Health Insurance
Floor Speech
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Mr. GRASSLEY. I thank Senator Johanns for his leadership in this area. He has spoken on regulations quite regularly on the Senate floor and also in our caucus, and I thank the Senator for his leadership in that area.
No. 1, I would say there is a certain irony between a President who is going around the country now and talking about, We have got to pass legislation to create jobs, at the very same time as the Senator demonstrated in his remarks that there is a health care bill law being instituted that is making people unemployed.
There is also a certain irony in what the President does and the Secretary of HHS does with what Speaker Pelosi said at the time the bill was up: You know, we have got to pass this bill to see what this bill does. Well, now we are finding out what it does, and people don't like what it does.
You spoke about regulations causing unemployment, and you spoke about 10,000 pages of regulations. That is probably 10,000 pages of regulations out of the 66,000 pages of regulation that we have had this year, and 10,000 of that deals with health care. But think about the other 57,000 pages that deal with other pieces of legislation that are a problem for small businesses--particularly small businesses. I guess it is a problem for all business, but particularly for small business. And so far, a few regulations have been issued adding up to that 10,000 pages.
People can read this 2,700-page bill and understand what is in it, and most of them read it and understood what was in it before Speaker Pelosi said, ``We have got to pass it to find out what is in it,'' and didn't like what was in it. But in this bill, there are 1,693 delegations of authority to write regulations. So if you have 10,000 pages so far based upon the new regulations that have been written, just think what it is going to be like when all of the pages are printed for the 1,693 regulations. So I think we are at the tip of the iceberg so far in this legislation, and the damage that is done to employment and lack of job creation has just started. That is my comment on that.
I have some remarks I wish to make, if it is okay with the Senator; and if he has to go to a committee meeting, I understand.
This is not the first time this situation has happened in Iowa, and it is coming at a time when people need stability. American families are struggling to put food on their table, pay their utility bills as winter arrives, and purchase health insurance as costs are skyrocketing.
In other words, the President has promised: Pass this legislation and it is going to keep health care premiums down, but that is misleading people, and at a time when, as Senator Johanns said, another promise made was: If you like what you have, you are going to be able to keep it.
Well, I don't know exactly the figure--I have got it here coming up. There is a figure of several thousand people in our State who aren't going to be able to keep the health insurance they like and they already have because of this company closing down individual policies.
Unemployment continues to hover around 9 percent and 1 million Americans are underemployed, and here we have a health care bill that is causing more people to be unemployed, as well as not keeping the health insurance they want. With the economic situation our country is facing, Congress must reexamine its actions and realize the errors that were made because of partisan votes. This bill was an entirely partisan piece of legislation, unlike most social contracts in America that have been passed, such as Social Security, Medicare, and Medicaid, civil rights legislation. Those were bipartisan pieces of legislation because it was felt that when you are making this difference in America, you ought to have a broad consensus that major changes such as this ought to be made. But in this particular case, it was very partisan.
I want to go over to what Senator Johanns said about the Des Moines Register article. The American Enterprise Group, an insurance company participating in individual health insurance markets in Iowa and Nebraska, is leaving the market. This action shows the importance of repealing and replacing the health care overhaul passed by Democrats in Congress and signed by the President last year before the situation deteriorates even further. Just think what it is going to be like when we get the rest of these 1,693 delegations of authority to the bureaucracy to write regulations.
American Enterprise notified 110 employees in Iowa and Nebraska that they will lose their jobs sometime during the next 3 years. American Enterprise is leaving the individual health insurance market as a result of the instability caused by the implementation of this health care reform bill. American Enterprise stated it will no longer sell individual health insurance policies because of the regulatory environment created by the health care reform bill.
This isn't an isolated incident for Iowa, this one company, because the Principal Financial Group left the small group insurance market in 2010, and Principal Financial isn't a small Main Street operation. It is one of the major financial groups in the United States, but still, they could not find it to be competitive to stay in the
individual market.
This has cost many Iowans their jobs, while leaving scores of small businesses and their employees to choose from health insurance plans in a health insurance market where there is less and less competition. The regulatory culprit in this incident is a medical loss ratio regulation of this legislation. This regulation requires insurers to pay a certain percentage of premiums in claims.
I know supporters will defend the regulation as ``keeping insurers in check.'' But the real world effect is to force insurers to leave the market, thereby reducing competition and choice available to consumers--not exactly what the President promised, that we are going to have competition, keep price down, and people are going to have choice, they are going to be able to keep what they want if they have it. But in this case, for these people, that isn't a promise kept. That turns out to be a falsehood.
