Health Care Reform
Floor Speech
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Mr. TONKO. Thank you, Representative Markey.
It is so important for us to underscore the value of competition that drives the American economy. We've seen it in so many industries and where competition provides choice for consumers. I think it's very interesting to note that over the last decade, as average households have stayed flatlined and as insurance premium costs have more than doubled, the consumers have had no choice in some situations. They have had to tolerate price fixing or insurance groups dividing up territories amongst themselves or certainly just subterfuging any of their competition out there.
I think that it's time for us to make certain that there is the competition. Certainly by moving with this reform to McCarran-Ferguson, we now can hope for a better day for America's insured. It is so important for us to make certain that this 65-year-old prohibition is undone. And as Representative Perriello said, this costs government nothing. It is the sort of reform that I believe can drive wonderful benefits for the people of this country as they have looked at these exorbitant prices where we've seen huge increases, where there's a need for a stronger bed of oversight, of regulation, making certain that the double-digit percentage increases are not tolerated, are not just rubber-stamped in a way that really engages the price fixing, that engages the efforts out there of greed that with that monopoly power have enabled them to really sock it to our health care consumers. We need reforms. We need them now. And I think this is a wonderful effort.
I want to applaud Representative Perriello and you, Representative Markey, for putting forth this initiative. I think it's going to be something that meets with success in this Chamber, and then we're hopeful that we can continue to march forward for that progress to be struck.
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Mr. TONKO. Representative Perriello, you know, I earlier heard Representative Markey speaking of the 400 mergers, and you talked about that resulting in 95 percent of the markets being concentrated. That simply states, no choice, no choice for the consumer. That means a runaway with costs that are going to be so inflated.
When you look at some of the stats out there, the large five, the big five insurance companies, you know, we look at that profit column, at some $12-plus billion, a 56 percent increase from calendar year 2008 to 2009. $12-plus billion. You know, those are benefits that could be shared.
As you said, you know, we understand it's a capitalist society. There are efforts out there, obviously, to be productive and be profitable. But 12 billion, a 56 percent growth, when average household
incomes are flatlined, is very difficult to absorb for our constituents, for consumers out there.
And then to even look at the track record over the last decade from 2000 to 2009, to know that 250 percent increase was the outcome for profits. The time is more than past.
And as all these commissions had indicated, the Association of Attorneys General, all speaking out in defense of this. It's no wonder everyone is promoting this reform.
And I, again, want to congratulate the two of you for putting this measure out there, bringing it to the floor so that we can now make a statement, in a bipartisan fashion. We hope that tomorrow when this vote is taken there will be this effort to speak in defense of consumers who have taken it on the chin. These profit margins are cutting away at their own doability as a household. We can stretch that household budget by reducing those insurance premium costs, and that's what this effort is about: Accountability, affordability, accessibility, quality of care.
This is a major cornerstone of reform that is outside that package that we have been trying to assemble, but this is something we can do immediately, and as has been stated so many times over, without any cost to government. So this is a win for the consuming public out there. And they deserve this sort of effort because they've gone far too long where this injustice has been allowed to occur time and time again because of that exemption for an industry, when all other industries out there are covered by the forces of the antitrust legislation from McCarran-Ferguson's Act of 65 years ago. So it's time for change. It's time for reform, and I believe this brings balance to the equation and is the rightful thing to do.
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Mr. TONKO. This dynamic of competition, as the gentleman from California makes mention, competition is what drives the benefit for the consumer. Competition is stymied by the fact in my home State of New York three companies, three insurers, have asked for or have sent dividends to corporate parents out of State that fell just shy of a billion dollars last year. Just three groups. Now, would they have the luxury to do this if they were pressured to compete, to hold on to their market? I don't think so.
This year, those same three companies are looking to send $1.2 billion outside of the State to corporate parents. This is the sort of action that takes hold where you're not encouraging anybody to compete to hold on to their market and we're exporting these billions of dollars. My State, I am certain, is not alone in that phenomenon, and it is hurting the consumers of New York State simply because there is this mass exodus of dividends that are being paid out to the corporate parent firm.
So you look at the record in New York and what has happened over a 10-year stretch from 1999 to 2009, and that amassed to some $5 billion worth. This is a pattern that is becoming more and more pronounced, that is again not putting pressure on the system to respond in competitive measure. And that dynamic being pulled out of the equation then causes hardship for the very people that we need to hold down costs for health care insurance; $1.2 billion requested this year from just three groups to send those dividends out of the State.
These are reports that are disturbing, these are the forces that are driving this thinking to bring about the reform that is introduced in the Perriello-Markey legislation.
Again, to our Representatives here who have thought in such progressive terms, I say ``thank you'' because this will be a major piece of reform that brings instant benefit, that induces competition into the process, and it doesn't cost government a dime.
I am very happy that this effort is being made in this House, and I applaud the sponsors. I applaud all who are working to make this happen
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Mr. TONKO. Thank you, Representative Perriello.
When we start talking about this competition, we wonder about the benefits that are so drastically needed because we see now that some companies are looking at charging a 39 percent increase for the premium; 39 percent. That is a gross, gross, difficult outcome for consumers in this country.
