Service Members Home Ownership Tax Act Of 2009

Floor Speech

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Ms. CANTWELL. Mr. President, I am proud to be out on the floor tonight with my colleagues.

I thank the Senator from New York for his comments and his work in the Finance Committee. He literally did work night and day in that committee and then worked with Leader Reid on trying to get consensus within our caucus on this legislation. So I appreciate his strong, active support in making reform.

I, too, wish to add my congratulations tonight because we are here to talk about controlling health care costs and what we are going to do to help the American people. I too wish to thank my colleagues, Senator Baucus and Senator Reid, for their active leadership, as well as Senator Dodd and Senator Harkin.

I add my thanks to the whole Finance Committee staff. I don't think people realize they have worked from January until December, many weekends as well as during the week, many late nights as well as early mornings, and they deserve a lot of credit for the details behind this legislation and making sure the i's are dotted and the t's are crossed.

I wish to thank my staff, all of my staff but in particular Mark Iozzi, who worked on this legislation, as did the rest of the Finance Committee members of the staff, for about the last 11 1/2 months. I was glad to send him off on a plane today to reach his family, and hopefully he will be watching the vote tomorrow morning by television. It should be a proud moment for him.

I also wish to add a particular thanks to President Obama. I wish to say to the President that he started this year with the dedication that this was going to be a year where we got health care reform. He stated that at the beginning of his Presidency and held steady to that during the very raucous debate that happened in the early months regarding the budget and whether we would have the money to do health care reform. He remained committed as we went home over the summer and many things happened at town meetings. He came back and was determined that we would forge ahead. He, as we got legislation out of the Finance Committee and had to combine bills, remained active and intent about this legislation.

It reminds me of a saying my father used to make to me because he was a Navy man and always came up with nautical terms to kind of describe the direction in which he would want his children to go. The President's actions on health care policy for this year remind me of the saying ``steady as she goes'' because that is what the President has done for the last many months--steady as she goes so that we can get health care reform.

So I wish to add my thanks and congratulations to him and to his administration and to the many members of that administration who were down here on the Hill, including Mr. Messina, who made many frequent visits, I think, to Members to talk about some of the details.

I am glad I am following my colleague from Idaho, from the Northwest, who spoke earlier, because I think it shows you can be from the same region of the country and have the very same interests but look at this legislation differently--not that I don't share some of his concerns, and I am going to fight to make changes and add to the legislation as it continues to move into conference and in the years after its implementation. I think the Senator has brought up some good points that we need to follow up on.

Controlling health care costs in general is what is driving us to take action tomorrow morning on Christmas Eve. We know we have already seen a 120-percent increase in insurance premiums for the last 10 years; that is, from 1999 to 2009, we have seen a 120-percent increase for Americans and their premium costs. That is something the American people can't afford. And when my colleague from Idaho talks about the increase we are going to see in the next 10 years, he is right. Insurance premiums are going to go up again. This debate is about what we are going to do to try to control those costs, whether this legislation we are discussing today will have an impact in reducing those costs so that maybe premiums aren't going to go up another 120 percent in the next 10 years and make insurance even more unaffordable for the American people.

We know there are organizations that have done multiple studies. We know there is at least $700 billion in waste each year in our health care system. That is according to the Robert Wood Johnson Foundation. We know that is the kind of money that, if we are smarter about our health care choices, we can reduce the costs of health care and improve the system.

Part of this is reforming Medicare and the cost of Medicare because Medicare dollars are one in every five health care dollars today. The more expensive Medicare is, the end result is the more expensive insurance is in general. So it is very important for us to reform the Medicare system, to have provider reform, which this legislation has, and to change the system.

But we also have to deal with the cost of the uninsured because we know that Americans right now who don't have insurance and who go to the emergency room are adding something like $43 billion a year in higher premium costs. That is $1,000 for each family in their premium increases.

I know we can do nothing and have these same costs on the backs of the American people or we can try to change the system, as we are with this legislation, to improve the quality of care and access and to lower the costs for Americans. That is why one of the main reforms I fought for in this legislation was about paying for value, not for volume; that is, to change the fee-for-service system that rewards physicians for how many procedures they do or how many patients they have seen a day but not for the value of the system. So I know that because of the change we have in this legislation, we are going to reward physicians, starting several years from now--something that has worked in my State and many States in the Pacific Northwest that are more efficient at lowering the costs--by increasing efficiency and thereby rewarding those States with better Medicare payments.

What it actually means for individuals is that they are going to get shorter waiting times, they are going to get better access to doctors, they are going to get more coordinated care, and they are going to get better outcomes. Why? Because that is what we are going to incent in these reforms. That is the kind of system that is working in many parts of the country that are cost-effective, that yield better results for individual patients at lower cost.

I wish to thank my colleague from Minnesota, Senator Klobuchar, because it was her legislation that she introduced early this year that really catalyzed this effort to focus on many of the things done at the Mayo Clinic and things that had been done in Minnesota and things we had done in Washington State that said: Let's change this process and save dollars for everybody in America by getting off the fee-for-service systems and going to a system that will be more cost-effective. So I wish to thank her and her State for that leadership and to thank those in my State who have performed the same way on efficiency to deliver this kind of health care reform.

A second cost control of this legislation that I supported that I think will do well for many people in this country is in the area of long-term care reform.

