Covering the Uninsured

Release Date: 5/12/2004

by U.S. Senator Kay Bailey Hutchison The next time you head to the doctor for a check-up, or pick up your prescription at the drug store, think of the nearly 44 million Americans who don’t have health insurance. For them, these seemingly routine activities become a tremendous financial burden, if not impossible. Yet cost is not the greatest concern. For some, insurance can make the difference between life and death. Nearly 18,000 Americans die each year of treatable diseases because they don’t have health coverage. May 10-14 is national "Covering the Uninsured Week" designed to highlight this growing problem. The crisis of the uninsured is reaching epic proportions across the nation, but nowhere is the situation more prevalent that in our own backyard. According to a recent study, 27 percent of working adults in Texas are uninsured -- the highest rate in the country. This is one race we aren’t proud to lead. Crisis in Texas Many of these Texans are without health coverage because they work for small business owners who want to offer their employees insurance, but can’t. People who work for large corporations from Dell Computer to UPS often have a variety of health plans from which to choose. With thousands of employees in different states and other countries, these big businesses can negotiate a cost effective plan that enables them to offer this benefit to their employees. Insurance costs are rising across the board, for large and small companies, but the cost is hitting small businesses, which already run on razor thin profit margins, below the belt. Small businesses have reported insurance rate increases of 30 percent or more during the last year alone. A farmer in Uvalde who employs 21 ranch hands, or the owner of a women’s clothing boutique in Salado with three employees, may want to offer this important benefit, but current costs would far exceed their profits. In fact, 60 percent of uninsured Americans are employed by small businesses that can’t afford to offer health care benefits. But there is a light at the end of the tunnel. Current legislation before Congress would allow the creation of Association Health Plans (AHPs) to help solve the epidemic. Association Health Plans AHPs would allow members of bona fide associations to pool their resources and get affordable health coverage packages from insurance companies. For example, the local Chamber of Commerce could broker a deal with an insurance company to provide health benefits to all of their member businesses and employees whether they be a dry cleaner or a hardware store. This innovative plan has wide support from small business owners, which make up the overwhelming majority of American business owners. Groups as diverse as the National Funeral Directors Association and the American Disc Jockey Association have voiced their support for AHPs. In fact, organizations representing 12 million employers and 80 million workers have backed the legislation and are calling on Congress to help them provide health insurance. AHPs would be certified by the Labor Department and would have to meet rigorous standards -- even more stringent than those followed by large national corporations and labor unions. And uniform federal regulations of AHPs will help businesses lower their administrative costs. By operating under federal law, AHPs can avoid the complexity and cost of complying with regulations in 50 different states. Personal Experience I am an original co-sponsor of this legislation because as a former business owner myself, I know the challenge of offering employee benefits like health care. I carried that experience and the many challenges of entrepreneurship with me to Washington, where I have consistently fought to reduce red tape and bureaucracy to help encourage business growth. Small businesses and the millions of people they employ are the economic engine of America. Congress should help build pathways and not create barriers to their success. By promoting Association Health Plans, we will encourage more people to take advantage of the American dream of entrepreneurship and enable them to offer the critical and lifesaving benefit of health insurance. I hope my colleagues will work with me to bring this benefit home to Texas.