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pd22mr04 The President's Radio Address...
[[Page 419]] But the good news as well is this: Inherent in the health savings accounts are savings, savings for employers, savings for employees. In other words, one way to deal with the cost of health care is to push for health savings accounts. You're going to hear an interesting discussion on this today. Another way to make sure that small businesses can survive and provide care for their employees is through association health plans. These would provide small businesses the same opportunity that big businesses get, and that is the economies of scale, the economies of purchase, the ability to share risk in larger pools, which drives down the cost of health care for small businesses. These plans are resisted here in Washington by special interests. We're trying to bust through the special interests to make sure that small businesses have got the same advantages of big businesses. And there's some good law passed out of the House of Representatives, stuck in the Senate, like a lot of other things are stuck in the Senate. And they need to get it out, for the sake of controlling health care costs. You hear a lot of rhetoric in Washington about jobs and job creation and outsourcing. The best way to deal with job creation and outsourcing is to make sure our businesses are competitive here at home. The more competitive we are here at home, the better it is to do business at home, the more likely it is we'll keep jobs here at home. And association health plans is one such way. And there's another way we can help control the cost of health care. I mentioned Congressman Greenwood. He is fighting the ultimate entrenched interests and special interests, and that is the lawyers who love the fact that you can sue right and left in America. That's what he's fighting. He understands available and affordable health care is affected by frivolous and junk lawsuits. It's an issue--it's a national issue. When I first came up from the Governor, I said, ``We'll just let the States deal with the medical liability reform.'' And then I saw what the practice of defensive medicine does to our budget. That's--defensive medicine means we're going to practice more medicine than we need to in order to make sure we've got a good case in the court of law when we get sued. See, everybody is getting sued. It's like a giant lottery. ``I'm just going to sue and sue and sue, and maybe I'll get lucky and win one of those settlements where I get 40 percent of the take.'' But it's harming our society. It's harming people who are trying to create jobs, because it's running up the cost of their health care. And so I took a look at the cost to the Federal Government. Imagine what the Federal Government is paying. We pay Medicaid and Medicare and veterans' health care costs, all of which are affected by the practice of defensive medicine as a result of frivolous lawsuits. And so I said, ``Well, let's get to work on this issue. Let's take on the special interests here in Washington, DC.'' And Congressman Greenwood stepped up and got a good bill out of the United States Congress. I said, ``It's a national problem that desires a--needs a national solution.'' Congressman Greenwood responded. We basically said, ``If you get hurt by a bad doc, you get paid the economic damages.'' That's fair. That makes sense, but there needs to be a cap on noneconomic damages at $250,000, so the settlements are reasonable, not outrageous. And of course, if there is a need for punitive damages, they've got to be reasonable. And Congressman Greenwood is willing to be reasonable on such an issue. Medical liability reform will make it easier for people to afford health care, which will make America more competitive a place. It means we're more likely to hire people right here at home. His bill got out of the House. It's stuck in the United States Senate. The trial bar won't let it out. For the sake of good health care, for the sake of job creation, for the sake of expanding--an expanding economy, we need medical liability reform now. Okay, you've heard enough from me. Roman is with us. Roman, tell us your business. He's from Knoxville, Tennessee. It doesn't sound like it. Roman Botcharnikov. Well, yes, I'm from Russia originally. The President. Are you? Raised in Russia? Mr. Botcharnikov. Yes. The President. Born in Russia? Mr. Botcharnikov. Born and raised there. The President. Where? [[Page 420]] Mr. Botcharnikov. Sochi, it's Black Sea. The President. Yes, I know Sochi. Mr. Botcharnikov. It's a resort area. I think you've been there. The President. No, I haven't been there, but Vladimir Putin called me from there. He's been there. [Laughter] Mr. Botcharnikov. Putin, yes. He's always there. The President. It's a nice place. Mr. Botcharnikov. Yes, it is. The President. So when did you come to the States? Mr. Botcharnikov. Well, I'm a professional coach, actually, and I coach pole vaulting. And I coach American recordholder and silver medal winner at the Sydney Olympic Games. The President. Really? Mr. Botcharnikov. Yes. That's my profession. That's how I end up---- The President. Have you got somebody vaulting in the Olympics this year? Mr. Botcharnikov. Well, we're getting--we have to upgrade our medal from silver. The President. Yes. Mr. Botcharnikov. There's only one way. The President. That would be gold. [Laughter] Okay, so you're a pole vault coach, but you're also a businessman. First of all--let me just-- I'm fascinated by knowing this--this is the first I've heard he came from Russia. So