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Small Business Access to Healthcare SMALL BUSINESS ACCESS TO HEALTHCARE FIELD HEARING BEFORE THE COMMITTEE ON SMALL BUSINESS HOUSE OF REPRESENTATIVES ONE HUNDRED SEVENTH CONGRESS FIRST SESSION ARLINGTON HEIGHTS, IL, JULY 9, 2001 Serial No. 107–16 Printed for the use of the Committee on Small Business ( U.S. GOVERNMENT PRINTING OFFICE 74–642 WASHINGTON : 2001 For sale by the Superintendent of Documents, U.S. Government Printing Office Internet: bookstore.gpo.gov Phone: (202) 512–1800 Fax: (202) 512–2250 Mail: Stop SSOP, Washington, DC 20402–0001 VerDate 11-MAY-2000 21:55 Sep 09, 2001 Jkt 074642 PO 00000 Frm 00001 Fmt 5011 Sfmt 5011 E:\HR\OC\A642.XXX pfrm01 PsN: A642 COMMITTEE ON SMALL BUSINESS DONALD MANZULLO, Illinois, Chairman LARRY COMBEST, Texas NYDIA M. VELA´ ZQUEZ, New York JOEL HEFLEY, Colorado JUANITA MILLENDER-MCDONALD, ROSCOE G. BARTLETT, Maryland California FRANK A. LOBIONDO, New Jersey DANNY K. DAVIS, Illinois SUE W. KELLY, New York WILLIAM PASCRELL, New Jersey STEVEN J. CHABOT, Ohio DONNA M. CHRISTIAN-CHRISTENSEN, PATRICK J. TOOMEY, Pennsylvania Virgin Islands JIM DEMINT, South Carolina ROBERT A. BRADY, Pennsylvania JOHN THUNE, South Dakota TOM UDALL, New Mexico MIKE PENCE, Indiana STEPHANIE TUBBS JONES, Ohio MIKE FERGUSON, New Jersey CHARLES A. GONZALEZ, Texas DARRELL E. ISSA, California DAVID D. PHELPS, Illinois SAM GRAVES, Missouri GRACE F. NAPOLITANO, California EDWARD L. SCHROCK, Virginia BRIAN BAIRD, Washington FELIX J. GRUCCI, JR., New York MARK UDALL, Colorado TODD W. AKIN, Missouri JAMES R. LANGEVIN, Rhode Island SHELLEY MOORE CAPITO, West Virginia MIKE ROSS, Arkansas BILL SHUSTER, Pennsylvania BRAD CARSON, Oklahoma ANI´BAL ACEVEDO-VILA´ , Puerto Rico DOUG THOMAS, Staff Director PHIL ESKELAND, Deputy Staff Director MICHAEL DAY, Minority Staff Director (II) VerDate 11-MAY-2000 21:56 Sep 09, 2001 Jkt 074642 PO 00000 Frm 00002 Fmt 5904 Sfmt 5904 E:\HR\OC\A642.XXX pfrm01 PsN: A642 C O N T E N T S Page Hearing held on July 9, 2001 ................................................................................. 1 WITNESSES Kuhn, Michelle, President, Aeffect, Inc. ................................................................ 5 Weber, Douglas, President and CEO United Way of Lake County, Green Oaks, IL ................................................................................................................ 7 Davis, Sammy, President and Owner, Handyman at Work, Mundelein, IL ...... 10 Canary, Patrick H., Owner, PHC Enterprises, Inc., DBA Alphagraphics, Vernon Hills, IL ................................................................................................... 11 Berman, Erika, Senior Human Resources Manager, The Revere Group, Lim- ited, Deerfield, IL ................................................................................................. 13 APPENDIX Opening statements: Manzullo, Hon. Donald .................................................................................... 30 Christensen, Hon. Donna ................................................................................. 32 Biggert, Hon. Judy ........................................................................................... 38 Prepared statements: Kuhn, Michelle .................................................................................................. 41 Weber, Douglas ................................................................................................. 44 Davis, Sammy ................................................................................................... 47 Canary, Patrick H. ........................................................................................... 50 Berman, Erika .................................................................................................. 52 (III) VerDate 11-MAY-2000 21:55 Sep 09, 2001 Jkt 074642 PO 00000 Frm 00003 Fmt 5904 Sfmt 0486 E:\HR\OC\A642.XXX pfrm01 PsN: A642 VerDate 11-MAY-2000 21:55 Sep 09, 2001 Jkt 074642 PO 00000 Frm 00004 Fmt 5904 Sfmt 0486 E:\HR\OC\A642.XXX pfrm01 PsN: A642 SMALL BUSINESS ACCESS TO HEALTH CARE MONDAY, JULY 9, 2001 HOUSE OF REPRESENTATIVES, COMMITTEE ON SMALL BUSINESS, Washington, DC. The Committee met, pursuant to call, at 10 a.m., at the Wheeling Township Offices, 1616 N. Arlington Heights Road, Arlington Heights, Illinois, Hon. Donald A. Manzullo [chair of the Committee] presiding. Chairman MANZULLO. Good morning. The United States House of Representatives Small Business Committee will come to order on the field hearing that we’re having here in Congressman Kirk’s Congressional District. At the beginning of this year, I became Chairman of the House of Representatives Committee on Small Business. We’re charged in the broad oversight to investigate issues involving extremely important component of our economy, the