good morning everyone i want to thank our witnesses for being with us today and for sharing their thoughts and experience on this very important subject the steady rise in cost is a critical challenge facing our nation's healthcare system for many patients the price of health care is the determining factor when deciding whether to receive the care he or needs it also imposes a tremendous burden on taxpayers as government health services become more and more expensive as a parent a physician and elected official hardly a day goes by when i'm not reminded of this difficult reality yesterday was no exception employers hire understand better than most to tough choices workers and their families face as health care costs go up year after year in hundred seventy four the employee retirement income security act commonly known as a risk became law it provides the rules of the road for benefit plans offered by employers including employer provided health care employer provided health care is now is common to employee compensation paid vacation and sick leave roughly one hundred seventy million individuals receive health insurance through an employer provided health care plan it has become central to our nation's health care system while not perfect it has served employers and employees well for nearly forty years any changes to the nation's health care system will affect the lives of millions of unemployed years workers and their families that's why the challenge of rising costs is a pressing national concern an aging workforce more advanced therapies higher utilization liability and fewer providers are just some of the factors contributing to the increases as policy makers we have a responsibility to understand the underlying causes of these factors and to consider commonsense solutions that ultimately reduce expenses for workers and their families president obama understood this responsibility when as a candidate for put the presidency he outlined a plan he promised would reduce costs for families and businesses without providing specific details for businesses then senator obama promised his health care plan with more premiums by as much as twenty five hundred dollars per family as president mr obama claimed that under his plan if you like your current health care you can keep it unfortunately now we know that these assertions to be untrue along the path to health care reform the president and his democratic allies abandon any effort to reduce costs and instead focus on expanding access to the creation of a new government entitlement program a program that will surely change how workers receive their health care regardless of whether they like it or not this is left this issue of rising costs unresolved as the need for meaningful reform grows there are a number of provisions in the recent health care law that not only fail to address rising cost but actually exacerbate the problems facing employers and their workers for the first time in our nation's history we have a mandate requiring certain employers provide government approved insurance or pay a fine however providing government approved health care will grow more and more expensive as benefit plans begin to comply with a number of additional mandates and requirements control by washington bureaucrats existing employer plans were supposed to be grandfathered from the new laws requirements but we've since learned this will not be the case for up to sixty nine percent of plans including up to eighty percent of smaller plans we all want to see individuals with preexisting conditions get the care they need and young adults receive extended help from their parents if they so desire but a sea of government mandates will not lead to lower costs and better health care a number of independent health care researchers have examined the issue and determine costs will continue to increase at a rapid pace due in part to obamacare that's why we're here today we must examine these and other driving forces behind rising health care costs their effects on employers and workers and begin to consider responsible solutions that address the needs of the nation i now it's been nearly one year since the affordable care act became law and already millions of americans are realizing its benefits the new health care law comes at a time when both employers and families are struggling to keep up with skyrocketing increase in their health care costs over the last decade family premiums more than double in the employer based health insurance market we know that without reform the problem of rising health care costs will just get worse the commonwealth estimates  allowed the insurance industry in this country to pocket at the expense of hardworking americans by charging more but spending less on benefits in two thousand and ten the top five insurance companies united health point  insurance company abuses by requiring them to spend more on benefits and less on profits and the law's medical loss ratio requirements require insurance companies eighty five percent of premium dollars on medical care and health quality provision alone will provide up to one point two billion dollars starting in two thousand and twelve benefits for employers are already being realized even before the law is fully implemented more than five thousand employers are taking part in the law retiree reinsurance program which is reimbursed more than five hundred thirty five million dollars in health care benefits benefiting more than four point five million americans four million small businesses are eligible for the small business tax thank you for being here mr thomas miller's a resident fellow of the american enterprise institute where a focuses on health care policy with a particular emphasis on such issues as information transparency health insurance regulation consumer driven health care  a member of the national advisory council for the agency of health care research and quality from two thousand and seven and two thousand and nine prior to his work mr miller was a senior health economist for the joint economic committee where organized where he organized a series of lanes that is known today was started in one thousand nine hundred seven operate bowling alleys and six locations in four states including new york maryland florida and california baltimore headlands has grown from fifty to more than five hundred thank you mr chairman jim houser is co owners of hawthorne auto clinic a aaa approved auto repair facility located in portland oregon auto clinic has been the recipient of a number of awards including the blue seal of excellence award from the national institute automotive service excellence the best practices for sustainability award from the city of portland and the small business of the year award in both one nine hundred ninety six and two thousand and seven from the better business bureau mr hauser is testifying on behalf of the main street alliance a national network of small state based small business