what age were you when you came? Mr. Botcharnikov. Well, I actually went to Australia first when I was 19. Then I lived there for 3 years and then came here in '92. The President. So at 22 years old. Mr. Botcharnikov. Yes. The President. Fantastic. Why did you come here? Mr. Botcharnikov. Well, it's a land of opportunity. The United States is unbelievable country, unbelievable. People all over the world look up to United States and see what's going on here and have the business. You were just talking about products made in USA. All over the world, people want ``Made in USA.'' They do. And everybody dreams to come in here and test--and everybody is allowed--there's a good environment here where entrepreneurs can succeed. I had my business-- several businesses actually, kind of expanding and expanding. And how I got in--why we have a hair design studio, which---- The President. Yes, I was wondering about the hair design thing. [Laughter] Mr. Botcharnikov. Yes, finally. [Laughter] Third attempt. My wife-- -- The President. Is it wigs or--[laughter]--what is your business? Tell us your business, how you started it. [Mr. Botcharnikov, business director, Salon Azure, Knoxville, TN, made further remarks.] The President. Listen, here's the thing. Here's what people have got to understand. The combination of his premium payments for major medical insurance--major medical means if you have a real expensive problem-- plus what he puts into his savings account equals a savings of $200 a month, and yet he gets as good a coverage---- Mr. Botcharnikov. Better. The President. ----even better coverage. And that's the point. This is a new product. This is a new idea, and people--one of the reasons we're having this discussion is to encourage employers and individuals and employees to look into what's called health savings accounts. They used to be called MSAs; they're now called HSAs. And I just--again, I repeat Roman's story. He puts 177 in for his insurance, monthly premium. He puts $100 in a month for his savings account. It goes in tax-free. It accumulates interest tax-free. When he withdraws it to pay for medical bills, it's tax-free. If he doesn't use it all, he rolls it over to the next year. It's a savings account to pay for medicine, and yet, he's saving $2,400 a year. It's an interesting, interesting opportunity, and I want to thank you for describing it. Mr. Botcharnikov. It is kind of unbelievable to me. The President. Yes, it is unbelievable, just like America. Okay, Sandy Calohan is with us. She is the president of Carolina Paper & Builders Materials, Inc. By the way, when you hear her talk, she is a--first of all, there's a lot of female-run businesses in America, which means the country is better off. There's a--the fastest growing component of the entrepreneurial class is women-owned businesses. [[Page 421]] They're being created, like, at two times the rate other businesses are, which is a really exciting part about the country. Secondly, she's a Subchapter S corporation. She's part of the rich. You'll hear, ``taxing the rich.'' That means we're going to tax Subchapter S corporations. These are people who are actually hiring people, people who are expanding the job base because they're willing to take risk. And so--and by the way, just an aside, just to keep everybody's perspective properly focused, when you're running up individual tax rates, you're taxing small businesses just like Sandy. Welcome. [Ms. Calohan made brief remarks.] The President. And the--see, what's interesting about how a marketplace works, all of a sudden Sandy bugs her provider, and the provider begins to say, ``Well, gosh, maybe there's a demand here for a different kind of product. We'd better get involved. If we want to keep her business, we better come up with a new way to deal with her problems.'' I think what you're going to find is, is that the more widespread the notion of health savings accounts become, the more carriers will start providing this kind of insurance. That's how a market works. That's in stark contrast to a Government-run policy in which there is no market. It's like, ``Here it is, as decided by bureaucracies and/or law.'' And I thought it was a very interesting story that you've been bugging the guy for 7 years. A new product becomes available as a result of Government action, which I find pretty interesting, isn't it? I guess it's the tax aspects that required Government action in the first place. But--and all of a sudden, these products are becoming more available, and Sandy has got one. And she is a satisfied customer, but most importantly, so are her employees, I presume? Ms. Calohan. Yes, we are. It was either--we were going to have to do something because it was--the cost of health insurance was getting prohibitive. We weren't going to be able to have any if we didn't do something. The President. Yes. Ms. Calohan. Because I just can't--$100,000 a year is a lot of money for health insurance for 19 people. The President. For a small business. Yes. The other day--are you going to hire anybody this year? Yes, hope so. Me too. [Laughter] Small businesses are expanding, and one way to help them is so they can control their cost, health care costs. It's a major part of a person's outlook. A small-business owner's outlook is improved when there's a new product available that says, ``Gosh, I'm meeting the needs of my employees and also been able to better control costs.'' Dan Schmidt is with us. He's the CEO of Mercury Office Supply, St. Paul, Minnesota. How's the weather up there? Dan Schmidt. Well, it's beautiful. You just got