Congressional News Conference - Rising Health Care Costs and the Uninsured

Federal News Service

HEADLINE: CONGRESSIONAL NEWS CONFERENCE

SUBJECT: RISING HEALTH CARE COSTS AND THE UNINSURED

PARTICIPANTS: SENATE MAJORITY LEADER BILL FRIST (R-TN); SENATOR JUDD GREGG (R-NH); SENATOR JAMES TALENT (R-MO); SENATOR OLYMPIA SNOWE (R-ME); SENATOR MIKE ENZI (R-WY); SENATOR JOHN CORNYN (R-TX) LOCATION: SENATE RADIO/TV GALLERY, THE CAPITOL, WASHINGTON, D.C.

BODY:
SEN. TALENT: (In progress): I want to thank the chairman for his effort and his patience in pulling us all together behind this product. It wasn't easy, but he did it, and I congratulate him on that-and also on the leader, because of his consistent interest in this issue, which I really believe day to day and year to year may be the one that affects more Americans and more deeply than any of the other domestic issues that we deal with him.

I'm going to talk a little bit about cost. But one of the things I like about this overall package is that-really two things-one of them is it's not an attempt to come up with something at 40,000 feet of ideology and then force that on people. It's an attempt to make the common-sense changes that we can make within the existing system to make it better for people.

I think the potential for reducing health care costs and increasing coverage for people is enormous. I think you'll see that if you look at the package.

And the other thing is it doesn't just feed the beast. I mean, both parties have ideas for how we can put more money into the system to help basically buy more coverage for more people, or provide more coverage for more people. But that doesn't do anything to address the cost drivers in the system. It just as I said just feeds the beast-just giving them more and more and more, and it doesn't deal with the issues that are driving up health insurance premiums around the country.

Well, this package does. And as Chairman Gregg said, we didn't try and reinvent the wheel. It includes, for example, the liability reform, the frivolous lawsuit reform measures that we have introduced time and again on the Senate floor. And I just think it's just idle to deny at this point that these kinds of runaway lawsuits are driving up costs across the United States. Every place I go in Missouri they're losing OBs, they're losing neurosurgeons, because the rising cost of medical malpractice insurance. And that's just the tip of the iceberg, because there's a whole lot of extra costs that are undertaken, undergone, borne in the health care system, because people are afraid of being sued. And if you don't believe it, just sit down and talk with anybody. Talk with a set of nurses, talk with physicians, talk with hospital people-and they'll tell you that. We can reduce this siege mentality while protecting the right of people to recover for injuries. We can draw those costs out of the system.

A very important feature of the package-and the leader has worked very hard on this-the president has been talking about it recently-is increasing incentives to make certain that we help health care build better architectures of technology. The health care system is behind-there's a lot of reasons for this-but it's behind in the kind of technology that you all use every day in reporting the news, and even we use in the Senate. Here's an example I use to illustrate this. I get the oil changed in one of my cars-or the cars-I go to one of those oil change places, and they ask me if I've got the card that they give me, and I said, Yeah, and I give them the card and they put in the machine, and they can tell me everything that they've done to my car, at least within that system. That's an electronic medical record for my car.

You go to somebody new in health care, a specialist you're referred to, like as not, they will gather information about you the same way they did 50 years ago. They'll give you a clipboard with a questionnaire on it, and you have to fill it out, talk about the meds you're taking and why you're ill and what you're allergic to and all the rest of it. I don't want to blame-I think this is a combination of regulatory disincentives and the fact that reimbursement rates don't encourage investment. But we begin to address that problem in here.

And then also-and this is something that Chairman Snowe I think will talk about more at length, but I am very gratified that the bill does contain support for association health plans, which is really an attempt to reduce the administrative costs that small business people are facing, and give them some of the opportunities that larger businesses already have in terms of economies of scale and the way they buy insurance. And we think that will reduce the costs.

Again, I want to emphasize that all these are measures which are really common-sense reforms within the existing system to reduce some of these costs. If we can get costs down in health care through the things just 10 percent, this is a $1.7 trillion system-that's $170 billion a year we save nationally-that will fund the measures that we need to provide coverage for everybody.

SEN. GREGG: Thank you, Senator Talent. Just to follow up on that, a more in-depth statement which is followed up by a more in- depth background is in this packet. The packet has all the different items. There are a number of cost initiatives. Senator Talent highlighted a couple of them.

Now two people are going to talk about the coverage issues, Senator Snowe and Senator Enzi.

SEN. SNOWE: Thank you very much. And first of all I wanted to thank the leader and commend him for assigning high-priority value to one of the most challenging domestic issues facing this country by creating this task force, and to Chairman Gregg for helping to guide us through these very complicated issues in trying to address 44 million uninsured Americans.

Recently the Institute of Medicine issues a report, and it indicated that 18,000 people die annually due to a lack of health care coverage, and that the average family ends up spending more than $10,000; that we're spending on health care at an unsustainable rate of $1.7 trillion, or 15 percent of the GDP. So there's no question that now is not soon enough to get the job done.

