News From Congresswoman
Nydia M. Velázquez
Representing New York's 12th Congressional District - Brooklyn, Manhattan, Queens
Ranking Democratic Member, House Small Business Committee

For Immediate Release
March 2, 2005

CONTACT: Kate Davis, Allyson Ivins, (202) 225-4038

Velázquez: Health Care Crisis Not Solved by Bush Administration's Empty Promises

WASHINGTON - Congresswoman Nydia M. Velázquez (D-N.Y.), Ranking Member of the House Small Business Committee, today highlighted the serious health crisis that is currently facing the nation's 23 million small business owners, and called the Bush administration's actions "failed attempts at addressing the crisis."

"The number one challenge facing small businesses today is their ability to access affordable health care," Congresswoman Velázquez said. "All one needs to do is look at the numbers to see the effect rising health care costs are having on small business. Clearly, we have a health care crisis that needs to be addressed. There is no question that there is a growing insurance gap between Corporate America and small business."

Health care costs have risen by double digits for the past four years - by 11% in 2002, 13% in 2003 and by 12% in 2004 - adding up to an increase of 60% over the past five years and making it increasingly difficult for small businesses to purchase affordable health care. Small businesses lag far behind large businesses in terms of health insurance - large firms have a coverage rate of nearly 90% versus small firms that have a coverage rate of only 50%. In addition, six out of every 10 uninsured Americans are in families headed by a self-employed worker, or a small business employee.

During a House Small Business Committee hearing today, solutions were discussed including the Association Health Plans (AHPs), which allow small businesses to ban together in order to purchase health care. Congresswoman Velázquez has been working on AHP legislation since the mid-1990s. The legislation passed three times in the past four years in the House with overwhelming bipartisan support. Since 2001, President Bush has repeatedly touted their importance to small business, yet has made no effort to move the legislation forward. Congresswoman Velázquez stated, "We have seen in the past that when President Bush really wants to move something forward he can - as he showed us two years ago with his prescription drug plan. The reality is that the Republican Party controls the White House, and both the Senate and the House - and if they want to get this done, it can get done."

In addition, discussion took place surrounding another alternative which has passed into law - the Health Savings Accounts (HSAs). Congresswoman Velázquez expressed her disappointment in HSAs, which have not addressed the problem of increased health care costs facing small businesses. A recent study done by the Kaiser Foundation found that only 5% of small businesses were looking into offering HSAs in the upcoming year, while 30% of large businesses were considering the option. Despite the fact that the Bush administration has sold HSAs as a small business solution - large businesses receive the most benefits under the initiative.

"This health care crisis has been going on for too long now," Congresswoman Velázquez said. "We need to end the back and forth, and start taking steps forward to implement a solution that will actually help small business owners. As the economic engines of this country - small businesses deserve to be confident in their ability to provide health care for themselves and their families. Protecting small businesses and the self-employed should be a top priority, but unfortunately health care costs only continue to sky rocket."

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