coalition i have had the pleasure of meeting with main street alliance members at home and welcome mr hauser to washington and this committee thank you mr chairman thank you mr lew and i also you mr hauser for being here our final witness as mr michael brewer the president of a locked in benefit group located in kansas city missouri a locked and benefit group provides national employee benefits consulting services to services to about twenty five hundred companies nationwide in a broad range of industries a locked in benefit group as part of a locked and company's l l c which provides global risk management insurance and employee benefits services locked in is the world's largest privately owned independent insurance brokerage firm and has more than thirty eight hundred associates worldwide for we start the testimony let me explain the life system basically you have five minutes yellow light with a green light yellow light means you have a minute in the red light means it probably all starts to happen the in your testimony so with that mr miller would you begin thank you very much chairman row representative kucinich members of the subcommittee for this opportunity to speak on the pressures of rising costs on employer provided health care we should be more concerned about what is likely to unfold as we approach in two thousand and fourteen and the immediate years afterward than the most recent ups and downs of the limited dosage effects of the affordable care initial year of implementation it hasn't provided much short term help but it still threatens to do more harm later partly because the a ca actually has provided very little intangible first year benefits it also has impose only modest immediate costs and complications on most employers although the health sector appears to exhibit a long standing ability to grow faster than the rest of the economy the substantial effects of a deep recession within the last three years certainly slowed the absolute dollar growth of health spending and some healthcare utilization if not its relative share of the troubled economy we often forget that national health spending has grown to a slower rate in every year from two thousand to two thousand and nine however we can neither afford nor should we expect to rely on a prolonged recession or sluggish economy to keep slowing down that rate there remains a substantial list of theories and explanations for this persistent excess growth of health spending in health insurance costs and often inconsistent provisions will be interpreted leaves many employers frozen in uncertainty in their health benefits planning leading examples include the narrowed range of grandfathering protection for previous employer health plans and future definitions of details to be unveiled later for essential benefits and state health benefits exchanges in isolation the few of the initial burdens for employers are likely to determine decisively whether most of them continue to offer health insurance but over time amount to a steady drip by drip political will form of water torture that can eventually reach critical mass and push a much larger share of employers to reconsider their continued involvement in offering health coverage the structure of future penalties for noncompliance with employer coverage mandates will send out additional economic disincentive signals that tell different categories of business owners to grow slower hire fewer pay less and restructure their firms more  playing field beginning in two thousand and fourteen for future tax subsidies for workers at the same income level depending on whether they are inside employer health plans or purchasing outside coverage of any benefits exchanges that actually come into existence by the end appears far from politically sustainable if and when the highly flammable legislative fire walls constructed to separate these two health insurance domains begin to break down the federal budget terry implications of an employer coverage meltdown alone would be explosive on affordable and the future of market based forms of private insurance would be an even greater jeopardy we still have time to pull back before testing the temperature of the water for the lead group of health policy lemmings nearing the edge of this cliff a short list of changes in direction would include a much stronger focus on responsible choice and competition in healthcare markets more neutral limited and transparent taxpayer subsidies for health spending by most americans but more targeted special protection for the most vulnerable in highest risk portions of the populations real steps toward meaningful information transparency and realignment of incentives to reward better health care choices and higher value health care delivery the last round of purported health care reform overloaded the operational circuits of our political system over fed its appetite for more private resources and offended longstanding cultural norms rebalancing the mix necessarily must begin with repeal of many core components of the but it cannot and short of equally difficult but necessary and more sustainable reforms enacted to replace them thank you thank you mr park chairman of congressman percentage and distinguished members of the subcommittee thank you for the opportunity to testify before you today on the pressures businesses face from the rising costs of providing employees with health care benefits am brett parker vice chairman and chief financial officer of bowmore lanes which is headquartered in new york city i'm here to speak with you today on behalf of the u s chamber of commerce but more lanes as we know it today was formed in one thousand nine hundred seven in greenwich village we purchased the original bowmore location and completely remodeled the internal operations by infusing a vision of upscale design elements and dramatic architecture into what had become a tired and dilapidated dilapidated space the overhaul  the installation of video screens and lay inside food and drink service we strove to make bowling a relevant activity to the city's residents and businesses again by one thousand nine hundred nine ball more lanes became the highest grossing bowling alley in the united states today it stands as one of the longest continuously running bowling alleys in the country following the phenomenal success of baltimore new york city we knew that the bowmore concept could be introduced in other locations across the country today we have a total of six locations in four states and last year we opened our new flagship location in times square that we are quite excited about boomer has grown from fifty to over five hundred employees in the last ten years we are creating jobs with the economic downturn well more took a hit most businesses in the united states we did not cower from this challenge or simply hope that things would somehow play out favorably we tightened our belts and continue to work hard and smart we are entrepreneurs we