[House Hearing, 117 Congress]
[From the U.S. Government Publishing Office]
EXPLORING PATHWAYS TO AFFORDABLE,
UNIVERSAL HEALTH COVERAGE
=======================================================================
HEARING
Before The
SUBCOMMITTEE ON HEALTH,
EMPLOYMENT, LABOR, AND PENSIONS
OF THE
COMMITTEE ON EDUCATION AND LABOR
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED SEVENTEENTH CONGRESS
SECOND SESSION
__________
HEARING HELD IN WASHINGTON, DC, FEBRUARY 17, 2022
__________
Serial No. 117-39
__________
Printed for the use of the Committee on Education and Labor
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Available via: edworkforce.house.gov or www.govinfo.gov
__________
U.S. GOVERNMENT PUBLISHING OFFICE
56-628 PDF WASHINGTON : 2025
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COMMITTEE ON EDUCATION AND LABOR
ROBERT C. ``BOBBY'' SCOTT, Virginia, Chairman
RAUL M. GRIJALVA, Arizona VIRGINIA FOXX, North Carolina,
JOE COURTNEY, Connecticut Ranking Member
GREGORIO KILILI CAMACHO SABLAN, JOE WILSON, South Carolina
Northern Marina Islands GLENN THOMPSON, Pennsylvania
FREDERICA WILSON, Florida TIM WALBERG, Michigan
SUZANNE BONAMICI, Oregon GLENN GROTHMAN, Wisconsin
MARK TAKANO, California ELISE M. STEFANIK, New York
ALMA S. ADAMS, North Carolina RICK W. ALLEN, Georgia
MARK DeSAULNIER, California JIM BANKS, Indiana
DONALD NORCROSS, New Jersey JAMES COMER, Kentucky
PRAMILA JAYAPAL, Washington RUSS FULCHER, Idaho
JOSEPH D. MORELLE, New York FRED KELLER, Pennsylvania
SUSAN WILD, Pennsylvania MARIANNETTE MILLER-MEEKS, Iowa
LUCY McBATH, Georgia BURGESS OWENS, Utah
JAHANA HAYES, Connecticut BOB GOOD, Virginia
ANDY LEVIN, Michigan, Vice Chairman LISA McCLAIN, Michigan
ILHAN OMAR, Minnesota DIANA HARSHBARGER, Tennessee
HALEY M. STEVENS, Michigan MARY MILLER, Illinios
TERESA LEGER FERNANDEZ, New Mexico VICTORIA SPARTZ, Indiana
MONDAIRE JONES, New York SCOTT FITZGERALD, Wisconsin
KATHY MANNING, North Carolina MADISON CAWTHORN, North Carolina
FRANK J. MRVAN, Indiana MICHELLE STEEL, California
JAMAAL BOWMAN, New York CHRIS JACOBS, New York
SHEILA CHERFILUS-McCORMICK, Florida
MARK POCAN, Wisconsin
JOAQUIN CASTRO, Texas
MIKIE SHERRILL, New Jersey
ADRIANO ESPAILLAT, New York
KWEISI MFUME, Maryland
Veronique Pluviose, Staff Director
Cyrus Artz, Minority Staff Director
------
SUBCOMMITTEE ON HEALTH, EMPLOYMENT, LABOR, AND PENSIONS
MARK DeSAULNIER, California, Chairman
JOE COURTNEY, Connecticut RICK ALLEN, Georgia,
DONALD NORCROSS, New Jersey Ranking Member
JOSEPH D. MORELLE, New York JOE WILSON, South Carolina
SUSAN WILD, Pennsylvania TIM WALBERG, Michigan
LUCY McBATH, Georgia JIM BANKS, Indiana
ANDY LEVIN, Michigan DIANA HARSHBARGER, Tennessee
HALEY M. STEVENS, Michigan MARY MILLER, Illinios
FRANK J. MRVAN, Indiana SCOTT FITZGERALD, Wisconsin
ROBERT C. ``BOBBY'' SCOTT, Virginia VIRGINIA FOXX, North Carolina (Ex
(Ex Officio) Officio)
C O N T E N T S
----------
Page
Hearing held on February 17, 2022................................ 1
OPENING STATEMENTS
DeSaulnier, Hon. Mark, Chairman, Subcommittee on Health,
Employment, Labor, and Pensions............................ 1
Prepared statement of.................................... 5
Allen, Hon. Rick, Ranking Member, Subcommittee on Health,
Employment, Labor, and Pensions............................ 7
Prepared statement of.................................... 9
WITNESSES
Reich, Robert, Chancellor's Professor of Public Policy,
University of California at Berkeley....................... 10
Prepared statement of.................................... 12
Benjamin, Dr. Georges C., Executive Director, American Public
Health Association......................................... 19
Prepared statement of.................................... 21
Blase, Dr. Brian C., President, Paragon Health Institute..... 35
Prepared statement of.................................... 37
Keith, Dr. Katie, Director, Health Policy and the Law
Initiative................................................. 58
Prepared statement of.................................... 60
ADDITIONAL SUBMISSIONS
Chairman DeSaulnier:
Statement from Families USA.............................. 98
Statement dated February 17, 2022, from the National
Association of Health Underwriters..................... 170
Ranking Member Allen:
Statement dated February 17, 2022, from American Hospital
Association............................................ 106
Statement dated February 17, 2022, from The Coalition To
Protect and Promote Association Health Plans........... 109
Statement dated February 17, 2022, from the Partnership
for Employer-Sponsored Coverage........................ 119
Letter dated February 17, 2022, from the Corporate Health
Care Coalition......................................... 122
Letter from the Council for Affordable Health Coverage... 124
Letter dated June 10, 2019, from the Job Creators Network 129
Letter from National Association of Health Underwriters.. 131
Letter dated February 17, 2022, from NFIB................ 133
Statement dated February 17, 2022, from the U.S. Chamber
of Commerce............................................ 136
Article dated February 2019, by the American Enterprise
Institute.............................................. 137
Article dated February 7, 2019, by Grace-Marie Turner.... 147
Article dated July 30, 2018, by mercatus.org............. 154
Issue Brief dated September 12, 2018, by the National
Taxpayers Union Foundation............................. 156
Statement dated February 15, 2022, from The Alliance to
Fight for Health Care.................................. 160
Memorandum dated February 4, 2022, from Americans for
Prosperity............................................. 162
Public Opinion on Health Care Policy dated April 23,
2019, from The Heritage Foundation..................... 165
QUESTIONS FOR THE RECORD
Responses to questions submitted for the record by:
Dr. Georges C. Benjamin.................................. 174
Dr. Katie Keith.......................................... 179
Mr. Robert B. Reich...................................... 188
EXPLORING PATHWAYS TO AFFORDABLE,
UNIVERSAL HEALTH COVERAGE
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Thursday, February 17, 2022
House of Representatives,
Subcommittee on Health, Employment, Labor, and
Pensions,
Committee on Education and Labor,
Washington, DC.
