Health Care Reform
Floor Speech
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Ms. SCHAKOWSKY. Let's talk about rates for a minute. We had testimony from customers of Anthem Blue Cross/Blue Shield, which is owned by Wellpoint. We also had the CEO of Wellpoint, a woman named Angela Braley, who I suppose it was somewhat rude for me to ask her how much money she made. But she was kind enough to answer, and said that she made $1.2 million a year, plus $8 million in stock options. That was how well she did. But then she went on, of course, to absolutely justify these rate increases for their private insurance market.
Three people had testified before she got up there about what these rate increases meant to them. An individual, middle-aged guy, tended toward younger man, who had a preexisting condition. He had seen his rates go up about 75 percent, not quite the 90; but it was too much for him.
A woman who, because her son had a preexisting condition, had such a high deductible they had never even made their deductible, and yet their rates were going to go up even higher.
And another woman who had a preexisting condition, who was unable to keep her policy. And Ms. Braley is making all this money. The company, overall, was making literally billions of dollars in profit.
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Ms. SCHAKOWSKY. Let me comment on this gender discrimination. I think the Speaker of the House, Nancy Pelosi, put it really well today--some of the women had a meeting with her--when she said, being a woman is a preexisting condition.
Mr. GARAMENDI. Exactly.
Ms. SCHAKOWSKY. And the truth of it is that pregnancy, in some cases, is considered a preexisting condition. A C-section, a cesarean section, being a victim of domestic violence is a preexisting condition that could make you ineligible.
If you go out on the private market right now, only about 12 percent of policies actually cover pregnancy.
Women overall are charged about 38 percent more for health care than men are. And in some cases it is as much as 70 percent more than men for health care just because we have slightly different--well, maybe extremely different parts to our bodies. That is so wrong. This bill ends gender discrimination.
But I do want to say one thing about rates that I don't want to forget to say.
Mr. GARAMENDI. Before you go there, let me just make this point. This is the point to the insurance companies. The day the President signs this bill, your discriminatory practices are over. You will not be able to discriminate against Americans because of their health status, their marital status, whether they are male or female. Those days are over.
Listen carefully, health insurance companies. I know why you are spending that hundred million dollars trying to oppose this bill, because you know that the day we pass this legislation, the day this is signed by the President, your discrimination is over and every American is protected.
Please go ahead.
Ms. SCHAKOWSKY. Thank you.
And that is so important to every woman in America, that we will finally be on a par, which under current circumstances isn't good enough, because the insurance companies--why is it that adding 30 million more people isn't good for them? Because they don't want everybody. They want to pick and choose. They want to pick the healthiest people. It really shouldn't be called health insurance. Well, I guess it is, it is only for healthy people. That is accurate.
What we do is we start deciding whether or not rate increases are reasonable or unreasonable. We are not against profits here. We are still doing private insurance. But for heaven's sakes, when you start talking about 50, 60, 94 percent rate increases, they are going to have to justify that. I am proud to have introduced that amendment that says that we are finally going to get a handle on it.
I come from a State where there are no limits, there is no regulatory body that can say how high rates can go. And as you can see, right now--in fact the insurance companies are kind of helping us pass this bill because they are showing us if we do nothing, they are going to keep raising their rates double digits, or almost triple digits and charging people.
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Ms. SCHAKOWSKY. I wanted to point out that our colleague, Representative CAROLYN MALONEY from New York, is head of the Joint Economic Committee, which just did a study, too, on the effects of health care, the current health care problems that women face. One of the things that she mentioned, which I hadn't really thought about, is that a number of men reach the age of 65 and retire and go onto Medicare while their wives, who are often younger than they are, are then left stranded. Because many of them have been on their husbands' policies, so the husbands go into retirement, they have the coverage, and women don't. So we have this period between 50 and 65 where men and women alike are left stranded.
One of the things our bill does is to create a $5 billion pool that would be available for people in those 50 to 65 years to get some help with their health care. So in addition to making sure that women can go onto the exchange.
The other point I wanted to make about women is many women--men too, but women--often work in small businesses. A big beneficiary of this legislation, and it starts right away, are small businesses who are going to get up to a 35 percent tax credit on their premiums. And that will be immediately available to firms that choose to offer coverage to their employees. And a lot of those employees are women. A lot of those business owners are women. So this is another way that our bill will help women and men alike.
Mr. GARAMENDI. Let's take this just for a little more, and then I really want to come back to something that you talked about, and that is the bill that you introduced having to do with the rate regulation process.
Ms. SCHAKOWSKY. Which is part of our bill.
Mr. GARAMENDI. But before we go there, the statistics just came out from the Labor Department that the majority of workers in America are now women. If we keep women healthy, then the productivity of America is substantially increased. And in order to stay healthy, women or men, you really need that health insurance that provides for the preventative care.
And that is in this legislation that there is an expansion of the preventative care services. For seniors, they will be free. For the rest of the public, the insurance policies will have to offer that preventative care. So if we keep women healthy, the productivity of the Nation is going to increase.