believe in ourselves and our business and we're willing to take risks and put our reputation and our money on the line i've found that many of the roadblocks that we face to doing those very things expanding our business and generating new jobs our record by the government whether it is the threat posed by card check the absurdity of the new ten ninety nine reporting mandate or the anxiety and complexity of the new health care law and its array of mandates we feel like the federal government time and time again creates obstacles to success and by doing so increases the likelihood of failure these forces combined to make future investments and growing our business less and less attractive to more lanes currently employs five hundred thirty two members of our team with a workforce completely comprised of two hundred fifty eight full time employees and to earn seventy for part time employees under the new healthcare law it seems probable that we will sustain a per capita cost increase on existing full time employees of at least two thousand dollars per person this poses a significant cash strain on the business for bowmore to develop a new location we need to have two million dollars in cash equity on hand by depriving us of the cash we need to grow through dollars paid to penalties and lost profits from prison facilities not developed over the first five years health care law will preclude us from opening five locations creating over five hundred jobs or investing twenty six million dollars in new infrastructure the damage gets worse every year the employer mandate and the health care law are in effect when it comes to health insurance we have been continually forced to weigh the difficult choice between increasing costs for the company and our employees with reducing coverage every year we pay more and get less to minimize the losses sustained due to this mandate we will have to keep employees part time and not allow them to work thirty hours a week were very on b about the effects this will have on our employees unfortunately even if more found a way to offer coverage that meets the new law standards we would still be subject to a three thousand to three thousand dollar fines whenever a low income employee gets a subsidy this is a big incentive for us to stop offering any coverage at all if no more attempts to continue offering benefits we can look forward to more expensive insurance thanks to the health care law next we have a host of new taxes to look forward to taxes that would make the more us health insurance more expensive taxes on prescriptions medical devices and insurance plans will be passed on to consumers meaning bullmore and its employees first and foremost congress should repeal the job despite destroying employer mandate senator hatch introduced a bill to do that in the senate that has twenty six co sponsors but nobody has in the house as introduced a companion legislation a conclusion from the perspective of the more lanes the cost incurred with the new health care law will greatly hinder our ability to expand and develop new venues and create new jobs i am hopeful that this body will make it a priority to repeal the most objectionable provisions like the employer mandate also i hope you will look to real reforms that lower costs such as tort reform and throughout this process i would ask that you continually be mindful of how your decisions directly and oftentimes inadvertently impact businesses in this nation we are the job creators please rebuild an environment that encourages not suppresses business growth entrepreneurism investment and job creation thank you for this opportunity to testify and i look forward to your questions  and members of the committee thank you for the info in the invitation to testify regarding trends in health insurance costs and their impact on small businesses my name is jim houser i am an a s e certified master automotive technician and co owner of hawthorne auto clinic in portland oregon i'm also co chair of the main street alliance of oregon a small business group in my state and i serve on the national steering committee of the main street alliance a network that creates opportunities for business owners to speak for ourselves on issues that impact our businesses when my wife liz dally and i opened hawthorne auto clinic twenty eight years ago we made the commitment to offer health insurance it seem like the right thing to do and it made good business sense in a high school field we're offering benefits to keep experienced technicians is important but it hasn't been easy small businesses are recognized as the engines of job growth but health care marketplace that stacks the deck against small businesses has put us at a consistent disadvantage small business health care costs have grown a whopping one hundred twenty nine percent since two thousand we pay an average eighteen percent more than large firms for the same coverage at my business we pay one hundred percent of the insurance costs for our nine full time employees and their dependents our premiums have doubled over the last eight years reaching one hundred thousand dollars last year more than twenty percent of payroll this year we've witnessed a minor miracle our premiums went down three percent it's the first time in my memory they've declined a provision of the affordable care act is allowed my twenty two year old daughter a recent college graduate to return to our insurance plan i'm glad our family business can actually cover our family again we're also eligible for the new tax credits in the health law my accountant says we should get back with twenty five thousand and ten thousand dollars on our two thousand and ten taxes combine that with the decrease in our premiums and will sa eight to ten percent of our insurance this year due to the affordable care act now i'm well aware that health insurers are pursuing steep rate increases i'm also aware that insurance lobbyists are trying to pin these increases on the new law this claim just doesn't pass inspection if insurers are jacking up their rates again it's in byt of the new health law or not because of it if anything insurers are seizing the moment to hit customers with one more off the charts increase while they still can get away with it before measures to rein in those increases take effect even insurance executives admit the rate increases aren't because of the new law a senior vice president of higher harvard pilgrim in massachusetts said only one percentage point of this year's increases was attributable to the paid me to the federal law and that was mainly due to the requirement for free preventive services as my mechanics will tell you customers who have us perform regular preventive maintenance rarely get towed in for unanticipated expensive repairs similarly it's much more cost effective to spend two hundred dollars to get a patient's blood pressure under control than to spend fifty thousand dollars for the e r response to a stroke