessity to offer greater incentives and inducements for small businesses to offer this coverage. That is why we are offering a premium support program with it.

Mr. Speaker, I yield 5 minutes to the coauthor and codrafter of this substitute amendment, the gentleman from New Jersey (Mr. Andrews).

(Mr. ANDREWS asked and was given permission to revise and extend his remarks.)

Mr. Speaker, I just recommend to the previous speaker that he should talk to any Federal employee with regard to the choices that they are offered under the Federal Employee Health Plan.

Mr. Speaker, I yield 2 minutes to the gentlewoman from Ohio (Mrs. Jones), a person who would rather take millions of people off the ranks of the uninsured rather than add a million people into the uninsured.

Mr. Speaker, I yield 4 minutes to the gentleman from Tennessee (Mr. Cooper).

Mr. Speaker, how much time remains?

Mr. Speaker, I yield 4 minutes to the gentleman from Rhode Island (Mr. Kennedy), someone who understands the importance of maintaining consumer protections as we have in our substitute bill.

Mr. Speaker, I yield 2 minutes to the gentleman from Maryland (Mr. Cardin), a person who has built up considerable health care expertise from his position on the Committee on Ways and Means.

(Mr. CARDIN asked and was given permission to revise and extend his remarks.)

Mr. Speaker, will the gentleman yield?

We are waiting to get a cost estimate back, but based on two previous debates on this issue, it was comparable to the amount of money set aside for the health savings account that has been a part of this bill in the past, but is not this year.

Mr. Speaker, I yield myself the balance of my time.

Mr. Speaker, I think there is wide agreement, bipartisan agreement that we have got a serious issue on our hands, a huge challenge that is facing our Nation, that is, rising health care costs and the impact it is having on economic growth, the opportunities for businesses large and small to grow and hire additional workers. I think it is one of the main reasons why we have experienced such anemic job growth in this country in recent years, because of the hesitancy of so many businesses, especially small businesses to hire additional workers because of the associated rising health care costs. It is something that we must address in order to deal with an expanding economy at a rate that we would all like to see, but also to get a grip on the stagnant wages right now that are holding so many of our workers back.

I think there is a direct cause and effect whereas the typical worker's wages have been frozen in effect in recent years because of the additional costs coming out of their pockets to afford health care. That is why, again, we have had an important debate today, but it is one we should be working on in a bipartisan fashion to address the underlying causes.

Volumes have been written about the underlying associated health plan that is before us today. And, unfortunately, the verdict is in and that verdict is this is just bad public policy. That is why so many of the Governors and so many of the attorneys general, and the commissioners of insurance, the Association of State Legislatures in a bipartisan fashion have roundly criticized and condemned the underlying associated health plan, because they feel as we do on this side that it will do more harm than good.

I understand and appreciate the motivation on the other side to try to move forward on this issue. But we are stuck. The wheels are stuck in the mud, and it is just spinning because it is not getting any traction. And that is because the Senate in their analysis of the underlying bill has found that it, too, is bad public policy. And I am afraid we are going to have this debate today, it is going to expire and it is going to get stuck with no progress being made.

Perhaps there may be some deficiencies in what we are offering in our substitute, just as we believe there are deficiencies in theirs. But now is the time for us to come together to try to find some common ground so we can make progress and deal with this issue that is affecting more and more Americans every year.

One of the issues that really has not received that much attention, and I would just like to close on and highlight it, is again the fact of the Federal preemption and taking away from States the ability to conduct proper oversight and accountability with these insurance plans.

Both the GAO in a study and a recent Georgetown University study that came out this summer indicated that the underlying AHP bill, as it is written with the weak provisions that would go to the Department of Labor, would lead to an explosion of fraud and abuse with these types of plans throughout the country. And there is a history of fraud and abuse.

Currently, there are over 144 plans that are set up fraudulently that are not paying the claims that are affecting well over 200,000 workers. But for the effective oversight and the policing that is taking place at the State level, even these would probably go unnoticed. It would impact more and more Americans. It is another reason why the underlying bill does not make sense, why the Federal preemption over State jurisdiction, which has been the history of health care regulation in this country, is another bad idea.

Our substitute addresses that by not preempting State law by allowing the State jurisdiction and oversight to continue. It does build upon the concept of a purchasing pool modeled after the Federal employee health plan which, as was stated earlier, has worked marvelously over the years. No one is recommending dismantling that.

I would encourage a ``yes'' on the substitute and a ``no'' on the underlying bill.

Mr. Speaker, I yield back the balance of my time.

Mr. Speaker, on that I demand the yeas and nays.

Mr. Speaker, pursuant to H. Res. 379, I call up the bill (H.R. 525) to amend title I of the Employee Retirement Income Security Act of 1974 to improve access and choice for entrepreneurs with small businesses with respect to medical care for their employees, and ask for its immediate consideration.

Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days within which to revise and extend their remarks on H.R. 525.

Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, the most pressing crisis we face in health care today is the number of Americans who lack basic health insurance. The number of uninsured Americans today stands at 45 million Americans; 27 million are fully employed. And 63 percent of these working uninsured are either self-employed or work for a small business with fewer than 100 employees. It is tragic that so many employers cannot afford to purchase high-quality health insurance benefits for their workers.

The problem is not going away, and we have a responsibility to confront it. With health care costs continuing to rise sharply across the country, more and more employers and their employees are sharing the burden of increased insurance premiums. Employer-based health insurance premiums jumped by 11 percent last year following a 15 percent increase in 2003.

Clearly, we need to focus on providing affordable health care to the uninsured as well as ensure employers

who provide health benefits to their employees are not forced to drop their coverage because of rising premiums and high administrative costs.

The Small Business Health Fairness Act responds to this problem and can help reduce the high cost of health insurance for small businesses and uninsured working families. By creating association health plans which would be strictly regulated by the Department of Labor, small businesses could pool their resources and increase their bargaining power with benefit providers which will allow them to negotiate better rates and purchase quality health care at a lower cost.

President Bush addressed this point directly last year during his speech at the United States Chamber of Commerce where he said, ``AHPs would provide small businesses the same opportunity that big businesses get, and that is the economies of scale, the economies of purchase, the abilities to share risk in larger pools which drives down the costs of health care for small businesses.''

The President is right, and we should help level the playing field so small businesses can offer quality coverage to their workers.

Americans overwhelmingly agree with President Bush that association health plans are the right plan to help the uninsured. A poll conducted last year showed that 93 percent of Americans support association health plans as a way of providing access to affordable care for American workers who lack coverage. Over the last year, we have seen how large corporations are now starting to band together to provide health care to their part-time workers. Do small businesses and their workers not deserve the same opportunity?

Importantly, the bill gives AHPs the freedom from costly State mandates because small businesses deserve to be treated in the same fashion as large corporations and unions who receive the same exemptions today. Clearly, these mandates are useless to families who have no health coverage in the first place. If you do not have health care coverage, State mandates requiring health plans to offer specific benefits do you and your family no good at all. This measure includes strong safeguards to protect American workers.

Despite the bipartisan nature of this bill, I would like to correct some of the misinformation that I have heard. The measure protects against cherry-picking because we make clear that AHPs must comply with the 1996 Health Insurance Portability and Accountability Act, which prohibits group health plans from excluding or charging a higher rate to high-risk individuals with a high claims experience.

Under our bill, sick or high-risk groups or individuals cannot be denied coverage. In addition, AHPs cannot charge higher rates for employers with sicker individuals within the plan except to the extent already allowed by State law where the employer is located. The bill also includes strict requirements under which only bona fide professional and trade associations can sponsor an association health plan, and, therefore, does not allow sham association plans set up by health insurance companies. These organizations must be established for purposes other than providing health insurance for at least 3 years.

We in Congress have a responsibility to deal with a problem of small businesses who cannot afford to provide health insurance because of skyrocketing health care costs. The U.S. economy is getting stronger by the day, and more and more employers are hiring workers each month. Earlier this month the unemployment rate dropped to its lowest level since September of 2001 and the Labor Department reported that 3.7 million new jobs have been created since March of 2003. That is 25 consecutive months of sustained job creation.

We want to make sure that these workers have the opportunity to receive quality health insurance through their employer, and this bill can help make that happen.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I yield 4 minutes to the gentleman from Texas (Mr. Sam Johnson), chairman of the Subcommittee on Employer- Employee Relations.

Mr. Speaker, I yield 3 minutes to the gentleman from Georgia (Mr. Norwood), the chairman of the Subcommittee on Workforce Protections.

Mr. Speaker, I yield myself 30 seconds.

Mr. Speaker, the gentleman from Georgia and I have had a disagreement over this particular provision for several years. It is very clear in the bill, as I read it, not the way the gentleman from Georgia (Mr. Norwood) reads it, and this is where the source of the disagreement comes in terms of how plans can choose groups of employees.

Under current ERISA law, you are allowed to have different rates for different groups of employees as long as there is a reason other than the health status of that group to have a separate group. Maybe you have a plant located in one part of the State, another plant in another part of the State. You could have two different rates at those two different plants, just like you can under most State laws and what you can under ERISA.

So I look forward to continuing to work with my friend from Georgia to resolve our misunderstanding of this issue.

Mr. Speaker, I yield 2 minutes to the gentleman from Louisiana (Mr. Boustany), a physician.

Mr. Speaker, I am pleased to yield 2 minutes to the gentleman from Louisiana (Mr. Boustany).

Mr. Speaker, I yield 3 minutes to the gentleman from Texas (Mr. Sam Johnson), the chairman of the Employer-Employee Relations Subcommittee.

Mr. Speaker, I yield myself the balance of my time.

Mr. Speaker, small employers today have a difficult problem. They are trying to keep their business alive. They are trying to make enough money to hire and grow their business and at the same time trying to provide affordable health insurance. About 60 percent of the 45 million people who have no health insurance work for small businesses of some sort. But what happens to those small employers in most of these State risk pools? They are in the small group coverage area, and guess what happens? There may be a provider or two that will offer them insurance. They are stuck in a small pool, and they pay the highest rates of any group that is out there, unless, unless, one happens to be self- employed.