So for many, many reasons. We'll come back and deal with the issue of the overall economy in a few moments, but I really would like you to pick up the issue that you raised about rate regulation as a result of the extraordinary announcements that the insurance companies made about their rate increases.
Tell us about what you have introduced.
Ms. SCHAKOWSKY. First of all, it's no wonder that the insurance industry is fighting us tooth and nail and with millions upon millions of dollars in TV advertising because they are making so much money and they do that by raising their rates. And it's really astonishing to me that in this period when the Congress is discussing how we're going to change and make the health care system affordable for people that they have the utter audacity to show their true colors by raising their rates.
Let's look again at your chart.
Anthem Blue Cross customers. That's in California, right?
Mr. GARAMENDI. That's California.
Ms. SCHAKOWSKY. Ninety-four percent rate increases in the last 2 years. Something clearly needs to be done to get them under control. This bill does that. It says that they will have to justify, they'll have to open their books, they'll have to explain, and if they can't, that those rates can be modified, consumers can get a rebate. Enough of their taking such tremendous advantage of American consumers.
Mr. GARAMENDI. I think in the testimony that you talked about here in Congress--and I know in California that when Blue Cross Anthem raised their rates about 39 percent on the average, or 39 percent maximum, about 25 percent on the average, and then had done that previously just in the previous year, so it's actually--the 2-year period is actually 12 months over 2 years, 2 calendar years.
What happened, the profits of the company went from about $300 million to over $2.2 billion profit. And that's probably why this CEO came before--and correctly, because I suspect she was under oath; you don't lie to Congress--told that she now has a $2 million salary plus an $8 million bonus because she was able, by raising the rates, to obtain a higher bonus for herself and obviously an extraordinary increase in the profitability of the company.
Now, if this bill passes, there will be a national standard for rate increases. It also says that if the State governments--and many State governments already do this--that they will be able to continue their rate regulation process.
Now, in California, as insurance commissioner in 1991, there was a proposition passed that set up a rate regulation system for the property, casualty. This is auto and homeowner and business insurance. It didn't cover health insurance. But the effect of that rate regulation over a 20-year period as described by the Consumers Union is over a $30 billion savings to consumers.
Now, I was able to do that because I became insurance regulator. I set up the rate regulator system. The insurance companies are allowed a profit. They have a steady 10 percent profit. The extraordinary swings in the system, eliminated. The extraordinary increases and then some decreases were eliminated. A steady state was put in place so that the market actually became more competitive. There were more insurers. The policy costs were held down for consumers. We were unable to get that for the health insurance industry. We were unable to overcome the political strength, the contributions, the advertising of the health insurance industry. California remains today a State where consumers in the private individual market in California faced this rate increase because there was no rate regulation.
I am so thankful that you have introduced the legislation. This has been the heart and soul of my work for more than 8 years over a 20-year span of time, and if this comes into place, I know from my experience as insurance commissioner, it will be a substantial improvement to the cost of insurance. It will bring rates down, not just over time, but immediately, because the insurance companies no way, no how can they justify the kind of increases that they're imposing upon the public. And that's now in this legislation.
Ms. SCHAKOWSKY. That's right.
And let me say I think truly this is one of the dividing lines between the Democratic majority that's about to pass this bill that stands with the American people versus the Republicans who persistently have stood on the side of the insurance companies that have raised our rates for decades, have cut people off, have canceled policies, have put in preexisting conditions. We want to stop those kinds of abusive practices. That's what they are. It's really abuse. And the Democrats are standing with the American people. It's a really, Which side are you on?
Mr. GARAMENDI. Which side are you on?
Okay. I prepared a chart. I have got my donkey up here. This is the Democratic proposal, and, yes, this is a very partisan thing. There is not one Republican vote for our reform, but here's what our proposal will do: 31 million Americans will have access to insurance, and if you already have an insurance policy that you like, keep it. Nobody is going to take it away from you. Keep your insurance policy.
If you happen to be of low or moderate income, there will be a substantial--the single largest personal tax cut ever is in this legislation. You mentioned it earlier. It is the tax credit. We're not talking about a deduction for medical care. We're talking about a tax credit. It is taken right off your bottom line taxes, and its up to $53,000--or excuse me, $5,300 for a family of four with a $50,000 income. This is a substantial tax cut going right to the middle class, middle America.
Secondly, denial of coverage. We have talked about this over and over again. Those days are over. Hey, insurance industry, it's done. The day the President signs this bill, you will end your discrimination. It's over. Millions of seniors will see the prescription drug--we've talked about that--and millions of Americans will have access to coverage.
We haven't talked about the insurance exchange. But before we go there, you mentioned the Republicans. Okay. Here we are.
Let's talk about the Republican program. What's the Republican program? And this is in the next 10 years.
If the Republicans have their way, 67 million Americans will remain uninsured. That's an increase. Some 40 million, in that range, today are uninsured. But if Republicans have their way, we're talking 67 million Americans.
Single and family health care policies will double over that period of time. We're already paying more than can be afforded today, and if they have their way, the Republicans have their way, you will see a doubling.
Employer premiums, the cost to employers will double.