The Subcommittee met, pursuant to notice, at 12 p.m., via
Zoom, Hon. Mark DeSaulnier (Chairman of the Subcommittee)
presiding.
Present: Representatives DeSaulnier, Courtney, Norcross,
Morelle, Wild, McBath, Stevens, Levin, Scott (Ex Officio),
Allen, Walberg, Banks, Fitzgerald and Foxx (Ex Officio).
Also present: Representatives Jayapal and Cherfilus-
McCormick.
Staff present: Ilana Brunner, General Counsel; Daniel
Foster, Health and Labor Counsel; Christian Haines, General
Counsel; Rasheedah Hasan, Chief Clerk; Sheila Havenner,
Director of Information Technology; Eli Hovland, Policy
Associate; Carrie Hughes, Director of Health and Human
Services; Ariel Jona, Policy Associate; Stephanie Lalle,
Communications Director; Andre Lindsay, Policy Associate;
Richard Miller, Director of Labor Policy; Max Moore, Staff
Assistant; Kayla Pennebecker, Staff Assistant; Veronique
Pluviose, Staff Director; Cyrus Artz, Minority Staff Director;
Michael Davis, Minority Legislative Assistant; Mini Ganesh,
Minority Staff Assistant; Taylor Hittle, Minority Professional
Staff Member; John Martin, Minority Deputy Director of
Workforce Policy/Counsel; Hannah Matesic, Minority Director of
Member Services and Coalitions; Audra McGeorge, Minority
Communications Director; Ethan Pann, Minority Press Assistant;
Krystina Skurk, Minority Speechwriter
Chairman DeSaulnier. Good morning. The Subcommittee on
Health, Employment, Labor, and Pensions will come to order
please. Welcome, everyone. I will note for the record that a
quorum is present. I note for the subcommittee that
Congresswoman Jayapal of Washington and Congresswoman
Cherfilus-McCormick of Florida are permitted to participate in
today's hearing with the understanding that their questions
will come only after all members of the subcommittee on both
sides of the aisle who are present, have had an opportunity to
question the witnesses.
The subcommittee is meeting today to hear testimony
exploring pathways to affordable universal health care for
Americans. This is an entirely remote hearing, and all
microphones should be kept muted as a general rule to avoid
unnecessary background noise.
Members and witnesses will be responsible for unmuting
themselves when they are recognized to speak, or when they wish
to seek recognition. I also ask that members please identify
themselves before they speak. Members should keep their
cameras--thank you, ranking member. Members should keep their
cameras on while in the proceeding.
Members shall be considered present in the proceeding when
they are visible on camera, and they shall be considered not
present when they are not visible on camera. The only exception
to this is if they are experiencing technical difficulty and
inform committee staff of such difficulties. If any member
experiences technical difficulty during the hearing, you should
stay connected on the platform, make sure you are muted, and
use your phone to immediately call the committee's IT director
whose number was provided in advance.
Should the Chair experience technical difficulty, Mr.
Courtney, or another majority member is hereby authorized to
assume the gavel in the Chair's absence. This is an entirely
remote hearing, once again and as such the committee's hearing
room is officially closed.
Members who choose to sit with their individual devices in
the hearing room must wear headphones to avoid feedback,
echoes, and distortion resulting from more than one person on
the software platform sitting in the same room. Members are
also expected to adhere to social distancing and safe health
care guidelines, including the use of masks, hand sanitizer,
and wiping down the areas both before and after their presence
in the hearing room.
In order to ensure the committee's 5-minute rule is adhered
to; staff will be keeping track of time using the committee's
digital timer which appears on its own thumbnail picture.
Members and witnesses are asked to please wrap up promptly when
their time has expired.
Pursuant to Committee Rule 8(c), opening statements are
limited to the Chair and Ranking Member. This allows us to hear
from our witnesses sooner and will provide all members with
adequate time to ask questions. With that I will now recognize
myself for the purpose of making an opening statement.
First of all, thank you all to all the members for
attending, and for our visitors who are with us as well. Today
we are meeting to explore pathways to help all Americans access
high-quality, affordable health care. Over the past decade
we've made significant progress toward expanding access to
health care for Americans. Since President Obama signed the
Affordable Care Act into law in 2010, more than 20 million
Americans secured health coverage, and the uninsured rate has
significantly declined.
