Health Care Reform
Floor Speech
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Mr. GARAMENDI. Thank you, my colleague. I look forward to your continued pushing of this issue.
It was a century ago that Teddy Roosevelt established an effort, the progressive effort, to push back against the rapacious greed of Wall Street and those who were raping the American environment and began the progressive movement. Competition was at the heart of that effort to bring about justice and an opportunity for the small guy to actually make it.
Right now here in Washington, those of us who care about individuals, who care about small business, who care about the future of this economy are pushing back against those very same forces who over the last 65 years have been able to embed themselves firmly in the American system in a way that has created greater profits for them at the expense of people. The health insurance industry has clearly put profits before people, and it's time for us to end that.
With this bill, we force that industry into the same competitive market that we want all of American industry to be in, that is, in the free market competitive system, and to no longer be able to monopolize the health insurance marketplace.
Let me give you an example of what happens in California where WellPoint, Blue Cross of California, has 80 percent of the individual market. Last year, in 2009, they raised their rates an average of 30 percent in that individual market. The result of that was that their fourth quarter profit year to year, 2008 to 2009, increased some 700-fold from 300-plus million dollars to over $2.7 billion. How did they do that? They did that by controlling the marketplace, having a virtual monopoly on the market.
Now, that wasn't enough for them. Because of their market control, they have been able to institute, although it's been delayed, a 39 percent, up to 39 percent and a 30 percent average increase in this same marketplace. It is time, it's absolutely essential, that this two-page, 24-line bill that establishes the antitrust law in this field of health insurance be enacted.
Later, when we come back around with another comment, I will tell you how it worked in California in 1991 when we instituted proposition 103 that eliminated the ability of the property casualty market, automobiles, homeowners, similar products, limited their ability to monopolize and to take advantage of being outside of the antitrust laws.
Let me congratulate you and our colleague from Colorado for putting forth this bill. It is essential.
Mr. PERRIELLO. Not to jump to the end of that story, but before we go on, I do believe when you instituted those reforms in your State, the premium rates increased at one-fifth, one-tenth of the rate of the rest of the country; is that correct?
Mr. GARAMENDI. Well, what happened in proposition 103--and I was the newly elected Insurance Commissioner in 1991 responsible for implementing the law. The insurance industry had the ability to work together to set rates and to monopolize the market in a way that was in a pattern to be able to have a uniform rate system using what was called rating bureaus. We simply outlawed rating bureaus and forced each company to use its own statistical analysis to set rates. The result was, over a 10-year period, a $30 billion reduction in costs to homeowners and automobile insurance consumers in the State of California.
I will tell you this, when you force these companies to compete, when you eliminate their protection from the antitrust laws, you will see a significant rate decrease. And when you have a company such as Blue Cross, that dominates a segment of the market, that is what is outlawed under the normal antitrust laws of this Nation.
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Mr. GARAMENDI. Well, there is absolutely no doubt that it's an axiom of American business, and the American economic system, that competition leads to good things, lower prices and better product. But in the case of health insurance, as we've seen over these last decades, we've seen an increasing concentration and less and less competition. This bill will put competition back into the health insurance sector, and it is desperately needed.
Right now, in California, with Blue Cross of California, where they have 80 percent of the market, they don't need to compete for the customers. The customers are desperate to get coverage, and they've got to take whatever is being offered by a company that has 80 percent of the market. So let's get some competition back in there.
This is also an issue that affects individuals. I know a 23-year-old girl who's no longer on her parents' health insurance, cannot get health insurance, even though she's applied to Blue Cross, because she had acne. And the list of preexisting conditions is three pages long. So if we have competition, by eliminating this antitrust exemption and forcing and ending the monopoly, then I think companies are going to have to go out and search for customers, and that would help us all.
And let us also be very, very aware. I've spent 8 years of my life regulating the insurance industry, and I know this about that industry: It's about profit. It's not about people.
Now, in the property casualty business, it's important to pay attention to people. But it's not life or death, in most cases. In the case of health insurance, it is about a human being's life. It's about the young lady that I saw at a town hall meeting this last week, a 12-year old girl, born with a heart condition, whose father cannot leave the job, cannot go to a better job for fear of losing his health care, knowing that if he lost his health insurance, this young lady would not survive. She would lose her life. That's wrong, and that's got to end.
This bill is one small piece of the larger puzzle that we're working on to put in place in America a health care bill where people come before profit. We can do that. We can do that with this bill, and it'll be very clear in this House tomorrow where we stand.
Do we stand with families who need health care? Do we stand with individuals? Do we stand with young Gloria and her parents and say: End the monopoly. Put the antitrust laws in place so that the health insurance industry has to compete? That's our choice. And we'll see tomorrow where we stand.
Do we follow the tradition of Teddy Roosevelt, a Republican who went after the big corporations and said that in America, competition must be there, who fought back and pushed back against Wall Street? Or do we stand with the health insurance industry? That's our choice tomorrow, and it's there because two Members of this House have put forth a bill: my colleague from Virginia and my colleague from Colorado. I thank you for bringing this before us so that we can identify with the individuals who need health care or, on the other hand, with the insurance industry.
