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40–231 PDF 2008

FULL COMMITTEE HEARING ON

LIMITED HEALTH CARE OPTIONS

FOR SMALL BUSINESSES IN THE

SMALL GROUP MARKET

COMMITTEE ON SMALL BUSINESS 

UNITED STATES HOUSE OF 

REPRESENTATIVES

ONE HUNDRED TENTH CONGRESS

SECOND SESSION

JANUARY 23, 2008

Serial Number 110-67

Printed for the use of the Committee on Small Business

(

Available via the World Wide Web: http://www.access.gpo.gov/congress/house 

HOUSE COMMITTEE ON SMALL BUSINESS 

NYDIA M. VELA ́ ZQUEZ, New York, Chairwoman 

HEATH SHULER, North Carolina 

CHARLIE GONZA ́ LEZ, Texas 

RICK LARSEN, Washington 

RAUL GRIJALVA, Arizona 

MICHAEL MICHAUD, Maine 

MELISSA BEAN, Illinois 

HENRY CUELLAR, Texas 

DAN LIPINSKI, Illinois 

GWEN MOORE, Wisconsin 

JASON ALTMIRE, Pennsylvania 

BRUCE BRALEY, Iowa 

YVETTE CLARKE, New York 

BRAD ELLSWORTH, Indiana 

HANK JOHNSON, Georgia 

JOE SESTAK, Pennsylvania 

BRIAN HIGGINS, New York 

MAZIE HIRONO, Hawaii 

STEVE CHABOT, Ohio, Ranking Member 

ROSCOE BARTLETT, Maryland 

SAM GRAVES, Missouri 

TODD AKIN, Missouri 

BILL SHUSTER, Pennsylvania 

MARILYN MUSGRAVE, Colorado 

STEVE KING, Iowa 

JEFF FORTENBERRY, Nebraska 

LYNN WESTMORELAND, Georgia 

LOUIE GOHMERT, Texas 

DEAN HELLER, Nevada 

DAVID DAVIS, Tennessee 

MARY FALLIN, Oklahoma 

VERN BUCHANAN, Florida 

JIM JORDAN, Ohio

MICHAEL DAY, Majority Staff Director 

ADAM MINEHARDT, Deputy Staff Director 

TIM SLATTERY, Chief Counsel 

KEVIN FITZPATRICK, Minority Staff Director

STANDING SUBCOMMITTEES 

Subcommittee on Finance and Tax

MELISSA BEAN, Illinois, Chairwoman 

RAUL GRIJALVA, Arizona 

MICHAEL MICHAUD, Maine 

BRAD ELLSWORTH, Indiana 

HANK JOHNSON, Georgia 

JOE SESTAK, Pennsylvania 

DEAN HELLER, Nevada, Ranking 

BILL SHUSTER, Pennsylvania 

STEVE KING, Iowa 

VERN BUCHANAN, Florida 

JIM JORDAN, Ohio

Subcommittee on Contracting and Technology

BRUCE BRALEY, IOWA, Chairman 

HENRY CUELLAR, Texas 

GWEN MOORE, Wisconsin 

YVETTE CLARKE, New York 

JOE SESTAK, Pennsylvania 

DAVID DAVIS, Tennessee, Ranking 

ROSCOE BARTLETT, Maryland 

SAM GRAVES, Missouri 

TODD AKIN, Missouri 

MARY FALLIN, Oklahoma

(II) 

Subcommittee on Regulations, Health Care and Trade

CHARLES GONZA ́ LEZ, Texas, Chairman 

RICK LARSEN, Washington 

DAN LIPINSKI, Illinois 

MELISSA BEAN, Illinois 

GWEN MOORE, Wisconsin 

JASON ALTMIRE, Pennsylvania 

JOE SESTAK, Pennsylvania 

LYNN WESTMORELAND, Georgia, Ranking 

BILL SHUSTER, Pennsylvania 

STEVE KING, Iowa 

MARILYN MUSGRAVE, Colorado 

MARY FALLIN, Oklahoma 

VERN BUCHANAN, Florida 

JIM JORDAN, Ohio

Subcommittee on Urban and Rural Entrepreneurship

HEATH SHULER, North Carolina, Chairman 

RICK LARSEN, Washington 

MICHAEL MICHAUD, Maine 

GWEN MOORE, Wisconsin 

YVETTE CLARKE, New York 

BRAD ELLSWORTH, Indiana 

HANK JOHNSON, Georgia 

JEFF FORTENBERRY, Nebraska, Ranking 

ROSCOE BARTLETT, Maryland 

MARILYN MUSGRAVE, Colorado 

DEAN HELLER, Nevada 

DAVID DAVIS, Tennessee

Subcommittee on Investigations and Oversight

JASON ALTMIRE, PENNSYLVANIA, Chairman 

CHARLIE GONZA ́ LEZ, Texas 

RAUL GRIJALVA, Arizona 

, Ranking 

LYNN WESTMORELAND, Georgia

(III) 

C O N T E N T S 

OPENING STATEMENTS 

Page

Vela ́zquez, Hon. Nydia M. ....................................................................................... 1

Chabot, Hon. Steve .................................................................................................. 2

WITNESSES

Teske, Donn, Kansas Farmers Union, on behalf of the National Farmers 

Union ..................................................................................................................... 4

Eckstein, Scott, James Scott Custom Builders, on behalf of the National 

Association of Home Builders ............................................................................. 5

Sandman, Cathey, Sandman Family Daycare, on behalf of the National Federation of Independent Businesses ..................................................................... 8

Lee, Richard, Lee’s Flower & Card Shop, on behalf of the Society of American 

Florists .................................................................................................................. 10

Groza, Lee, Mountjoy & Bressler, LLP, on behalf of the American Institute 

of Certified Public Accountants ........................................................................... 12

Eby, Dr. R. Stephen, on behalf of the American Academy of Family Physicians ...................................................................................................................... 14

APPENDIX 

Prepared Statements: 

Vela ́zquez, Hon. Nydia M. ....................................................................................... 31

Chabot, Hon. Steve .................................................................................................. 33

Altmire, Hon. Jason ................................................................................................. 34

Teske, Donn .............................................................................................................. 35

Eckstein, Scott ......................................................................................................... 42

Sandman, Cathey .................................................................................................... 45

Lee, Richard ............................................................................................................. 51

Groza, Lee ................................................................................................................ 57

Eby, Dr. R. Stephen ................................................................................................. 61

Statements for the Record: 

National Cattlemen’s Beef Association .................................................................. 64

CompTIA .................................................................................................................. 65

National Funeral Director’s Association ................................................................ 74

Western PA Coalition for Single-Payer Healthcare .............................................. 76

(V) 

(1)

FULL COMMITTEE HEARING ON LIMITED 

HEALTH CARE OPTIONS FOR SMALL 

BUSINESSES IN THE SMALL GROUP 

MARKET 

Wednesday, January 23, 2008

U.S. HOUSE OF REPRESENTATIVES, 

COMMITTEE ON SMALL BUSINESS, 

Washington, DC. 

The Committee met, pursuant to call, at 10:00 a.m., in Room 

2360 Rayburn House Office Building, Hon. Nydia Vela ́zquez [chairman of the Committee] presiding. 

Present: Representatives Vela ́zquez, Cuellar, Clarke, Ellsworth, 

Chabot, Akin, King and Gohmert. 

OPENING STATEMENT OF CHAIRWOMAN VELA ́ ZQUEZ 

Chairwoman VELA ́ ZQUEZ. This hearing on limited options for 

small businesses in the small group market is now called to order. 

It is clear that our economy is facing many challenges, and small 

businesses know this better than anyone. Whether it is finding access to adequate capital during a credit crunch or dealing with today’s overall uncertainty, small businesses are confronting many 

obstacles to success. Despite the growing list of concerns, something that continues to top that list is access to affordable health 

insurance. 

Since 2001, small businesses have been confronted with annual 

price increases for health insurance ranging from six percent to 

over ten percent. During that time, the average small business has 

seen their premiums double. This has forced many entrepreneurs 

to decide whether they can continue to offer coverage. These rising 

costs are clearly having an impact. According to the small business 

administration, price is the most significant factor influencing the 

decision of small firms to offer health insurance. 

But price is not the only factor. Today’s hearing will address the 

growing cost of health insurance for small businesses, as well as 

highlight the variety of challenges small firms face in offering 

health coverage. The panelists before us will explain how difficult 

it is for small firms to find, keep, and administer health insurance 

plans. Each of these challenges influences whether a small firm 

will offer coverage. 

Unfortunately, the stories we hear today are not out of the ordinary. Similar struggles could be told by nearly any business in any 

town across the country. The first obstacle small firms usually confront in offering coverage is identifying health insurance options. 

2

There are no one stop locations where these entrepreneurs can 

identify available health care options and compare plans. This only 

adds to the disproportionate administrative burden small firms 

face in comparison to larger counterparts. 

Small businesses in rural America often face greater difficulty 

where physician shortages and limited access to health services 

discourage insurers from offering coverage. This can lead to one 

carrier being the only game in town, which can drive up overall 

costs. 

Because access to insurance is restricted, many small business 

owners simply abandon the search for small group insurance. Managing a plan also creates additional cost for these companies. Small 

business owners must devote valuable resources working with vendors, handling insurance, paper work, and addressing employee 

claims issues. 

Because small firms often do not have HR departments or brokers, owners are forced to take time away from their businesses to 

insure coverage for their employees. 

Along with the challenges of offering insurance, small firms regularly struggle with keeping their insurance plans affordable. A 

major problem is the uncertainty created by high cost claims. Too 

often minor surgeries, pregnancies, and other basic health care 

treatment that are part of everyday life result in double digit rate 

increases. 

Small business owners quickly find themselves in the position of 

having to choose between paying unreasonable premium hikes or 

dropping coverage altogether. This explains the findings in a recent 

study that found over 60 percent of firms that already have health 

care options are shopping for different coverage. The fact these 

businesses are looking reveals one of the largest heating costs of 

health insurance. 

