Bill Clinton: “I'd like to make an observation about this, if I might, because you see this quite a lot. Both cases--you have someone…”

“I'd like to make an observation about this, if I might, because you see this quite a lot. Both cases--you have someone who has got a serious health problem, a diabetes problem, with a small business, it blows your rates up, and you can't afford to keep your coverage; or a certain industry gets red lined, a certain business. If you look at it today from the point of view of the person in the insurance business, trying to be responsive and trying to still make a profit in the American free enterprise system, if you insure people and they're in fairly small pools, and one person has a huge medical bill, that can wipe out the whole profit in the insurance policy in the small pool. If you have one or two AIDS patients in a small pool, the same thing can happen. Now, the reason that I think that what we're trying to do is so important to small business people is this: What we're trying to do is to create the conditions that existed in the beginning. When health insurance first started, when Blue Cross first got started, insurance was just what you would normally think. All of us were put in a big pool and paid roughly the same rates, and it was for the people that got sick. And we all bought insurance against getting sick, in the same way you buy insurance for life insurance. And the premiums are set based on the probabilities, but everybody is sort of treated the same at a certain point in time. Well, what's happened now is, we're the only country in the world with 1,500 separate companies, writing literally thousands and thousands of different policies, so that people are in smaller and smaller pools. And sometimes the administrative cost and the profit margin against the premium is enormous. What we need to do is to go back to community rating where you would be put into a very large pool, so if you had one patient, one employee, who turned out to be a diabetic, that problem would be spread over a very large number of people. And the insurance business would, in effect, have to make money the way grocery stores do, a little bit of money on a lot of people, instead of a sizable amount of money on a few people where you can't afford the risk of having even one person who's real sick or the policy becomes unprofitable. This is key. We cannot do this and be fair to small business and really do it unless we can go to community rating and all of us can share these risks. I think it's very important. I'd like to go to David Hoffman, if I might, now to make the point in another way with somebody who's kept insurance and had to pay an enormous premium for it or at least did until recently. Would you talk, David, about your experience? [David Hoffman explained that as the employees of his architecture firm aged and needed more medical attention, his insurance premiums increased by 35 percent, to 12 percent of payroll for the firm's share of the cost.]”