Health insurance matters. The simple fact is that people with health insurance are healthier than those who are uninsured. People without health insurance are less likely to seek care when they need it, and to forgo services such as periodic check-ups and preventive services. As a consequence, they are more likely to be hospitalized or require costly medical attention for conditions that could have been prevented or treated at a curable stage.
Maine is in the midst of a growing health insurance crisis, with insurance premiums rising at alarming rates. Whether I am talking to a self-employed fisherman, the owner of a struggling small business, or the human resource manager of a large company, the soaring costs of health insurance is a common concern.
In 1999, the average family premium for employer-based coverage in Maine was $6,182, the 14th highest in the nation at that time. Since then, Maine's employers have faced premium increases of as much as 40 percent a year. These premium increases have been particularly burdensome for small businesses, the backbone of the Maine economy. The problem of rising costs is even more acute for individuals and families who must purchase health insurance on their own. Anthem Blue Cross Blue Shield has increased its rates by 40 percent over the past two years. Monthly insurance premiums often exceed a family's mortgage payment. It is no wonder that more than 150,000 Mainers are now uninsured. Clearly, we must do more to make health insurance more available and affordable.
Recently, I introduced the Access to Affordable Health Care Act, a bipartisan, comprehensive, seven-point plan that builds on the strengths of our current public programs and private health care system to make quality, affordable health care available to millions more Americans. The legislation's seven goals are: to expand access to affordable health care for small businesses; to make health insurance more affordable for individuals and families purchasing coverage on their own; to strengthen the health care safety net for those without coverage; to expand access to care in rural and underserved areas; to increase access to affordable long-term care; to promote healthier lifestyles, and; to provide more equitable Medicare payments to Maine providers to reduce the Medicare shortfall, which has forced hospitals, physicians and other providers to shift costs onto other payers in the form of higher charges, which, in turn drives up health care premiums. Each of these goals is important. Most uninsured Americans are members of families with at least one full-time worker. And, uninsured working Americans are most often employees of small businesses. In fact, some 60 percent of uninsured workers are employed by small firms. Smaller firms generally face higher costs for health insurance than larger firms, which makes them less likely to offer coverage. Small businesses want to provide health insurance for their employees, but the cost is often just too high. The legislation I have authored will help small employers, by providing new tax credits for small businesses to help make health insurance more affordable. It will encourage those small businesses that do not currently offer health insurance to do so and will help employers that do offer insurance to continue coverage for their employees even in the face of rising costs. The legislation will also help increase the clout of small businesses in negotiating with insurers. Premiums are generally higher for small businesses because they do not have as much purchasing power as large companies, which limits their ability to bargain for lower rates. They also have higher administrative costs because they have fewer employees among whom to spread the fixed cost of a health benefits plan. Moreover, they are not as able to spread the risks of medical claims over as many employees as large firms.
To remedy these problems, my legislation would authorize federal grants to assist states with the planning, development, and operation of small employer purchasing cooperatives. These cooperatives will help to reduce health care costs for small employers by allowing them to band together to purchase health insurance jointly. Group purchasing cooperatives have a number of advantages for small employers including increasing the number of participants in the group help to lower the premium costs for all.
My legislation would also build on the success of the State Children's Health Insurance Program (S-CHIP), which provides insurance for the children of low-income parents who cannot afford health insurance, yet make too much money to qualify for Medicaid. This important program has provided affordable health insurance coverage to over four million children nationwide, including more than 12,000 who are currently enrolled in the MaineCare program. Even so, nationwide, hundreds of thousands of qualified children have yet to be enrolled in this program, many because their parents simply don't know that they are eligible for the assistance. My legislation would give States a number of new tools to increase participation to ensure that the entire family receives the health care they need.
The legislation would also create a new program to encourage innovation by awarding demonstration grants to states conducting innovative coverage expansions, such as alternative group purchasing or pooling arrangements, individual or small group market reforms, or subsidies to employers or individuals purchasing coverage. The states have long been laboratories for reform, and they should be encouraged in the development of innovative programs that can serve as models for the nation.
The Access to Affordable Health Care Act outlines a blueprint for reform based upon principles upon which I believe a bipartisan majority in Congress could agree. The plan takes significant strides toward the goal of universal health care coverage by bringing millions more Americans into the insurance system, by strengthening the health care safety net, and by addressing the inequities in the Medicare system. I look forward to working with my colleagues from both sides of the aisle to make progress on this important issue.