Health Care Reform

Floor Speech

Mr. GRASSLEY. Mr. President, with the words ``health care reform,'' everybody would expect costs to go down, premiums to level off, and more people being served. But it seems as though the proposals that are before the Senate are going to increase taxes, cut Medicare, and increase health insurance premiums. I think anybody hearing that would say that is not health care reform or at least not the health care reform they expected Congress to pass.

So we are here in the Congress, soon about to consider a single bill that will personally affect the lives of every single American. Not often do we pass a bill that affects the lives of every single American, and not often do we pass a bill that restructures 17 percent of the U.S. economy--maybe never before.

As one Washington Times editorial pointed out--and I am going to quote from it, and it is here for the audience to read:

[The U.S. health care system] is bigger than Great Britain's entire economy. Imagine five bickering Congressional committees trying to redesign the British economy successfully in just a few weeks. No wonder people are getting nervous.

It is true, people are getting nervous. As I travel around Iowa, I hear a lot of concern about out-of-control government spending and a massive government takeover of our health care system. People are worried that health care reform will result in lower quality, less access, and government bureaucrats deciding what health insurance they can or can't have. On top of all of that, Gallup released a poll last week saying 49 percent of Americans believe their personal costs will get worse--yes, worse--after health care reform is enacted. The poll also reported that only--and I emphasize ``only''--22 percent actually think costs will go down. Less than one-quarter of the people polled actually thought health reform would accomplish its top priority: making health care more affordable.

I can't speak for my colleagues. I don't know what they are hearing from their constituents. But I know Iowans can't afford to pay more for health care. Costs are already rising three times faster than the rate of inflation. Costs are straining family budgets, and they are making it increasingly difficult for employers to offer health insurance.

The nonpartisan Congressional Budget Office, the Joint Committee on Taxation, and even the Office of the Actuary at the U.S. Department of Health and Human Services have told us what the American people already know: These massive partisan health care reform bills are going to make the problem worse.

Let me emphasize for the American people who might be listening that the people at the Congressional Budget Office, the Joint Committee on Taxation, and the Office of Actuary at the Department of HHS are professional, not political. They don't change from time to time when the makeup of Congress changes. They are there over a long period of time studying things in an intellectually honest way to tell it like it is. This is what they are saying: These massive partisan health care reform bills are going to make the problem worse.

So I wish to go to some analyses we have already received from these nonpartisan, intellectually honest organizations.

According to a September 22 letter from CBO to Chairman Baucus about the Finance Committee bill:

Premiums in the new insurance exchanges would tend to be higher than the average premiums in the current-law individual market.

So according to CBO, after these bills spend $1 trillion, many of the people struggling to afford their premiums today will actually end up seeing those premiums go up if this bill is enacted. The Congressional Budget Office also commented on how the tax increases would also raise premiums.

During the Finance Committee markup, Senator Cornyn asked this question:

Would the new fees on health insurers be passed down to health care consumers?

Dr. Elmendorf, Director of CBO, responded by saying:

Our judgment is that, [the new fees] would raise insurance premiums.

The Joint Committee on Taxation confirmed that they came to the same conclusion during the markup. Mr. Barthold, the director there, said:

Basic economics is that that fee will be reflected in higher premium costs.

Let's not forget that these new insurance fees begin next year, in the year 2010, 3 years before any of the reforms in the bill take effect. So it is irrefutable that premiums will go up for every single American starting next year as a result of a bill that came out of the Senate Finance Committee.

The Office of the Actuary with the U.S. Department of Health and Human Services--another nonpartisan, highly regarded set of expert analysts, by the way--has also looked at some of the Democratic health reform proposals.

In a memo released on October 21, the Department of Health and Human Services, Office of Actuary, provided an analysis of House bill H.R. 3200. In the memo, the Health and Human Services actuary writes that the House bill does bend the growth curve, meaning the inflationary increase in health care costs. Of course, a top priority for Congress and the White House was to bend that curve. Unfortunately, the chief actuary says the Democratic leadership and the White House have failed to tell the American public it bends the curve in the wrong direction--not downward but upward.

According to the HHS memo, health care spending would actually increase if the House bill became law. The actuary writes it this way:

In the aggregate, we estimate that for calendar years 2010 to 2019, national health expenditures would increase by $750 billion, or 2.1 percent, over the updated baseline projection.

While some of the supporters of these partisan bills may not want to tell their constituents, we all know that as national spending on health care increases, American families will bear a burden through increased health insurance premiums.

Let me be very clear. As a result of the pending health care proposals, most Americans will pay higher premiums for health insurance.