preventative measures are an investment that pays off big in the long run whatever the lobbyist say the fact is the health law is giving small businesses tools to put the brakes on rising insurance rates for example the new premium tax credits four million small businesses like ours can qualify for a credit of up to thirty five percent new customer protections allow young adults up to twenty six to enroll on their parents plan review resources give states a new tools to protect small businesses from unreasonable rate increases new medical loss ratio standards ensure small businesses get value for their premiums and the state insurance exchanges being designed to operate greater transparency more choices and with as many as nine hundred seventy thousand people predicted to enroll in the exchange in oregon much more bargaining power small businesses are moving forward on health care ties or family foundation reports the percentage of employers with three to nine employees offering health coverage rose forty six percent from forty six tax credit what about next year will i be able to bank on the credit and use that money to invest in my business or not we can't afford to go back to a system that stacks the deck against small business we've got to move forward with proper implementation we can level the playing field get control of insurance costs and allow small businesses to focus on what we do best things like fixing cars creating jobs and building local economies across america thank you very much thank  could you pull that michael closer make sure it's on i don't have it on sorry black to benefit group provides employee benefits consulting services to twenty five hundred middle market clients nationwide the vast majority of our clients employ between five hundred and two thousand employees our clients include private and governmental employers and employers in a wide variety of trades and industries our clients agree that improvements in the health insurance system are necessary and important however they are frustrated that the health reform law imposes additional cost and other burdens upon them our clients wish that congress would work to make employers provision of health insurance easier and less costly rather than more expensive and more burdensome our actuaries have modeled for several hundred clients the m pact of the health reform law on their group health insurance programs to date we've aggregated the results from one hundred thirty six of these modeling reports and broken out the results by industry segment i'd like to share some of those results with you today on average the reform laws immediate benefit mandates add two and a half percent to our clients health insurance cost the automatic enrollment requirement in two thousand and fourteen adds three point eight percent to our clients health insurance spend on average even assuming that seventy five percent of the automatically enrolled employees who would not have otherwise enrolled in coverage would opt back out of the coverage with the opportunity these increases may appear modest but they're not many clients have health insurance expense trends of ten percent or more annually ten percent trendline becomes twelve and a half percent in two thousand and eleven and sixteen point three percent in two thousand and fourteen just on account of the a madman dates that i've mentioned i'd like to speak for a moment of the impact of employers pay for pay or play mandate which also takes effect in two thousand and fourteen across most industry segments our clients will have significant financial incentive to terminate the group coverage once the insurance exchanges present employers with another subsidized health insurance option that's because the vast majority of our clients currently spend far more on health insurance per employee than the penalty under the player pay mandate by two thousand and fourteen this gap will become even wider on average our analysis shows that by terminating group coverage our clients would save an amount equal to forty four percent of the projected health insurance costs in two thousand and fourteen and fairness if you clients have told us today here in two thousand and eleven that they definitely intend to terminate group coverage in two thousand and fourteen similarly if you have said they intend to maintain their health insurance coverage the vast majority tell us they're going to wait and see they tell us that what they do in two thousand and fourteen depends upon their health insurance cost then and their perceived need to use the health plan to gain a competitive advantage for labor with regard to this latter point many employers have told us we won't be the first to drop coverage but we also won't be third the modeling results for our clients in the restaurant retail and hospitality industry is a damned if we do damned if we don't scenario on average to comply with the player pay mandate and offer qualifying affordable coverage to all full time employees the employer's health insurance costs increase one hundred fifty percent ironically if the employer simply terminates its group plan it still pays fifty six point six percent more than it would to maintain the current plan offered today because it then has to pay the two thousand dollars per year nondeductible penalty for each of its full time employees even those employees to whom the employer has never offered coverage these clients and clients like them tell us they have the one option to eliminate large numbers of full time positions by making full time employees part time employees are removed from the penalty equation let me also note that health reform adds up to nineteen additional disclosures and reports to the already daunting twenty seven disclosures and reports mere health plan may already be required by federal law to make to its enrollees or to the federal government our employer clients are not the bad guys our clients simply do not understand why for making the effort to supply a valuable employee benefit to their employees the federal government imposes so extensive an administrative and regulatory burden these obligations because of their complexity and state penalties for violation give employers yet one more reason to simply surrender and exit the group insurance marketplace this is of course a huge concern to us again locked and greatly appreciate the opportunity before you today we simply urge congress that in assessing the m pact of this health reform legislation you place yourselves not only in the shoes of those americans who deserve and need access to affordable insurance but also into the shoes of the american employers who supply health insurance coverage to one hundred sixty million of us  we need to be sensitive to all of those businesses that are providing health insurance now mr hauser is here and can you tell us how many employer employees you have we have nine full time employees we have student interned who work half time go to school