The goal of this hearing is to bring into focus these and other 

very real problems faced by small firms every time they offer or 

consider providing insurance. This is the third hearing this Committee has held on the issue of health insurance access and affordability. The problem is complex as it is severe for small businesses. 

We have with us small business owners from around the country. 

I want to thank you for taking the time away from your firms to 

discuss these challenges. As Chairwoman of the Small Business 

Committee, I plan on keeping this issue in the spotlight because it 

is so important to firms across the country. 

There are many in this Congress that say that health care reform will not be addressed until we have a new administration. 

But one thing is sure. We need to keep this issue in the forefront 

by bringing it to Capitol Hill, by telling members of Congress that 

out of the 44 or maybe more million of people in this country that 

do not have any kind of health coverage, 62 percent, 62 percent of 

those are either small businesses, their employees, and relatives. 

So health insurance and access to health coverage is a small 

business issue. 

I now look forward to today’s testimony and yield to the Ranking 

Member for his opening statement, who is a year younger today. 

Congratulations. 

[Laughter.] 

3

OPENING STATEMENT OF MR. CHABOT 

Mr. CHABOT. Thank you, Madam Chairwoman, for yielding and 

noting how old I am and for holding this hearing on the limited 

health insurance options for small businesses. 

I appreciate our witnesses who in many instances have come 

from far distances to share their testimony. 

I want to especially thank Dr. Stephen Eby who is from Cincinnati, Ohio, which happens to be the great community that I represent in Congress, and I will be introducing him shortly. 

Madam Chairwoman, 47 million people, as you indicated, in our 

country do not have health insurance. According to the National 

Federation of Independent Business, about 27 million of the uninsured are self-employed or small business owners and their families. 

The uninsured are less likely to have access to preventive care 

and chronic disease management, all of which would save lives and 

save money in the long term, and for small businesses that are 

able to offer their employees health insurance, the cost of doing so 

continues to rise. Many of these small firms are faced with double 

digit premium increases and have only one or two insurance companies from which to choose. 

When the members of this Committee travel back to their districts, I know that we all meet small business owners every day 

who are struggling to cope with the rising cost of providing health 

care for their employees. Increasing competition is one way to bring 

down these costs. 

I, for example, support Association Health Plans, AHPs, which 

would permit small business owners to pool together to purchase 

health insurance at lower rates. These arrangements could increase negotiating leverage and administrative efficiencies and help 

to insure more consistent benefits among the states. 

I also want to mention that I have introduced over a number of 

years now the Health Insurance Affordability Act, which is legislation to allow individual taxpayers and small businesses to deduct 

100 percent of their health insurance premiums from their annual 

tax returns. This would help bring more people into the health insurance marketplace and ultimately increase competition and reduce health insurance costs. 

Today we will hear from small business owners who will share 

their personal stories of the challenges in finding, affording, administering, and keeping adequate health insurance for their employees. I look forward to their comments and continuing our work in 

developing health care solutions. 

And I again want to thank you for holding this hearing, and I 

look forward to hearing from the witnesses here this morning. 

Thank you. 

Chairwoman VELA ́ ZQUEZ. Thank you, Mr. Chabot. 

And now I would like to introduce our first witness, Mr. Donn 

Teske. He is the President of the Kansas Farmer Union in McPherson, Kansas. Mr. Teske is the fifth generation to operate his family 

farm in northwestern Kansas. He is testifying on behalf of the National Farmers Union, which represents over 250,000 farm and 

ranch farmers. 

4

Welcome, Mr. Teske. You will have five minutes to make your 

testimony. 

STATEMENT OF DONN TESKE, PRESIDENT, KANSAS FARMER 

UNION, McPHERSON, KANSAS, ON BEHALF OF THE NATIONAL FARMERS UNION 

Mr. TESKE. Thank you, Madam Chairman and Ranking Member 

and members of the Committee for allowing me to speak here 

today. 

As the Chairwoman said, my name is Donn Teske, and my wife 

Kathy and I live in northeast Kansas. I serve as President of the 

Kansas Farmers Union, and today I am representing National 

Farmers Union. 

When I was asked if I would be willing to testify today, I jumped 

on that because I, like many Americans have a personal story to 

share with you, and so most of my testimony is bellyaching instead 

of actual testimony. 

[Laughter.] 

Mr. TESKE. My wife Kathy and I live in rural northeast Kansas. 

The hometown where we live of Wheaton is 97 people. The neighboring community of Onaga is where our health care system is, 

where our kids go to school. 

We are a fifth generation farm as you say. Our roots are deep, 

and when Kathy finally decided that we had to go off the farm to 

get health insurance, she went to the community hospital to work, 

and she works there in insurance and in reception, and she has 

been there for ten years. 

She went to get health insurance, and literally all of her health 

insurance goes to pay health care costs for the family, and we have 

a very healthy family. We do not have big problems, but our community hospital is a rural hospital. It is a very large, very modern 

rural hospital and serves many of the surrounding communities 

and employs almost 300, and our family is insured through the 

group plan. 

I was always concerned that the insurance was inadequate to 

other policies, and regretfully we ran into this the last few years. 

My wife Kathy had to have two partial knee replacements over the 

past several years. After our deductible was met, we were personally responsible for over $6,000 that we had to take loans out and 

that we are paying hopefully off some day above what the policy 

would cover. 

And what really has my dander up now is that this past summer 

when I was welding on the combine, I screwed up my back, and 

I am one of those guys that you screw up your back and you go 

to the chiropractor a couple of times and you get over it and life 

goes on and you are fine. I could not throw it, and so this fall I 

went in and had two epidurals done on my back. Come to find out 

that farming is not covered under insurance policy. That is right. 

If you are self-employed for profit, this insurance policy does not 

even cover the spouse. 

And so we may very well have another $4,000 we have got to figure out how to pay from that. 

The Onaga Community Hospital is a good hospital, and it is desperately needed in the community. I have no problem with the hosVerDate 0ct 09 2002 13:14 Mar 04, 2008 Jkt 033615 PO 00000 Frm 00010 Fmt 6633 Sfmt 6633 G:\CLERK SB\HEARINGS\TRANSCRIPTS\40231.TXT LEANN
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pital, but there are many families like ours that the spouse is just 

there working for the family’s health insurance, and now the 

spouse of the employee is not covered? 

If this is the best health care policy that an entity like the Onaga 

Community Hospital can offer to its employees, then there is something wrong with the economics of rural America and adequate 

health care because it is clashing. 

Now, farmers are small business owners. We cannot get the 

group rates like others can get. We end up paying higher premiums. In 2006, I was asked by the Access Project out of Massachusetts if we would be willing to participate in a study. I agreed 

to a professional survey of my membership base. I had no idea 

what the response would be when my staff sent out 600 surveys 

to randomly selected Kansas Farmers Union members. 

To my great surprise, 47 percent of those surveyed responded. 

Obviously, it is important to Kansas residents. The study found 

that 29 percent of residents in rural Kansas under the age of 65 

have medical debt even though 95 percent of them had some type 

of health care insurance. Like our family, their coverage was not 

sufficient to offset the cost of treatment. 

Even more disturbing was a study finding that 67 percent had 

delay receiving primary medical care because of financial concerns. 

As a result of this involvement, I became involved with the KHCC, 

the Kansas Health Consumer Coalition in Kansas whose mission 

is affordable health care for all Kansas. 

Rural communities have difficulties providing adequate health 

care. However, the challenges facing rural health care are not insurmountable. There are successful examples: Massachusetts, West 

Virginia, New York. They all have programs that help small businesses. 

Clearly, rural Americans need assistance to insure they have access to the health care they need. As you move forward, I urge you 

to consider the unique needs of rural Americans, many of whom 

are small business owners, and draft legislation that will help them 

to obtain quality health care at an affordable price. 

Thank you very much, and I welcome any questions. 

[The prepared statement of Mr. Teske may be found in the Appendix on page x.] 

Chairwoman VELA ́ ZQUEZ. Thank you. Mr. Teske. 

Our next witness is Mr. Scott Eckstein. He’s the President of 

James Scott Custom Builders in Bollingbrook, Illinois. James Scott 

Custom Builders has provided custom home building in the area 

for the last 15 years. 

Mr. Eckstein is also President of the Home Builder Association 

of Illinois and is representing the National Association of Home 

Builders. The National Association of Home Builders represents 

over 235,000 home builders and professionals in related fields. 

Welcome, sir. 

STATEMENT OF SCOTT ECKSTEIN, JAMES SCOTT CUSTOM 

BUILDERS, NAPERVILLE, ILLINOIS, ON BEHALF OF THE NATIONAL ASSOCIATION OF HOME BUILDERS 

Mr. ECKSTEIN. Thank you. 

6

Good morning, Chairman Vela ́zquez and Ranking Member 

Chabot and members of the Committee. 

My name is Scott Eckstein. I am a 41 year old self-employed custom home builder-remodeler from Naperville, Illinois, west of Chicago. My wife Jackie and I work together in our family business 

along with raising three daughters. 

I have operated my two companies, Dupage Design and Construction, Inc. and James Scott Custom Builders, for the past 15 

years. 

I currently employ five full-time workers and my companies have 

thrived in the northern Illinois market. 

Currently, I serve as President of the Home Builders Association 

of Illinois. The HBA of Illinois represents over 5,000 businesses 

throughout the state. Nearly 80 percent of our members are small 

companies, such as mine, and have similar issues and concerns. 

During my presidency I have been traveling the state and meeting with members. I have quickly learned that the issue of health 

care and its affordability are overshadowed only by the concerns for 

the state of the housing market in general. I find it ironic that the 

very people that house our country’s doctors cannot afford proper 

health care coverage. 

When my first daughter was born, I was employed in a management job with a large national retailer. I had excellent insurance 

coverage and paid less that $350 a month to insure my young family. When my wife’s pregnancy of our first daughter required an 

emergency C-section, there was no discussion. Doctors acted decisively and she was born. 

Years later I realized my own dream to start my business. Luckily, I kept my insurance through a COBRA extension. I carried that 

insurance for years, each year experiencing large increases, but 

never having an affordable option for change. 

