Service Members Home Ownership Tax Act Of 2009 - Motion To Proceed
Floor Speech
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Ms. CANTWELL. Mr. President, my colleague, Senator Landrieu, was going to be next, but I will switch times with her. She will join us on the floor shortly.
I want to join my colleagues this morning and talk about this important issue of controlling health care costs. That is why we are here. We know Americans are facing higher and higher health care costs and that we can do something to drive down the costs of our health care system. We know health care costs are not only strangling us, but they are impacting our constituents, our budget, and they are leaving 47 million Americans without insurance.
Our aim is to promote better quality care and get costs under control. Whether those costs be to consumers struggling to pay insurance premiums or to our government, we need to make sure we are doing all we can. Doing nothing in this debate is allowing health care costs to continue. I want to make sure my colleagues on the other side of the aisle who talk a lot about this legislation understand that if we do nothing, we are going to leave the American people and our budget in serious danger by not controlling health care costs.
As always, in this debate we must keep in mind Federal spending, and the numbers on Federal spending are stark.
In terms of doing nothing, if the U.S. Government does nothing, health care spending will double in the next decade. That is, we spend about $810 billion on health care. That is one-third of our total Federal budget. If we do nothing, Federal spending is going to go to $1.56 trillion. That is because we are not controlling health care costs, baby boomers are reaching retirement, and Medicaid and Medicare costs are ballooning. One-third of our Federal budget is a big enough bite. But if we do nothing, then our health care priorities are going to push out other priorities of our Federal Government.
The biggest area where we could control costs is in Medicare. Medicare is 57 percent of all Federal spending, and it is getting bigger. By 2020, Medicare spending alone will reach $1 trillion, doubling the $466 billion we spend today. That is to say that Medicare spending has been doubling in the last 10 years, and if we do nothing as our colleagues on the other side of the aisle are suggesting by not moving forward on this legislation, then it is going to double again. This is unsustainable because if we do not address this, Medicare is going to bankrupt us.
The prospects are just as daunting when it comes to our Medicaid budget because Medicaid spending over the next several years will also double, and it has doubled in the last 10 years. States are struggling, as many of us know, with what they can do to help sustain Medicaid since they pay for part of that for individuals.
So we see we are in a situation where doing nothing is an irresponsible way to go. In fact, for our constituents, they are seeing a 120-percent increase in insurance premiums. While we are worried about the impact on the Federal Government, they are worried about the impact on them, on their individual budgets. That means the average family today pays about $7,000 more per year for the same health care benefits than they did a few years ago. If you think about that, that means that is less money for them, less money for their families, less money to meet the other bills in the family.
Why has this happened? If we look at what has happened in our country, we see that wages have not gone up. In fact, during that same 10-year period of time, wages have only gone up 29 percent, health insurance premiums have gone up 120 percent. And where has the insurance industry been? The insurance industry has seen a 428-percent increase in profits over the last 10 years.
That is why we need to do something about controlling health care costs. We cannot let the American people continue to be subject to such huge increases in premiums and then have the insurance industry walk away with huge profits and American consumers make less and less.
What is going to happen if we do nothing, if we do not advance this bill to control health care costs? Those same premium increases we have seen in the last 10 years are also going to go up again. In fact, they are projected to go up another 7.9 percent in annual growth. That is, every year, they are going to go up another 8 percent. That is unsustainable. That means somebody is going to be paying $10,000 or more than what they are paying for their health insurance today for the same health care benefits. That is why doing nothing and not advancing this bill is just acquiescing to the fact that everybody is going to pay more for health care.
What makes this number so scary is that it is four times the rate of inflation over the same period. That means what we need to do is look at general inflation, which is usually about 2 percent. But health care inflation, as is shown on this chart, is more like 8 percent. If we do nothing to change this, Americans are going to continue to do with less because health care costs are demanding more and more of their budget.
What do we do about this? We certainly want to make sure that we change the system, and that is one of the reasons I support driving down costs by having a public option. We know that two factors are involved: We don't have enough competition and there are very concentrated markets in health insurance across the country. Many times there are only one or two insurance providers providing coverage in a market. They might have 94 percent of the market. It is too concentrated. We know if we provide an alternative in the marketplace, we can help drive down costs.
One provision in this bill of which I am very supportive is the basic health plan because it lets States negotiate with private insurers for lower costs. In my State, this program has been in place for 20 years. It has been able to provide those who participate in the program--about 70,000 people today--a 30- to 40-percent savings if they had to buy that plan as an individual from a private insurer. That is incredible success in driving down the cost.
Why? I call it the Costco model because like when you go to Costco and you buy in volume, the State of Washington, buying in volume on behalf of those individuals, was able to drive down the cost of health care for those individual citizens. They were able to choose between four different plans, and they were able to get access to a very good proposal for health care for them.