Let us say that they were a realtor, and as a realtor they are self- employed, they are not an employee of a company, and they try to buy health insurance for themselves out in the open market again in these small State risk pools. Here it comes, $1,500 a month,

$2,000 a month. And, my goodness, if they are sick, they will not get it at all.

So what we have been proposing now for some 10 years, and the House has passed this on a bipartisan basis at least five times, is to allow businesses and self-employed individuals who belong to bona fide organizations to group together for the purposes of health insurance. Why should a realtor who belongs to the National Association of Realtors not have an opportunity, whether their State association or the national association wants to put together a package of plans and allow them to choose one of those plans that might fit the kind of coverage that they want, why would we not want to do this?

We have heard all this shtick about all these plans are lousy, they are low-cost coverage. No. These plans would look exactly like the plans that big companies and unions offer today. Everybody in America wants to work for a big company or a union. Why? Because they have got great health benefits. And why do they have great health benefits? Because that is what their employees and that is that their members want. People do not want to go out and buy low-cost coverage that does not cover anything. That does not accomplish anything.

So when we look at the opportunity for small businesses to go out and to be able to purchase health insurance for their employees, just like a big company or just like a union under the same set of rules, the same set of rules for small companies that big companies have today, we should not let the perfect become the enemy of the good. This will not solve the problem of all 45 million of the uninsured, but it will help millions of Americans who work for small businesses have a better opportunity at getting good health coverage at competitive prices.

We have heard an awful lot of talk about it does not have this mandate, that mandate, that mandate. And why do big companies who do not have to have any mandated coverages under ERISA, why do they provide those? Why do they have breast cancer screening? Why? Because it makes sense to screen for this to detect it early and to deal with it. Why do they have these benefits that are not mandated? Why? Because they make sense to find out early in the illness.

These small companies are going to have the same types of high- quality plans that big companies have today without State mandates, because what happens is every State has a mandate. Some of them have as many as 30 mandated benefits that drive up the cost of health insurance and drive the number of uninsured up as well. But companies that offer a lot of these benefits, they do so with, as an example, a breast cancer benefit that covers the whole country, one size, not 50 different States done in 50 different ways that they have to find out exactly how it is going to be covered in each of those 50 States.

I have no doubt that the policies that will be offered by these association health plans will, in fact, be high-quality policies at very competitive prices.

As I said before, this bill has passed the House on a number of occasions with broad bipartisan support, and I expect that will occur again today. So I would ask my colleagues to stand up and vote. We hope that the other body will eventually take this bill up and move it and to help reduce the number of uninsured Americans that we have.

Mr. Speaker, I yield back the balance of my time.

Mr. Speaker, I thank my colleague for yielding me this time to speak on the substitute that has been offered.

Now, if we think that having States regulate insurance in a small group market is a problem with state-mandated benefits, this is the mother of all complicated programs to offer health insurance, because what are we going to do? We are going to have the Federal Government do it. Now, none of us really believes that the Federal Government ought to be in the business of running big-risk pools and offering plans to small businesses.

Secondly, the bill is estimated, and it has changed from last year; last year there was a $50 billion authorization, but it is still going to cost an awful lot of money to do this bill.

One of the most damaging parts, though, is that each employer who would take part in this plan that is being offered would still be subjected to the State mandates on health insurance in their particular State. There are 1,500 State-mandated health benefits around the country. It also requires that the employer must pay at least 50 percent of the premium. In most cases, I would imagine the employer would pay far more than that of the premium; but maybe it is a small company, maybe it is five or six employees, and maybe together they decide, we want to qualify for this, but we will each pick up our own share of the cost. Why would we want to prohibit them from including themselves in this by this type of a requirement?

It also says that every employer must offer this to every employee who has worked at the company for 3 months. That seems like a very short period of time, especially in some industries where you have an awful lot of turnover where they would typically require that you wait 6 months before you would qualify. All this would do would be to drive up the cost.

But one of the most amazing parts of this substitute, we would subsidize this from the Federal Government and, for employers with 25 or fewer employees, we would give them a subsidy to help entice them into this program. And, if you qualified, you qualify for a 10-year period. Now, some small company with less than 25 employees may qualify, may get the subsidy and may, over a course of several years, become highly successful. But under this particular substitute, they would still qualify for the subsidy.

I do not think any of us believe that the Federal Government ought to be operating a health insurance company. There are a lot of mechanisms in the private market for this association health plan program to work. And, again, why do we want to make the perfect the enemy of the good?

The underlying bill that we have will, in fact, work. It will allow millions of Americans to get better-quality coverage at much more competitive prices than what they get today.

So let us allow the underlying bill to go forward. Let us defeat the substitute.

Mr. Speaker, I rise in opposition to the gentleman's motion.

Mr. Speaker, the most coveted health insurance available to Americans is offered by big companies and unions. All we are trying to do in the underlying bill is to give small employers the same opportunity to provide high-quality health insurance to their employees at competitive prices.

