Health Care Reform
Floor Speech
HEALTH CARE REFORM -- (Senate - October 15, 2009)
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Mr. THUNE. Madam President, I wish to pick up where my colleague from Tennessee left off and talk a little bit about this issue that is before us and before the country right now, the issue of health care reform. I would submit to my colleagues in the Senate that the purpose of reform, as has been stated now for many years as reform has been talked about, is that we have to do something to get health care costs under control. We have to rein in these increasing, double-digit, every year inflationary increases people are seeing in their health care costs. So the purpose of health care reform, as stated, is to lower the costs of health care for people in this country, as well as to extend coverage, provide access to coverage for those who don't normally have it, which, as has been noted in the past, is about 15 percent of the population. About 85 percent of the people in this country do have health care, and their concern is: What are we going to do to drive down the costs of health care? What are we going to do to make my health insurance cost less and my health care coverage cost less?
In that vain, I wish to point out an article from yesterday in the Wall Street Journal, which I would recommend to my colleagues and which was written by former CBO Director Douglas Holtz-Eakin.
Madam President, I ask unanimous consent to have that article printed in the Record.
There being no objection, the material was ordered to be printed in the Record, as follows:
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Mr. THUNE. Madam President, I wish to highlight a few sentences from that article regarding the bill that was reported out of the Finance Committee earlier this week. In that article he says this:
The bill would impose nearly $400 billion in new taxes and fees. Nearly 90 percent of that burden will be shouldered by those making $200,000 or less. It might not appear that way at first because the dollars are collected via a 40-percent tax on sales by insurers of ``Cadillac'' policies, fees on health insurers, drug companies, and device manufacturers. But the economics are clear. These costs will be passed on to consumers by either directly raising insurance premiums or by fueling higher health care costs that inevitably lead to higher premiums.
Mr. McCAIN. Madam President, will the Senator yield for a question?
Mr. THUNE. I am happy to yield to my colleague from Arizona.
Mr. McCAIN. It is my understanding of the proposal that this reform will begin to be implemented in what year?
Mr. THUNE. I believe the answer to that question, I might state through the Chair, is 2013, 2014.
Mr. McCAIN. 2013, 2014. But when do the taxes that would supposedly implement this proposal kick in?
Mr. THUNE. The taxes, I would say to my colleague, again through the Chair, kick in immediately. You get the revenues starting to come in right away. So the revenues are front-loaded, the costs of the program are back-loaded, so it understates and distorts what this new proposal will cost.
Mr. McCAIN. So we have 10 years' worth of tax increases to pay for 5 1/2 years of the implementation of this so-called reform, and then what are the implications in the future?
Mr. THUNE. Well, that is clearly the case. If you look at the 10-year cost of this, because the revenues--the tax increases--are front-loaded, and we get to see basically 10 years of tax increases and only about 5 1/2 years of actual implementation of the program, what you have to do to get a full picture of what the cost of this program will be is take the fully implemented cost. When you take the fully implemented cost, I would say to my colleague from Arizona, you are looking not at the $829 billion that was reported by the CBO; because of this distortion and this creation of a revenue source before the actual costs kick in, you are looking at a $1.8 trillion new entitlement program fully implemented over a 10-year period.
Mr. McCAIN. I have one more question for my colleague. Is there any provision in the legislation, as you have seen it, that has any approach whatsoever to medical malpractice reform or medical liability reform which, in the view of many experts, could be as much as $100 billion to $200 billion a year?
Mr. THUNE. There is not.
Mr. McCAIN. Isn't that incredible?
Mr. THUNE. I think it is incredible because it is now validated by the Congressional Budget Office that if you were to incorporate that, you would drive down the cost of health care in this country by literally billions and billions of dollars. Yet there is no mention or reference to medical malpractice reform in this bill.
Mr. McCAIN. Isn't it true, as much as we respect the Congressional Budget Office and their figures as to the amount of money that can be saved by implementing meaningful medical malpractice reform, such as is the case in the State of Texas, that it doesn't reduce the costs as far as litigation is concerned? Not only that, but I don't believe it is calculated using the way they calculate costs: The incredible increase in health care costs associated with the practice of defensive medicine, with doctors prescribing unneeded, unnecessary and, many times, because of the nature of the procedure, unwanted additional tests and procedures because that physician is practicing what we call defensive medicine, which is the fear of finding themselves in court; and not only because of the increasing premiums for medical malpractice but also obviously the time, the effort, the energy, including damage to reputation that could accrue from a lawsuit brought against that physician.
The ACTING PRESIDENT pro tempore. The Senator from South Dakota is recognized.
Mr. THUNE. Madam President, my understanding is that the Congressional Budget Office does not only contemplate the cost of litigation, it does not take into consideration the cost of the practice of defensive medicine, which, as the Senator from Arizona noted, is an enormous additional cost, and many independent estimates suggest $100 billion to $200 billion annually. The CBO study only took into consideration government health care, so it didn't include the private health care delivery in this country. But many physicians, as the Senator noted, practice defensive medicine because they are worried about being sued. All these duplicative tests and additional practices that are undertaken by doctors in this country to avoid the lawsuit potential or the risk they incur when they practice medicine adds significantly--as I said, as independent estimates suggest, to the tune of $100 billion to $200 billion annually.