half time and we have to part time employees help or shop maintenance helper and part time office assistant to offer family and individual coverage we provide complete hundred percent coverage for employees for full time employees and their families part timers we offer proportional and no imposes modest immediate costs and complications on most employers could you tell us about your experience with that congressman the our experience has been several one is of course the tax credit that we'll be  getting but more than that the the new health insurance exchange is what appears to be going to provide the greatest benefit to our business the state of oregon is currently very actively moving forward to not only cover about nine hundred seventy thousand more oregonians but also to change the way with that level of buying power to change the how health care is paid for to actually lower the cost of health care by changing from a fee for service fee for procedure to a deeper outcome mode of how to pay  now back on our health care plan that's the biggest and so that's the biggest advantage that we've experienced so far i can't say whether our decrease in premiums was a result of the affordable care act or not i don't know that and do you think this law will raise your costs complicate your ability to offer health care if the costs were to keep going up like they were before the affordable health care although our employees are toward the higher end the fifty thousand dollars is the limit and so we're not quite there on average but we're pushing that but the tax credit does go up in i believe employers will increasingly stop offering health care to employees as a result of this law do you think that's true do you think that small employers are offering health insurance now do you have any experience in at outside your own if you talk to i know that from recent reading the kaiser family foundation report that actually the number of small employers who are covering have increased from two thousand and nine from forty six percent to fifty nine percent so actually more small businesses are actually increasing their coverage one final question what power did you have to negotiate with your insurance company when you increasingly saw your health care costs increase during the last year i'm sorry i didn't hear what kind of negotiating power did you have with your insurance company all we can do is wait for our broker to bring us thank you all for being here and i'm also going to have to slip away so let's start with mr hauser you mentioned that your business will receive a credit between five thousand and ten thousand on your two thousand and ten packs of because a small employer health premiums tax credit do you know who is paying for that credit my taxes i assume any idea you think your taxes are health care premiums are also paying for people who work for companies who don't cover their employees do you have a plan in twenty sixteen when the credits no longer available don't ever dropping health care coverage for our employees ok thank you one thing if i could deal just a few seconds to our chairman to explain the impact  dollars so i missed it seven times in tennessee we saw medicaid we went to a managed care plan very similar to this in tennessee in one nine hundred ninety three to try to control health care cost because we had the things that you mentioned rising costs access in lab building and what happened was in ten years ten budget years our cost tripled in the state of tennessee so it is about how do you hold the cost and i have been a provider for all these years health insurance that's the major problem in america is the cost of the care if it was all affordable we could all have back ok thank you for the history lesson i know that you have those numbers well in mind mr miller we've heard supporters  the new law claim that republicans have not provided concrete ideas or suggestions to change financial incentives in health care and expand access to affordable quality coverage however your testimony suggests there are alternatives to obamacare can you elaborate on some of the alternative proposals to reform the health care system and design to lower costs of coverage and increase access well may put that into tears i mean i think that the actual official congressional responses are still evolving we have an earlier history of proposals in the house and individual members and in the senate if you risking for what i would advise the people i've spoken to along those lines we need to do several things we need to first unfortunately under the damage we lost two years on the clock and we've gone in the wrong direction so we can't overextend our resources and basically over overload the entire system what's happened some positive proposals they have all limited effects in isolation you have to combine them the old tool kit includes wage to reduce regulatory costs across state purchasing is one proposal in that regard we certainly hear a lot about medical malpractise what will make some contribution in that regard we also need to step up to the plate in terms of rearranging the overall subsidy structure in health care financing while putting more money into a different more expensive version of high risk pools what's in the current law has failed in that regard that we deal with what are the serious problems of people who have substantial spikes and continued problems in health care costs we don't need to think about how we're going to rearrange our tax subsidies not only for private health insurance but i'm up to the plate on medicare we do need to make some cost changes in medicare unfortunately most of the low hanging fruit that was rated for medicare spending reduction was then plowed right back into the system for the other type of entitlements in the private side medicaid has been overloaded we need to restructure that so essential to be simple we need more transparent measures of the value of health care being provided we talk a lot about insurance and financing but until we change the cost of we haven't change that basic problem there are a lot of hypotheticals in the law which someday somehow might eventually happen we need to get the private sector involved in actually making them come about and change realign the incentives but we're go you put enough skin in the game roundabout way of saying that workers need to pay more for health care so they don't use it as much in two thousand and nine sixty percent of bankruptcies were caused by medical bills seventy five percent of these bankruptcies were filed by workers who actually had health insurance you are on record supporting the road map offered by congressman ryan in that roadmap congressman ryan proposes raising taxes on working families by eliminating the individual income tax exclusion for employer than any other reason what i can say is that sixty percent figure and the conclusions drawn from an erroneous we've done work on that primarily my colleague