Healthcare Insurance Plans

Floor Speech

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Mr. KENNEDY. Mr. President, I want to talk for just a few minutes about our efforts to get control of health insurance costs in America. With me today is one of the colleagues from my office, Ms. Katie Dwyer.

The Affordable Care Act has not worked for the American people. I wish it had. I am disappointed that it hasn't. We were promised upon the passage of the Affordable Care Act that our lives would be better. Our lives are worse. We were promised upon passage of the Affordable Care Act that health insurance would be cheaper and more accessible. It has been neither.

As you know, the Senate has tried to come up with a health insurance reform effort to replace the Affordable Care Act. We have not been able to do that, but we didn't quit, as you well know. We have started, through a number of small but meaningful measures, along with the Trump administration, to lower the cost of health insurance for the American people, and we have made substantial progress. It has been lost in the noise, but it is real, nonetheless. I want to briefly talk about two such efforts.

First, association health plans. As you know, one option that has often been missing from our array of health insurance choices is the ability to get together as a group of people, sometimes across State lines, and buy health insurance. Let me explain what I mean by that. Let's suppose you have a chamber of commerce, as many cities and towns do. Those chambers of commerce in my State would join with chambers of commerce in Mississippi, which would join with chambers of commerce in Arkansas, and they would pool all of their members and say to a health insurance provider: Here are all these people who want to buy health insurance. Give us the best deal you can.

Through the economy of scale, we could lower the cost of health insurance. It makes sense, but forever and a day, it hasn't been legal in the United States of America. It now is. In 2017, President Trump issued an Executive order directing Federal agencies to draft regulations to allow the American people to enjoy the fruits of association health plans. In January of this year, the Department of Labor proposed a rule expanding the scope of groups and individuals eligible for banding together as associations and purchasing coverage through an association health plan. The rule was finalized on June 21 of this year, and it became effective on August 20, 2018.

I am not suggesting that association health plans are going to solve all the problems of access to insurance and cost of health insurance in America, but they will help, and they will help because the principle underlying association health plans is that they allow the free market to work.

If you are a member of a Rotary Club, and you want to join with Rotary Clubs in other States or other parts of your State, pool a large group of people together, and go to a health insurance provider and say ``I have a lot of potential customers here, and I want to buy major medical insurance. What kind of deal will you give me?'' that would be legal in our country.

The second thing we have done, Mr. President, as you are well aware-- I consider you an expert in healthcare and in healthcare insurance--has to do with what we call short-term, limited-duration health plans.

What is a short-term, limited-duration health plan? Well, let's suppose that I leave my job and I have employer-provided insurance and I am not sure what I am going to do next. I have some ideas and I have some prospects, but it will probably be 6 months before I will take a new job with a new company that will provide health insurance. There will be a 6-month gap where I and my family will not have health insurance. That is the purpose of short-term, limited-duration health plans.

There are plans offered throughout our country where, if I am in between jobs, for example, and I don't have insurance and I don't want to pursue my prior health insurance through COBRA, I can go buy one of these short-term, limited-duration health plans. It is sort of gap coverage, if you will.

Short-term, limited-duration health plans have been around for a long time. The problem is, for all practical purposes, the Affordable Care Act made them illegal. That is a bit of an overstatement. You could still purchase a short-term, limited-duration health plan but for a very short period of time, so they were rendered ineffective.

Under changes made, these plans will allow families and individuals to purchase these short-term plans for up to 12 months and in some cases, for up to 36 months. That is the result of a new rule promulgated by the Trump administration which reverses the Obama-era policies that limited these short-term plans to only 3 months with no option to renew.

Why are short-term, limited-duration health plans important? Why are they helping to contribute to our efforts to lower the cost of health insurance? Here is the problem we are trying to solve, as you well know.

These are the increases in premiums--the cost you pay--to purchase health insurance through the Affordable Care Act.

In Texas, from 2017 to 2018, the price of the silver plan--to buy a silver plan through the Affordable Care Act--went up 41.3 percent; in my State of Louisiana, 12.9 percent; in Oregon, 31.9 percent; in Wisconsin, 43.5 percent; in Pennsylvania, 30.6 percent. I could go on and on. That is why the Affordable Care Act hasn't worked. No one can afford it. I wish it had worked. It gives me no pleasure to say that. But we were told health insurance premiums would go down. They have gone up.

By making these short-term, limited-duration health plans available for a longer period of time, we are giving people the flexibility to extend them. The Trump administration, in my judgement, is making sure American families have access to a reliable, affordable health care option.

We had a vote yesterday. Some of my friends on the Democratic side of the aisle decided they wanted to end short-term, limited-duration health plans. They promulgated a proposal through the Congressional Review Act to end them. Fortunately, we defeated that effort.

What has been the effect in terms of price and availability? Well, short-term, limited-duration health plans, in many cases, are 50 to 80 percent cheaper than plans purchased under the Affordable Care Act.

You say: Why is that?

Well, there is no free lunch, and you are not going to get one now. If you purchase a short-term, limited duration health plan, it oftentimes does not have the same coverage a company is required to offer if it is a health insurance company offering health insurance under the Affordable Care Act. You don't get the same coverage. That doesn't mean you get no coverage. That doesn't mean the short-term, limited-duration plan is junk insurance, because it is not. It is considered major medical insurance, and issues like lifetime limits, annual limits, coverage of preexisting conditions--there are a variety of plans out there offered. If you want to purchase a plan that is still cheaper than you could buy under ObamaCare that covers preexisting conditions, you can.

This idea that these short-term, limited-duration health plans are not insurance at all, or so-called junk insurance, is simply a bunch of nonsense. I will give an example. In the last quarter of 2016, a short- term, limited-duration health plan cost an individual about $124 a month. That is a lot of money for a lot of Americans, but it is much better when you compare it to an unsubsidized ObamaCare plan that costs $393 a month. You could save 70 percent by buying a short-term, limited-duration health plan.

Again, the problem was that under ObamaCare, you could only buy one of these short-term plans for 3 months. Now you can buy them for much longer.

The self-styled betters of Washington, DC, the cultured, cosmopolitan crowd up here who think they know better than everybody else in America, who think they are smarter than all Americans, would do away with short-term, limited-duration health plans if they could because they think the American people are not smart enough to understand what they are buying. We are not going to give them the choice. We are smarter than they are. They need to look to us here in Washington, DC, to run their lives.

We saw that effort yesterday on the floor of the Senate. Fortunately, we defeated it. The American people are plenty smart. They may not have time to read Aristotle every day because they are too busy earning a living, but they get it. They watched their health insurance premiums rise through the roof as a result of the Affordable Care Act, and many of them have sought out this alternative, a short-term, limited- duration plan, and said: Hey, we know it doesn't cover as much as some policies, but it is a heck of a lot cheaper, and we would like to buy it and try it for a while.

As Americans, they are entitled to do that. I am pleased that we could reserve the option for them. It was a win for American families, in my book.

We are not giving up on replacing the Affordable Care Act. Again, it gives me no joy to say we have to replace it, but it just hasn't worked. Any fairminded person who is at all objective would have to look at a plan that promised us cheaper policies and more accessibility and ended up with more expensive policies and less accessibility and say: It just didn't work. We have to replace it, and we are going to keep working on it.

In the meantime, I wanted to point out to my colleagues that we continue to chip away at the rising cost of health insurance in America.

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