A few years later I went back to work for a mid-size builder in 

the Chicago land area. The employer provided me with health insurance coverage through an HMO program. Sixteen months after 

starting this job, my wife and I found ourselves expecting our second child. 

This time the doctors advised us that a Caesarian was not necessary. They were wrong. My daughter was injured during the 

birth process, born with an APGAR score of 0, later resuscitated, 

but suffered brain damage and cerebral palsy, which still affects 

her today. 

Because of this I have been unable to change my health insurance for the past 16 years despite many arbitrary increases. 

My personal policy under COBRA that once cost me under $600 

per month for my family was now as high as $1800 per month. I 

currently pay in excess of $21,000 a year for two insurance carriers 

to provide my family with unreliable health care coverage. My wife 

spends, on an average, two to four hours a week on the phone with 

our insurance companies fighting for coverage, prescription refills, 

or payment of bills. 

My daughter, with preexisting conditions as a result of her birth 

injury, often misses scheduled therapy appointments because of our 

carriers’ inability to process referrals when needed. This is the 

7

quality of health care coverage business owners can expect for 

$22,000 a year? 

My written testimony includes several examples of premium increases up to 32 percent in a given calendar year. An increase like 

this could cost a small company of six an additional $18,0000 annually. If new home prices rose at this rate, could you imagine the 

cost to shelter our nation? 

My inability as an employer to provide adequate, affordable 

health coverage over the past few years has directly resulted in employee turnover and my inability to hire consistent, qualified workers. Over the years many of my qualified employees have left the 

company and I believe they could have been retained if I was able 

to offer affordable health care options. 

I hear the rhetoric in regards to this issue in every election. Yet 

when the polls close and the politicians are elected, nothing ever 

changes and we are faced with a deeper quagmire than before. It 

is time for the federal government to stop talking and start acting 

on behalf of the small business owners. 

Following the tragedies of 9/11 and Hurricane Katrina our industry carried the national economy through tough times, preventing 

a deeper recession from taking hold. The building community 

pulled together to help others, yet shamelessly many of our people 

cannot afford health care coverage. 

I am here today as a small business owner and a representative 

of the home building community to ask for your help in solving this 

crisis. This just does not affect home builders. If affects everybody 

in America. It is up to you, our elected leaders, to stop this runaway train before it derails our American health care system altogether. 

Association health plans that would allow organizations, such as 

ours, to receive large group pricing and avoid exemptions from preexisting conditions would make health care affordable and accountable to the consumer again. 

Keep in mind that our members are small business owners. They 

cannot take a day off of work for a cold or a sniffle because they 

have a business to run. Generally, we are healthy individuals performing active work, making us attractive clients to any insurance 

carrier. Yet these are the individuals who struggle to receive the 

same benefits that a bag boy at a national grocery store can obtain 

through his company’s plan. 

In a country that encourages the entrepreneurial spirit, health 

care must become affordable and available to our businesses. 

Thank you for the opportunity to share my thoughts and experience with this Committee today. I look forward to answering any 

questions you might have. 

[The prepared statement of Mr. Eckstein may be found in the 

Appendix on page x.] 

Chairwoman VELA ́ ZQUEZ. Thank you, Mr. Eckstein, for sharing 

your personal story. Quite compelling, and I am really sorry to 

hear what happened to your daughter. 

I also want to share with you that in the last Congress I was the 

lead sponsor of the Association Health Plan. 

Now, I welcome Ms. Cathey Sandman. She is the owner of Sandman Family Daycare in Lockport, New York. Ms. Sandman is repVerDate 0ct 09 2002 13:14 Mar 04, 2008 Jkt 033615 PO 00000 Frm 00013 Fmt 6633 Sfmt 6633 G:\CLERK SB\HEARINGS\TRANSCRIPTS\40231.TXT LEANN
8

resenting the National Federation of Independent Business, NFIB. 

It is the national organization that has been representing small 

businesses since 1943 and has over 600,000 members. 

Welcome. 

STATEMENT OF CATHEY SANDMAN, SANDMAN FAMILY 

DAYCARE, LOCKPORT, NEW YORK, ON BEHALF OF THE NATIONAL FEDERATION OF INDEPENDENT BUSINESSES 

Ms. SANDMAN. Thank you. 

On behalf of NFIB, I want to thank Chairwoman Vela ́zquez for 

inviting me to discuss the significant challenges facing small businesses trying to access and afford health insurance. 

My name is Cathey Sandman and I operate Sandman Family 

Daycare, a home-based business located in Lockport, New York. 

As a small business owner, mother, wife and child care professional, I deeply believe that health care is at a critical tipping 

point. Something must be done to improve access to and affordability of health care. 

The health care cost crisis affects two specific small business sectors, those who are insured and struggling to keep up with the 100 

percent increase over the last six years, and the 27 million in the 

small business community who are uninsured. 

NFIB members represent both of these sectors. I once was an 

NFIB member with insurance. Today I am an NFIB member with 

no health insurance for myself or my family. I have been an inhome child care provider for 18 years. I personally service 13 families and up to 18 children in any given week, ranging from six 

week old through 13 years. 

My services are vital to these families and enable them to go to 

work and be productive. Like most small business owners, I work 

long hours, 12 to 14 hour days. I spend a great deal of time when 

I am not working planning and organizing for the next day. 

Mr. CHABOT. Ms. Sandman, I apologize for interrupting you, but 

could you pull the mic a little closer. The folks in the back may 

have trouble hearing you. 

Thank you. 

Ms. SANDMAN. This is one of the best aspects of owning your own 

business. Is that better? 

Mr. CHABOT. I would pull it even closer. 

Ms. SANDMAN. Thank you. 

This is one of the best aspects of owning your own business. You 

work for yourself, so the extra hours are not a burden. I have a 

passion for the families and children in my community and work 

to serve many of their needs. 

Five years ago my husband joined my business as my assistant 

and business partner. We then had to purchase our own health insurance and found it expensive, but affordable. But after multiple 

premium increases the cost began to threaten our ability to maintain our insurance. 

In October of 2007, my husband and I made the difficult decision 

to give up our health insurance. It was not an easy choice, but 

after the last few premium increases, the monthly cost of our 

health insurance was the same as our monthly mortgage payment. 

9

Since I am self-employed and work out of my home, I felt there 

was no other choice. I need a place to live and I need a place to 

work. But I simply could no longer afford to pay the equivalent of 

a second mortgage. So we terminated our coverage as of October 

1st, 2007, and tried to figure out what to do next. 

Unfortunately, time was not on our side. On October 13th, less 

than two weeks after becoming uninsured, I became ill and ended 

up in the hospital with appendicitis. I had to have surgery and my 

appendix was removed. The hospital and doctor bills totaled 

$10,000. Today I am on a payment plan with the hospital. 

While I appreciate their willingness to work with me, every dollar I spend to pay off this bill I cannot use to purchase health insurance. 

Back home in Niagara County, I am not alone in this struggle. 

There are about 125 in home child care providers in my county, 

and I know many of them. I operate a training and support group 

to assist all providers. The health care crisis is on everyone’s mind. 

I hear discussions about it constantly. 

It is necessary, but unavailable to many, and it is a heavy burden to many more. It is vitally important that something changes 

and soon. As Congress works to develop specific policy related solutions, please keep in mind that many small businesses are looking 

for a balance, a balance similar to the one outlined in NFIB’s small 

business principles for health care reform. 

The principles are a foundation for health care reform that 

achieves four goals: access to quality care, affordability, predictability, and consumer choice. Those goals are achieved by creating 

a system that is universal, private, affordable, unbiased, competitive, portable, transparent, efficient, evidence-based, and realistic. 

NFIB will pursue legislative proposals that are reflective of these 

ten principles. 

Finally, Madam Chairwoman, I appreciate the work your Committee has done with NFIB. I am hopeful that you will continue 

working with NFIB and other groups that are committed to developing effective solutions for small business owners, employees, and 

their families as well as the broader population. 

Recognizing that many voices are stronger together, NFIB joined 

Divided We Fail in 2007. The coalition, which includes AARP, Business Roundtable, and the Service Employees International Union, 

represents more than 53 million people. These groups do not agree 

on many issues, but the coalition does agree on the need to seek 

out and engage in a serious dialogue to find broad based bipartisan 

solutions that address what has become a national crisis for American job creators, health care. 

Thank you, again, for holding this hearing today and shining a 

spotlight on the health care crisis facing small businesses. I greatly 

appreciate your interest and your willingness to listen to my story. 

NFIB shares your desire to address the nation’s health care crisis. I am hopeful that working together, today’s horror stories can 

be transformed into tomorrow’s success stories. 

Thank you. 

[The prepared statement of Ms. Sandman may be found in the 

Appendix on page x.] 

Chairwoman VELA ́ ZQUEZ. Thank you, Ms. Sandman. 

10

Our next witness is Mr. Richard Lee. He is the President of Lee’s 

Flower and Card Shop in Washington, D.C. Mr. Lee is the fourth 

generation to run the family owned business. It was established in 

1945. 

Mr. Lee is testifying on behalf of the Society of American Florists. The Society of American Florists represents over 15,000 retailers, growers, wholesalers, and importers in the floral industry. 

Welcome. 

STATEMENT OF RICHARD S. LEE, PRESIDENT, LEE’S FLOWER 

& CARD SHOP, WASHINGTON, D.C., ON BEHALF OF THE SOCIETY OF AMERICAN FLORISTS 

Mr. LEE. Thank you, very much, Chairman Vela ́zquez and also 

to the members of the Committee. 

Good morning and thank you for this opportunity to present testimony on behalf of the Society of American Florists and the U.S. 

floriculture industry on this subject of limited health care options 

for small businesses. 

At the outset, I want to thank you, Chairwoman and the other 

members of the Committee who have been particularly supportive 

of the need for health care reform for so many years. And thank 

you for holding this hearing and once again being the voice of small 

business in the halls of Congress. 

My name is Rick Lee. I am President of Lee’s Flower and Card 

Shop in Washington, D.C. The Society of American Florists is the 

national trade association representing the entire floriculture industry, a $19 billion component of the United States economy. 

Membership includes about 10,000 small businesses nationwide, 

and this issue is important to nearly every one of them. 

