Statements on Introduced Bills and Joint Resolutions

Floor Speech

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Mr. CASSIDY. Mr. President, the Supreme Court is about to rule on King v. Burwell. This decision is a question of a plain reading of the law, which is that subsidies shall only be given to those who reside in States which have established State exchanges. That is the plain reading of the law. The administration maintains that, no, ``States'' doesn't mean ``States,'' but, rather, it can be an exchange set up either by the State or the Federal Government.

Presuming the Supreme Court decides that a plain reading of the law is correct--that for a resident of a State to receive a subsidy, they have to reside in a State that has established an exchange--there are 37 States in which those currently receiving subsidies will lose their subsidies. This is important because under ObamaCare we have seen a dramatic increase in the cost of health insurance premiums. So many people who formerly would have been able to afford an insurance premium no longer can without the subsidy. What this means for that person in a State such as Louisiana is there will be someone in the middle of chemotherapy who can no longer afford their insurance without a subsidy. The insurance has been made so high because of ObamaCare that that patient is no longer able to afford her insurance and she is at risk of losing her coverage because the administration illegally implemented the law.

This is where we are going into the Supreme Court decision. Let me kind of now start on a different tack.

The President's health care law, ObamaCare, the Affordable Care Act, has continued to be singularly unpopular. A recent ABC poll showed that only 39 percent of Americans approved of the law. That is an alltime low--10 percent lower than it has been.

One can ask why it would be unpopular and why it would be particularly unpopular now. I think the reason it is unpopular in general is that ObamaCare is a coercive Federal Government program, that if you don't bend your will to the Federal Government, the Federal Government will penalize you. That is not how Americans view their relationship to the Federal Government. We don't expect the government to tell us what to do. There might be income taxes, which we pay, and there will be drafts in times of war, such as World War II, but in general, aside from those two things, the Federal Government should just stay out of our lives. In this case--ObamaCare--the Federal Government gets right in the middle of that which is most personal, and that is our health care.

I think the reason ObamaCare is particularly unpopular now is because of the premium increases that have resulted because of ObamaCare. Here are some headlines: CNN, ``Obamacare sticker shock: Big rate hikes proposed for 2016''; AP, ``Many health insurers go big with initial 2016 rate requests''; AP again, ``8 Minnesota Health Plans Propose Big Premium Hikes for 2016''; the New York Times, ``In Vermont, Frustrations Mount Over Affordable Care Act''; and the Washington Post, ``Almost half of Obamacare exchanges face financial struggles in the future.''

In my own State, insurers are asking for 20 percent increases, and this is on top of premium increases that have resulted from the previous few years.

Indeed, the President likes to speak about how health care costs under ObamaCare have mitigated--health care costs. Actually, that began in 2007 before ObamaCare passed. But since ObamaCare passed, it has been true. Health care costs have not risen as they did in the past. Health insurance costs have gone up dramatically. The remarkable story of ObamaCare is that there is now no relationship between health insurance cost and health care cost. The insurance companies, with the regulations imposed by ObamaCare, are charging far more for insurance than one would expect because of the health care costs. Of course, the President chooses to speak of the cost of care, not the cost of premiums, but for the average person, it is the cost of premiums which is making her so frustrated with this law.

That brings us back to King v. Burwell. At this point, I am offering today, along with several original cosponsors, what we call the Patient Freedom Act. We give patients the power which ObamaCare took from them, and we give them the power by lowering the cost. We lower the cost by eliminating the mandates that are part of ObamaCare. We return power over insurance to the States, with the rationale that she who governs best governs closest to those who are governed. The insurance commissioner in that State should be able to decide what the person in their State wishes to have for their policy, not a Washington bureaucrat. And we give patients knowledge. We give them price transparency. They should know the cost of something that is ordered for them before they have the procedure performed as opposed to learning afterward. We give them portability, and we give them protection against preexisting conditions.

I and others--I think the Presiding Officer as well--have campaigned for several cycles that we were going to repeal and replace ObamaCare. In this situation, the Supreme Court will repeal a portion of ObamaCare--not all but a portion--in 37 States, and this is the plan that will replace that portion of ObamaCare which is repealed.

We like to look at it this way. We begin to plant the seeds. Now, in those 37 States, those 8 million people affected by the Obama administration's illegal implementation of the subsidy law--we make it better for them. We plant the seeds so that over time other aspects and eventually the entirety of ObamaCare will be replaced with something which gives the patient the power as opposed to a Washington bureaucrat.