The motion to recommit would require every AHP to cover every mandate known to man, driving up the cost of those policies and making sure that no new employees would ever be covered by an AHP. There are 45 million Americans with no health insurance. While this will not cover all 45 million Americans, it will help some Americans who have no access to health insurance today have access to high-quality, competitively priced health insurance. You can have all the mandates in the world; but if you do not have health insurance, you get no coverage at all. No doctors' visits. No nothing. It is a bad motion. Support the underlying bill.

Mr. Speaker, I yield back the balance of my time.

Mr. Speaker, I rise in opposition to the bill and I yield myself 4 minutes.

(Mr. ANDREWS asked and was given permission to revise and extend his remarks.)

Mr. Speaker, today there is a point of agreements and a strong point of disagreement. There is a point of agreement that health care costs are rising too fast for too many people. There is a point of agreement that the consequences of that price increase is a tremendous burden on small business and a high likelihood that more people will be uninsured.

I do not think there is a Member of this body that does not favor finding an intelligent and effective way to reduce health care costs for small business so they can continue to insure the people they do insure and expand and insure more people in the future.

Where we disagree is over whether this underlying bill is the right way to do it, and we emphatically believe that it is not.

There are four reasons to oppose this bill. The first is that there is a better idea. There is a better way to solve this problem, and the gentleman from Wisconsin (Mr. Kind) will address that issue when our substitute is brought to the floor in a little while.

The second reason is that this bill will not result in a reduction of the number of uninsured. To the contrary, it will result in an increase in the number of uninsured people, and here is how. It is estimated by the experts in this field that 8 million people will be shifted from conventional health care policies and plans to association health plans. These 8 million people will, in fact, probably have a lower premium than they do right now for a little while. But when those 8 million people are shifted out of conventional health care plans and they will tend to be younger and healthier people, the people remaining in the conventional health care plans will have to bear more of the costs, and premiums will go up by an estimate of 23 percent. When the premiums go up on the rest of those in the pool, fewer of them will be insured.

The experts estimate that while 8 million people will be shifted from regular plans to AHPs, 9 million people approximately will lose their coverage altogether, and the results will be a net loss in the number of insured of 1 million people.

So supporting this bill will increase the number of uninsured, not decrease it; and it will increase premiums by 23 percent.

The second reason to oppose this bill is that it fails to provide the protection to patients, providers and consumers that good insurance regulation provides. There are simply no effective regulations that will keep an insurance company from going bankrupt and being unable to meet its obligations to its policy holders and pay its claims. We have seen this happen before in multiemployer welfare associations. We will be submitting at the appropriate time a list for the Record of MEWAs that have failed.

This is the reason that the National Governors Association, that attorneys general, that commissioners of insurance both Republican and Democrat oppose this bill because the regulation that would protect patients and providers and consumers is not there.

The third reason that we should oppose this bill, the final reason, is that the coverage that people have fought for over the years, so that women have a minimum stay in the hospital after they have a C section, so that women have the right to an annual mammogram, so that people with diabetes have the right to insulin or diabetic care, so that people struggling with mental health problems or with substance abuse have the right to have those services covered, those protections which have been supported by Republicans and Democrats in State legislatures around this country are effectively repealed by the underlying bill, a judgment being made in Washington that contravenes the good judgment of Republicans and Democrats around the country.

This bill should be opposed. There is a better way that the gentleman from Wisconsin (Mr. Kind) will be putting forward with my assistance. This is a bill that will increase the number of uninsured and increase health insurance premiums for small businesses.

This is a bill that will leave patients and providers and consumers unprotected if and when insurance companies go bankrupt. Finally, this is a bill

that effectively repeals protections for breast cancer screening, colon cancer screening, diabetes care, substance abuse care, and mental health care. It is a bill that should be defeated.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I am pleased to yield 3 minutes to the gentleman from Wisconsin (Mr. Kind), who has come up with a very constructive and progressive alternative.

Mr. Speaker, I am pleased to yield 3 minutes to the gentlewoman from California (Ms. Woolsey), a person who is a strong voice for the rights of patients and families.

Mr. Speaker, I yield 3 minutes to the gentleman from New Jersey (Mr. Holt), a Member who does not want to see a 23-percent increase in premiums for his constituents.

(Mr. HOLT asked and was given permission to revise and extend his remarks.)

Mr. Speaker, I yield 3 minutes to the gentlewoman from New York (Ms. Velazquez), a person with whom I share an important goal, but have a disagreement on means.

(Ms. VELAZQUEZ asked and was given permission to revise and extend her remarks.)

Mr. Speaker, I yield 3 minutes to the gentleman from Massachusetts (Mr. Tierney), a Member who understands that this bill will increase the number of uninsured by at least 1 million people.

Mr. Speaker, among those who know the difference between a Cadillac and a lemon are the insurance commissioners of our States who oppose this bill.

Mr. Speaker, I yield 2 minutes to the gentleman from North Dakota (Mr. Pomeroy), one of their former members.