Lee’s Flower and Card Shop has been in business for 62 years, 

since 1945. We are a full-time and full service retail floral shop. As 

a family owned business we pride ourselves on our service, both to 

our customers and to our community. 

Community service is a family tradition started by my parents, 

Winnifred and William Lee, when they founded the shop. We have 

stood by our neighborhood, through its ups and downs, and I am 

happy to say we are back in an upswing now. 

Everyone knows about the U Street corridor and how it has come 

back and the gentrification that is going on there. I founded the 

neighborhood’s first Jaycee chapter back in 1968 after the assassination of Martin Luther King, Jr. 

My daughter, Stacey, who works in the business, donates a substantial chunk of time to at least five civic and charity groups. 

So it is not only a disadvantage to us not to be able to offer 

health insurance coverage to our employees. It goes against my 

philosophy of community service. 

There was a recent poll reported by HR News that demonstrates 

the importance employees place on health insurance. According to 

this poll, of 1,200 United States adults, age 18 and older, 84 percent say health insurance is the most important factor in choosing 

a job. 

So offering health care in reality is a benefit that is necessary 

for a business to succeed. We have seven full-time employees plus 

many part-timers on a weekly basis, and more at holiday and speVerDate 0ct 09 2002 13:14 Mar 04, 2008 Jkt 033615 PO 00000 Frm 00016 Fmt 6633 Sfmt 6633 G:\CLERK SB\HEARINGS\TRANSCRIPTS\40231.TXT LEANN
11

cial events. The biggest enticement besides salary in our repertoire 

of tools to attract and keep employees is benefits, and the most important benefit is our ability to offer health care. 

There are very limited health care options for small businesses 

in the small group market. I believe that cost is the biggest impediment, but is also a lack of options and lack of negotiating power 

that are also important. 

Right now there does not seem to be any options in all of the 

market for me. And I know from talking to others in my industry 

the small businesses in many states are similarly faced with the 

limited or no choice. 

When I was in the market I had to rely on agents and brokers 

to help me choose a plan, and some agents did not want to deal 

with me because of my company being so small. I can tell you first 

hand that small businesses do not have the same market advantage that large businesses do. Small businesses have no negotiating 

power. 

So even if we can purchase insurance, if a year later we have 

had one or two expensive claims, the premium costs go up by double digits and the out-of-pocket costs go up also. 

The last time I attempted to purchase insurance and offer it to 

my employees I had to ask them to pay 25 percent of the premiums. It was the best deal that I could get, but even then the 

younger ones decided it was not viable for them. They said they 

would rather roll the dice, pray, and cross their fingers that they 

did not get sick or injured. 

Our work force spans a range of ages from 20 years to a driver 

in his 60’s. They want and need different things in a health plan, 

and I need to be able to find a policy that provides adequate coverage but is affordable and responds to their different needs. 

Right now one of my long-term employees who has been with us 

for 26 years—he is one of our drivers—just could not afford the coverage and recently had an accident. He was treated in the emergency room and could not pay. So now he has had his wages garnished. 

Another example is one of my employees who became pregnant. 

She could not afford the health care so she went on public assistance. If employees do not get affordable coverage through the employer, they certainly are not going to hunt for coverage in the nongroup market where the costs are out of reach for these workers. 

The outcome is that the small business owners and the small 

business employees are often not covered by any health insurance. 

My two daughters also work in the business. Both have spouses, 

fortunately, whose employers provide coverage so they are covered. 

My wife, who retired from Verizon a number of years ago, and I 

receive health insurance on her plan. 

Unfortunately, my other employees have few options for health 

insurance coverage. Three of them have spouses, but the spouses 

do not have health insurance. So it is a vicious circle. The higher 

the cost, the more workers are shut out or priced out of the system. 

Having uninsured workers has an impact on everyone who is insured. 

So in conclusion, I hope that my sharing with you these experiences with trying to provide health insurance as a small businessVerDate 0ct 09 2002 13:14 Mar 04, 2008 Jkt 033615 PO 00000 Frm 00017 Fmt 6633 Sfmt 6633 G:\CLERK SB\HEARINGS\TRANSCRIPTS\40231.TXT LEANN
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man has been helpful to the Committee in understanding both the 

importance of my ability to do this and the urgency that Congress 

create the solutions to this problem. 

Please find a way to expand the availability of affordable health 

care coverage. It is probably the number one problem facing small 

businesses and their employees today. 

Thank you very much. 

[The prepared statement of Mr. Lee may be found in the Appendix on page x.] 

Chairwoman VELA ́ ZQUEZ. Thank you, Mr. Lee. 

Our next witness is Mr. Lee Groza. He is a partner at Mountjoy 

& Bressler, an accounting firm based in Louisville, Kentucky. The 

firm has over 100 employees with four locations throughout the 

state. 

Mr. Groza is testifying on behalf of the American Institute of 

Certified Public Accountants. AICP is a national organization representing over 330,000 certified public accountants. 

Welcome. 

STATEMENT OF LEE DAVID GROZA, MOUNTJOY & BRESSLER, 

LLP, LOUISVILLE, KENTUCKY, ON BEHALF OF THE AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS 

Mr. GROZA. Thank you, Chairwoman Vela ́zquez, Ranking Member Chabot, and members of the Committee. 

My name is Lee Groza. I am a CPA and one of several owners 

of Mountjoy & Bressler, LLP, located in Kentucky. I am here today 

representing the American Institute of Certified Public Accountants. I include several of my own opinions based on the experiences 

with my firm. 

The topic of health care coverage has been an interest of mine 

for a number of years and one that I have been able to view from 

several different perspectives. Not only am I small business owner 

who has spent a considerable amount of time involved in considering coverages for our own employees, but as a CPA, I am an advisor to many small businesses and have been able to witness their 

health care challenges first hand. 

Additionally, I am currently the President of the Kentucky Society of CPAs and have served as a member and former chairperson 

of the committee that oversees the association sponsored health 

care plan that is offered to our nearly 5,000 members across the 

commonwealth. 

At my CPA firm, we are annually faced with the challenge of offering quality health care benefits at a manageable cost. This delicate balancing act between benefits and affordability has resulted 

in my own firm switching to three different insurers in the last 

three years alone. 

Like many small businesses, we significantly subsidize the premium cost to our employees, but we do not cover 100 percent of 

this cost. We have found that even though our offices lie in the 

larger population centers of the state, our health insurance options 

have been limited to just a few dominant insurers. 

While having just a few options may call into question the competitive nature of this process, just two alone has resulted in an experience where one insurer dramatically decreased their bid in an 

13

effort to counter another’s proposal to secure the relationship. 

Truly, when competition does exist, we as consumers of health care 

can benefit greatly. And as the number of options increase, our potential benefit increases accordingly. 

As of the first of this year, our employees were offered the option 

of a high deductible health plan coupled with a health savings account feature. These new plans have now become the lowest cost 

option for our employees and were intended to provide a better way 

to manage and potentially gain from their individual health care 

spending while assuming a manageable amount of additional risk. 

These plans encourage healthy behavior and efficient spending 

while protecting our employees from escalating costs. I am encouraged by the fact that nearly 30 percent of our participants decided 

to make the switch to these HSA plans in the first year alone. 

My involvement with the Insurance Committee at our state association pool has left me somewhat discouraged. As a statewide 

membership organization, our association health plan must be able 

to provide coverage to our CPA members who are located in every 

corner of the state. 

Consequently, we have been left with only one insurer with a 

provider network that is sufficient enough to maximize our coverage area. In this situation, there is no room for negotiation, and 

our annual renewal meetings have become an exercise in futility 

where the terms are clearly dictated by the insurer. 

As our association pool continues to evolve into one that serves 

very small practitioners in the increasingly rural areas of the state, 

there is no doubt that we are paying higher premiums than our 

members who are served in larger areas and have more options. 

When developing the required annual premium for our pool, the 

insurer will often rely on national trend rates that may have no 

correlation of the cost trend based on our actual claims’ history. 

In a clear show of dominance, they have gone so far as to additionally assess an explicit profit charge among all other administrative costs which appears to serve no other purpose but to pad their 

profitability. 

A few years ago we were able to add a risk sharing arrangement 

to our association pool health plan that provides for a refund of 

premium in the event that the initial estimates used by our insurer 

were too high. Of course, this arrangement brought with it an additional fee. 

So we are now in a situation where we feel compelled to pay an 

additional significant sum of money every year just to ensure some 

degree of accuracy in the determination of our health insurance 

costs. I cannot help but believe there is something fundamentally 

wrong with a system that permits this practice. 

I have personally witnessed how competition in the area of 

health care can work to our advantage, and I am a strong believer 

that any step taken to increase competition is a positive step for 

the American consumer. As an employee of the federal government 

nearly 20 years ago, I fondly remember the ability to select from 

a variety of plans and insurers to suit my needs. Today most, if not 

all, small business employees do not have that luxury. 

Thank you, again, for the opportunity to testify before you today. 

14

[The prepared statement of Mr. Groza may be found in the Appendix on page x.] 

Chairwoman VELA ́ ZQUEZ. Thank you, Mr. Groza. 

And now I will recognize the Ranking Member, Mr. Chabot, for 

the purpose of introducing our next witness. 

Mr. CHABOT. Thank you, Madam Chairwoman. 

And I have the honor of introducing our next witness who is Dr. 

Stephen Eby, who is from the greatest city in America, Cincinnati, 

Ohio. We are very pleased to have him here. 

Chairwoman VELA ́ ZQUEZ. After New York. 

Mr. CHABOT. After New York, of course. 

He is actually originally from Toledo, Ohio, and educated at Ohio 

State University in Columbus. After completing his residency in 

family practice at the University of Cincinnati, Dr. Eby joined a 

multi-specialty group. He also worked as an emergency room physician before starting his independent solo practice. 

Currently Dr. Eby is the senior partner and President of Western 

Family Physicians, which is, I believe, a six-doctor, independent 

family medical practice with 25 employees, serving the west side of 

Cincinnati. 

We are very pleased to have you here this morning, Dr. Eby, and 

we look forward to your testimony. 

