Unemployment Compensation Extension Act Of 2009 - Continued
Floor Speech
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Mr. CRAPO. Mr. President, I wish to talk this afternoon about health care and specifically the impact of some of the proposals we have on the cost of health care insurance. Before I do so, I think I must respond to some of the comments that were just made by the Senator from Michigan accusing the Republican Party of being the party of no. It seems we are starting to get to a point here where bipartisanship is not being achieved. But it seems the definition of bipartisanship is becoming ``either do it our way or you are the party of no.''
It seems to me what we need to really do is step back and take a couple of deep breaths and start working together on legislation. I will use the example the Senator from Michigan used, the unemployment insurance compensation legislation. As she correctly indicated, there were 87 votes to move forward with this legislation. This is not an effort to obstruct the legislation. The effort that caused us to slow down a couple of days on this legislation was an effort to improve it. In fact, had we not slowed down a couple days, the bill would have gone through and would have been passed, but it would not have the home buyer tax credit in it for the purchase of homes. It wouldn't have the net operating loss carryback provisions in it. They are both important provisions for creating jobs rather than just providing a safety net for those who lost jobs. The bill has been improved, and I think it will be further improved by the time we have the final vote.
It is that process of give-and-take, trying to work on and improve the legislation, that occasionally causes the Republican side to say: No, we are not going to move forward until we have an opportunity to present some amendments and until we have bipartisan work to help improve the legislation. That is what happened in this case.
In reality, the majority party has 60 votes. If they want to proceed on anything, they can do so. In this case, on the unemployment insurance bill, they did stop and allow us another couple of days to work on it and improve it with the home buyer tax credit and the operating net loss carryback provisions.
Mr. President, I will now address the question of health care. It is interesting. One of the comments the Senator from Michigan also made was that we cannot get to the health care bill because we are spending our time on the unemployment compensation bill. The reality is that we don't even know what the health care bill is yet. The bill was crafted behind closed doors in the Capitol Building, and it is being scored by CBO. We don't know when CBO will have the full bill to score or whether the full bill has even been drafted. We don't know what it contains.
That is in stark contrast to the President's commitment on how this process would proceed. The President stated in the San Francisco Chronicle in January of last year:
These negotiations will be on C-SPAN ..... and the public will be part of the conversation and we will see the choices that are being made.
He indicated that everybody should be in the room and it should be broadcast on C-SPAN. Instead, there is a very small group of people from the White House and the majority leader's office and probably a couple of senior Senators he is working with who know what is in the bill. The rest of us don't know.
Frankly, the reason we are not moving to the bill has nothing to do with procedural maneuvers on the floor. It has to do with the fact that the bill is not drafted yet or prepared and ready to bring forward.
Let me move to the actual bill itself. In this context, I have great concerns
with the legislation that is being brought forward on many different fronts. It expands the Federal Government by about $1.2 trillion, depending on how you count it; some say up to $1.8 trillion. It imposes massive new taxes and cuts in Medicare of equal amounts to balance it off and make it appear it is not increasing the deficit. By cutting Medicare, it seriously jeopardizes the quality of health care we provide to our seniors in this Nation and, as I indicated, the massive new taxes that are involved, which fall squarely on the backs of the middle class, violating another one of the promises President Obama made. In doing so, it does not achieve the very objectives our citizens in the United States ask of us in health care reform.
What am I talking about? That is what I want to focus the rest of my remarks on today.
When you ask most Americans, Do we need to reform health care in the United States, they will say yes. What they mean when they say that is they are tired of the double-digit, skyrocketing inflation of the cost of their health insurance and the cost of medical care in the United States, and they think Congress should do something about it, that Congress should ``bend the cost curve down''--that is the phrase that has been made popular--and they believe Congress can do something about it and help control these skyrocketing costs of health care.
They also believe we should try to find a way to get access to those who are needy and unable to purchase their own insurance. They know we are providing for the cost of health care for those who do not have insurance and they do get it in a much more expensive way and in a way that does not give them the quality of health care they should get. That is what Americans think of when they are asking for health care reform. But center in the focus of the American people out of what they want out of health care reform is control of the costs of health care and control of the skyrocketing costs of the insurance they pay.