Mr. Speaker, I yield 3 minutes to the gentleman from Maryland (Mr. Van Hollen), a Member who understands that this bill will raise premiums by 23 percent and cost 1 million people their coverage.

Mr. Speaker, I am pleased to yield 3 minutes to the gentleman from California (Mr. George Miller), the ranking member of the full committee and a fighter for working families throughout his career here.

(Mr. GEORGE MILLER of California asked and was given permission to revise and extend his remarks.)

Mr. Speaker, I yield myself the balance of my time.

Mr. Speaker, the argument for this bill rests upon a false choice that I believe would have catastrophic consequences for many Americans. We are told by proponents of the bill that if we are willing to yield the guarantees that they presently enjoy under the law that guarantee them a mammogram, guarantee them care for diabetic illness, guarantee them other rights that they fought and won for, if we make that trade- off, we will get more people health insurance. If that were true, this would be a difficult choice, but it is not true.

The net impact of this bill will be to increase the number of uninsured people by nearly 1 million people because the increases in premiums for small business that will occur in businesses that stay in conventional plans will chase more people out of these plans. The experts estimate that these increases will be in excess of 20 percent.

So this is a false choice. This bill does not say that if we yield these benefits that people cherish, more people will be insured. The opposite is true. If we were to make the mistake of yielding these cherished benefits, more people would lose their coverage than would gain it.

This is a choice not worth making, and it is why the National Governors Association opposes the bill, Republicans and Democrats. And it is why the Attorneys General oppose the bill, Republicans and Democrats. And it is why commissioners of insurance, Republicans and Democrats, oppose the bill.

I urge our colleagues on both sides of the aisle to protect the benefits that our constituents earned and deserve and to prevent the increase in the number of uninsured and the increase in health insurance benefit premiums and vote ``no'' on this bill.

Mr. Speaker, I yield back the balance of my time.

Mr. Speaker, I thank my friend, the gentleman from Wisconsin (Mr. Kind), for yielding me the time.

I think the best way to understand the difference between the plan that the gentleman from Wisconsin (Mr. Kind) and I are putting forward and the majority plan is to look at it from the point of view of one of the small business people that we keep hearing referred to over and over again here today.

My friend, the gentleman from Wisconsin (Mr. Obey), often refers to speeches on the floor as posing for holy pictures, and I think that is what is going on here today, where everyone is embracing the small businessman or small businesswoman and saying how much we love them and care about them, and I am sure everyone does. But I think what matters is the impact of these various proposals, what the proposals would have on the small business person.

In my State the cost of insuring a family is about $14,000 a year. So let us

take a small business person that has 10 employees and is looking at a situation where he or she would have to spend $140,000 to insure each of those employees and their families if the employer was going to bear the whole cost. That is a huge amount of money, but is probably well beyond the ability of that employer to pay for.

Under the majority's bill, if we give the majority every benefit of the doubt, if we assume that the majority's bill will work exactly as they say that it will, the most optimistic forecast is the majority's bill will save 13 percent in premiums for that employer. And let us round it up a little bit and give them the benefit of the doubt further and say it will save $2,000 per employee off that $14,000.

So what would happen? We would save $20,000, and the employer would be looking at spending $120,000 to insure the families instead of $140,000. That is not going to do it. That is still far more than the person running a machine shop or a small retail store or landscaping business or a delicatessen is ever going to be able to afford. This just is not going to happen. It is not going to happen.

Our proposal is very different. It says that in a case of a small business like the one I am hypothesizing here, where you have about 10 employees, and where those employees make less than 200 percent of the poverty level, which in my State for a family of four would be about $40,000, so just about anybody making less than $20 an hour or so would be eligible for this kind of subsidy, that is most people. That is most people. Under our plan that employer, if the employer chose to do this, my friend a minute ago said that the employers were mandated to do this, that is not so. No one is required to insure their employees under this plan, but if the employer chooses to insure his or her employees, what would happen is they would get a credit of $7,000 per employee toward the cost of this health insurance, a 50 percent credit. So the price of the coverage would drop from $140,000 down to $70,000. That is still an awful lot of money. It is an awful lot of money for a person running a small business, but it puts the person in reach of maybe covering that family, particularly if they ask the family to share with copays and deductibles and their own contribution.

Now, my friend, the gentleman from Ohio (Mr. Boehner), the chairman of the full committee, said, my goodness, the Government will be subsidizing small employers if we do this. It is big government. Well, government already subsidizes health care for large employers, because they permit the large employers to deduct every premium dollar. And that employer is paying at the 36 or 37 percent corporate tax rate, which most of them do. That constitutes a 36 or 37 percent subsidy. So General Motors is getting a nearly 40 percent subsidy, but the person running the delicatessen or the machine shop is not. This evens the playing field.

Now, how do we pay for this? Now, the chairman knows that under the rules of the House that it would not be appropriate or germane for us to identify the source of paying for this, because it would take it outside of the committee's jurisdiction.