STATEMENT OF R. STEPHEN EBY, M.D., M.D., CINCINNATI, 

OHIO, ON BEHALF OF THE AMERICAN ACADEMY OF FAMILY 

PHYSICIANS 

Dr. EBY. Thank you. 

Well, thank you, Chairman Vela ́zquez and Representative 

Chabot. Happy birthday. 

Mr. CHABOT. Just to clear up the record, it was actually yesterday, but—

[Laughter.] 

Mr. CHABOT. —who is counting? 

Dr. EBY. And the members of the Committee, I thank you for the 

opportunity to participate in this hearing. 

As one of 93,800 members of the American Academy of Family 

Physicians, I applaud your concern for how the cost of health insurance impacts small medical practice. It makes it difficult for these 

small businesses to provide health insurance benefits for their employees. 

My name is Dr. Steve Eby. My practice, Western Family Physicians, is a small practice providing primary care health services to 

families on the west side of Cincinnati, a practice of six doctors, 25 

employees. 

To attract and retain good employees, since the inception of our 

small business we have paid for our employees’ individual insurance. We have never been able to afford health insurance for their 

families. 

Between 2003 and 2008, the cost of a single policy has increased 

80 percent, an average of 16 percent a year. This staggering escalation has occurred despite other steps we took, such as increasing 

the deductibles to $500 and the co-pays by 33 percent. 

15

The monthly premium for a family coverage in Cincinnati, even 

with high deductibles, is $1,300. That amounts to over half of our 

average office worker’s monthly pay before taxes. 

Because of these astounding expenses, one of our receptionists, 

a single mom, is able to afford coverage only for herself. Her children, therefore, went on Medicaid. 

Our front desk coordinator has been with us for seven and a half 

years. She was pregnant when her husband lost his job and his 

health insurance. Our employee purchased individual coverage, 

covered her in the delivery, but once born the infant had no insurance coverage. Fortunately the necessary immunizations are covered by the Ohio Vaccines for Children’s program, Physician Visits 

or Not. 

The costs associated with well baby care and all shots necessary 

through H2 equals about $2,200. This amount takes into consideration no additional visits for acute illnesses. 

Not only is it our employees who are struggling with these insurance costs. My wife and I cannot obtain health insurance through 

my practice because the premiums are unaffordable. She is a registered nurse with a Master’s degree. She was able to take a second 

job with a large hospital system in order for us to get affordable 

health insurance coverage. 

Similarly, I am aware of medical practices in the Cincinnati region which are not able to get health coverage at any price because 

some of their employees have common chronic conditions, such as 

diabetes, blood pressure, and heart disease. I suppose when these 

people become ill they will have to go to the emergency room and 

pray that the hospital bills don’t drive them into bankruptcy. 

Affordability is a relative concept of both expenses and revenues. 

I know this Committee is well aware of it, but I would be remiss 

if I didn’t mention the significant problem on the income side particularly affecting small, primary care practices like mine. And that 

problem is the statutory formula for determining physician payment under Medicare. This formula, known as the sustainable 

growth rate, is dysfunctional and inaccurate. 

Due to a cumulative nature of the SGR, payments rates have not 

kept pace with medical inflation even as measured by the government. Physicians are currently being paid at 2001 rates, and if 

Congress does not intervene, a steep 10.6 percent cut will take effect July 1 of this year. 

The inability of even medical doctors to offer adequate health insurance benefits to their employees or in some cases even themselves is more proof that a health insurance crisis exists today in 

this country, and this is occurring while health plans are reporting 

record profits. 

In closing, family physicians commend the Committee for highlighting these issues associated with health insurance coverage for 

employees and owners of small businesses and even medical practices. And we urge Congress to give high priority to actions that 

will provide affordable health coverage for every American. 

In addition, we would ask Congress to recognize and appreciate 

the emergency situation that has been created by the arcane Medicare payment formula that is incorporated in the statute. 

16

I thank you for the opportunity to share these views with you, 

and I look forward to answering your questions. 

[The prepared statement of Dr. Eby may be found in the Appendix on page x.] 

Chairwoman VELA ́ ZQUEZ. Thank you. Thank you very much to all 

of the witnesses. 

I would like to address my first question to Mr. Eckstein. 

There seems to be no disagreement among small business owners 

that health insurance is their number one concern. Mr. Lee made 

reference to the fact that employees responded to a survey by 84 

percent, and when we look and watch the presidential candidates’ 

debate that is taking place in America, we know that I guess at 

least they know that health insurance or lack of health coverage 

is the number one concern of the American public. 

Additionally, it is also one of the most unpredictable costs small 

firms face. Given the current housing market and the financial 

challenges you must address, how do you cope with this volatility 

while keeping your business afloat and maintaining coverage? 

Mr. ECKSTEIN. Quite honestly, that is a situation that we will 

continue to address as this unfolds and we see how far this decline 

in housing takes us. In the past, I had one year, one instance 

where I had to sell property, valuable real estate at a loss in order 

to liquidate funds so I could send my daughter to get the medical 

treatment she needed because the insurance company wouldn’t pay 

it. 

If this continues the way it is, I will be forced to and I have already been forced to relinquish my 401(k) in order to meet my 

overhead obligations, but I have to keep my employees insured. 

I have got an incredible staff right now, and you know, I fight 

every day to make ends meet to keep them around, but we will see 

how this thing unfolds. 

Chairwoman VELA ́ ZQUEZ. Mr. Groza, according to a recent study, 

the majority of small businesses who already have health insurance coverage continue to shop for new plans. As a small business 

owner with a plan in place, how often do you search for new insurance? How much time do you devote to identifying new options for 

your firm? 

Mr. GROZA. We do it on an annual basis, and I suspect that is 

common probably with most small businesses. The health insurers 

typically will write the policy for a 12-month coverage period, and 

then you know, around nine months into that plan, they start contacting you to want to come in and tell you how bad the news is 

for the next policy period. 

So we do it on an annual basis. We enlist the use of a broker 

to help us through that process, and we tell them to go out and see 

who is on the market, tell us if there are new options that we can 

consider, and price it for us. 

Chairwoman VELA ́ ZQUEZ. What would be the average cost? How 

much will you pay a broker? 

Mr. GROZA. Well, my experience is a little different in that area. 

On the association side, I think typically the commission rates have 

been in the range of five to ten percent, but I do know that there’s 

some health insurers out there that on new business they’re willing 

to pay commissions of upwards of 30 percent. So 30 cents of every 

17

dollar goes to compensate somebody for selling the policy as opposed to covering claims. 

Chairwoman VELA ́ ZQUEZ. And when the insurer’s called you and 

say it is time for us to come and talk to you and give you the bad 

news, what type of explanation will they give you as to the cost? 

How do they explain the premiums going up? 

Do you find any transparency in that process? 

Mr. GROZA. No. There is little transparency in the process, but 

I would probably say that the explanation or the justification that 

we hear more often than not is just because medical costs in general are rising across the board. Drug costs are rising in general 

across the board. We expect that drug utilization increased. The 

prescription costs are going up, and we have no choice but to take 

the premiums up. 

Chairwoman VELA ́ ZQUEZ. Mr. Teske, in your testimony you mentioned that your wife works at a local hospital for the purpose of 

supplying health insurance to your family. If you were not longer 

able to be insured under your wife’s plan, what insurance options 

would be available to your family? 

And could your small business afford the costs? 

Mr. TESKE. That is the problem. When you are not under a group 

payment plan, you end up paying higher premiums. There are opportunities available. I consider Blue Cross in Kansas to be the 

premier health care provider, and people that have that are very 

happy that they have it. 

My wife’s employers decided that was too expensive and they 

could not afford it for their employees. There are options, but it is 

going to cost me more, and we are struggling at this point to make 

our cash flow meet with the health care payments under the employment. 

And the hospital does co-pay. My wife’s policy is $655 a month. 

The hospital is co-paying 326 addition. So if we had to take that 

all on as a farm operation, the cash flow would be much tighter. 

Chairwoman VELA ́ ZQUEZ. Thank you. 

Dr. Eby, insurers tell us that increasing health care costs are the 

primary culprit for rising premiums, and I would be inclined to believe them if insurance profits were not also on the rise. 

In your estimation how much have your premiums increased in 

recent years? 

Dr. EBY. What is remarkable to me is how across the board the 

story is the same. On a good year, it is ten percent. In a bad year 

it is 30. We have seen jumps that high in one year. Never does the 

coverage get better. It always gets worse, higher co-pays, higher 

deductibles. 

Probably in our practice from the business end, 20 percent of our 

receipts come straight out of the pocket of the patient in co-pays. 

That has gone up. 

Chairwoman VELA ́ ZQUEZ. And during that time, have you seen a 

significant increase in your reimbursement rates for medical care 

that was provided? 

[Laughter.] 

Dr. EBY. Some increase some years. I talked with my practice 

manager, two, three percent from the same company, in fact, that 

18

jacked our rates. My payments go up 16 percent. My receipts go up 

two or three. 

Chairwoman VELA ́ ZQUEZ. Thank you. 

Ms. Sandman, I am curious. I know that you participated in New 

York’s Healthy New York Program for Small Businesses. 

Ms. SANDMAN. Yes. 

Chairwoman VELA ́ ZQUEZ. And the goal of the program is to make 

insurance more affordable and available to small businesses like 

yours. In your opinion, why did the Health New York Plan fail to 

work for you and your husband? 

Ms. SANDMAN. Because the premium became oppressive. I simply 

as a small business owner cannot afford a second mortgage. Currently, because I do not have insurance and we are constantly 

shopping around, the Healthy New York premium is about $50 

more than it was when I lost my coverage in October. 

Chairwoman VELA ́ ZQUEZ. Okay. I now recognize Mr. Chabot. 

Mr. CHABOT. Thank you, Madam Chairman. 

First of all, I’ll address this to the whole panel, the question, but 

before I do, let me just make a statement. 

The Chairwoman had mentioned that she was the lead co-sponsor of the association health care plan. I want to commend her for 

that leadership, and I am a supporter of that as well. 

Chairwoman VELA ́ ZQUEZ. With Mr. Johnson, Sam Johnson. 