The ACA has also ensured that 130 million individuals
living with pre-existing conditions cannot be discriminated
against or denied coverage--130 million. To expand American's
access to health care during the pandemic we passed the
American Rescue Plan, which has dramatically helped lower costs
for families by providing enhanced upfront tax credits to low-
income individuals to lower monthly health care costs, ensuring
premium-free access to silver plans, and eliminating the
subsidy cliff, so more low-and moderate-income individuals have
access to affordable health care.
During the last open enrollment period, a record 14 and 1/2
million Americans enrolled in health care coverage through the
ACA and state-based marketplaces. Simply put, the steps taken
in the American Rescue Plan made coverage more obtainable for
millions, and these reforms have saved lives.
While the U.S. has made progress in terms of coverage over
the course of the past decade, millions of Americans remain
uninsured, or underinsured. This is particularly true for
Black, Latino, and low-income Americans, who are even more
likely to be uninsured compared to their peers.
For more than a decade, some of our colleagues,
particularly Republican State Attorney's General, have
relentlessly worked to erode or eliminate the ACA entirely.
While I think all open-minded people recognize that we can
always improve on legislation, and look back at it, these
attacks are unacceptable to the American public.
Far too many individuals also continue to be pushed toward
low-quality, and unregulated junk health care plans. The ex-
Trump administration actively promoted these plans, saddling
many Americans with piles of debt. If Americans do not have
high-quality coverage, they won't have the care they need.
Unfortunately, 12 of these Attorney General led states,
Republican Attorney General led states, have also yet to expand
eligibility for Medicaid, to help low-income individuals afford
health care, which has left approximately 2.2 million Americans
without insurance.
In comparison to our peers around the world, our health
care system is underperforming. According to analysis by the
Kaiser Family Foundation, the U.S. spent around 19 percent of
its GDP on health care in 2020. Whereas the next highest
comparable country, the United Kingdom, devoted 13 percent of
its GDP. The same analysis by the Kaiser Foundation found that
health care spending per person in the U.S. was almost $12,000
in 2020, whereas the nearest comparable country Norway, in this
case, spent less than $7,000.
We know that these inflated costs are driven in part by
excessive prices for prescription drugs and other health
services. Not only does the United States underperform on
access, but our peer nations also often have better outcomes,
better quality care according to OECD data.
Our current health care system is broken, and Americans
depends on us to fix it. The lesson we learned from the ACA and
COVID-19 pandemic is that when we invest in expanding quality
health care coverage, when we expect providers, insurance
companies to perform and have outcomes in the performance, we
can save lives. That is why Democrats are committed to ensuring
all Americans have affordable, high-quality coverage, and I
certainly hope that all of us in Congress feel the same way and
will join our efforts.
As our witnesses will discuss today there are many
approaches to expanding access to health care, and lots of good
ideas about how to get there, such as expanding the Affordable
Care Act, establishing a public option, or transitioning to a
single-payer, Medicare for All system. Each of these options
builds on the progress we have made, and helps us achieve our
shared goal of affordable, high-quality coverage for all.
I really hope that this conversation can also draw upon
some of our own experiences back home as well in our districts.
In California for example, we have taken a number of steps to
improve coverage. I am proud of what we have done in
California. I was proud to be very involved with it as Chair of
the California State Senate Budget Committee for Health and
Human Services, as well as being a member of the Policy
Committee, and that body when we implemented the ACA. I am
proud of the success that we have had, and we have had
challenges.
In Contra Costa County here in San Francisco Bay area, we
even have our own version of a public option, the Contra Costa
Health Plan, which I am a proud member of, as a country
retiree, and I can tell you I would not be here if it was not
for them. They have saved my life. This public option competes
with commercial insurers, and cooperates with commercial
insurers. We cooperate with Kaiser, which is a dominant player
started here in the East Bay. We have a collaborative effort
that keeps prices low, and quality high for everyone in this
area.
I think it is important that we learn from these and other
examples as we discuss how best to deliver the quality health
care coverage that Americans deserve. I look forward to hearing
from our distinguished panel of witnesses, and I look forward
to a robust conversation among my colleagues, where we have
legitimate differences of opinion, but I really hope, and I
hope our experience with pensions in the subcommittee, I want
to thank Ranking Member Allen and Ranking Member Foxx for their
support in those efforts.
For all our differences, there is work to be done, and I
hope we can accomplish real improvements for Americans and
health care. With that, I am happy to recognize the Ranking
Member for his opening statement.
Mr. Allen.
[The statement of Chairman DeSaulnier follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Mr. Allen. Thank you, Mr. Chairman. Thank you to the
witnesses here and for everyone participating in this important
hearing today, employer sponsored health insurance, or ESI is
the bedrock of America's healthcare system. We cover the
majority of lives.
Despite this, the Biden administration has waged an assault
on the coverage of the majority of Americans and their families
rely on. As employers struggle to attract talent during the
ongoing labor shortage due to the Biden administration's
policies. They are increasingly bolstering health benefits to
attract and retain talented workers.
We know that this recruiting tool works, in fact 75 percent
of Americans say that coverage played a role in their decision
to accept their current job. Further, a new poll released this
week found that those with employer sponsored coverage ranked
19 percent more positively than those with coverage under Obama
Care.
In an attempt to push more Americans into the Affordable
Care Act exchanges, democrats are increasing Obama Care
subsidies. If these subsidies get too high and create an
unlevel playing field in our healthcare market, employer-
sponsored health insurance plans will not be able to compete
with Obama Care plans, which will ultimately lead to a public
option.