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Mr. GARAMENDI. If I might, Mr. Tonko just reminded me of two cases. One, a New York case last year in which the New York Attorney General brought action against 11 insurance companies in your State of New York who had conspired not only against consumers but against doctors and hospitals to artificially lower their rate of reimbursement to those hospitals.
Now, that followed on the heels of another national case in which insurance companies, the largest insurance companies in this Nation, also conspired against doctors in reducing their rates in a conspiracy. Those kinds of conspiracies are specifically outlawed by the antitrust laws of this Nation and this bill. I thank you so very much, Mr. Perriello and Ms. Markey, for bringing this to our attention, bringing this bill here, because the kind of conspiracy that we have evidence that exists in America today will be outlawed at the Federal level.
These other cases were brought in State courts where there are antitrust laws that prohibit these kinds of conspiracies to harm the consumers or the providers of services.
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Mr. GARAMENDI. My colleague from New York, thank you for bringing to our attention, did you say $24 billion for the executives of the five largest?
Mr. TONKO. Million.
Mr. GARAMENDI. Five biggest.
Mr. TONKO. The five largest insurers being compensated $24 million.
Mr. GARAMENDI. That ought to be enough. In fact, that ought to be about a hundred times too much. Competition.
You also brought out the word ``progressive.'' It was Teddy Roosevelt, in the early part of the last century, that really created the early progressive movement and the trust busters, recognizing that companies like Standard Oil and others had dominated the market and were squeezing, driving down and harming small businesses and individuals, and tried to set about a better balance. And they did.
That long tradition of standing up for families, working men and women, is a tradition that we now hold on the Democratic side of this House. It is what we are trying to do in so many different ways here with this bill, ending a 65-year opportunity that the health insurance industry has had to monopolize, to engage in conspiracies to set prices, and to harm the public not just in their economics and in their family income, but in their ability to sustain their life.
We have a chance tomorrow to follow a long tradition of righting the balance, of pushing back against those forces that would dominate us economically, socially, and, in this case, in our very health. So tomorrow is a very, very important day. But it is also a day when we
can continue the process that we have seen this last year in this Chamber, where the Democratic Party is pushing back against those forces.
In December, we put forth a health care bill that would move us towards accessibility, towards accountability from the health insurance industry, and to affordability. We pushed back. Here is one more push that we are making tomorrow.
We also pushed forward on regulating Wall Street. There are those over here I heard earlier this evening that said that this thing began in 2009. It didn't. It began because the previous administration refused to push back against the rapacious greed of Wall Street, and we wound up with the collapse of the financial industry. We need to right that.
We are doing that with the bill that we put out here in December on regulating Wall Street, and now following up with taking money back from Wall Street that was put out there by the TARP and sending it to Main Street in our jobs bill; righting the balance in America so that young families, hardworking Americans have a chance, in this case, to get health care, to get a job in the case of Jobs for Main Street. And for Wall Street, the days of unbridled opportunity for greed are over. And it is time for them to also hew to the lines of correct American competition, not greed--greed has never been good--but, rather, to provide the financial services that this economy needs.
We have a choice tomorrow. One more step along a policy of righting the ship of this Nation's economy, pushing back against the greed, pushing back against the rapacious attitudes that have dominated the American economy for the last decade.
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Mr. GARAMENDI. Mr. Tonko, as I was listening to you, several thoughts came to mind. You were listing a series of activities that are clearly contrary to the normal competitive marketplace, price fixing and the like. There is also an issue in this health insurance sector called vertical integration, in which these large companies not only monopolize the market, but they have now reached into the various other aspects and vertically integrated, owning consulting companies, actuarial companies that provide them with the basic data where
they can more easily manipulate that data, now moving into the pharmacy benefit programs and gaining control over the entire marketplace. That is one of the activities that would be able to be attacked by the Federal Attorney General if this law were to go into place.
The monopolization of the market, as I described in California where Blue Cross has 80 percent of the individual market, leads to a terrible situation. And I would just like to bring us back to why we are doing all of this, why we are doing the health care reform that is now going to be taken up in the summit on Thursday of this week, why we are doing this particular bill. It is really about Gloria, that 12-year-old girl that I talked about who was born with a heart condition and also has diabetes. Her father is desperate to hang on to his job and the insurance policy that comes with it because they know--the mother, the father, and Gloria--know that should he lose that job, that family is uninsurable. And that young girl who has had to fight for every treatment in her 12 years to sustain her life is an opera singer, a Class A student, and has a future ahead of her. But if they have no health insurance, she is going to die because she needs constant care.
I can talk about a carpenter who retired because he couldn't continue to work who I saw on his deathbed saying, I just want to live long enough so that my wife can turn 65 and get Medicare, because if I die before that, she has no insurance, and she has a preexisting condition.
There is hurt upon this land. People are suffering for lack of a job, and they know that if they lose that job, they will lose their health care and they will lose their wealth and they may very well join the 40,000-plus Americans that lose their lives for lack of health insurance.
This side of the aisle, the Democrats, are pushing back against these situations. And tomorrow, one step, one more step, one more pushback and saying, in America, the present system is wrong, and tomorrow there will be an end to the ability of these insurance companies to monopolize the market, to engage in anticompetitive activities, price setting, vertical integration, and the rest.
I want to congratulate, I want to thank Mr. Perriello and Ms. Markey for what you are doing tomorrow in your legislation.
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