What is driving it? Well, yeah, there is lack of competition, but that lack of competition, that allows for a rather comfortable zone to increase CEO salaries. And when we look at the big five again, the largest insurers, the data shows that the CEOs were compensated up to $24 million in 2008. That is, I think, an outcome driven by a lack of competition. That pressure isn't there to respond, and so you just easily pass it over to the consumer. And without any sort of reform here, this will continue to grow.
I know that there had been many suggesting from studies that are very much respected that the average family plan will be increased by about $1,800 per year. Today, that is an average of $13,000, I believe, for a family plan. Well, in a short decade, we are just going to transpose those numbers, so 13 grows to 31. 31,000 is a train wreck waiting to happen. It is unsustainable. It is the sort of outcome we get when we don't take the bull by the horns and say, look, there is a simple reform. It is straightforward. It is basic. It calls for the all-American sense of competition, the all-American quality of competition, a good thing.
If you are a strong business, you welcome competition. It is good for the soul. It is good for the consumer. And so let's open this process to competition. Let's avoid some of these hefty increases in CEO salaries, or profit margins that are record breaking, and all sorts of insensitivities, gross insensitivities to the quality of care and the affordability of care for individuals and families out there.
The time has more than come. It is an important measure that we take before us tomorrow in this House. It will be a moment in history, I am convinced, so as to move forward and respond in compassionate measure, in reasonable terms, to bring those scales of justice back into a balance that speaks to a favorable outcome, a progressive path that we will follow.
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Mr. TONKO. I think the special interests are so glaringly obvious, my colleagues; the fact that they can escape these Federal investigation and enforcement measures, measures of antitrust laws that make them subject to Federal prohibitions against bid rigging or price fixing or dividing up market territories.
These are tools in the tool kit that don't serve consumers well. And as if the escaping isn't egregious enough, they can then move to prejudice against by not insuring because of preexisting conditions. We have talked about some of those more easily recognized or imagined conditions--heart disease, diabetes, high blood pressure, cancer--but it gets into the realm of the very loosely defined preexisting conditions--acne, domestic violence, overweight for toddlers, or what have you, obesity in toddlers. It is all set up in their favor. And I believe that there needs to be balance. And as Representative Perriello said, there are undeniably sound players, good, good behaviors out there that respond well. But for those who are taking advantage of this exemption that has allowed to continue for far too long, the time has come to put up the stop sign and say it's over, it's a new set of rules come your way.
And the Attorneys General of this country obviously know something, they see it front and center, they see it in cases that they have to defend for the people in their respective States. And so they're advising us, in bipartisan fashion, they are advising us that a better day can be had, and here is the opportunity. A simple vote--hopefully a bipartisan vote--on a very succinct measure, one easily understood. It is time to end a 65-year stretch of what is I think a special response to an industry.
We talk about the deep pockets, we talk about the special interests, we talk about the force that they have had on this process as an industry. Well, when I think about the recent Supreme Court decision to allow for open-spigot season and pour more dollars into the process to influence legislative outcomes, to have more pressure on the process, to perhaps deny progress, I get very worried about this measure hanging around for far too long. I think the time has more than passed to get this done. Let's get it done in the sort of way that acknowledges that we have tough work to do here. We have people hurting across this country, not being able to afford health care coverage, not being able to sustain what are these ever-spiraling increases for health care premiums. Let's do them the big, big benefit of changing this law and voting ``yes'' tomorrow in the activities that will take place in the House.
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Mr. TONKO. I know that we are coming close to the end of our hour. I just want to state that perhaps, if this unfairness were not being levied upon, thrust upon American families, maybe this moment of reform wouldn't be happening, but because there is that unfairness, the propensity to push for this reform has now reached a very solid height.
I think that, as we go forward, as we are waxing anecdotally, what comes to mind for me is a couple whom I know who was hit with a catastrophic illness--a husband and wife team. Their premiums increased by 37 percent over the course of 2 years, and they are left now with one wage earner in the family. Both had been working. As the wife of this couple was impacted by catastrophic illness, they are now left with one wage earner and with a pile of debt that is $18,000 worth of uncovered medical expenses.
So that's what this is about. That's what feeds the passion of this debate.
I have to commend the leadership of this House. Speaker Pelosi has been vigilant about pushing the reforms, along with our respective Chairs from Education and Labor, from Ways and Means, from Energy and Commerce, and about really making it happen, about moving forward to make certain that the people's voices are heard here in this debate.
When we talk about some of the unfairness, about some of the imbalance in the outcomes, what about the medical loss ratio? Fewer and fewer premiums collected, percentage-wise, are returned to direct care for consumers. It was 95 percent a decade-and-a-half ago. Today, it's below 80 percent. So there is a reason for a number of these issues to come forward. There are a number of reforms to be advanced.
This bill, the Perriello-Markey bill, hopefully, will be approved tomorrow in a bipartisan vote. I am pleased to stand here in support of this measure. I want to thank all of my colleagues for the input that they are providing for this historic moment to happen.
I thank you very much.
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