As everyone knows a public option is simply a trojan horse
for Medicare for All. Democrats radical Medicare for All in
public opinion proposals would destroy most employer--in public
opinion proposals, would destroy most employer-sponsored
insurance plans, stripping America of their employer's-
sponsored insurance, and dumping them into a government run
healthcare, and that would be a major mistake.
It would worsen the current labor shortage and create a
disincentive for work. The vast majority of the 155 million
Americans who have employer-sponsored insurance are very happy
with their plans. On average, employer-based plans provide
richer and more comprehensive coverage, relative to ACA plans.
Further, when given the option 83 percent of employees in
the U.S. choose to be on an employer-sponsored insurance plan.
The Biden Administration's attempt to undermine these plans is
a threat to the personal choice, and affordable healthcare, and
it will cost taxpayers exponentially more.
We should be encouraging less dependence on government
assistance, not more. We must resist democrat's attempt to
expand broken, unaffordable programs. The so-called Build Back
Better Act would drastically expand ACA, and Medicaid
eligibility. Obama Care has been breaking promises for over a
decade, and throwing more money after bad will not fix this
problem. Additionally, these proposed expansions to the ACA
would overwhelmingly help wealthy households and exacerbate
healthcare inflation.
These expansions also will not increase the number of
people insured, but they will primarily go to those who already
have health insurance. President Biden's socialist tax and
spending bill would also allow the Secretary of Health and
Human Services to negotiate, if not dictate, the prices of
prescription medications. These price controls would reduce the
incentive for companies to participate in medical innovation,
and severely cut back on new life saving drugs and their
development.
Companies who do not abide by the negotiated price will
face such steep penalties that they would likely be driven out
of the market. This will give Americans less freedom and less
choice in healthcare. More government intervention with
decrease the cost of healthcare. The best way to make
healthcare affordable would be to increase the use of
association health plans.
These plans have the power to save Americans up to 50
percent on healthcare cost by allowing small businesses to band
together to offer lower cost health insurance. While democrats
want to monopolize healthcare with inefficient government run
plans, associated health plans focus on expanding real
healthcare options to Americans who do not currently have
affordable coverage.
Simply put, more Federal control is the biggest threat to
our healthcare system. Socializing healthcare would increase
inflation, exacerbate the Federal debt, grossly diminish the
quality of healthcare and put Washington bureaucrats in charge
of making the healthcare decisions for millions of Americans.
Expanding Washington control will not improve our country's
healthcare system, it will make it exponentially worse, and
with that I yield back.
[The statement of Ranking Member Allen follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Chairman DeSaulnier. Thank you, Mr. Allen. It is now my
pleasure to introduce our witnesses, and we will start with a
friend, Secretary Robert B. Reich. He is Chancellor's Professor
of Public Policy at the University of California Berkeley and I
will show you the cup I am drinking from, Go Bears. Welcome,
Mr. Secretary.
He is previously served in a number of key positions in the
Federal Government, including as Secretary of Labor under
President Bill Clinton, for which Time Magazine named him one
of the ten most effective cabinet secretaries of the 20th
Century. Mr. Secretary welcome, please go ahead.
STATEMENT OF HON. ROBERT B. REICH, CHANCELLORS PROFESSOR OF
PUBLIC POLICY, UNIVERSITY OF CALIFORNIA AT BERKELEY
Mr. Reich. Well thank you very much Mr. Chairman, members
of the committee and the subcommittee. My name is Robert Reich,
Chancellor's Professor of Public Policy at the University of
California, Berkeley. Thank you for giving me this opportunity
to testify before the subcommittee.
Let me just begin by saying it would be hard to invent a
more expensive, and less effective health care system than we
have here in the United States. Even before the pandemic the
typical American family was spending more than $6,000 a year on
health insurance premiums.
If you add in copayments and deductibles, the doctors,
hospitals and drug companies also charge, that sum increases to
$6,400. Add in typical out of pocket expenses for
pharmaceuticals, and it is at least $6,800. That is not all,
because some of the taxes that a typical family pays are for
health care too for Medicare and Medicaid and the Affordable
Care Act.
Add them in, and the typical household pays $8,975 a year
for health insurance. This number does not include what typical
worker's employers spend on their health insurance, which might
otherwise go to their wages. Americans spending on health care
per person is more than twice the average in the world's other
35 advanced nations.
Here's where we come to ineffectiveness. The United States
ranks near the bottom among advanced nations for lifespan and
infant mortality. Americans are sicker, our lives are shorter,
and we have more chronic illnesses. Canadians for example, can
expect to live an average of almost four and a half years
longer than Americans, even though health care spending per
person in Canada is only half as high as in the United States.
The connection between the high cost and ineffectiveness of
our system is clear because health care is so expensive, many
Americans put off seeing a doctor until their health has
seriously deteriorated. Even with the Affordable Care Act,
there are tens of millions of Americans who have no health
insurance coverage at all.
One major reason for the extraordinary cost is the
administrative costs involved in private for-profit insurance.
About a third of what the typical American pays for health
insurance goes to the people who oversee billing and
collections. Then of course there are marketing and advertising
expenses, and the profits that go to shareholders or private
equity managers.
Replacing private, for-profit health insurance with
Medicare, Medicare for All would lead to far lower total costs,
and I am including premiums, copayments, deductibles and taxes.
It would cover all Americans. People could keep their same
doctor, or other health care provider, and could buy private
insurance to supplement it just as some people now buy private
insurance to supplement Medicare and social security.
Finally, if the pandemic has taught us anything, it is that
we need to decouple health insurance from employment. Losing a
job should not mean a loss of the family's lifeline to health
care. The Affordable Care Act was a good start at reform, but
as Medicare and Social Security have demonstrated, we should
not have to pay private for-profit insurers, boatloads of money
to get the insurance we need.
