Senator Eliot Shapleigh - El Paso, Texas

“Supporting a Healthy Future—the Business Case for Reform”

Dear Bill:

Stop the presses—no more “Angry Mob” bumper stickers.  Your grandkids won’t respect you! Turn off Rush Limbaugh.  Put down your policy fax from the Texas Public Policy Foundation.  Please, don't take Tom Delay's call—he's busy dancing.

Instead, let's talk business.  Lack of health care, redistribution of uncompensated care costs, and rising hospital and pharmaceutical costs are killing Texas businesses.  Let’s do something about it.

First, let's look at the facts:

By any measure, Texas is now "the ground zero of health care" in America.  Texas has more uninsured than any state in the U.S..  One out of four Texans—5.7 million—does not have health insurance.

Not a single Texas city meets the national average in citizens covered with insurance—not Austin, not Dallas, not Houston.  In fact, with one out of three uninsured in 2007, El Paso has more insured by percentage than any large city in America.  Early reports on the soon-to-be-released U.S. Census Bureau figures for 2008 indicate nearly half of El Pasoans might be without health coverage.

Contrary to the claims of some, even if non-citizens (who include legal residents as well as undocumented immigrants) were removed from the statewide estimate, Texas would still have the highest uninsured rate in the country with 4.1 million uninsured citizens.

Here's more:

From 1996 to 2006, the cost of family coverage in Texas increased 86 percent—ten times faster than Texans' wages increased (8.6 percent).  Rates are projected to increase another 7.3 percent in 2009.  

17 percent of middle-income Texas families spend more than 10 percent of their income on healthcare.

The percent of Texans with employer-sponsored coverage fell from 57 to 50 percent between 2000 and 2007. 

In 2008, only one out of three businesses with fewer than 50 employees offered health insurance.  For businesses with fewer than 10 employees, only one out of four offered health insurance.  In comparison, 92 percent of medium and large businesses offered their employees coverage.  

So let's ask the obvious question.  If you head the business group for the most uninsured state, and the reform that's now on the table gets you an insured workforce, which is paid mostly by a national tax base, then why in the world are you fighting so hard against reform?

First, let's see what happens to large businesses under the President's plan.  Here in Austin, what happens to Dell Computer, a great company that employs thousands of Texans?  Mainly, premiums go down because the size of the health pool grows, and cost containment that TAB has tried to create on its own is now national policy.  By focusing on patient outcomes and not utilization, the President's health reform will substantially decrease our per capita costs and bring us more in line with every country with which we compete.  In 2007, we spent $7,290 per person versus Canada's $3,895 per person and the U.K.'s $2,992 per person on health care expenditures.

What have high health costs done to manufacturing for example, which has always been one of our strengths?  In 2007, 15.5 percent of Texas' GDP was in manufacturing.  However, health care costs are increasingly the driver on whether an American car is competitive or not.  When each American car carries $1200 to $1500 in health care costs—significantly more than a Toyota or Honda—it's easy to understand why more and more employers cannot afford to offer health care to their employees.

Today, Texas businesses and families shoulder a hidden health tax of roughly $1,800 per year on premiums as a direct result of subsidizing the costs of the uninsured.  More uninsured means higher premiums on Texans who are insured—and the U.S. Census Bureau predicts many more Texans will lose health insurance this year.

What about small businesses—those with a payroll of less than $500,000 or fewer than 25 employees, like Dalton's Brake Shop just down the street here in El Paso?  In Texas, 87 percent of all employer firms have fewer than 20 employees.  That's why the President made clear that small businesses will be exempt from the requirement to offer health insurance.  Small business owners who choose to offer health insurance to their employees will be eligible for significant tax credits of up to 50 percent of the costs of providing health insurance based on their size and payroll.

In all of the proposed bills, the smallest employers would gain quick access to new insurance exchanges where plans would compete for their business with rates comparable to those enjoyed by large employers.  Today, small businesses in Texas pay 18 percent more on average than large businesses for the same benefits policy. 

Finally, all across Texas, many small businesses with low-wage workers would be eligible for substantial tax credits to subsidize their coverage.  All of the House and Senate bills under consideration offer subsidies for families up to 400 percent of the federal poverty level (up to $88,000 for a family of four).  In El Paso, this would cover at least 80 percent of households.

One very important point to stress is this: heath care itself is big business in our state.  Every day, 72,600 Texans go to work at the Texas Medical Center in Houston.  In Dallas, San Antonio, Lubbock, Tyler, El Paso—major medical centers employ tens of thousands in good paying jobs.  5.9 percent of Texas' GDP is now in health-related services.  In El Paso, the President's reform will add another 33 percent of "insured" patients to the pie.  What business doesn't want more customers?

So, now, I ask that you do what’s right for Texas, not the far right.  When good public policy is crafted on the facts, not myths, we make the best decisions.  Let’s make the healthy choice and back cost-effective reform now—Texans can't wait!