Mr. CHABOT. Oh, yes, Sam Johnson as well, absolutely. 

One of the more frustrating things that I have seen around here 

in a number of years is we are obviously in opposite parties, but 

when my party was in control for five or six times in the last five 

years, we would pass association health plans in the House, and 

then it would go over in the Senate, and over there you do not just 

need a simple majority. You need 60 votes for anything. The Democrats find that very frustrating now. The Republicans found it very 

frustrating when we were in control. 

But for whatever reason, we could not get 60 votes over in the 

Senate. So we were unable to actually pass it into law. The House 

did its job. The Senate could not. So we never got it passed into 

law. 

Unfortunately, this past year we obviously had a changeover, 

and now that Democrats control, we did not get it out of the House 

this time. Again, I want to commend the Chairwoman because she 

is a supporter, but we just did not have the votes in the House. 

And all of your or many of you spoke favorably towards association health plans. If we could maybe go down the line, if you could 

just say one or two quick points about why you think that would 

be helpful to small businesses in the country if we had association 

health plans. 

And, Mr. Teske, I guess we’ll begin with you. 

Mr. TESKE. If I understand it correctly, I would think that if we 

could qualify under some type of association group rates as individual farmers, it would have to be better premiums than what we 

get. 

Mr. CHABOT. Mr. Eckstein. 

Mr. ECKSTEIN. In a situation mine where my daughter has preexisting conditions, putting everything on a group level playing 

19

field definitely has to help from a premium standpoint. You know, 

in the event that this recession or, sorry, slowdown in the market—

[Laughter.] 

Mr. ECKSTEIN. —slowdown in the market stays and I have to relinquish my health insurance, I have no options. I do not know 

what I will do. I am forced to. That is the last bill I have to pay. 

Mr. CHABOT. Ms. Sandman. 

Ms. SANDMAN. Well, I believe that pooling would give us some 

real leverage and negotiating power to lower our premiums. It 

would directly change my life. 

Mr. CHABOT. Thank you. 

Mr. Lee. 

Mr. LEE. Well, in my personal opinion, I am for universal health 

care. I believe that health care should be available to every American citizen. You know, that is representing my own personal view. 

Mr. CHABOT. But short of that, would you support association 

health plans? 

Mr. LEE. Yes, I would. 

Mr. CHABOT. Okay. Mr. Groza? 

Mr. GROZA. I am very favorable to association health plans for 

a couple of reasons. One is I have seen on our member side that 

it tends to decrease the volatility in their insurance costs because 

under association plans typically you only have a range in which 

you can increase premiums instead of just letting it ride as it may. 

The other benefit that association plans have provided our members is it provides a guaranteed benefit. So as our other panelists 

said, you cannot deny client coverage for an association, at least 

our association, and preexisting conditions are covered after a 12-

month waiting period. So that provides another alternative. 

The most important thing about associations is I feel if we can 

get the numbers into an association to properly provide leverage 

against those costs and to further dampen the volatility, I think 

the prices are going to continue to drop, but I think that leverage 

has to be accomplished across state lines and not contained within 

a single state because we just can’t get the numbers that are needed. 

Mr. CHABOT. Thank you. 

And finally Dr. Eby. 

Dr. EBY. I think as independent practitioners we are in kind of 

a bind because if we collude for things, we are in restraint of trade, 

and in order to have a close enough association to legally do that, 

you have to give up your independence. A group rate I think would 

be excellent, but I do not think that is available to independent 

doctors. 

You know, the whole point of insurance is to spread the risk so 

that nobody gets hit too hard. I think that the concept of spreading 

the risk universally makes sense. 

Mr. CHABOT. Okay. Thank you. 

In my opening statement I had mentioned a bill that I have introduced a number of times, and we have gotten support, but not 

sufficient to get it passed into law yet, which would allow small 

businesses and individuals to fully deduct their health care premiums from their taxes. 

20

Could I just see a show of hands perhaps so that we do not have 

to take the time to go down the line? How many believe that that 

would be a good idea? If I could just see that. 

One, two, three, four. Okay. So four out of six, five out of six. 

Okay. Pardon me? 

Mr. TESKE. I meant to raise a point. 

Mr. CHABOT. Yes, feel free to if you would like. 

Mr. TESKE. I think maybe twice in the last 25 years I have paid 

income tax. It only helps you if you actually pay income tax. Farming has not been that good of a business. 

Mr. CHABOT. But there are many that do pay income tax. So you 

would not, I assume, hold it against them that they would get a 

break on their taxes. You do not have to answer that question. 

Mr. ECKSTEIN. I may need to change my vote, next year. 

Mr. CHABOT. Okay. Let me get another question real quickly. Mr. 

Lee had indicated that he was supportive of universal health care 

or what many would term, you know, socialized medicine similar 

to a Canadian or plan that they would have in Great Britain. 

Now, our country has chosen not to go down that path. Again, 

to be fair here, is there anybody else who thinks that this nation 

should go that far and do that? 

Two out of six. 

Dr. EBY. Anything is better than what we have, sir. 

Mr. CHABOT. But, Doctor, would you want to go to a Great Britain type plan or Canadian plan where you have essentially socialized? 

Dr. EBY. Strictly speaking, from my personal opinion, anything 

is better than what we have. 

Mr. CHABOT. Okay. 

Dr. EBY. I would be willing to take that hit. 

Mr. CHABOT. You think that is reflective of the majority in the 

medical community at this time? 

Dr. EBY. No. 

Mr. CHABOT. No? 

Dr. EBY. I do not. 

Mr. CHABOT. Thank you. 

What city are you from again? No, I am just kidding. 

Dr. EBY. I am so conservative I am past conservative. 

Mr. CHABOT. Okay, okay. 

[Laughter.] 

Mr. CHABOT. The Chairwoman just reminded me that is why we 

call Ohio a swing state. 

[Laughter.] 

Mr. CHABOT. Not necessary red or blue, but purple now. 

And finally, Dr. Eby, how much, if any, of the problem do you 

see in high medical cost, insurance cost to be the fact that there 

have been, arguably, or have there been I guess I should say, not 

to tilt this one way or the other, medical malpractice cases, frivolous lawsuits which have had a tendency to perhaps put doctors in 

a position where, and insurance companies as well, where their 

rates have gone up as a result of those particular lawsuits? 

Would you want to comment on that? 

Dr. EBY. Thank you. 

21

Especially being an ER doc in my past life, it is a significant 

problem. If everybody had a medical home with a family doctor 

who knew who they were, knew their background, was accessible, 

I think we would all be happy, doctors and patients alike, and efficient use of specialists. 

On the contrary, when folks go to the ER, the ER doc’s perspective, they do not know the patient, and they cannot afford to miss 

anything. You know, if you walk into the ER with a headache, you 

are going to get a CAT scan. Almost guarantee it. If you walk in 

with a sore throat, you will probably get a blood count, and that 

is rational in that setting because they have to practice defensive 

medicine. 

Mr. CHABOT. Right. 

Dr. EBY. They have to. It is a huge problem. 

Now, if they could get in to see their family doctor who knows 

them and get a rapid strep test and be done, it would be $86 instead of $860. Yes, it is a big problem. 

Mr. CHABOT. Thank you very much, Doctor. I appreciate it. 

And thank you for the whole panel. I think your answers and 

your testimony was excellent really. Thank you. 

I yield back the balance of my time, Madam Chair. 

Chairwoman VELA ́ ZQUEZ. Thank you. 

Mr. Ellsworth. 

Mr. ELLSWORTH. Thank you, Madam Chair. 

Mr. Teske, you were raising your hand and trying to get a point. 

I am going to let you get that in on my time, and then I will make 

my comments, if you remember what you were going to say. 

Mr. TESKE. Well, I do. It was the part about one payer health 

care. With all of the American public that is on Medicare now and 

Medicaid and other social programs, I have seen statistics that we 

have 47 percent of the American public now under some type of socialized medicine, and so I think it is getting beyond the point of 

debate. I think society is going that way so fast that it is a matter 

of when do you appropriately address these. 

Mr. ELLSWORTH. Thank you. 

Mr. TESKE. Thank you. 

Mr. ELLSWORTH. Madam Chair, I am not sure I have a question. 

I find myself over here getting to, oh, I do not think I am going 

to need medical care, but just over the situation. I look at this and 

I see the different backgrounds of the folks, and I do ont see Republicans and Democrats. I do not think this issue is RepublicanDemocrat. It is American. 

And somebody said it on TV tonight. We are better than this. 

And I can remember several months ago, and I think Mr. Eckstein 

brought up the presidential debates, and I can remember when the 

different candidates on both sides were bringing up their plan for 

the health plans, and they said, ‘‘We are going to announce this tomorrow,’’ and before they ever said what the details were of the 

plan, the other side was already saying, ‘‘Here is what it is going 

to be, and here is why it is bad.’’

And if we continue that debate, and it has become, I guess, politically dangerous to think out loud and to throw things out, and 

that is what is, I guess, so sad about this situation; that when we 

22

think out loud, somebody is there to cut your head off and feed it 

to you. 

We have got to do better than this. You know, doctors deserve 

better. Lawyers are not going away, and I do not think they should. 

So I see the backgrounds here, and America is better than this, 

and it is going to take debate, and it is going to take honesty and 

it is going to take not being afraid to throw an idea out there and 

cast out. 

It may not be a good idea, but it has got to be one that says, 

‘‘Hey, could this work?’’ and be willing to do that and not be afraid 

to look stupid and/or, like I said, get your head chopped off. 

So this is a crisis. When this background of folks is saying it is 

a crisis and Dr. Eby is saying anything is better than this, we have 

got to do something. And I commend you and Ranking Member 

Chabot for your willingness to take this on, and I would just say 

that this Committee needs to push and push and push until we get 

something through, and if we start with small business and get it 

through for them, maybe they will take that as an example and go 

with the rest of our country and businesses. 

And so that is not a question, but thank you all for your testimony. It has enlightened me, and when I fly back through your 

great city to another great city in Indiana—so I am surrounded by 

good friends in the Midwest all around—I will have some good 

things to tell the folks of Indiana. 