Now I have no illusions this is going to happen soon, but
the road we are now on is unsustainable economically,
politically and socially. Eventually we are going to have to
have some version of Medicare for All. The question is how much
unnecessary cost and hardship we must bear before we do. Thank
you.
[The prepared statement of Robert B. Reich follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Chairman DeSaulnier. It is the joy of aging and finding the
cursor Bannon. I talked to those people in Silicon Valley about
that. Thank you. I apologize. Now we are going to hear from Dr.
Georges Benjamin. He is the Executive Director of the American
Public Health Association.
He is also Board certified in internal medicine, a Master
of the American College of Physicians, a Fellow of the National
Academy of Public Administration, Fellow Emeritus of the
American College of Emergency Physicians, and a member of the
National Academy of Medicine. Dr. Benjamin the floor is yours.
STATEMENT OF GEORGES C. BENJAMIN, M.D., EXECUTIVE DIRECTOR,
AMERICAN PUBLIC HEALTH ASSOCIATION
Dr. Benjamin. Mr. Chairman and members of the committee
thank you very, very much. I have had the privilege of
practicing medicine for many years, and in many, many settings,
and interestingly enough the one thing that I have learned
through all of my experiences is that coverage matters.
Now our Nation has been trying to get this right for over
100 years. We have not yet achieved that. There is no question
that we can do better. I am going to spend my time basically
just expounding on my written testimony that you have, and just
talk about what coverage matters.
There is no question that having an insurance card is your
entry fee into getting high-quality affordable health care. You
know numerous studies have demonstrated that fact. You go back
to 2002 when the Institute of Medicine found that uninsured
adults had fewer preventive screens, worse clinical outcomes
from cancer, cardiovascular disease, HIV, mental illness, and
end-stage renal disease.
When they did their study, they estimated that about 18,000
premature deaths occurred simply because people did not have
health insurance coverage. There have been many other studies.
One that I am aware of because it was published in the American
Journal of Public Health, which is the Journal that my
association sponsors, which went to almost 44,000 deaths per
year because people were not covered.
We also know that since the passage of the Affordable Care
Act, and when the Supreme Court decision made Medicaid coverage
optional for the states, we in effect have had a natural
experiment occurring in our country. We have had states that
have not been covered with Medicaid and did not expand in other
states.
We know that for example having a personal doctor, which of
course is known to be an important determinant of access to
care, the individuals in those states that were covered they
were much more likely to have a relationship with a particular
physician.
In addition, in a series of studies that found Medicaid
coverage facilitated more people having a regular source of
care, better access to preventive services, better access to
well-child visits, better access to early diagnosis and
treatment, and improved access to behavioral health, and
treatment for things like substance use disorders.
We also know that all-cause mortality, was reduced in
states like Massachusetts when Massachusetts expanded coverage
overall their mortality dramatically fell. We know that a
national goal also was to reduce utilization of hospital
emergency departments for non-urgent care.
There have been many studies that have shown that we
reduced the utilization of emergency departments when we've
expanded coverage. We also know that universal health care
coverage can reduce health inequities and disparities in
health. When we expanded CHIP, the Children's Health Insurance
Program, which was of course expanded for low-income families
who did not qualify for Medicaid.
It was associated with increased access to care and reduced
racial disparities. We also know that similarly differences in
diabetes and cardiovascular disease outcomes by race,
ethnicity, and socioeconomic status declined among previously
uninsured adults once they became eligible for Medicare
coverage.
We also know that as we think about these disparities
universal access to care goes a long way to improving health,
but the social determinant of health is actually a bigger
determinant in many ways, particularly around health care
disparities. Access is actually an essential component of that.
We know also that health insurance coverage can improve the
economic well-being of communities, it can create jobs as well.
If there is anything that we have not missed, the COVID
outbreak has demonstrated the importance of universal health
care coverage more than anything else. As you know we've got
over 78 million people that were exposed to this disease who
got it.
Peak hospitalizations--over 150,000 per day, and almost a
million deaths so far, and so there is an absolute need for
universal health care coverage. When it is time I will be happy
to take questions on any of these issues. Thank you very, very
much.
[The prepared statement of Dr. Benjamin follows.]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Chairman DeSaulnier. Thank you, Doctor. Next, we have Dr.
Brian Blase. He is the President of Paragon Health Institute.
He was previously Special Assistant to the President for
Economic Policy at the White House's National Economic Council
from 2017 to 2019. He also serves as a Senior Fellow at the
Galen Institute, and a visiting fellow at the Foundation for
Government Accountability. Doctor Blase, the floor is yours.
STATEMENT OF BRIAN BLASE, PH.D., PRESIDENT, PARAGON HEALTH
INSTITUTE
Dr. Blase. Thank you, Mr. Chairman, Ranking Member Allen,
and members of the committee. It is a privilege to testify
before you today, particularly since I was once a House
staffer. I am the Founder and President of a new think tank,
the Paragon Health Institute, and my testimony today represents
my own views.
I will focus on how to achieve more affordable and higher
quality healthcare and coverage. For too many people healthcare
and coverage are not affordable, for which government bears
some responsibility. For example, individual market premiums
more than doubled in the first 4 years of the Affordable Care
Act yet plans covered fewer doctors and hospitals.
In 2021, the average ACA plan premium plus deductible for a
family of four was $25,000.00. Since coverage is cost
prohibitive, most enrollees need large subsidies to afford
these plans. At the outset, it is important to acknowledge some
basic truths. The U.S. does not have a free market for health
care. Half of U.S. healthcare spending is by government, most
of the rest is impacted by government policy.