So the question is: What type of an approach? And even the Institute of Medicine could not I think finally reach a conclusion on any one method. In fact, the vice chairman talked about a multi- faceted approach. And that's essentially what we have adopted here, the sound premise that one solution does not fit all, that we obviously are going to have to develop, I think, a toolbox of legislative solutions based on sustainable reform that is built upon the principles of choice and competition, controlling costs, fiscal responsibility in the areas of improving care and coverage.

And the question is: How do you address the magnitude of this problem? You can't just simply increase coverage with one broad brush stroke. And that's why we adopted this multi-pronged approach that includes tax credit subsidies, health savings accounts, embarking on more expansive incentives for that, encouraging young people to purchase health insurance, as the chairman indicated; also to make programs, such as the State Children's Health Insurance Program, S- CHIP, more accessible to low-income individuals.

We also want to help people to be able to obtain health care coverage at more affordable rates through the tax credits and subsidies on a sliding scale. Health savings account is a good example that was recently created, as we all know. But it is encouraging consumer responsibility, more consumer-directed choices. And also as consumers are doing their comparative price shopping, it's encouraging competition among providers. This becomes especially important, because more than half of all employers by the year 2006 intend to use health savings account as a vehicle.

In addition, we shouldn't penalize individuals because they are not part of an employer-provided coverage. And therefore that's why we offer subsidies; because, after all, we don't tax Americans who get their coverage at work-we shouldn't tax individuals who are only able to get individual insurance plans. Therefore, we think that they should be able to deduct the full cost of their health insurance plans. But we go further: We also offer subsidies, because even as the president has acknowledged, deductibility in and of itself is not enough to accomplish the goal of providing affordable health insurance to low-income individuals. So we believe that we should also have fully-advanceable tax credits, similar to what we have provided under the trade adjustment assistance program. Now, we know that there have been some problems with that implementation. The General Accounting Office is looking into it. We obviously would adjust that program, depending on the changes that they recommend. But that is critically important, because programs like that can become a safety net for those individuals who are about to lose employer coverage.

Finally, as Senator Talent indicated, the issue of association health plans-that has also been included in the task force options and recommendations. As chair of the Small Business Committee, I've introduced this legislation along with Senator Talent and others, because this is one way of helping two thirds of the uninsured in America, who happen to work for small businesses, or who are dependent-who depend on somebody who does. That is critically important, because we will allow small businesses to be able to leverage their purchasing power on a national basis, and be able to have access to more affordable broad-based coverage that will lower the administrative costs anywhere from 10 to 30 percent. This could affect more than two thirds of the insured. That is very important, and I think in combination with the other initiatives we could upwards of-help 21 million Americans all combined potentially with these proposals.

Finally, we also include in the task force a recommendation that has been proposed by Chairman Gregg, and that is the issue of insurance market reform. Again, it's achieving economies of scale, encouraging competition, consumer choices, by saying that, you know, a patchwork of state regulations hinders our ability to have broad-based effective coverage. We want to be able to have multi-state plans that will allow for broader participation, that will give again more cost- effective, lower costs for health insurance plans.

I think in the final analysis these are various initiatives that are tools in our legislative toolbox that I think could be very helpful. This is obviously a daunting task, but it is not insurmountable.

SEN. GREGG: Thank you.

SEN. ENZI: Well, I too want to thank the chairman-not only for the direction that he gave, but for the people that he involved in some tremendous research. We had reams of material to go through so we could better understand what the groups were that weren't covered, and what the kinds of coverage were that were lacking. And Senator Snowe has covered very comprehensively the ways that this can be done. I want to put some additional emphasis on what we started under the Medicare prescription drug plan, the health savings accounts. The health savings accounts are the opportunity and the incentive for the young people of this country to be involved in insurance, as well as making sure that Medicare works. It encourages them to go into a type of insurance that has a higher deductible, and allows that deductible amount to be put in the bank for some other kind of investment each and every year. And it goes in tax-free, it grows tax-free, and it's spent tax-free. So that's some incentive.

The other part of the incentive we wanted to give was so that the premium that they have to pay for the high deductible is deductible. Corporations in this country, when they provide insurance for their employees, deduct the cost of the insurance. What this allows is for the individual who is providing their own insurance to be able to do the same thing that the big corporations are doing: deduct the cost of their insurance, so they can put the deductible in an account, and they can get a tax credit so that they don't have to fund the insurance themselves.

Now, there was also a little bit of mention there about individuals being able to buy into some national plans for insurance. We talked about the associated health plans which allow people who are in business associations to cross state lines to form bigger pools, and to set up programs that don't have the same basic mandates as some of the others. And that will solve some of the problems. But that needs to be carried out again to every individual in this country. Every individual in this country should have a right to the basic health plan that they want.

One of the things that's happening, beginning right now on Medicare, is people can call in to find out about a whole variety of plans on drug cards. They can go in on the Internet, www.medicare.gov <