There are different views as to how we could pay for this. I speak only for myself when I say this, but I would note for the record that the cost of tax breaks to companies that outsource their jobs outside of the United States is $100 billion over the next 10 years. So if that machine shop, if its competitor takes all of the jobs and moves them to Malaysia or Mexico, gets a tax break for doing that, which I think is a foolish policy, if we were to repeal that tax break for companies that are outsourcing their jobs out of this country, that would go a long way toward paying for the plan that we are talking about.

That to me is a pretty good trade-off. Companies that are sending their jobs overseas would lose a tax break; companies here in America would gain health insurance.

Vote yes on the Kind-Andrews substitute.

Mr. Speaker, on that I demand the yeas and nays.

Mr. Speaker, I thank the gentleman from Ohio for yielding me this time.

As you know, Mr. Speaker, the cost of providing health care for employees has become the number one issue for small businesses around this country. It is especially important to me, because in my home State of Texas, one in four workers are uninsured. Small businesses have it especially tough because there is an inherent problem in a small number of people. You need to be able to pool risk to make insurance work. To make matters worse, there is a lack of competition in the small group health insurance market, allowing a few insurers to charge whatever they want. That is why we need association health plans.

These AHPs would allow small businesses to pool together to purchase health insurance. So instead of one individual company shopping for health care insurance, they would bring an entire trade association, for example, the U.S. Chamber of Commerce, to the table with much better bargaining power.

However, pooling risk and buying in bulk is not enough. If your association had members all across the United States, you would have to abide by 50 different sets of mandated benefits in order to offer your insurance. Not only is that a headache, but it is more costly. Some of the mandates that have been enacted by State legislatures include infertility treatment and alternative health solutions such as acupuncture. These mandates drive up the cost of premiums.

To resolve this, AHPs would allow small businesses to buy insurance under the same terms that large corporations and unions enjoy today. ERISA, a law that governs employer benefits, lets these sort of self- insured plans use one set of Federal rules, not 50 State rules. Talk about a quick way to lower administrative costs.

And lower administrative costs, Mr. Speaker, means lower premiums, up to 30 percent lower by some estimates, and that means affordable health care for employers and their employees alike. So who would not want AHPs to pass?

Some critics say AHPs will be an opportunity for fly-by-night groups that front as insurance companies and then leave employers with unpaid claims. The AHP bill in both the House and the Senate has tough safeguards to protect small businesses and their employees. A bona fide trade organization must have been in existence for 3 years before enactment of the law in order to offer an AHP. And there are Federal solvency standards set up for these health plans, including requirements for a reserve fund and stop-loss coverage. This is beyond and above what ERISA requires.

Moreover, the Department of Labor would be charged with the oversight of these plans, and the bill gives them the power to pursue criminal penalties against those who commit fraud. The Department of Labor has testified in hearings that they are up to the task and support the legislation.

Who else? Groups that have worked so hard to get coverage for their particular treatment mandated by State legislatures do not want AHPs to be exempt from the 50 different State laws. Let me say it plainly: That is the point of the legislation. One uniform set of benefits lowers administrative costs. If it is good enough for large corporations and unions, it ought to be good enough for small businesses.

Mr. Speaker, AHPs are a big step in the right direction for our hard- working families who need health insurance now.

Mr. Speaker, I yield 2 minutes to the gentleman from Georgia (Mr. Price), a member of the committee.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I yield 4 minutes to the gentleman from Maryland (Mr. Wynn).

Mr. Speaker, we have heard it over and over again today on the floor. Too many working Americans have a job, but are uninsured because their employers cannot afford to purchase quality health insurance benefits for their workers.

This bill addresses the two most important issues in the health care reform debate: cost and access. H.R. 525 would, one, increase small businesses' bargaining power with health care providers; two, give them much-needed freedom from costly State-mandated benefit packages; and, three, lower their overhead costs by as much as 30 percent.

Our small businesses are denied the ability to purchase health coverage with the benefits large multistate companies and unions have enjoyed for decades. This bill fixes that problem.

By pooling their resources, increasing their bargaining power, AHPs will help small businesses reduce their health insurance costs. As the Members have heard me say before, if it is good enough for Wall Street, it is good enough for Main Street. Small businesses in most States are stuck with disproportionately higher costs because they have to choose from fewer than five providers. So AHPs offer them a new option to choose from. Most importantly, AHPs will expand access to quality health care for the people for whom it is currently out of reach: uninsured working families.

This bill has had unwavering support in the House for nearly a decade now. The other body is taking a serious look at the legislation this year, and it is a priority in the President's health care agenda. I look forward to working with our colleagues from the other body to make this bill law this year.

The problem is getting worse every day. Small businesses need our help now. Let us vote ``yes'' on H.R. 525.

Mr. Speaker, I rise in opposition to the amendment in the nature of a substitute.

Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, as the number of uninsured Americans continues to increase and health insurance costs continue to rise by double digits annually, it is clear that something must be done. I commend our friends across the aisle for coming up with a plan they think works. While I have great respect for the gentleman from New Jersey (Ranking Member Andrews) and the gentleman from Wisconsin (Mr. Kind), I have to disagree with them. Their substitute will have the unintended consequence of raising, not lowering, costs for small businesses trying to offer health insurance. It will impose new mandates on employers and saddle the American public with yet another government program to fund.