Let me lay out what we do. King v. Burwell goes against the administration. The Supreme Court rules that the law has been implemented illegally. States will then have a choice: They can either establish a State exchange if they wish for the status quo of ObamaCare, the State can do nothing, which means in that State all of ObamaCare goes away for the private insurance market, or they can choose the Patient Freedom Act, which is the market-based reform that we think gives the patient the power a
[Page: S3930]nd not the bureaucrat.

Now let me compare the two. I mentioned how under the Patient Freedom Act costs are lowered by repealing mandates. For example, under ObamaCare there is an individual mandate with a coercive penalty. The Patient Freedom Act does not have one. There is an employer mandate penalty. Yes, under ObamaCare the employer is penalized; under the Patient Freedom Act, no. There is the Federal essential health benefits mandate. Under ObamaCare, a Washington bureaucrat tells somebody that which they must purchase. In the Patient Freedom Act, we return that to the State insurance commissioner. We do not have these mandates. I can go on down the list, but the reality is that ObamaCare, coercive mandates; the Patient Freedom Act, no.

The money we make available to the States we take from the tax credits that ObamaCare would give to those in the State--those who are eligible and signed up--we take the Medicaid funding that would be available in the State for Medicaid expansion, and we combine those two for the total allocation that will go to that State.

Now, some would say: Wait a second. The Federal Government should not be in the business of helping people with health insurance. I say the Federal Government is deeply in that business already. If you look under public insurance, there is Medicare, Medicaid, CHIP, VA, TRICARE, and on and on where the Federal Government is providing health care benefits for a substantial portion--over 25 percent--of Americans. These are those Americans who get their insurance through the employer-sponsored insurance, where the employer and the employee can contribute to their insurance but they get a tax break on the purchase. That tax break averages about $1,700. We are speaking about that remaining group who purchases their insurance for themselves. We lower their cost by equalizing the tax treatment between the two. It is the same sort of tax break that those with the employer-sponsored insurance receive. We will now offer that same tax break to these folks and in so doing achieve that conservative goal of equalizing the tax treatment of those purchasing employer-sponsored insurance as opposed to purchasing on their own.

The funding goes to the patient. I am a doctor. I have been working in a public hospital system for 25 years. I learned working as a physician in both the private setting but also principally in the public hospital setting that whoever controls the dollar has the power.

That makes no sense whatsoever. It is one of the major flaws in ObamaCare. Since these subsidies are based upon estimated earnings that are later reconciled through tax returns, Americans are facing onerous tax liabilities and penalties as a consequence.

Let me explain further how this wage-lock occurs, because increasingly Americans are going to be running into this problem. Let me give you an example. Last year, the least expensive premium for a silver plan to cover a 50-year-old individual in Aroostook County, ME, cost $6,300 through an Affordable Care Act exchange. But that, obviously, is not what most individuals pay. Instead, they receive a subsidy that phases out based on their estimated income. But again, the subsidy completely disappears at a sharp cliff at 400 percent of the Federal poverty level.

An individual whose estimated income is just less than this cliff, say, one that is earning $46,500, will pay 9.5 percent of his or her income, or $4,370, for insurance and the rest is covered by the Federal tax credits. But if it turns out that this individual actually made a bit more than 400 percent of the Federal poverty level--let's say the individual made $47,000--then, he or she would be on the hook for the entire $6,300 premium. In other words, a 50-year-old who makes just $500 more than he or she estimated will have to pay $2,000 more at tax time for health insurance in the exchange.

Think about what this means for a self-employed individual whose income fluctuates not only from year to year but from month to month. This is a financial nightmare to try to figure out.

This cliff does not just affect individuals who get their coverage through the ACA. Cliffs appear over and over in the design of the subsidies under ObamaCare, and couples and families will face them at different levels of income as their household size changes. What will these bait-and-switch health insurance premiums do to incentives to work harder, to earn more, to accept promotions? If you accept a promotion at work and then your income goes over that magic 400 percent of poverty threshold, you are going to lose your entire subsidy. You might well decide to turn down that raise at work or that opportunity to be promoted to a better job. What kind of system has been designed to discourage people from moving ahead in the workplace?

In the State of Maine, so far we have learned that at least 1,000 Maine families have lost their subsidies completely because they were in that situation where their income went over that threshold. Another 1,000 Mainers are finding out that they are losing part of their subsidy and are going to be on the hook for paying more money.

I will say to my colleagues that you are going to start hearing this in your States, and it particularly is going to affect people who are self-employed and who have to estimate what their income is going to be. Through no fault of their own--unless they are going to turn down work--they may well go over the threshold amount and lose their subsidy altogether. Remember, it takes just $1 in additional earnings at the 400 percent of poverty level to lose your subsidy altogether.