The underlying bill includes language that says you could provide this basic health plan if States opted into it and cover 70 percent of the currently uninsured in America. I like this proposal because it gets us cheaper insurance for that population.
Why subsidize insurance companies by giving tax incentives to buy more expensive insurance when what Americans want is to drive down the cost of health care by having the same negotiating clout that big businesses or other entities have?
I hope we can continue to work and maybe even expand this provision to make it even more robust and to drive down costs.
What is clear is that the cost of the uninsured is adding to our health care
costs. In fact, the fact there are people in America who are uninsured is adding about $1,000 to our health care premiums overall. That is about $43 billion a year to our health care system.
If we can change our health care system and get more people into something such as the basic health plan, we would be able to drive down costs, and that is why that plan is so valuable.
We should not forget that our current system, besides insurance reform, needs provider reform. The reason why provider reform is so important is because our current health care system is flawed. It is driving up the cost of Medicare and health care in general because of the payment system. Basically, the current payment system perpetuates more spending. In fact, there is something like $700 billion in waste in our current system. If you think about it, it is this fee-for-service loop that I call it where you order more and you end up having more waste in the system, you have more spending, you have more use, and it keeps going. That is primarily because we pay doctors on volume. We pay doctors for how many patients they see every day, and we pay them for how many tests they order. Consequently, the cost continues to spin out of control.
As I was saying, we spend about $700 billion on health care that we do not need to spend. That is in duplicated tests, unnecessary procedures, excessive insurance overhead, uncoordinated speciality care, and preventable hospitalization.
We heard from many people during the health care debate that we have to do something to change this system. In fact, one of the witnesses before the health care committee said:
We have to go after how we reimburse physicians. The current system is the most broken part of Medicare.
What are we doing in this legislation to fix that? We are changing the way we reimburse for health care. In fact, we are going to look at how to get lower costs with better results. This is important because I don't think there is a person in America who doesn't know what it is like to go into a doctor's office and feel they are always in a hurry or feel as if the doctor didn't hear everything you had to say. This is about changing and rewarding physicians on the outcome of your health care so you can have shorter waiting times, better access to doctors, more coordinated care, and better outcomes.
We think if you change the health care system, which this bill does, to drive down costs and get better outcomes, we are going to have better health care in America.
We can continue on the path which I think my colleagues on the other side of the aisle want by not voting to move forward on this legislation, we can have less coordinated care, going from specialist to specialist without having that care coordinated and have unnecessary tests, but then everybody in America is going to be paying for those costs. Everybody is going to be paying higher health care premiums because of it.
What we need to do, which is what exactly this bill sets us on a course and path to do, is to pay for value not for volume, to pay physicians on the value they deliver and the outcome of their patients instead of volume.
If we did nothing else in health care reform but to change our payment structure to focus on this premise--paying for value and not for volume--then we would be delivering great long-term savings to our health care system.
We have other things we need to do, and that is in the area of long-term care and Medicaid because in our long-term care system, we are seeing a doubling in health care costs, primarily because of long-term care. When you think about our Medicaid budget, everybody thinks Medicaid is this program to help the low-income population. Medicaid is turning into a long-term care program for the elderly in America. That is, they cannot get long-term care access so they are spending down so they qualify under Medicaid to basically get on that system to cover their long-term care.
We can see that right now Medicaid is paying half of its funds, and that is an expense that is going to continue to grow.
We have made some reforms in the State of Washington to make that cheaper. We have said let's invest in home care instead. Instead of having everybody go to nursing homes, whether they need to be there or not, let's focus on the long-term care system reforms that keep people in their community and instead use the Medicaid budget to advance other things while keeping patients at home.
I think every senior in this country would rather have their health care delivered at home than in a nursing home, but our current Federal system continues to reward long-term care in nursing homes instead of in community-based care. This legislation starts us on a path to change that direction, to move closer to long-term care community services.
We did this in the State of Washington, again, over 20 years ago and have reaped huge benefits. If we took an individual in the system today, the cost is only about $22,000 per individual. If we had not reformed the system as we did 20 years ago, we would be paying $42,000 for that same individual. So we have been able to drastically cut the amount of money we are spending on long-term care.
This legislation includes the same kind of cost control reforms in long-term care as some States have already implemented. That is why we have to get at controlling health care costs. If we do not control health care costs in this area of long-term care, we are not going to control health care costs overall in America.
What does reform mean? Why are we here today to talk about the cost of health care and what we need to do? Why are we here talking about advancing this legislation so we can get this debate on the floor for the American people?
It is clear we need to have more competition through a public option, we need smarter reimbursement rates to incentivize value, and we need better use of Medicaid dollars.
The PRESIDING OFFICER. The Senator's time has expired.
Ms. CANTWELL. I thank the Presiding Officer. I hope my colleagues on the other side of the aisle will consider the important cost controls in this measure.
I yield the floor.
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