The proponents of the plan claim that the new ``small employer health benefits plan'' is modeled after ours here in the Federal Government. Unfortunately, unlike the Federal Employee Health Benefit Plan, health insurance provided under the Democrat substitute would be subject to more than 1,500 State mandates that make up 15 percent of the rising costs of health insurance. That increased cost would likely be funded by higher taxes, adding another burden to small businesses. And on top of that, the substitute would force small businesses to deal with a host of new mandates.

Their substitute mandates employers provide health coverage to every employee who has been employed for more than 3 months. It mandates that employers pay 50 percent of the health care premiums for employees. It mandates that they cover the dependents of their workers. More mandates are supposed to lower costs? The Democrat substitute just does not make sense.

In contrast, AHPs utilize the strengths of the employer-based system, the private market, competition, economy of scale enjoyed by large union and employer plans, and ERISA's preemption of State mandates, to lower costs. Mr. Speaker, AHPs are supported by our Nation's small businesses. The NFIB, the National Retail Federation; the National Association of Wholesalers and Distributors; the National Restaurant Association; Associated Builders and Contractors; National Association of Homebuilders; the United States Chamber of Commerce, and others are strongly supportive of this legislation.

I hope my colleagues will join me in offering assistance to our Nation's small businesses and their workers by supporting AHPs and opposing the Democrat substitute.

Mr. Speaker I reserve the balance of my time.

Mr. Speaker, I yield such time as he may consume to the gentleman from Ohio (Mr. Boehner), the chairman of the committee.

Mr. Speaker, I yield 3 minutes to the gentleman from Louisiana (Mr. Boustany).

Mr. Speaker, I yield 30 seconds to the gentleman from Louisiana (Mr. Boustany).

Mr. Speaker, do I have the right to close?

Mr. Speaker, I yield myself the balance of my time.

Mr. Speaker, we do not know the cost. It is going to be out of reason, I believe. And while AHP legislation will be implemented quickly, this Democrat substitute might take years to get up and running.

In addition, the funds are subject to appropriations. And if an appropriation did not go through or did not provide enough funds, small employers and their workers would be left hanging.

Let me make myself clear. I believe our Nation's employer-sponsored health care system is a success story. Employers provide coverage for the vast majority of our Nation's population; 131 million Americans obtain their coverage from private employers.

The Committee on Education and the Workforce and the Department of Labor through our oversight of ERISA have jurisdiction over employer- sponsored health care. So I support using

the employer-based system to address the problems of the uninsured.

However, the way to do that is to build on the success of the current system by utilizing the strengths that enable large employers and unions to offer Cadillac health plans. AHPs are the way to do that. Vote down this amendment. Vote for AHPs.

Mr. Speaker, I yield back the balance of my time.

Mr. Speaker, I oppose the underlying bill for many reasons. Fundamentally, it violates the concept of federalism that is embodied in our Constitution, respect for our States, and the ability of our States to be able to regulate public safety issues and health issues for the people of our States.

This legislation would preempt the ability of my State and your State to protect the rights of our own citizens through regulation. That is wrong. That is the wrong usurpation of power by the Federal Government.

This underlying legislation would adversely affect the people of Maryland, and let me tell you why. Our legislature has passed small market reform. People who work for companies that are between two and 50 employees have the opportunity to purchase insurance, affordable health insurance in Maryland as a result of our small market reform. The passage of this legislation will mean the end of the small market reform and the opportunity to purchase insurance by small employers in my State. That is wrong.

We are going to be moving in the wrong direction with making affordable health insurance available for the people of this Nation.

Mr. Speaker, I want you to understand the Insurance Commissioner of Maryland is a Republican. The Governor of Maryland, who opposes this bill, is a Republican. This should not be a partisan issue. This should be a matter about the appropriate use of the Federal authority and it is being used wrong here.

I congratulate the gentleman from Wisconsin (Mr. Kind) for his substitute which is sensitive to the rights of our States. I hope Members will support the substitute and reject the underlying bill.

Mr. Speaker, as a member who is dedicated to protecting the rights of Americans who have health insurance and to ensuring that opportunities to secure affordable health insurance can be expanded, I rise in opposition to H.R. 525. Since coming to Congress, I have heard frequently from individuals who work in small business. They have spoken to me about the difficulties that result from a lack of health insurance coverage, skyrocketing premiums, and reductions in benefits. I remain committed to developing solutions that will alleviate the hardships faced by many Maryland families and small businesses.

However, the Association Health Plan (AHP) legislation we are considering on the House floor today is not a viable solution. H.R. 525 would exempt AHPs from State laws and State regulatory oversight. Through this special exemption, AHPs would be able to severely undermine the goal of greater health care access and affordability for Maryland residents. Although some supporters of this legislation claim it will benefit small employers, the reality is that H.R. 525 will only hurt the small business community.

H.R. 525 would leave the Maryland insurance commissioner powerless to protect our citizens. Under this misguided bill, unregulated out-of- state AHPs could operate in Maryland without being required to comply with health care safeguards enacted by our state legislature, such as:

Appropriate access to emergency care. The right to independent appeal of denied claims, Fair insurance premiums for small groups, Consumer marketing protections, Prevention of health plan failures due to insolvency.