Thank you. 

Chairwoman VELA ́ ZQUEZ. Thank you. 

Mr. Gohmert. 

Mr. GOHMERT. Thank you, Madam Chair. 

And I appreciate the panel all being here. I am also a supporter 

of the Associated Health Plans, but to me that is just a Band-Aid 

fix. That will give you a little more leverage with the insurance 

companies. That will help a little bit. We are still going down the 

road to socialized medicine. That may help us pull off in a rest area 

for a little while, but we are still headed down the same road. 

And I was an exchange student of the Soviet Union back in 1973. 

I saw true socialized medicine. With all due respect, Dr. Eby, I do 

not want to go there. You know, when you are paying your physicians $200 a year and it is nine to five and too bad if you are sick 

and you leave sicker, I do not want to go there. 

But having been in private practice and had to pay those premiums and seeing them going up like you all are talking about, ten 

percent in a good year, 30 percent, actually I think we went up 50 

to 60 percent one year; it is just devastating, and then you want 

to reward your employees by giving them a raise, but then they 

cannot see that you have already given them a huge raise and they 

do not even benefit because their co-pay went up. 

I also appreciate everybody, and this seems to be the terminology 

in Washington. We want to see everybody with good health care 

coverage. Well, I am sorry. I do not. I want to see everybody with 

good health care. 

Now, the fact that it seems like most people want to make sure 

that the insurance companies make plenty of money and that is 

what you get when you make sure everybody has good insurance. 

23

The insurance companies are in the business to make a profit, and 

they are going to. 

So I am not sure I want to see everybody with good health coverage. I want to see everybody with good health care that they can 

afford. 

You know, one of the reasons I had not gotten personally into the 

health savings account before recently was because until the last 

Congress, you could have money pulled out pre-tax and put in a 

health savings account, but if you did not use it, you lose it. And 

I did not want to run the risk of losing money at the end of the 

year. 

Well, then in the last Congress we passed a bill that would allow 

it to roll over. So I am now in the health savings account, and I 

understand the idea of socialized medicine. I know there are a lot 

of folks here in Washington, the bureaucrats that would look forward to all of the additional jobs where they would get to tell doctors and patients what coverage you can have and what care you 

can get and who you can see. I would really rather avoid that. I 

would rather avoid giving insurance companies more employees. 

I would like to return people to where they got control, and I appreciated my friend, Mr. Ellsworth, saying we need to have people 

not afraid to be embarrassed throwing ideas out, and I have never 

been afraid to be embarrassed. You know, it is one of the benefits, 

I think, of being a Texan, but—

[Laughter.] 

Mr. GOHMERT. But with a health savings account, it seems like 

that is a possibility there where whether it is a union worker, 

where instead of putting $5,000 a month into some insurance company with the big profits, you put it in their health savings account. And it gets me to keep calling this medical insurance. I 

mean, because we all pay for gasoline, and I am thinking, well, 

dadgum, if it has worked so well for health care that you just call 

it insurance where they pay for everything, maybe we need gasoline insurance where everybody pays this huge amount every 

month into this gasoline insurance, and then they will pay for your 

gasoline and the company will make a big profit on top of that. 

I mean that is basically what it is. It is not insurance if it covers 

everything. So I am thinking if we can get to that deductible and 

people have got $5,000 that are in the account, I think it would 

even do the government good and be better off just to spot people 

that cannot afford it that have health care problems. Put 5,000 in 

their account so that they have got the deductible. Then they get 

to choose their doctor. They get to say, ‘‘No, I do not want that procedure. It is too expensive,’’ or, ‘‘you are charging too much. The 

doctor down the road will do it for half that.’’

That is when we finally get some responsibility and get some 

power back in the hands of the patient. Because I am tired of going 

to the doctor and not having a doctor-patient relationship because 

my insurance does not cover that procedure or it does not cover 

that medication. I want power back in the hands of the patient and 

the doctor, and the bureaucrats and the insurance companies not 

profit so much, and I have got more control. 

I would just throw that out. I got here late, and I apologize because we appreciate your time, but has anybody looked at possibly 

24

like unions, demanding HSAs where you have got the power instead of the insurance company? 

Yes, Mr. Groza. 

Mr. GROZA. We did. I touched on it briefly. We started offering 

an HSA, and it worked out fairly well for our employees. 

The problem is they are not all the same flavor. They do not 

come in the same shapes and sizes. So HSAs are only attractive to 

the extent that the insurer is really going to give you a break on 

the high deductible health plan that is associated with the HSA. 

In my personal example as someone who is in an HSA, I got a 

considerable break in the premium by going to an HDHP with an 

HSA, and I took that money, set it aside in an account, and since 

our utilization fortunately has been low, I have got a little bit of 

money there to spend. It has built up and otherwise would have 

gone off to an insurance company and added to the bottom line. 

But I have seen other insurers that did not give you that much 

of a price increase for going to an HSA, and in that instances I 

would say—

Mr. GOHMERT. Do you mean decrease? 

Mr. GROZA. Right. I am sorry. There is not that much of a decrease. 

Mr. GOHMERT. Yes. 

Mr. GROZA. So why take on the additional risk if you are not 

going to get a price break? 

Mr. GOHMERT. Right. You would have to get the break. 

And if I could throw this in, it looks like to me right now a problem with the HSAs that I have encountered is, you know, the price 

you are quoted by a hospital or a doctor is not what Blue Cross 

pays. It is not what the government pays, but right now if you pay 

cash, you are paying more than those folks. 

And so it seems like that was something that we would need to 

do so that you could negotiate more effectively. I had a relative who 

was in a car wreck, and the other side’s insurance company obviously owed it. Her health care had paid it. So I was trying to get 

that back, and she had $10,000 in health care bills. The other insurance company settled, and I did not take a fee as a relative. 

This is before I came to Congress and when I was not a judge, and 

anyway, the law requires that you pay back anything the health 

care provider has paid. 

And so I said, ‘‘All right. We have got the settlement. Show me 

exactly what you paid and I will cut you a check today.’’ Ten thousand dollars in bills, and there was $800 was all that health care 

insurance had paid in full and final payment of all that. 

So we need to get that kind of power back in the hands of the 

people. 

Chairwoman VELA ́ ZQUEZ. Your time has expired, Mr. Gohmert. 

Mr. GOHMERT. Thank you, Madam Chair. 

Chairwoman VELA ́ ZQUEZ. I now recognize Mr. Akin. 

Mr. AKIN. Well, I appreciate Louie’s passion and his interest in 

solving problems, and I cannot match a sermon like that, but just 

a quick question. I did not have a chance to hear your testimonies. 

They schedule us in multiple hearings at the same time, and we 

have not figured out how to be in multiple places. 

25

But my question is: do you see a pattern of the insurance companies developing almost a monopoly in various markets? And it may 

be from one city to the next. Is that pattern out there, and is that 

something that legislatively could be dealt with? 

Dr. EBY. Yes. 

Mr. AKIN. Doctor? 

Dr. EBY. Well, I cannot speak to the second half of that as far 

as the legislation. 

Mr. AKIN. yes. 

Dr. EBY. Not my area of expertise. But clearly, the number of 

plans out there is shrinking as acquisitions and mergers and whatnot, and in Cincinnati, we have still got a number of plans. I do 

not think in our practice any one plan is above 25, 30 percent. That 

is still an 800 pound gorilla in your living room. 

I think there are other markets where there is probably one or 

two carriers. 

Mr. AKIN. That is what I have heard, is that there are some markets, some cities where you have got basically one type of car. It 

is a black Ford and that is all you have a choice of. 

Dr. EBY. You had better like it. 

Mr. AKIN. You had better like it, yes, right or worse, yes. 

Okay. A second question. I think it was the Wall Street Journal 

not too long ago carried an article that I thought was kind of scary. 

It was basically one of these hard luck stories about some guy who 

does not feel too well, goes to see a doctor. The doctor is not a very 

competent doctor. He has some kind of an infection that the doctor 

does not correctly diagnose. He starts spinning down, gets in worse 

shape, finally gets to a decent hospital. They say, ‘‘Hey, you are 

pretty sick, you know.’’

‘‘Well, that is what I have been trying to tell people.’’ But anyway, so he almost dies. He goes into septic shock. Finally they 

manage to save his life, and they blow through the top of their insurance, which I think they had a $2 million insurance policy, and 

this guy had $3.5 million bills. 

So after the two million, the insurance that their little business 

had cut and ran, and now you have got a husband-wife, a very sick 

husband and a wife at home, and they are due for a million and 

a half worth of bills. 

Well, it is all of this monopoly money. It is this funny money, 

and the hospitals try and collect from anybody who has got some 

money. They just about had this woman selling her house and 

extra mortgages and putting them in the poor house, and finally, 

when the newspaper and media shined a light on it, the hospital 

backed off and said, ‘‘Well, we will settle for a couple hundred thousand,’’ or something like that, maybe even less than that, in fact. 

So it was one of these things where the hospitals in order to 

make their bottom line, they are just basically fleecing anybody it 

looks like they can get money from, but there is not really any consistency. They have got an $800 pair of stockings to help protect 

you from swelling or something and you could buy them at WalMart, you know, for $1.30 or something. 

So do you see that same kind of pattern happening where we are 

getting our costs complete out of line just because people are trying 

to figure out how to make the bottom line? 

26

Ms. SANDMAN. I would like to address that if I may, Mr. Akin. 

I think that what we really need is transparency. I think that that 

would just open the window to a lot of people to be able to shop 

around for a doctor that they have heard about or call someone and 

ask them what their record is. 

I also think that everybody in America needs to be responsible 

for some part of health care. I do not think it should be automatically an employer’s responsibility. I think they need to shop around 

for it like you do car insurance. Do you know what I mean? It is 

something that everyone is going to have some responsibility for. 

And when that happens, then the transparency can fall right into 

play, and I think it will improve overall health care. I mean not 

only health care insurance, but health care for everyone. 

Mr. AKIN. Thank you. 

Ms. SANDMAN. You are welcome. 

Chairwoman VELA ́ ZQUEZ. Thank you. 