a part of the war which if you examine what that's based upon there are a lot of reasons for bankruptcy they're not due to people paying too much for health care often these are done in the way that it says as long as you had a medical bill long the way it is then imputed that somehow was what caused the bankruptcy we have serious economic problems in the country i just think that's a miscalculation as to what is the cause and the effect in that regard on the larger issue as to whether workers are paying too much or too little that's not the issue the issue is whether or not they can see a way to find a better combination of health care that delivers improved health outcomes for them at a lower cost we have a structure which hides the results doesn't give us the information that they need in that regard if you look at the measures as to how much workers are actually paying out of pocket for their health care as opposed to what is regarded to a very expensive costly and inefficient insurance system the vast proportion of that still flows through third party insurance there has been an increase in the amount of quote sharing in some sectors of the marketplace  what are called consumer driven health plans are probably about twenty percent of the market without necessarily having accounts that is tended to slow down the overall increase in health care spending and in health insurance costs it has been a positive the law is fundamentally aimed against that it will not succeed in stopping that because when we're about five years from now we're going to be able to pay for all the stuff we say is going to be covered by insurance and we'll end up resorting to that type of questioning implicitly anyway do you think we should repeal the exemption it up everyone is going to have to pay some money themselves we can't subsidize everyone's bill and think they will come out ahead it has tended to drive up the cost of care the cost of insurance and we pretended it actually brings ahead steps further back it reform effort would lower health insurance premiums for families by much as much as twenty five hundred dollars so i'm having a hard time understanding why the city of montgomery is not  premium costs i cannot to where that came from what i can speak to is the reality of what's happened with the benefit mandates that have been imposed  cost to employers like the city of mcgovern by about two and a half percent this year the auto and roman feature down the road will add incrementally more cost to it it certainly would have been great  had congress been able to deliver a bill that actually reduced the cost of health insurance coverage for the vast majority of employers in the united states it would have been a message that probably would have resonated better and been better  received regrettably the i think the bill falls short in a number of areas of addressing the actual root causes of the cost increase in cost of health care with all due respect to leader i don't believe that the insurance companies and i'm themselves are the problem i think there's plenty of other areas where there are opportunities for savings so mr miller yeah i would agree that last comment by mr brewer certainly we all can do better and it's all in that regard the twenty five hundred dollars let's let's be straightforward about it was a campaign document i know the scholars who put it together and you put this on the back of the you make lab and they've been backpedaling from that in rearranging what it is supposed to eventually do a lot of it now is basically we're going to get all these tax money from other people and that's how you're saving your head down the central cost of care there are important things that need to be done in restructuring our health care delivery system making everybody participating in a more accountable hype it's there's a lot of grand plans national strategy we don't have anything deliverable in the first couple of years what this legislation essentially was about was about redistribution of money without fixing the problem so the cost is one place where there are some people when some people lose if you happen to be one of the tiny handful of people who might qualify for a small business you're a winner it doesn't deal with the larger organic system which is that all of the care cost too much compared to was living we've got to make some decisions in that regard and get more transparent so when you move past the politics of getting a law passed by any means the question is how do we drive forward and think about what is actually going to get to the cause of these costs until care is delivered earlier cheaper and better and people are healthier and do other things outside of the health care they're presenting fewer things to the table no matter how much we do to tweak the tiny amount of insurance administrative  through there's no money left we can just borrow some more and have to go back and forth we can't continue to subsidize we actually have to confront the fact that we've got to get better care at a lower price when we get to that stage then we'll have real reform that's what this bill is about and i this kind of collapse on it because we couldn't afford our way around all these mistakes for a long period of time now we've hit the margins where suddenly there's not someone else to pick up we're going to have to rework it thank you my time is up thank you mr cha you're saying your written testimony that your insurance costs for your nine full time employees and cover dependents doubled from two thousand and two through two thousand and ten eating into more than twenty percent of your pa e long before we started this health reform as a small business owner i know the difficulty of providing quality affordable coverage to employees because i was president of a family business for twenty years and  understand the choices you had to make i experienced firsthand how year after year every dollar i spent on health insurance for my employees was less and less given that number one the act places no requirement on small businesses with fewer than fifty full time employees and being that the affordable care act provides incentives and tax breaks as you pointed out in you remarks for those small businesses that offer coverage it's important that the record show that that the president obama did not promise that the premiums were going to drop two thousand five hundred dollars in two thousand and eleven and begin to ramp up that the real bulk of the law will be implemented by two thousand and fourteen and that at that time we will have insured an additional thirty million people being able to reduce the cost and some of our other witnesses are trying to make this appear as though the president did not keep his word or that he misled people but there's no question that as as people in my district find out the benefits of this health reform that they are very happy and they are hoping that we will tweak it but certainly not