Under this legislation, my constituents would not only lose their ability to demand an independent review of denied claims, but they would lose guaranteed access to important benefits such as emergency medical treatment and mammography screenings. Workers who purchase association health plan coverage--believing that they are getting comprehensive insurance--may very well find that they would still have to shoulder the costs of these essential services.

Not only would this bill be harmful to potential subscribers, it would destroy the small group market reforms already in place in Maryland. Twelve years ago, my home state of Maryland took a major step toward helping small businesses afford health insurance for their workers. Our reforms guarantee the availability of reasonably priced, comprehensive health insurance for all small employers. Specifically, Maryland requires all health insurers to sell a comprehensive standard benefit package designed by an independent commission to all employers with between 2 and 50 employees. The plan must have benefits that are actuarially equivalent to those required to be offered by federally qualified HMOs, and the average cost cannot exceed 12 percent of Maryland's average annual wage. Insurers have the option of offering additional benefits, but they must be priced separately. Insurers must use adjusted community rating to price their plans, and they cannot impose pre-existing condition limitations. The Maryland plan not only guarantees the availability of reasonably priced insurance, it also makes it easier for small employers to make ``apples to apples'' comparisons of health costs throughout the state.

Due to these reforms, more Maryland small businesses offer health care coverage to their employees than in any surrounding states or in the nation as a whole. Maryland's system is one in which healthy subscribers subsidize those who are less healthy. These reforms work because insurers are not allowed to ``cherry pick'' the businesses that have the healthiest workers. Association health plans have been outlawed in our state. The association health plan legislation before us would undermine our system by using the lure of lower premiums to attract firms whose workers have fewer health problems, firms whose employees might be willing to forgo some of the consumer protections offered under Maryland law. Businesses with older, sicker employees would remain in the state system, driving up premiums. H.R. 525 would, in effect, lead to the collapse of Maryland's system. I want to emphasize that this is not a partisan issue--AHS's are opposed by my own governor, our former colleague Robert Ehrlich, and by the National Governors' Association, and the National Association of Insurance Commissioners. I will submit for the Record an April 19 letter from Alfred Redmer, Maryland's Insurance Commissioner, expressing his opposition to H.R. 525.

This bill would be devastating on a national level, as well. The non- partisan Congressional Budget Office found that premiums would increase for 20 million employees and their dependents who are covered through small firms, and that 100,000 of the sickest workers would lose coverage altogether if this AHP legislation were enacted.

Passage of this legislation would be a disservice to every worker, every family, and every small business in Maryland. H.R. 525 fails to provide meaningful help for the uninsured, denies access to affordable health care for older, less healthy groups, and undermines the crucial consumer protections that our General Assembly has enacted. For these reasons, I urge my colleagues to vote against this bill.

Mr. Speaker, the following is a letter from our insurance commissioner who is opposed to H.R. 525:

Maryland Insurance Administration,

Baltimore, MD, April 19, 2005.

Hon. Benjamin L. Cardin,

House of Representatives,

Washington, DC.

Dear Congressman Cardin: As Commissioner of the Maryland

Insurance Administration I am writing to express my strong

opposition to federal legislation that would create

Association Health Plans, AHPs. I understand such

legislation, H.R. 525, has been passed, again, by the House

Education and the Workforce Committee and may soon come to

the floor of the House for a vote. H.R. 525 would allow AHPs

to form and operate in Maryland outside the authority of my

office and beyond the reach of proven State consumer

safeguards and solvency laws. If enacted into law, this could

do irreparable harm to our small group market and strip our

citizens of critical protections.

Altough I share the sponsor's concern for the growing

number of small business employees who cannot afford adequate

coverage, the fact is this legislation would do little, if

anything to address this problem. H.R. 525 ignores the root

cause of the current crisis--skyrocketing healthcare

spending. Unless spending is brought under control no

attempts to increase competition or enhance options for small

business will truly make insurance affordable and, thus,

promote coverage.

Even more troubling is the harm the legislation would do to

consumers, H.R. 525 would: (1) permit risk selection thereby

creating opportunities for ``cherry-picking'' among healthier

groups; (2) allow inadequate capital standards and solvency

requirements, both of which are inferior to existing State

standards; (3) eliminate proven State consumer protection

laws, including those designed to allow consumer appeals of

adverse plan decisions and those aimed at preventing and

fighting fraud; and (4) allow AHPs to ignore State benefit

requirements. To add insult to injury, while longstanding

State oversight and consumer protections would be eliminated,

H.R. 525 provides no additional resources to the Department

of Labor to regulate AHPs or help consumers.

I remain committed to improving access to affordable

insurance for small business owners and workers in Maryland.

Together, we can find solutions that will be effective and

not lead to greater problems in the future. H.R. 515 is

clearly not the answer and I urge you to oppose it.

Sincerely,

Al Redmer, Jr.,

Insurance Commissioner.