small business community, which represents 99.7 percent of all employers and employs 53 percent of the private work force. When my friend from the 10th District of Illinois asked me to hold a health care access field hearing, I jumped at the opportunity to investigate a such timely and significant issue. More timely than I thought. The Patients Bill of Rights is coming before the House of Representatives next week. Unfortunately, small business people have great difficulty pro- viding health insurance for their families, employees, and others. This dilemma is uncharacteristic and it’s ironic. Unlike larger cor- porations where CEO’s are solely charged to provide a bottom line profit before the company shareholders, and rarely interact with employees, most small entrepreneurs have the unique opportunity to maintain personal relationships with their workers. Small entrepreneurs are not just employers. They’re friends and neighbors. In fact, it’s not uncommon that a small entrepreneur with limited resources will choose to insure his or her employees before providing for his or her own families. A lot of that is because health—cost of health insurance pre- miums is not a hundred percent deductible for the employer, but it is for the employees. Figure that one out. Small businesses are not simply offered the accessibility to the quality health care cov- erage at afforded cost. I know this from personal experience where a family that is involved in Italian restaurant business for years, and has 13 tables and 13 bar stools; my brother is the operator of it, and his cost of health and accident insurance just for him and his wife is seven hundred dollars a month. It’s frightening. They don’t even offer health and accident insurance to their employees (1) VerDate 11-MAY-2000 05:48 Sep 07, 2001 Jkt 074642 PO 00000 Frm 00005 Fmt 6633 Sfmt 6633 E:\HR\OC\A642.XXX pfrm02 PsN: A642 2 because it would be cost prohibitive and they couldn’t stay in busi- ness. The best health care system for America is grounded in the free enterprise system. Congress can still work to eliminate areas in the tax and regu- latory code that punish small businesses from purchasing afford- able health care. At this time, I would like to recognize Mrs. Biggert, a fellow member of Congress from an adjoining Congressional District for an opening statement, and then to Congressman Kirk. Mrs. BIGGERT. Good morning. I want to thank my colleagues, Chairman Don Manzullo, for holding this field hearing and for Rep- resentative Kirk in hosting this field hearing in this area. I grew up in the 10th District, so I feel right at home. I guess it’s safe to say that today’s hearing just proves the theory that you can go home again. So, it’s nice to be back in the area. As a member of the House Committee on Education and the Workforce, I was very pleased when Congressman Manzullo asked me to join in today’s hearing, even though I’m not on the Small Business Committee. And probably you’re asking, then well, why would a member of the Education and Workforce Committee want to be included in a hearing about health care and small business? Well, it’s because the Education and Workforce Committee has ju- risdiction over ERISA and ERISA issues. And what is ERISA? ERISA is the Employee Retirement and Income Security Act, and is the law that applies to employers who are self-insured, so that’s why I’m here. And it’s because the Patients’ Bill of Rights is a workforce issue. And it’s also an issue that has dramatic impact on whether em- ployers continue to offer health care coverage as an employee ben- efit in the future. For most employers in America, health care coverage is far and away the largest employee benefit offered to workers. But for so many small business owners, employee health care is a benefit that they would very much like to offer, but they cannot afford to do so under the system as it exists today. And for many self-employed business owners and their families, health insurance is treated as a luxury under our tax code, which does not allow them full deductibility. So, health care certainly has moved to the forefront of Congress’s agenda, and rightly so. De- pending on which estimate one uses, there are at least 43 to 44 million Americans that currently do not have health coverage, and these are frightening numbers in themselves, but it seems that they’re getting lost in the clamor to pass a Patients’ Bill of Rights. So, what we need to do, and our challenge really is to work with state officials and health care providers, and employers to enact pa- tients protection for those who currently are covered, while at the same time reduce the numbers of uninsured Americans. And this last point is particularly challenging and relevant to today’s hear- ing, as the majority of uninsured
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