repeal it i would like to ask you this question do you expect that tough choice i mentioned earlier to get tougher or easier going forward for your business and small businesses like yours that you talked to i didn't understand you expect that between now and two thousand and fourteen that things are just going to be so tough that you wouldn't be able to offer health insurance to your employees no no congressman not at all i believe especially based on  the most recent trend with our premiums actually going down and with the state of oregon being very actively pursuing the exchange which will if  the legislation goes through at the state level that's currently being proposed will change the formula for how health care is paid for from the fee for procedure beeper service to be for outcomes so you're optimistic that this is going to of now if you were a business that it might have forty seven forty eight employees what would you believe that that's less of an incentive to to expand and grow your business to over fifty employees absolutely and you know more than that even if you're already well above that number the incentive now is to sort of that and down the hatches versus growing and i think you know people have been talking throughout this hearing about how well when we get to two thousand and fourteen the impacts will be this that or the other i can tell you it's not hypothetical this is impacting our business right now i look at you know i run development for our business our our our growth is is very much in fits and starts we have to develop a new location so we have to make a big bet we have to pick an area that we think can support it but to go in invest several million dollars and then we create a big chunk of jobs and we have a new business and each one of those is a big decision and we have a lot of skin in the game personally and we're putting the well being of everyone in the company on the line every time we do it and more deals that i've looked at over the last you know six months i tend to say it's marginal we're going to pass just because not only this bill and the impact it has today knowing that it's only going to get worse but you know what's next and it's a huge disincentive to growth i would say that a business that might have fifty two employees may actually a business that might be struggling to stay in business and pay its bills would you believe that they may lay off employees off to get under the fifty employer mandate absolutely you know have any idea where they pick the number fifty from and and how how fifty as a magic number i have no idea mr brewer same question would you believe that a business that might have forty eight employees would be reluctant to hire a few more sure we don't do business in that space there are cases are typically significantly larger but i can imagine the same logic would logical if somebody would be willing to do that and would you believe because of the affordable care act in america there will be businesses who will lay off employees if they're around fifty one fifty two fifty three employees i can't tell you that i professionally that was going to put you over the fifty employees especially if you were a business that might be struggling today congressman i make decisions like that based on my workload i would not turn down work because i didn't have sufficient employees i would make a decision about hiring more employees based on how much work i had to perform if i had forty nine employees and i had enough work for fifty two probably i'm talking about having enough work for fifty two employees that that would be the driving factor in my decision not whether or not i have to provide something because i'm already providing health care factored in you were talking about a business that might have forty eight forty nine employees that wasn't and hiring one or two more employees would now throw you into a mandate where you would be fined two thousand dollars per employee just making those employees work a little longer rather than hiring another more employees people make those kinds of decisions all the time and i'm not familiar with them  mr miller many small businesses have employees who work full time hours my business that i had was a line painting business lines on highways in pennsylvania obviously you can't paint lines in january that doesn't work that that fifty threshold and description is exactly right there's no one single factor that says we're going to shut down the business or we're not but these are all calculations if you try to trap employers and it looks like all the other doors are closed they're going to find one to go through pay for me to do something different do i restructure my firm have two businesses and ship people out somewhere else pay you differently because it turns out when i pay you more i lose money under other calculations is it going to hit me when i grow too much can i do it in a different manner all these are not what businessmen should be doing but they have to take into account the entire structure of them and they will act the best they can we are though overloading them so that they're trying to do your health plans comply with why it all right because your company is as far as i know that's correct i mean the basic premise of the discussion has been the cost of health care and and as you're probably aware under congressional testimony january other than the fact that you're hopeful the law will hold down health care cost but we know the data shows that that's not true i just wanted to get your view on that that that  with mr barletta said if you were an employer that had sixty employees seventy employees and you are not exempt from the healthcare law do you feel that you would try to put yourself in a position that you would have to comply with with not only providing health insurance but the specific type that is required in the law or else suffer penalties congressman there are over four million small businesses that fall in going away in fairly short order that will be a temporary thing and then what again i think you were asked a question earlier do you have a plan for your business when you're when the tax credits not only they go away but who's paying for the tax credit i mean where it where does the money come from it comes from the the american taxpayer and as we know with the testimony of mr foster as health care costs continue to rise under this health care bill everyone's going to continue to struggle your premiums are going to continue to go up and if you don't have a plan for when you lose your short term small business credits what are the other four thousand businesses like yourself around the united states going to do when those go away congressman in part my premium has gone down and i don't see any reason why that might not continue especially as more people join in our pain pain premiums especially younger healthier i have every reason to believe that there's health care premiums can