Bill Clinton: “Let me try to make an observation here about these two cases. Under the plan that we propose, no one could pay more than…”

“Let me try to make an observation here about these two cases. Under the plan that we propose, no one could pay more than 7.9 percent of payroll, no employer, for the health insurance premiums. So in the case of the architectural firm, David's firm, they would actually pay less, considerably less than they're paying now. Why would they be able to pay less? Well, because they would be, again, in a big pool where they'd have more bargaining power and it would be more economical to insure them. Now, in the case of the florist shop, they would obviously pay more since they can't get insurance now. But because it's a smaller business, they would be eligible for a bigger discount. And for somewhere in the range of, let's say, 6 percent of payroll, they'd be able to get a comprehensive benefit package, and no one would get cut off. Again, it all goes back to the economics of scale. Now, the problem is that some people will say--and we'll explore this because we're going to come to some harder cases as we go around the table--some people will say, ``Well, that's fine, Mr. President, but I can't afford 4 percent of payroll. My payroll is 50 percent of my cost of doing business, so 4 percent of payroll adds 2 percent to the cost of doing business. And I can't add 2 percent of the cost of doing business; my profit margin is less than that.'' Some people say that. Now, what we have to do is to--we need to kind of work through that. And that's one reason I asked Erskine Bowles to be head of the Small Business Administration, because he spent 20 years starting small businesses instead of in politics or doing something else, to try to work through these things. There's no question that the ability to bear this cost is greater if all your competitors have to do it as well. And that's one point that David Hoffman made, I thought, very eloquently. I was in a--we have someone here who's in the food service business--I know I was in a restaurant in Columbus, Ohio, with a woman who had 20 employees full- time and 20 part-time and had had cancer. And she insured the full-time employees, she didn't insure the part-time employees, and she paid high rates because she had cancer 5 years ago. And she said, ``I'm in the worst of all worlds; I insure my full-time employees because I feel that I should; but my competitors don't, so they have an advantage over me. And I feel guilty that I don't help my part-time employees.'' And she paid very high rates because one person--it happened to be the owner there--paid for her previous illness. So again, this whole thing will only work if everyone contributes. But as a result of contributing, you get to be in big buying pools, so at least your rates are manageable. In your case, I just don't think anybody should be paying 12.5 percent of payroll for a reasonable health insurance policy. We know that the economics of the competition--we've had it analyzed by too many people--will permit us to have a ceiling of about 7.9 percent of payroll. And you might actually qualify for a modest, but not a great, discount there because your employees make a good living. I'd like to go on now to Sheryl Wohlford, who is from Wichita, and have her talk a little bit about her situation because it's slightly different. And it will get more complicated as we go around the table to show some of the problems we've got with this. Sheryl. [Sheryl Wohlford expressed concern that her insurance premium costs of 5.5 percent of payroll, to cover the majority of her employees, would rise even more under the President's plan. Representative Jim Slattery asked if she had discussed her projected cost increase with her insurance agent, and she said she had not. Small Business Administrator Erskine Bowles then stated that small businesses would get better coverage at better rates under the new plan.]”