Ms. Sandman, do you think that if we offer like a one stop shop 

that will provide information to small businesses as to health care 

options, how much it will be, the differing information that will empower small businesses to make the right choice in terms of what 

is good for them based on the nature of their businesses, the number of employees and so on, that that will be a great tool for small 

businesses? 

Ms. SANDMAN. Absolutely. I think that it is an intimidating process. You go out looking, and you hear an outrageous rate, and you 

can go through the Chamber of Commerce in your area and there 

is no easy way to access it. 

I think it will open doors for everyone. There is no easy way to 

shop for health care in my community. 

Chairwoman VELA ́ ZQUEZ. Well, let me just mention the fact that 

the Small Business Committee as part of the SBA Reauthorization, 

we passed legislation in this Committee that passed through the 

House that will direct the Small Business Administration through 

the networks of SBDCs, small business development centers, to 

create a resource center with the type of information that will enable small businesses so that they know where to go. 

We have, between SBDCs and sub-centers across this country, 

close to 1,100 centers. So our position is that that will be a great 

way and a very effective way for the Small Business Administration and the SBDCs to help small businesses. 

Ms. SANDMAN. Absolutely. 

Chairwoman VELA ́ ZQUEZ. To know what options are there, and 

we all know, Mr. Groza, you know, when small businesses do not 

have a human resources department or the resources, the manpower to do the research. This will be then a great tool for them 

to have. 

Ms. SANDMAN. It would be, and I know that people in my community would use it. 

Chairwoman VELA ́ ZQUEZ. Okay. Mr. King, would you want to ask 

any questions? 

Mr. KING. Yes. Thank you, Madam Chair. 

As the Committee members know and I think a lot of the people 

here in this room know that I have spent my life in small business, 

and I recall a time that my Congressman came to my community. 

27

It was the first time anyone had ever entered into a small community like that that came from Washington, and it drew quite a 

crowd, 70 to 80 people 

And he asked the question of the 80 people that were roughly in 

the room, ‘‘How many of you are employers?’’

Twelve of us were employers in that room. 

‘‘How many of you provide health insurance for your employees?’’ 

And I was the only one out of that room that did. 

And so you will know that I have shopped for premiums, and I 

have tried to put together packages, and I have run into a number 

of obstructions. One of them is the inability to purchase group insurance if you’re a small employer, and another one would be the 

lack of flexibility of being able to purchase individual policies for 

your employees because of federal restrictions that prohibit us from 

being able to shop and pick a policy that fits one employee’s family 

and then find another policy from a different company that fits another employee’s family. 

Because the federal government seems to believe that employers 

want to discriminate against employees, and so therefore, you must 

have a one size fits all. 

And as I look at this and I wonder where can we go to solve this 

problem, one is association health care plans, which I thoroughly 

support. Another approach is to be able to allow that flexibility for 

employers to be able to go out on an open market and buy individual policies for individual employees that are tailor made for 

those employees. 

Now, if you have got one or two or five or ten or 20 employees, 

you know them. You know their families. You have their interests 

in mind. And so why is the federal government intervening into 

this kind of a relationship, this contractual relationship between an 

employer and an employee? 

Then another component that I think would be extraordinarily 

valuable to give us the flexibility would be to expand the deductible 

contributions into HSAs. Why do we have a cap on that? I would 

at least double that. 

And if we could double the HSAs and we would see young couples that enter into the job market. Let’s just say even at today’s 

standard if they entered into the job market when they are 20 

years old—I pick that number because it is a round number—and 

they work for 45 years and qualify for Medicare at 45 years of work 

at age 65, even under today’s numbers and if you spend $2,000 a 

year in real dollars, that comes out to be almost a million dollars 

a year in HSA. 

Well, what a wonderful tool to have to have the flexibility to be 

able to manage your health care, and a lot of this problem that we 

have is lack of the freedom to make decisions, and I think that as 

small employers you recognize that. 

I am watching the most empathy from Ms. Sandman, and I 

would ask you if you would want to comment on some of those remarks that I made. 

Ms. SANDMAN. I like what you are saying, and it makes a whole 

lot of sense, but one of the things that comes to my mind immediately is that I need to be able to purchase my insurance or put 

money into an account pre-tax dollars. Currently my money that I 

28

spend, I am not now covered by any health insurance, but when 

I was paying my premiums, it was after taxes. That would help 

small businesses a lot. 

Mr. KING. I left that part out. Let’s double emphasize that point 

because that has been one of my frustrations, too, that big business 

can do this, corporations can do this and the government can do 

this, but small employers, sole proprietorships cannot, not in the 

fashion necessary for themselves. 

Ms. SANDMAN. I think also we need to educate the public to what 

health savings would be cause there is a terror of being uninsured 

out there, and people are terrified of the $860 compared to $86 that 

you could spend. The education and the transparency is so important at the same time so that people have a sense of what it really 

costs and what their power is. 

Because we have no power now. There is no control on a small 

business level. 

Mr. KING. And I think you. 

And, Mr. Eckstein, would you care to comment on those points 

that have been made? 

Mr. ECKSTEIN. Well, my thought goes to I hear the federal government talking about writing checks, $800 to every taxpayer, and 

I question that, but why couldn’t that money be directed into 

health savings accounts to encourage people to spend money on 

health insurance to get coverage where they need and get us back 

to some kind of national fiscal responsibility instead of just foregoing our children’s health care, which is just crazy? 

Mr. KING. Let me weigh in on that since our light is still green, 

Mr. Eckstein. Looking at the magnitude of this proposal that the 

federal government, the White House, seems to be floating out 

there that hopefully will float for a while so that we can get our 

senses here, I remember when Bill Clinton came in as President, 

and he rode in on the concern about there being a recession. I do 

not know that there actually was one, but in order to cure that 

problem, he went to Congress and asked for $30 billion and an economic incentive plan. 

The Democrat Congress negotiated that down to 17 billion and 

finally decided that it was not enough money to make a difference, 

and so here we are now with 145 or $150 billion, and that is borrowed money, borrowed money that adds to our national debt or reduces the amount of the Social Security trust fund, which is only 

in bonds, and we simply cannot spend our way into prosperity. 

All of you in small business know that, and so I am concerned 

about where we are going with all of this, but to maximize the freedom, make sure that there is deductibility for sole proprietors to 

have everybody in America be able to deduct their health insurance 

except sole proprietors is an atrocity against your business. 

Ms. SANDMAN. It is, and what it does is it takes the bottom line 

away. It takes away my ability to expand, to improve my business, 

to go place where I would like to go with my business because 

there is not enough funds. 

Mr. KING. And it positions you to where one day a government 

job is going to look attractive just for the health care. 

Thank you very much. I appreciate the testimony. Madam Chair, 

I appreciate the privilege to ask some questions. 

29

Chairwoman VELA ́ ZQUEZ. Mr. Chabot? 

Mr. CHABOT. Yes, just one final question, if I could throw it back 

to you again, Dr. Eby. You know, obviously, I sense the level of 

frustration in your testimony, and I hear that frustration oftentimes when I am talking to doctors and medical personnel back in 

Cincinnati, and I am sure this is true all over the country. So many 

of them tell me that especially those that are perhaps considering 

retiring, they apparently decided, yes, they are going to retire or 

I have heard some act like they wish perhaps they had gone into 

something else because there seems to be much more control over 

what they can do, what medicines they can provide, whether it is 

covered or not covered by kind of, for lack of some better term, 

some insurance bureaucrat who is making those decisions about 

whether they are going to pay for the procedure or not. 

So there just seems to be a real sense of frustration in the medical community, and that is reflected in everything we have heard 

here as well. 

Is that true and would you want to comment on that? 

Dr. EBY. Are you sure? 

Mr. CHABOT. Yes, go ahead. 

[Laughter.] 

Dr. EBY. I would say that is very accurate. We spend a huge 

amount of our time doing things that really are not what we are 

trained to do in providing medical care, which is evaluate somebody and find out how you can help them. Filling out a prior authorization form because the insurance company does not want to 

pay for Allegra D for your chronic sinus, particularly in Cincinnati 

is not what I went to school for, but yet that is one of the things 

I did Monday, and that is just the tip of the iceberg. 

Yes, there is an awful lot of wasted time and trouble, and certain 

there is good intent. Prior authorizing of expensive imaging tests 

like MRIs, patients have some responsibility, too. They come in 

with a back ache because they are out of shape. They strained it, 

and they want an MRI, and it may not be necessarily if you look 

at the research appropriate in that case. That is 1,000-odd dollars. 

Well, actually they charge two, but they only get paid 800. 

Yes, there is a lot of wasted time, and you have to call the insurance company, explain to somebody that is a low level clerk why 

when you do feel it is medically indicated, why it should it be covered. Because their leg is going to be paralyzed? Well, but do they 

have this, that or that? 

Frustration is a mild term. 

Mr. CHABOT. Thank you very much. 

I want to again thank the panel for their testimony here today. 

I think it has been very helpful to this Committee. 

Thank you. 

Ms. SANDMAN. It was a pleasure. 

Chairwoman VELA ́ ZQUEZ. And I, too, want to thank you for taking time and being here with us today. I know this is a very complex issue, and there are not easy solutions or easy answers, but 

one thing is clear. This Committee will continue to address this 

issue and in ways where we can provide input into the different 

candidates. 

30

And we know that each one of us are supporting someone who 

is running for President of the United States, but if it takes the 

route that we must not do anything during this session, at least 

we are getting the information, the stories to be able to share this 

with those presidential candidates. 

But you have to help us in keeping this issue in the front burner. 

It is an important issue as and, Mr. Ellsworth, Mr. Chabot said, 

clearly, this is just not an issue of one particular sector. This is an 

issue that affects every person in this country, and the ripple effect 

of the lack of health coverage is incredible. It not only affects the 

public health of the American people, but also the impact in terms 

of our economy. 

So I want to thank you all, and let me ask unanimous consent 

that members will have five days to submit a statement and supporting materials for the record. Without objection so ordered. 

This hearing is now adjourned. 

[Whereupon, at 11:36 a.m., the Committee was adjourned.]

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