Some people may know that my colleague, Senator Harkin, was on the floor and was talking about long-term care in the insurance sector, but part of what we are doing in this bill is also to incent States to move off of nursing home care and on to community-based care.

Home care juxtaposed to nursing home care is 70 percent cheaper and better meets the needs of individuals. I say that because my State implemented this policy to focus on long-term, community-based care decades ago. The end result is that kind of care has been more cost-effective, less expensive, personalized care, and individuals get to stay in their communities.

I do not know any senior in America who would choose to go to a nursing home over staying in their home or in their community. But they have had very little choice up until now on this legislation to be able to do that because we continue to incentivize nursing home care.

There are some who need nursing home care because they need a higher level of delivery of care, and those people will still go to those facilities. But we will save a lot in our Federal budget, as we look at our Medicare and Medicaid budgets, for the future if we simply take this one action. This bill alone would be worth passing just for this one provision because of how much money it is going to save the Federal Government.

The Basic Health Plan. Many of my colleagues may have heard me talk about the Basic Health Plan as a basis of this legislation that we added in this country. Many people across the country may not understand the Basic Health Plan because they do not have something similar to the Basic Health Plan in their States.

Nearly 20 years ago, the Washington State Legislature passed the Basic Health Plan because it allowed States to negotiate for lower rates. Essentially, it is a public-private partnership. Some people call it a public option. Some people call it a public plan. I call it cost-effective health care delivery. It is cost-effective because we have proven for 20 years that we get 35 to 40 percent lower rates for individuals by grouping into this kind of plan and having the State negotiate the rates. We have been able to have that plan now for 20 years.

This provision of allowing States to do something similar to the Basic Health Plan is a provision we added in the Finance Committee that now will allow every State in America to take money they would get instead for tax credits and use that money in the delivery of negotiated rates for their States. This will allow 70 percent of the uninsured to have full coverage.

What does that mean from a cost-effective perspective? Let's take an example. If this legislation is not passed and we have the current system in America, an individual in 2016 trying to get access to the individual market would have to pay over $5,850, and the individual would pay everything. The government would be paying nothing; that is, if this bill does not pass. That is what would happen.

Let's look at what will happen if, in fact, this bill does pass. You will have the option of going into the exchange. The estimates are by CBO that you will be able to reduce from where we normally would be, about 11 percent, the cost of health care. In that exchange, an individual who would be covered at 200 percent of poverty would end up paying $1,200, and the Federal Government would end up paying $4,000. Already somebody is coming out ahead. They say that sounds good. That sounds like a better deal than me being able to afford this current rate. That would be $5,850. It means I would be uninsured.

The Basic Health Plan has been in operation for 20 years, driving down costs through negotiated rates, as I said, by 35 and 40 percent, and it is a far different picture for the individual.

In our State, the individual only pays $400--$400--versus $1,200. Look at the government. The government rate adds to that, $3,700, but it is cheaper. Why? Because the State has negotiated with insurers and driven down the cost. That is what is missing in the exchange.

While some of my colleagues, I know, think the exchange is going to deliver great clout through the Office of Personnel Management, I hope they are right. I am anxious to see the results of that. But I am unapologetic about the fact that I know the State of Washington has delivered these kinds of savings through negotiated rates and that many States in our country have been the most cost-effective tools for delivering new and efficient health care models, while we at the Federal level still struggle to try to drive those policies.

I know this legislation has cost controls. I know my colleague from Idaho is very concerned about this, and he is right to be concerned. We will be judged by how much we are going to drive down the costs. But the American people should understand that rates are going to go up another 120 percent in the next 10 years if we do nothing. So this legislation is about bending the cost curve. It is about looking at the projected growth, looking at general inflation, and trying to drive health care costs somewhere below what they would be on an annual basis. That is our objective.

We are going to have a challenge in monitoring this legislation, but that is why I am going to fight and cheerlead for the Basic Health Plan and hope that every State in the country takes the option of delivering health care through that kind of negotiated public plan that will allow them to drive down insurance costs.

I hope we can expand the Basic Health Plan in conference to an even more robust plan that would cover more people. It does not make sense to me to continue to subsidize expensive insurance by giving Federal tax credits when I know the bill to the Federal Government and to the individual taxpayer can be cheaper by implementing negotiated rates.

While we have not been able to fully implement that at the Federal level, let's not hold States back. Let States do what they have done best for the last several decades; that is, innovate--innovate more quickly, more effectively, not without a Federal partnership but in a partnership with the Federal Government and in a partnership with a public-private mechanism that I think has been cost-effective for the last 20 years.

Tomorrow, I will be voting in support of this legislation because I believe in the innovation this legislation enables. I know when we passed the Basic Health Plan in the mid eighties people said the same thing. There were concerns about whether we were going to be able to implement the cost-effectiveness. In fact, at that time, it was said that some stakeholders believed it would be an entitlement. Others saw it as essentially a cost-containment measure that would reduce uncompensated care. Some others thought it would demonstrate the viability of government-subsidized health care. Advocates wanted to implement something quickly so they could develop constituencies.

All these things are similar arguments to what we are hearing today and what this debate has been about. But I know that what happened after 20 years of us putting a plan in place is that hundreds of thousands of Washingtonians got more affordable health care. It has been a plan that has worked effectively. No one has tried to dismantle the program from a political perspective. I think working together with the Federal Government we can show more cost containment for the American public.

I thank the Chair. I yield the floor.

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