And you want to talk about the American economy being uncompetitive; this is where you will find it, right here, out-of-pocket expenses. We'll go from $315 billion today to over $564 billion in the year 2020. And insurance availability from small businesses' employers will be cut in half.
That's the Republican program.
Ms. SCHAKOWSKY. That is a better Republican program, because that's if we do nothing, that's what would happen. But actually, the proposal that was laid out by Representative Paul Ryan, the top Republican on the House Budget Committee, he laid out what he called the roadmap that would actually end Medicare for you as an individual.
Mr. GARAMENDI. I hope to be 65. Well, I actually am 65.
Ms. SCHAKOWSKY. Are you?
Mr. GARAMENDI. Yes.
Ms. SCHAKOWSKY. So let's say you're 54. Let's pretend. Are you? Okay. I believed you. I thought you were 54. Okay. So let's pretend you're 54 years old.
Mr. GARAMENDI. Thank you.
Ms. SCHAKOWSKY. And what it means is, when you would get to 65 years old, rather than getting Medicare, you would get a voucher and be told, Go out and buy insurance. There is no more guaranteed Medicare for you. There is no more guaranteed package of benefits. You go out and buy insurance. And that is really privatizing Medicare and destroying it for every American that is currently under 55 years old. When they get to 65, they wouldn't have it.
Mr. GARAMENDI. So what you're saying is this is the do nothing, the best case Republican scenario. But if they actually were able to pass a bill, they're going to take men and women that are 54 now, that in 10 years will be 65 going for Medicare, they're going to take those men and women and toss them into the shark pool with the insurance companies?
Ms. SCHAKOWSKY. That is exactly what I'm saying. And that it would also hurt Medicaid.
Mr. GARAMENDI. So for my Republican friends, this is the best deal they have to offer, the do nothing deal?
Ms. SCHAKOWSKY. The do nothing deal is better than the plan that they say is good for Americans.
Mr. GARAMENDI. Let's take a moment, and we can go back and forth with the dialogue here for a moment about the American economy.
This debate has been focused principally on individuals and families and the effect of this, of our program, and how it will help families. Prior to, oh, the last month or so, there was a debate in America, at least there was a discussion in America about the effect of health care and the cost of health care on the American economy.
I don't have a diagram here. I thought I would bring it, but it didn't get over here. And it's the fact that the American economy, we're now spending somewhere close to 17 percent of all of our wealth, our GDP, on health care. It's an extraordinary number, particularly when you consider what other economies are doing around the world.
Our competitors, Japan, Korea, the European countries, all of the European Union countries, have universal health care. All of the people in their societies, including visitors, have access to health care. Their health statistics are better. They live longer. They don't have as many diseases. Their children don't die as often as our children die. So yet the most any of those countries spend is 11 percent. Most of them are 10 percent or 9 percent of their total wealth. So we are at an extraordinary disadvantage.
One of the numbers I heard is like it's writing a check to our competitors for about $800 billion a year, an advantage that we're giving them in our economy because we're spending so much more on a health care system that is so grossly inefficient in so many, many ways.
Part of what is taking place with the reforms we are putting forth here is an effort to hold down the costs in many, many ways, including making sure that people have access to health care in the most efficient, effective way; not waiting until they are very, very sick, uninsured, very sick, going to the emergency room, which is the most expensive place, and being extraordinarily sick when they arrive but, rather, getting preventative care, getting the early care.
I will never forget a young man about 35. We were doing this debate about 4 years ago in California and he was a speaker at this thing, and he said, I want you to know that I am a glazer. I put glass up in buildings. That's my business. I put glass up in buildings, and I worked for a company for 12 years. We had good health insurance. And the company hit upon a hard time and so they cut the health insurance, and they then decided that they would reduce our health program. I said, I'm a healthy young guy and I've got good health, but I will get my children covered.
So he covered his children, and he eliminated his own coverage. He came down with a cold, simple cold. The cold got worse. He didn't have coverage so he didn't go to get care. He wound up with pneumonia, and he wound up then with a collapsed lung; wound up in the hospital for 3 or 4 weeks, became bankrupt. It could have been taken care of with a very simple antibiotic that would have cost $50. It became a $50,000 event.
This is happening across America. Those 45,000 people that die every year, this is the young man that didn't get care.
This is the extraordinary cost in our system because we don't cover everybody. We intend to deal with that and over time bring down the percentage of our economy that we are spending on health care as we make it more rational, more universal and more efficient.
Ms. SCHAKOWSKY. Those are the tragic stories that result from our health care system. But there are also enormous lost opportunities. One of the things that we know about our health care system is people get locked in jobs. They may dream about creating something, a really innovative product, or starting a new business or becoming a great artist, thinking of a new invention that will transform medicine or energy, but they are stuck in their job. A Canadian was telling me about the incredible freedom that people in Canada have to innovate, to experiment, to create, to do all the things that so many Americans, because of our health care system, are unable to do. If America, the United States of America, wants to be number one in innovation, we want to release that creative spirit and that spirit of innovation which is trapped in a job because of health care.
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