Some of my colleagues will try to refute this claim by mentioning the taxpayer-funded subsidies included in these health care bills. It is interesting that they don't even try to deny, in the process of talking about taxpayer-funded subsidies, that premiums will still go up. They don't deny that. They just say the government--or let's say the taxpayers--are going to pick up the tab.

It is true the proposals we have seen so far include about $ 1/2 trillion in cuts to Medicare and massive tax increases to pay for this new entitlement program. But once again, some of my colleagues fail to mention that most Americans would not qualify for these subsidies. Most Americans--about 160 million--get their health care through their employer.

But if you are one of those people who get their health care through an employer, you don't qualify for any subsidy until you spend 10 percent of your income on health care premiums.

The ACTING PRESIDENT pro tempore. The Senator has used 10 minutes.

Mr. GRASSLEY. I ask unanimous consent for an additional 7 minutes.

The ACTING PRESIDENT pro tempore. Without objection, it is so ordered.

Mr. GRASSLEY. The other side plans to throw much of your hard-earned dollars at it to make premiums appear affordable. But even with their $1 trillion in spending, the Congressional Budget Office has confirmed that in 2019 only about 7 percent of those insured will be getting government subsidies.

So even though there will be a huge new taxpayer-funded subsidy program to help pay for these premium increases, most people would not actually qualify for any of that help. They will just be stuck with higher taxes--yes, higher taxes--less choices--yes, less choices--and higher health insurance premiums.

Some people may wonder what parts of the bill are driving up these costs. We have already identified the new insurance fee.

One analyst of the Federal policy group concluded that the insurance fee alone could raise premiums up to $500 per year per family. Then there are the new benefit requirements.

Under the proposals we have seen so far, the Federal Government is now defining what kind of insurance you can buy anywhere in the United States. This means it will be illegal for insurers to sell or for you to buy many of the policies people are currently enrolled in.

By law, it will be illegal to buy policies that don't meet an actuarial value of 65 percent and cover a long list of mandated benefits.

The consulting firm Oliver Wyman has said that since this new Federal minimum standard is higher than many of the policies sold today, new enrollees will have to pay about 10 percent more to meet the new government benefit standard.

This is just under the Finance Committee bill. That 10-percent increase in premiums would be much higher under any of the House bills and the Senate HELP Committee proposals.

Once again, the other side of the aisle will point to a grandfathering policy that, as the President has said, will let you keep what you have. But they fail to mention that this grandfathering policy doesn't count if you ever plan to move or, two, your insurer stops offering coverage or, three, you want to change your policy to add vision or dental coverage.

If you meet any one of those criteria, the promise that you will be able to keep what you have doesn't apply to you.

Another factor that will drive up premiums is the new age rating rules. These rules set limits on the amount premiums can vary between younger and older enrollees.

Some of the proposals being considered would tighten this variation so much it will drive up premiums by almost 70 percent for younger, healthier enrollees. So all those so-called young invincibles we need to get into the health insurance pool, all the recent college graduates, will be hit hardest by the increase in premiums because of the proposed market reforms.

Taking all these factors into account, Oliver Wyman actuaries also concluded that individuals would pay as much as 73 percent more as a result of the policies in the Finance Committee bill. Small businesses could face about a 20-percent increase, which will lead to about 2.5 million less people getting coverage through their small business.

We can certainly debate all these numbers. Some may question whether rates will increase by that much. I am sure some will question the sources of these studies, although I should note we didn't take these estimates at face value. In fact, ever since the Gang of 6 meetings, we have had some of the best independent actuaries and insurance experts analyzing this data.

But even the people who want to debate the sources do not deny the fact that health insurance premiums will go up as a result of the bills we are considering. I am beginning to understand the game. I am actually beginning to wonder if the reason no one is denying it is because this is intentional.

If these bills drive up premiums in the private market, it is going to make it a lot easier to push for a government-run insurance program or a new entitlement program.

A Washington Post story over the weekend reinforced this concern:

[Senator] Reid's original inclination was to leave the public option out of the final bill ..... but his liberal colleagues began urging him two weeks ago to reconsider, after insurance industry forecasts that premiums would rise sharply under the Finance Committee bill.

Let's hope the Democratic leadership and the White House aren't willing to push a bill that forces 200 million people to pay higher premiums unless they enroll in a new government entitlement insurance program. But that is certainly what it sounds like.

Whatever the motive may be, the facts are undeniable. Health insurance premiums will increase for every individual and small business as early as next year as a result of the pending health bills. It will hit young, healthy people the hardest. It will cause small business to stop offering health insurance premiums. We have heard it from Joint Tax, we have heard it from CBO, and we have heard it from the Office of the Actuary within the U.S. Department of Health and Human Services.

I wish to make sure all the American people hear it.

I yield the floor.

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