go down and or stabilize and especially  state of oregon makes improvements in health delivery i also believe premiums can go down so i don't plan for the worst i plan for the best and just sort of proceed on that basis that  you're going to have trouble and also you know i do think when you are discussing something which you're completely exempt from that gives you a little bit different perspective on on your testimony  so i'm hopeful that we can get some real cost containment in place for businesses like yours going forward because i'm fearful that when the when these very small credits are going to be struggling and my time is up thank you thank general feeling i will finish the questioning by saying that not anybody on either side of the aisle didn't think we need to have meaningful health care reform th doctor saying right here knew it better than anybody that's one of the reasons i ran came to congress and the number one issue in america was how do we control the cost of care because once we get the costs under control and more formal more people can buy number two in the second problem we the american health care delivery system was we had a group of people who did not have access to affordable insurance coverage in this country we had the working poor they didn't apply for didn't qualify for medicaid they didn't have a job to provide the insurance that's the group we're talking about and thirdly which didn't even come up in this bill which is a huge problem for doc to be shown in myself with liability reform there's a huge cost for defensive medicine in this nation so those are the very problems this bill did increase access to a program that's already failed which is the medicaid system and needs to be revamped it did nothing to hold the cost down and did nothing for law building reform the other equation young probably physicians in the crowd out here i'm glad came is we've forgotten about that part of the program let me explain to you what happens in these government programs in their paid to providers less on the dollar for providing the care medicare in our state pays about ninety percent of the cost of the care leaving that shifted to the private sector that's one of the reasons that cost a private health insurance has gone up so rapidly in this country is that cost me give you an example when implantable defibrillator first came out and you can do two thirds of it with two paragraphs one is simply stop the people who are currently eligible for medicaid and number two which i like is leave your twenty six year old you only had one child i had three that did that allowed him to stay on that covers over twenty million people and then lastly what you do let people shop across state lines the only insurance let them form association health plans and get bigger like you're talking about and have liability reform those simple things not complicated you can help force the cost down here's a card that's a health savings account card i have right here i had to have some biopsies done i had to have had to have for it i would recommend you pay you in a millisecond and guess what i say thirty five i was happy the hospital was happy and that's what mr miller was talking about i think is changing the way we pay for health insurance in this country so mr dealt with this  issue as a as a former mayor and these costs are being passed along let me ask you why wouldn't do this three hundred fifty employees in my practice right now we put about five thousand dollars per person away if i pay the fine and the penalty we have three hundred people get health insurance through our practice by paying a two thousand dollars that's six hundred thousand if i pay the five thousand that's one point five million if my employees in the exchange which i certainly don't want to do we why he's going to say why in the world would not do that h r is going to be fighting about well we need it for a competitive advantage you know the c d o refers to a tight labor market that doesn't exist so i'm not sure that one holds any water  but over some period of time if you've been in business and you have you know how this works over a period of time the c f o is going to win that argument logic of survival will trump the logic of warm and cuddly h so to answer your question is there isn't any reason why you wouldn't do that if you had any reasonable assurance that your employees were going to be adequately covered or adequately managed within the framework of the exchange  don't have any insurance hospitals and to be in their emergency rooms taxpayers end up footing that bill in some way shape or form after the exchanges are set up mr parker's  that i believe that businesses and all of you all have been involved in business are much better suited to decide what health insurance that they need to purchase for their business and the federal government what's happened is that the federal government will now decide which is adequate health insurance coverage let me give you just an example they have a minimum benefit package that's going to be and everyone will have to do it and mr hauser what you may have purchased may not be the minimum your cost may go up because you may not meet the standard that the government says you have to make i think you should be able to make that decision there's a company in tennessee i won't mention the name of it right now has a plan that they can afford a large company that they can  afford and that they're happy with their employees are happy with but he won't meet this man i'm standard that the government has laid out in this affordable health care plan it will cost them forty million dollars to comply with this if they drop their their employees into the exchange it will save them forty million dollars and mr burke clearly point out that argument will go on but eventually all went out i believe that individuals should make those decisions and businesses should make those decisions not the government the other thing that i have a little problem with the matter fact a major problem with the cost estimates is that a year ago the c b l these are good people they're honest they plug in the numbers that they told us that the budget deficit was going to be one point two billion it turns out is going to be one point six five billion so in one year they missed it by four hundred billion dollars and i'm supposed to believe looking at all the past year that i have with medicare and with care and with and with massachusetts quite frankly what their massachusetts plan which has the mandate have the highest insurance premiums rising faster than anybody else in the country so when government makes those decisions and you don't make them as an individual or your  family and i've said this from day one health care decisions should be made by patients their families and doctors shouldn't be decided by the federal government i've enjoyed this discussion to mention today i think each one of you for preparing you did a great