As government's role in healthcare has expanded, prices
have soared. By contrast, in industries where government's role
is minimal, inflation adjusted prices typically decline while
quality improves. High healthcare prices and spending that
correspond to meaningful health and longevity gains have
justification. Some areas of U.S. healthcare, like our cancer
survival rates are exceptional compared to other developed
nations.
Too often however, high prices and spending do not
correspond to high value and improved health. This is a key
problem to confront in health policy. For example, if the ACA
expanded coverage, and significantly increased Federal health
spending, primarily through Medicaid, but American life
expectancy declined for three straight years after the ACA's
covered provisions took effect.
In fact, American's life expectancy was lower in 2019 than
in 2013. There is too much government bureaucracy in
healthcare. Different Government rules despite good intentions,
often restrict options for coverage and care, stymie
innovation, and prevent providers from being able to best meet
their patient needs.
Government also mismanages programs to an epic degree. Last
year CMS reported annual Federal improper payments in Medicaid
were 100 billion dollars. There is too much insurance
bureaucracy in healthcare. Insurance is important, but having
insurance pay for routine and shoppable services leads to over
consumption and waste. People often secure better prices by not
using the health insurance.
One study estimated the cash prices are 40 percent cheaper,
than prices with insurance. For healthcare services where a
third-party payment is limited, such as cosmetic surgery and
Lasik, real prices have declined while quality has improved.
Moving forward you should keep a few principles in mind.
First, policy changes always have unintended consequences.
We should evaluate outcomes, not the intentions behind those
policies. For example, many ACA proponents said it would reduce
ER visits because patients could find a usual source of care,
but the exact opposite happened. ER use surged, often for non-
emergent care.
Second, when government subsidizes something, it becomes
more expensive. Subsidies increase demand, raise prices, and
increase total spending, and must be funded by taxpayers. The
American Rescue Plan Act expanded the ACA's already substantial
subsidies, and in doing so increased coverage, but most of the
benefit went to people already insured, so it was a highly
inefficient way to increase coverage.
According to CBO estimates, the subsidy expansion cost
about $17,000.00 each year per newly insured person. These
subsidies are also inflationary, allowing insurers to raise
premiums at taxpayer's expense.
Finally, some recommendations. Congress should codify four
of the previous administration's policies that expanded options
without new Federal spending--association health plans will
allow more small employers the ability to offer coverage to
workers. Short term plans help many Americans who could not
otherwise afford coverage.
Individual coverage HRA's enable employers another way to
offer health insurance through tax deferred contributions that
the workers use to buy coverage in the individual market. Price
transparency rules empower patients and employers to know
prices before purchasing services.
Congress should also reorient this government spending to
maximize patient choice, and reward value conscious decisions.
Americans should have the freedom to spend their own money on
the healthcare and coverage they choose. These policies provide
a good start. I thank you again for the opportunity to testify
today, and I look forward to your questions.
[The prepared statement of Dr. Blase follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Chairman DeSaulnier. Dr. Blase, you get a gold star for
perfect timing. Very efficient.
Dr. Blase. Thank you.
Chairman DeSaulnier. You are welcome. Next speaker, our
last witness, is Katie Keith, is a Visiting Professor and
Director of the Health Policy and Law Initiative at the O'Neill
Institute for the National and Global Health Law at Georgetown
University Law Center.
She is also a contributing editor at Health Affairs, where
she writes extensively about the Affordable Care Act and other
topics relating to health coverage. Dr. Keith the floor is
yours.
STATEMENT OF MS. KATIE KEITH, JD, MPH, VISITING PROFESSOR AND
DIRECTOR OF THE HEALTH POLICY AND THE LAW INITIATIVE, O'NEILL
INSTITUTE FOR NATIONAL AND GLOBAL HEALTH LAW, GEORGETOWN
UNIVERSITY LAW CENTER
Dr. Keith. Thank you so much, Chair DeSaulnier, Ranking
Member Allen and members of the subcommittee, I am honored to
appear before you on a topic that is near and dear to my heart,
and the need for affordable universal health coverage.
My written testimony covers four main issues. First, we
have made significant progress under the Affordable Care Act.
The Chair mentioned some of these statistics already, but I
think they are worth repeating. The uninsured rate has reached
historic lows, we have narrowed racial and ethnic health
disparities and coverage and access to care, and we have
improved families' financial stability thanks to the Affordable
Care Act.
The law has also served as a critical part of the safety
net throughout the pandemic. Millions of families who would
otherwise have gone uninsured, have instead been able to enroll
in Medicaid, or the Marketplace, and access the coverage they
need, including coverage for COVID-19 tests, vaccines and
treatment.
Second, the American Rescue Plan Act has built on the
important gains we have made under the Affordable Care Act. For
2021 and 2022 the new law provides increased premium tax
credits for lower income people, and for the first time extends
premium tax credits to middle income families.
Unsurprisingly to me there has been strong demand for this
affordable comprehensive coverage, we have seen record high
Marketplace enrollment of 14 and 1/2 million people enrolling
for 2022. Nearly 6 million new consumers enrolled in
Marketplace coverage throughout 2021.
The American Rescue Plan Act consumer savings are also
significant. Average monthly premiums fell by 23 percent for
Healthcare.gov consumers, one-third of whom selected a plan for
$10 a month or less. Deductibles are also down as a result of
the American Rescue Plan; more generous premium tax credits
have meant many consumers can afford to choose to enroll in a
more generous plan with a lower deductible.