On that issue, the bills before us fail dramatically because not only do they grow the Federal Government, not only do they increase taxes, and not only do they deeply cut Medicare, they will increase the cost of health care insurance and increase the cost of medical services in our country beyond what growth they would have seen without the legislation.
I will go through a couple of examples, focusing on the bill that went through the Senate Finance Committee. It includes, as I have indicated, significant amounts of taxes and different kinds of taxes on different parts of the economy. Both the nonpartisan Congressional Budget Office and the Joint Committee on Taxation have stated that a number of the taxes included in the Senate Finance Committee bill will be passed on to consumers in the form of higher premiums.
During the Finance Committee markup, CBO Director Douglas Elmendorf stated:
Our judgment is that that piece of legislation--
Referring to the provisions increasing taxes in this legislation--
would raise insurance premiums by roughly the amount of the money collected.
Meaning in one of the particular cases there is a $6.7 billion tax imposed on insurance companies. His point is that $6.7 billion tax is going to raise the cost of insurance.
Another example in the bill, there is a tax on medical devices. Both CBO and JCT have said this tax on medical devices will be passed on to patients, increasing their health insurance premiums and increasing the prices on everything from powered wheelchairs to pacemakers.
Another example is the tax on insurers. I mentioned the tax on insurers is what generated this answer. CBO and Joint Tax have said this tax will be passed through, and some estimates on this passthrough show this tax on insurers could raise premiums for American families by as much as $500 a year.
The Congressional Budget Office sent a letter to Senator Grassley last week in response to his inquiry about this provision and stated:
While uncertainty exists, we assume that a very large portion of this excise tax on purchased insurance will be borne by consumers in most markets, including in some markets with a high level of concentration among market participants covered by the proposed excise tax.
Still quoting the letter:
While consumers or employers may respond by changing their insurance coverage from more expensive coverage to less expensive plans to offset any potential price increase, this behavior, too, is properly characterized as the consumers bearing the burden of the excise tax by accepting lower quality (for example, a more restricted physician network) for the same price rather than paying a higher price for the quality [that they would have had had there been] no tax.
Again, still quoting from the letter:
Our estimate is that the premiums for purchased health insurance policies, including the tax liability, would be between 1.0 and 1.5 percent greater than they otherwise would be as a consequence of the industry fee for calendar years 2010, 2011, and 2012.
Joint Tax did not estimate the years beyond that and were not able to do a distributional analysis based on income as to where those with higher premiums would most likely fall. But we know, again, it is almost certain it will hit those in the middle class.
Premiums are also going to rise because of the new excise tax on so-called Cadillac health plans. Many believe that companies will respond to this new tax by either passing the costs on to consumers or cutting benefits so the plan can avoid the tax. Inevitably, like the AMT, the alternative minimum tax, the impact of this tax will be passed along to more and more people, not just those with Cadillac plans, either in the form of higher costs or lower benefits.
That is how the tax-and-fee provisions portion of the bill impact health insurance. And there are many more. But what other provisions in the bill impact the cost of insurance? The insurance mandates in the bill will have similar impacts on raising the cost of health care insurance for Americans.
The Finance Committee bill also contains a number of market reforms that will result in these higher premiums. For example, the new federally mandated rating rules will result in a huge premiums increase for younger and healthier individuals.
In my home State of Idaho, studies have shown that a 20-year-old male can go out today and buy a policy in the individual market for $67.63 a month. A 20-year-old female can buy a policy for $94.35 a month. If the insurance rating reforms in the Finance Committee bill are enacted, those exact same policies would rise to a level of $166.75 per month. That is a 147-percent increase for a 20-year-old male and a 77-percent increase for a 20-year-old female.
These figures, frankly, are optimistic for several reasons. They assume that the young and healthy will continue to purchase insurance. If they do not continue to buy insurance, the premiums would likely be even higher than those which were shown in the studies.
In addition, these rate estimates assume a 4-to 1 age rating band. The House bill introduced last week contains a 2-to-1 age rating band mandate, meaning that the rates for the young and healthy, again, would be made significantly worse.
In addition, many of the proposals in Congress contain mandates about what an insurance policy must include. Here is an example of what we can see in that context: An older gentleman wanting to purchase insurance in the new exchange to be created may not be able to save money by enrolling in a more basic plan. Instead, it would not be possible for him to enroll in a policy that does not include maternity care and newborn care, something he may not want or need to purchase.