to think of the bright side, ice fishing--the positives. The President. Yes, okay. [Laughter] Mr. Schmidt. That's the key. You got to be active in winter. [Mr. Schmidt made brief remarks.] The President. Yes, you see what he's saying is, what's interesting about this, that one of the great elements about health savings accounts is that all of a sudden the consumer starts being more in charge of the decisionmaking process. As he said, the consumer can make choices. And when consumers make choices, it then encourages them to start making healthy choices, particularly when you get to save money, when it's like your money on the line. And remember, you save money. People say, ``Well, why would I want to put money aside when it's being paid for me?'' Well, the answer is, because the costs of the HMO plans on a monthly basis far exceed the costs of major medical insurance, plus your own savings. In other words, you're saving money, but you're also watching your money grow if you start making healthy choices. People say, ``Will there be gaps in coverage?'' No. You get the same amount of health care coverage. I presume your employees are not complaining about the fact that they don't get coverage? Mr. Schmidt. No. And that was one of the key things. We were actually looking at, [[Page 422]] can we afford this as a small business? Are we going to have to drop insurance? And morally and ethically, I had to take care of my employees. It's just something that every American should do. The President. Yes, see, you're part of the responsibility era. You see the responsibility that comes with owning your own small business. I love that sentiment. ``I have a moral responsibility to take care of my employees,'' says Dan. And that's why the country's great, by the way. There's a lot of people who have that great sense of responsibility. That's why it's important to keep the entrepreneurial spirit strong. Small-business owners know that they can't survive without taking care of their employees. It's kind of a necessity, isn't it? Not only do you have a good heart, but there's an economic necessity involved as well. I want to thank you for coming, Dan. By the way, he's a Subchapter S corporation, which means if Congress doesn't act, they're going to be raising taxes on people like Dan Schmidt. Employers who are looking to expand--he's got 13 employees. I know that's not a lot for some of the people here in Washington, but there are millions of companies that employ 13 people or less. And there's a lot of small businesses. And it's that vibrancy in the private sector that really defines a strong economy. The vibrancy of owning your own business makes people come from Russia with a great dream. And Congress must understand that good policy is necessary to keep these people energized and excited so that the small-business sector is strong. If you've got too much Federal Government intruding into the lives of small business, it's going to make it hard for us to expand the job base. Now, speaking about people who are interested in expanding the job base, Patty Orzano is with us. Patty, I'm glad you're here. She owns her own business. Isn't that true? Patty Orzano. I'm a partner with my husband for over 30 years in 7- 11 franchises. The President. In more ways than one. [Laughter] Ms. Orzano. Now--okay--[laughter]--I'm the managing partner. [Laughter] The President. I've got that relationship in my household too. [Laughter] Good job, everybody. Ms. Orzano. Mr. President, I'd like to thank you for coming back to New York last week. New York does love you, and we need you back. The President. Thank you. [Ms. Orzano made brief remarks.] The President. I appreciate that. Listen, what you're hearing is the call for help. By the way, Patty is a 7-11 franchisee, owner, pays taxes, by the way, business taxes at the individual income tax rate. So when you hear them talking about, going to run up these--tax the rich, that's who she's talking about, right there. And she is--wants to stay in business. She wants to expand. She doesn't need the added expenses. She's got huge medical costs already. Perhaps HSAs will help you, but more importantly, AHPs, associated health plans, will, because basically what she's saying is, is that I need to be able to afford--have a basic health care plan, free of mandates, available to my employees, where I can share risk with other small-business owners. That's not too much to ask, is it, to allow small-business owners to have the same benefits as large businesses in America? That's what she's asking for. And frankly, that's what I'm asking Congress to do, to provide small businesses with the same opportunity that big businesses have. It's a practical way to deal with the costs of health care. It will allow this good lady to feel comfortable about expanding her business and, at the same time, taking care of her employees. The costs of health care, the rising costs of health care, for a lot of reasons, are affecting the ability of the Pattys to be able to be comfortable in her relationship with her employees and expand her business. And the option, by the way, is not to say, ``The Federal Government ought to take it over, take over the health care industry.'' That would be the absolute wrong prescription. The right prescription is reasonable policy, one of which is associated health plans. We've got with us the president of R.W. Murray Company, Bill Fairchild. By the way, Subchapter S corporation--he pays tax at the individual income tax level. The rhetoric that [[Page 423]]
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