As you can tell these gains are critical, but they could
soon be lost if Congress does not extend the subsidy
enhancements beyond 2022. Third, there is a continued need to
protect consumers from the range of what I refer to as non-
comprehensive insurance products. These include short-term
limited duration insurance, fixed indemnity plans, excepted
benefits, health care sharing ministries, there's more detail
about each of these types of products in my written testimony.
In general, these products do not offer the protections
that patients have come to expect and appreciate under the
Affordable Care Act, and these products can and do discriminate
against people with pre-existing medical conditions. Sadly, the
media has been filled with stories of those who enrolled in
these non-comprehensive products, only to be left with
devastating medical bills after their plan did not cover their
care.
These products proliferated during the Trump
Administration, and in my view are a particularly ripe area for
consumer protection because of the often egregious, aggressive,
and misleading marketing tactics that are used to sell these
products to consumers.
There is also evidence to suggest that some of these non-
comprehensive products are being offered as a primary form of
coverage in the employer market, which raises significant
concerns for workers and their families. I believe that a
comprehensive approach is needed to protect consumers from
these types of products, and I fear that other efforts by the
subcommittee to advance universal coverage will fail if we do
not also address these other products.
Fourth and finally, we must continue to push ahead on
improving access to affordable high-quality coverage. Congress
should extend the American Rescue Plan subsidies, provide a
coverage option for low-income adults, and states that have not
yet extended their Medicaid program, and support continued
access to Medicaid at the end of the public health emergency.
As you address the next wave of health reforms, I also
encourage the subcommittee to consider high health care
spending by commercial plans. Previously panelists have hit on
this, and my written testimony touches on recent data on these
issues, but I want to emphasize that high health care costs,
and high provider prices are increasingly a challenge for those
with job-based coverage.
As health care costs rise and we know employers pass those
higher costs to employees through higher premium contributions,
higher deductibles, narrower benefits and higher cost-sharing.
As a result, under insurance is on the rise, especially for
those with employer plans.
Congress has tools at its disposal to address high provider
prices and one mechanism to do so would be to create a public
health insurance option that pays lower rates and competes
alongside private plans. I will close there but thank you again
for the opportunity to address you, and I look forward to your
questions.
[The prepared statement of Dr. Keith follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Chairman DeSaulnier. Thank you that was great. Under
Committee Rule 9(a), we will now question witnesses under the
5-minute rule. I will be recognizing subcommittee members in
seniority order, and again to ensure that the member's 5-minute
rule, and I want to thank the witnesses for being so good, is
adhered to, staff will be keeping track of time. Please be
attentive to the time, and wrap up when your time is over, and
re-mute your microphone.
Now I will see if I can adhere to the rules as I recognize
myself for 5 minutes. Secretary Reich and Dr. Benjamin, for
both of you. You and I both talked about the overall costs and
the under performance of the American health care system, and
you mentioned a little bit about what we get for that, so the
outcomes do not nearly replicate the investments for the
Americans.
One thing, and Dr. Benjamin in particular, those outcomes
point members to a really wonderful study by the Kaiser Family
Foundation about life expectancy internationally comparing
countries, for people over 65, and also regionally. Here on the
west coast the United States would be 13th out of that study in
nations, but then regionally California and the west coast
would be first in the world if it was a country for life
expectancy, they are now diving into that.
As somebody who is a survivor of chronic cancer, and has
spent 4 weeks in an ICU, I have seen the best and the worst of
American health care personally. The public option we have
here, as a former small employer owning restaurants, we use
that and it is on our Exchange. It helps the employer. A
question for both of you starting with Secretary Reich is what
do we get out of this, not just consumers, but our economy and
businesses, in particularly small businesses?
Mr. Reich. Well, Mr. Chairman, the costs overall of health
care are increasing dramatically. They are now 19 percent of
our entire economy. Within the next 5 years if present trends
continue, we are going to be up beyond 22 percent. When I say
that that is not sustainable, I mean it is not sustainable not
only for the individual, it is not sustainable for the Nation
as a whole because there are a lot of other things we as a
nation need to spend our money on as individuals, and as a
country.
Pharmaceutical costs are skyrocketing, but it is not just
pharmaceutical costs, it is also all forms of hospitalization
and medication as well as tests, machinery, equipment. Now it
has been pointed out, and I think it is true, the United States
does have for those who can afford it, a terrific medical
system. That is like many other areas of our national life, if
you are very wealthy, if you are able to spend the money, you
can get better health care here than you can almost anywhere
else.
The problem is that not only is it expensive from the
Nation as a whole standpoint, but from individuals who are
middle income, or working-class, or poor. It is simply
unaffordable, and we have a lot of data showing that people
because of mostly the high deductibles, or copayments, but also
because they do not have insurance to begin with, do forego the
kinds of medical care they need that would have prevented more
serious problems, particularly diabetes, and certain forms of
cancers, and other potentially preventable diseases that are
extremely expensive to deal with once they get out of control
as it were.
Again, Mr. Chairman, both on the standpoint of the Nation,
and on the standpoint of the individual, we are not doing
nearly as well as we should. We are on a trend line that is
unsustainable, and we are not doing nearly as well as
comparable nations.
Chairman DeSaulnier. Dr. Benjamin, outcomes, are we getting
what we are paying?
Dr. Benjamin. We are not yes sir, by any means getting what
we are paying for. There are really four reasons why we differ
from those other nations. No. 1 the fact that we do not have
universal access to all of our citizens. Second, that we have--
we focus too much on specialty care, and not enough on primary
care.
We have a much more complex system, both on the finance and
the delivery side, and we do not spend enough on the social
determinant's, a huge difference of what we spend on societal.