The actuary firm of Oliver Wyman, in a study commissioned by Blue Cross/Blue Shield, concluded that insurance reforms in the bill and the minimum required
benefit levels in the Baucus bill could drive up family premiums for new coverage by as much as $3,024.
My point is, both the taxes and fees and the insurance mandates will generate higher premiums, not lower premiums, for Americans, exactly the opposite of what Americans are asking for in health care reform.
Similarly, both the House bill and the Baucus bill, and what we expect to see in the Senate bill when it finally comes out, will have a significant expansion of moving those in lower income categories into Medicaid rather than providing a way for them to obtain insurance.
The Baucus bill contains an enormous expansion of Medicaid, up to 133
percent of poverty. That means 14 million more people are going to be enrolled in the Medicaid Program, the largest expansion since it was created in 1965, a program that financially is going to hit the cliff soon. We know we are undercompensating for medical services in Medicaid, which ultimately results in those undercompensated costs of health care being borne by the rest of the insuring population in the United States with higher premiums.
So what are we going to do? We are going to expand a program that drives a lot of its costs off onto the private sector so we can avoid the need to identify the way to move forward and develop a true reform that will enable those who are needy and uninsured to be able to obtain insurance. Instead, we are going to push them onto the Medicaid system and, again, drive up premiums.
Those who are pushing this legislation have responded to some of these arguments by saying: The subsidies we are providing in the bill for those with lower incomes will help to reduce insurance costs. If you focus on those who receive the subsidies, of course, their insurance costs may go down. But this is true for only a very small number of Americans.
The reforms in the Finance bill will raise health care costs for most Americans while lowering them for some through subsidies. But there are several important points to make on the subsidy argument.
First, the credits and subsidies are only available for those who receive insurance through the new exchange. In other words, if you get your insurance through your employer, which most Americans do, you do not qualify for any subsidy support.
CBO has estimated that only 23 million Americans will receive insurance in that fashion. If you do the math, that represents 8 percent of the 282 million nonelderly Americans. Why do we take the nonelderly number? Because elderly Americans are covered by Medicare.
Let's put up a chart. The subsidies are not available for individuals who get insurance through their employer and, instead, those individuals will pay higher premiums for those who receive the subsidies. Here is the way it works out. You have about 185 million Americans who will be paying more taxes and higher health care premiums, and about 18 million Americans who will actually see their health care premiums go down because they will receive a Federal subsidy.
While it is true that the subsidy will help reduce the health care costs of those who receive it, it is not true that the health care costs for every other American are going to go up, again I want to point out, in two significant ways. The 185 million Americans who are not participating in the subsidy will pay more in taxes--and significantly more in taxes--and will pay more in their health care insurance premiums. That is not the kind of reform, again, that the people of the United States are asking for.
One last point, and that is about this proposal to have the Federal Government step in and create a government health care company. A government-run health care insurance company is promoted by saying we need a competitor for the private sector. I think most Americans see through that. But last week, CBO released their score of the House bill which creates just such a government-run health care company. Their score shows that the new government plan would typically have premiums that are higher than the average premiums for private plans.
What is CBO saying? The CBO letter then states that although the government plan would likely have lower administrative costs than the private plans--which is one of the key arguments that is often made--the government plan would--and I am quoting from CBO--``probably engage in less management of utilization by its enrollees and attract a less healthy pool of enrollees,'' resulting in higher premium costs in the government plan.
So now what do we have? We have a government plan into which we are going to push a lot of Americans, unwillingly, which will charge higher premiums than the private sector. We have taxes, penalties, fees, and mandates being imposed on the private sector that are going to drive up their premiums as well. It is all justified by the argument that we need to somehow create a government control of health care so we can reduce the costs. There are other ways to reduce the costs. I don't have time in my remarks today to get into those, but there are a number of proposals we do know about for which we have bipartisan support that will help us address that cost curve.
It is my hope we will reject these proposals that take us down the wrong path and result in the wrong solutions for Americans in health care reform and begin focusing on what I started out with--that cost curve about which most Americans are so concerned.
We can drive down that cost curve without raising taxes, and that is where this Congress ought to be spending its attention.
With that, I yield the floor.
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