Let me give you an example of a Maine couple who contacted my office. They discovered to their horror that when they filed their taxes, they had earned more than the threshold and they owed $13,000 to the IRS for the health insurance they received through the ObamaCare exchange, on top of the $4,000 that they had been told their exchange coverage would cost.

Imagine finding out that because you worked a little harder, because you earned a bit more money, you now unexpectedly owe an extra $13,000 to the IRS because you lost your subsidy. The Patient Freedom Act would put an end to the bait-and-switch premiums that are built into the ObamaCare exchanges.

One of the reasons I opposed the Affordable Care Act was that there was nothing affordable about it. I predicted at the time that it would lead to fewer choices and higher insurance costs for many middle-income Americans and small businesses.

A ruling in favor of the plaintiffs in King v. Burwell would prompt Congress to protect those who would lose their subsidies, but it would also provide the opportunity to give States the option to replace the Affordable Care Act's poorly crafted mandates with patient-directed reforms that contain costs, provide more choices, and still provide assistance to those who need it most.

The Patient Freedom Act does exactly that. I urge my colleagues to support it.

Now, if it is a bureaucrat who controls that dollar, then the bureaucrat will dictate the type of facility the patient is seen in. If the patient controls the dollar, the hospitals are going to compete for her business, and she dictates the type of facility in which she is seen. So in the Patient Freedom Act, the money goes directly to the patient. It can go through the State. The money can be granted to the State on a per-patient enrolled grant type; and in so doing, the State would then distribute--and there are advantages for the State to do the distribution--or, if the State does not want that responsibility, it can be a Federal tax credit that goes into a health savings account that the patient controls. But either way, the patient controls the dollar. The patient has the power, not a bureaucrat.

Here is a brief example of how it will work: Here is the health savings deposit that goes into a health savings account. There will be some reforms in the bill that allow the patient to either use it as her contribution--as the employee's contribution on a employer-sponsored plan. She can directly contract with a provider network. She can purchase commercial insurance or, if she does nothing, the State has the option of creating a system, where someone is enrolled unless they choose not to be.

Again, I am going to call upon my experience as a physician. Think of a person who might be schizophrenic, homeless, living beneath a bridge. He is never going to do what ObamaCare mandates, which is to get on the Internet and fill out a 16-page form. It is just not going to happen. I have been there, I have done that. I have been in the ER in the middle of the night when a patient has come in with some acute medical or trauma condition. Under this system, though, the State could have this person enrolled unless they choose not to be.

So with the health savings account, they would have first-dollar coverage for a visit should they decide to go into an outpatient clinic for a foot that was infected. If they have some major issue and they are brought to the hospital, the catastrophic policy would then give them the coverage for that hospitalization but also protect the hospital, the doctors, and other providers from taking a total loss--which, by the way, society ends up paying for--because they have no coverage for that hospitalization. So with this system, we can achieve higher enrollments than are achieved under ObamaCare.

Last, let me talk about one more way in which we think patients will have the power. One, they will have power portability. Every year, in an open enrollment season, if the patient wishes to change plans, she may, without penalty. Secondly, she will be protected against preexisting conditions. The only rating that will be required for premiums will be for geography and age. A 57-year-old will get a bigger credit than a 20-year-old. But aside from age and, again, geographic--because it is more expensive to receive care in Manhattan, NY, than Manhattan, KS--that will be the only differences allowed. Lastly, there will be the power of price transparency.

Currently, a woman goes in with her daughter, the doctor orders a CT scan, and the patient has no clue what the cost of that CT scan is. Now, it can be anywhere from $250 to $2,500 or more. I pick those numbers because the LA Times had an article a couple years ago, they found that the difference in cash price for CT scans was $250 to $2,500. The only way someone could know is if they were an investigative reporter and able to find out, not if you are a mom with a sick child who needed a CT scan. For me, it is going to be great when the mother can take her smart phone, scan a QR code, and pull up something which says: CT scan $250 here, $2,500 there. I am going to make my decision based on some combination of cost, quality, and convenience. I will pick based upon my values on where to go. It is not a Washington bureaucrat, it is a mother who is going to make that decision.

Again, continuous coverage protects those with preexisting conditions, and we mentioned the price transparency. In this way, Republicans will give States the option to choose. Again, they can stay in ObamaCare if they want. They have that option now. They can do nothing, and it goes away if the Supreme Court rules that the subsidies have been implemented illegally or they can go with the Patient Freedom Act--the Patient Freedom Act--which gives patients the power by lowering costs, lowering the cost by eliminating mandates, returning power over insurance back to the commissioners who govern closest to those who actually will be using the insurance, and then giving the patient the power of portability, protection against preexisting conditions, and the power of price transparency.

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