Mr. McCAIN. Madam President, isn't it absolutely incredible that in the name of reducing health care costs, and with the burden that rising health care costs impose on every American family, that there should not be one provision--one meaningful provision--for medical liability reform, which is, in the judgment of any objective observer--except maybe the trial lawyers--something that must be implemented if you are going to have a serious effort at reducing the cost of health care in America?
Mr. THUNE. Absolutely. I think that in a moment of honesty Howard Dean
recently said that the reason medical malpractice reform is not included in this legislation is because they didn't want to take on the trial lawyers. It seems to me that you cannot have a meaningful discussion about lowering health care costs in this country absent the inclusion of this issue--an important issue--of the practice of defensive medicine, which is tied directly to medical malpractice lawsuits in this country, and the desperate need we have for reform in that area.
Mr. McCAIN. I thank my colleague.
Mr. THUNE. Madam President, as the Senator from Arizona noted, an important component of the debate is the cost curve, which leads to higher premiums and health care costs both in government-held care--Medicare and Medicaid--and in private health care delivery.
Despite all of the promises the President has made to the contrary, there isn't anything in these bills to date, according to the CBO, that drives the cost curve down. In fact, what we are looking at is higher health care costs attributable to many of the provisions in these bills. It is interesting to know, because during the hearing, the Director of CBO, Doug Elmendorf--and earlier I mentioned Douglas Holtz-Eakin, a former CBO Director, but the current Director has repeatedly admitted that he did not have the opportunity to find answers to some of the important questions in this debate. CBO told us increased taxes will be passed on in the form of higher premiums, general dollar for dollar. When he was asked if CBO calculated how much insurance premiums will rise for Americans who already have coverage, he said no. When he was asked whether they calculated whether total spending on health care would go up or down, he said no. When he was asked if they calculated how the bill would affect access to health care, he said no. Because of the way the bill has so many holes and no real legislative language, and the way it has been rushed through, there has simply not been time, evidently, for CBO to look at this and to know for certain what some of the impact will be. I have to ask, would Americans buy a health care plan without knowing how much it costs? Does anybody in this country look at buying a plan without knowing its cost? That is exactly what the Democrats are doing with this bill--buying a national health care plan without any idea about how much it is going to cost the Nation or individual taxpayers.
We do know that the plan is going to bring us higher taxes, higher premiums, and cuts in Medicare. I think that is a fair assessment. Two studies last week--independent analyses--verified that premiums are going to go up. I will point out that one of those studies which came out yesterday--the Oliver Wyman study--said premiums will increase in the individual market approximately $1,500 for single coverage and $3,300 for family coverage annually. That is exclusive of inflation. So the annual inflationary increases we are seeing in medical expenses are not included in that estimate, but it is $1,500 for an individual and $3,300 for a family annually, the increase in cost for coverage.
Small employers purchasing new policies in the reform market are going to experience premium increases that are up to 19 percent higher. This is in year 5 of reform. The other study--the PricewaterhouseCoopers study--which came out a couple days ago, also had some statistics that were revealing. It illustrated, too, that these premium costs that are going to be borne by the American people will go up significantly. So you have two independent analyses that have been done in the last week, talking about how much premiums are going to go up. We know now, with the Joint Tax Committee's assessment and CBO's assessment, that taxes will go up. We have said how the impact of that is going to fall. If you look at the biggest impact of the tax increases, families earning 150 percent of the Federal poverty line, $32,200, will face an effective marginal tax rate of 59 percent. And 89 percent, according to the CBO, of the tax increases will fall on earners making less than $200,000 a year. Fifty percent would fall on those making less than $100,000 a year.
You have average Americans out there trying to cope with the cost of health care, along with the cost of everything else, who are going to be hit with higher taxes and premiums, and our senior population will be hit with higher Medicare premiums because Medicare will be cut, and it is going to impact the Medicare Advantage Program, and it will impact providers across this country.
What we know for certain about this bill is that it is going to spend $1.8 trillion, when fully implemented over a 10-year timeframe; it is going to leave 25 million people without coverage; it is going to raise premiums for people in this country; it is going to raise taxes on people in this country, particularly those who make under $100,000 a year--half of the tax burden will fall on them, according to the CBO and the Joint Committee on Taxation. That is what we are looking at with this legislation.
As much as is talked about in health care reform and covering more people and lowering costs, at the end of the day we are looking at higher premiums, higher taxes, and cuts in Medicare. That is the bottom line. That is why we, as Republicans, are looking for real solutions that bend the cost curve down. As the Senator from Arizona noted, one of those solutions certainly would be throwing into this mix the issue of medical malpractice reform.
I want to point out a couple of statistics before I conclude about how this would impact people in South Dakota, according to one of the studies. In the South Dakota market, the individual market, if you are buying in that market, you are going to see your premiums go up by 47 percent. If you are a family, it will go up by 50 percent; and if you are in the small group market, you will see a 14-percent increase in premiums; and if you are an individual and for a family, it is 15 percent.
My State of South Dakota isn't going to fare very well when it comes to the costs associated with this plan. I argue that most Americans, as they evaluate the personal impacts of this health care reform proposal, are going to give it a thumbs down and, hopefully, we can go back to the drawing board and address this in the way we should have in the first place, and that is step by step, not rushing to jam through this massive expansion, this $1.8 trillion program, with higher taxes, higher premiums, and cuts in Medicare.
I yield the floor.
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