The small group and individual markets happen to be very vulnerable. That is the problem. Insurers risk and set their premiums accordingly. Insurers are making a rational decision to get out of the market because the risks have become too great. Competition is reduced. Costs rise.
Once upon a time, the President promised Americans that if they liked the insurance program they have, they can keep it. This is more evidence that that promise rings hollow.
This recent planned pullout will leave 35,000 individuals without insurance plans that they have grown accustomed to. Forcing people to choose a different insurance option can lead to higher costs and may limit the health care accessibility these individuals have depended on for years. This is especially detrimental when these individuals have preexisting conditions or acute chronic disease. The President specifically promised that if these people want to keep their health care coverage, they would be able to do it with the passage of that law. This is just one of the many examples of how this overhaul has led to broken promises made by the President when pushing through the passage of this legislation in a partisan way.
These problems will certainly continue as more regulations are written. The Congressional Budget Office expects people in the individual market to see an average of a 10-percent to 13-percent rise in premium costs solely based on the passage of the health care law. Does that increase accessibility or affordability? No, of course it doesn't.
Not only has the health care overhaul caused health insurance companies to leave parts of the health insurance market and health insurance costs to increase, it has also put added burden on employers. Some employers will no longer offer their employees health care coverage. Higher taxes and mandates put on employers by the new health care law have left many employers without resources to maintain current coverage for family members of their employees. The negative impact this legislation is having on large employers and those insured by employers was demonstrated by the National Business Group on Health. In its recent annual survey, overall planned costs for larger employers are expected to rise by 6 percent in 2012.
The National Business Group on Health also notes that 7 out of 10 employers will lose their grandfather status, meaning employees will lose their current health care plans and employers will be subject to additional regulations.
According to the same survey, 3 out of 10 employers are unsure if they will continue to insure employees due to the health care overhaul. Other employers will increase the employee share of the insurance premium, and many employers state they will likely lower the level of health care coverage offered to their employees. Walmart, as an example, will not allow many of its new part-time employees to receive health care insurance through the company. Many of these workers are underemployed. They work hard yet do not always have adequate resources to purchase health care insurance on their own, especially as costs in the insurance markets continue to increase due to the new law.
Additionally, many businesses are simply dropping coverage for their own employees because of the extra costs incurred in the legislation. It is more affordable for some employers to drop coverage for their employees and pay the fine associated with the employer mandate. An employer must provide health insurance for their employees if they have more than 50 employees or 50 full-time equivalents. Employers who are required to insure employees will be fined $2,000 per employee who seeks health insurance through one of the exchanges created under the health care overhaul, and any employer-sponsored plan must meet the definitions of HHS on what an adequate plan is under the mandate.
This requirement will increase insurance costs for employers and employees when they must upgrade health insurance benefits in order to meet the standards defined by HHS. Forcing employers to provide health insurance when they have a tough time hiring new employees just adds to the burden employers are facing in this struggling economy. Employers will likely pay their increased health insurance costs by reducing employee take-home pay or by increasing the employee share of health insurance premiums. Also, employers will continue struggling in future years as the Federal Government increases year by year the requirements of health insurance benefits needed to avoid a penalty.
Furthermore, employers already faced with economic uncertainty have to deal with the government regulations that continue to change, adding to uncertainty. An HHS rule released last November allows fully insured group plans to switch insurance providers as long as the insurance benefit provided to the beneficiaries remains comparable. However, this is only for group plans that switched after November 15 last year.
HHS wrote this new rule so more group plans can find affordable coverage and shop around for similar coverage at cheaper rates. But if the group insurance plan carrier was changed before November 15, the plan would lose grandfather status and then be subject to a whole bunch of new regulations. Ironically, what created the need for this new rule was another rule the President's administration and HHS crafted in June last year that stated plans would lose their grandfather status if they switched carriers. This chaotic situation shows what happens when the government is given more authority to regulate the health insurance market.
What we have is a mess. We need to put a halt to the implementation. We need to repeal the law and start over again with commonsense solutions. We need to move away from the regulatory and bureaucratic nightmare that is costing Americans their coverage and too many Americans their jobs.
With 10,000 pages of regulations at this point, just think what it will be like when all 1,693 regulations get written.
I yield the floor.
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