We do not spend as much on societal needs as other nations.
Chairman DeSaulnier. Thank you. Ms. Keith you mentioned
that some of this, but just some of the loopholes that this
committee could work on, and I would hope we could work on this
in a bipartisan effort because it seems like people are
abandoning the system, which is all too frequently. Maybe you
could expand a little bit on junk health, excepted benefits,
short-terms plans and the subcommittee, what we can do
collectively.
Dr. Keith. Certainly. There is many products out there, and
I think a comprehensive approach is needed. At a minimum I
think you know Congress should look to minimum standards. Some
of these products might be appropriate, but they are being
misused, so there could be ways to tighten up the Federal
definitions, and do increased enforcement, so a whole range of
options I would be happy to talk about further, thanks.
Chairman DeSaulnier. Thank you. I will note for my
colleagues I am 11 seconds over. I will now go to the ranking
member for the purpose of questioning witnesses, Mr. Allen.
Mr. Allen. Thank you, so much Mr. Chairman, and Dr. Blase,
in my--of course I have been staying in close touch with all of
our healthcare providers, and our hospitals during COVID. It
has been kind of amazing to see how public medicine, private
medicine, can't agree on COVID.
I guess we are going to make it all public now. The fact
that I talked to patients, I do not know, maybe you guys should
go to an emergency room on a Friday or a Saturday night. People
are not happy. They are just not happy with their healthcare
period.
They expect much more. Again, you talk to these folks, but
you talk to the providers. Let me tell you something, our
hospitals were operating at 50 percent capacity during Omicron
because of a shortage of providers. We have a terrible,
terrible issue in this country. We are losing providers. Why?
Yes, they are very unhappy with the way the government is
running healthcare, I can tell you that.
I do not know of anybody who is not complaining. Dr. Blase,
you know this committee is advocating Medicare for All, and
other forms of government run healthcare. We have not talked
much about the quality of care. It is not surprising because
frankly the Federal Government has its issues in dealing with
any type of a government program.
I mean most of my constituent services is dealing with VA
healthcare, and I just had two big issues on that in the last
week or so. What would Medicare for All do to employer
sponsored insurance, and how would this affect the 155 million
Americans currently enrolled in employer sponsored coverage?
Dr. Blase. Mr. Allen, in most proposals of Medicare for All
that I have seen would outlaw private coverage. The government,
the Federal Government would take over as the single insurer.
There would be no more employer sponsored insurance, and even
you would take away Medicare, both Medicare Advantage where 25
million seniors get their care, as well as traditional Medicare
where there are deductibles, where there are cautionary
benefits under the Medicare for All, sort of general rubric.
Mr. Allen. In the previous administration the Department of
Labor made it easier for businesses to band together to form
associated health plans. This rule was in effect for several
months until a Federal judge ended it. What did you learn about
this rule, and its effect on healthcare choices for Americans?
Dr. Blase. The rationale for the rule was to make it easier
for small businesses to offer coverage to their workers, to get
some of the advantages that large employers get when they offer
coverage. That rule was finalized in June 2018.
It was in effect for several months, and my written
testimony cites a Washington Post story and a study that shows
that these plans were comprehensive coverage, typically covered
far more doctors and hospitals than ACA plans, and it delivered
significant premium savings to employers and employees that
were using them.
Mr. Allen. Yes. It is amazing we cannot even secure our
borders, and in fact we have got more Fentanyl that is coming
over that border to kill every American seven times over, and
we are talking about a government takeover of healthcare. We
lost 100,000 lives to overdoses in this country, the largest
ever last year, which might be one of the reasons that there
are lengths of age is dropping.
I know that Obama Care significantly raised individual
market premiums, but I was shocked to learn that for example, a
benchmark for a family in Prescott, Arizona was $50,000.00 a
year. You use this as an example, Dr. Blase. Could you
elaborate more on the problems of Obama Care, and these
subsidies?
Dr. Blase. You could--people could find this information
out on their own too. They could go to the subsidy calculator
that the Kaiser Family Foundation puts out, and again you could
get families that face benchmark premiums of $50,000.00 or
more. Importantly, a benchmark premium only overs about 70
percent of the plan's spending, so it is going to come with
high deductibles and copayments as well.
There has to be underlying problems with a program that has
caused such significant premiums. Because the premiums are so
high, the subsidies need to be so high in order for people to
afford coverage. I think we need to get out of the increasing
subsidies, and we should look at what is the underlying driver
of the high premiums of these plans.
Mr. Allen. Thank you, sir. I am out of time, and Mr.
Chairman sorry, I yield back.
Chairman DeSaulnier. Quite all right, Mr. Allen. Thank you
very much. We will now go to the very distinguished gentleman
from the great State of Connecticut, Mr. Courtney.
Mr. Courtney. Thank you, Mr. Chairman, and thank you to all
the witnesses. Professor Keith, I mean you did a really nice
job of explaining the enhancements to the Affordable Care Act
under the American Rescue Plan, and there is a big blinking
light in front of Congress right now that it is going to--it is
time limited. In terms of trying to understand this issue
better, I reached out to my good friend locally who is an
insurance broker, lifelong Republican, but you know who is
enthusiastic about the ACA in terms of an enrollment per
client.
She told me a story that she had a couple who in 2020 were
uninsured, their annual joint income was about $70,000, which
put them just above the 400 percent Federal poverty level, so
the private market did not offer them anything that was of any
value, or that they could possibly afford.
We passed the American Rescue Plan. The husband had been
laid off, so that brought the premium down to the maximum you
know benefit, which was about $7 a month. It is a good thing
they had it because sadly both husband and wife were stricken
with COVID. The husband lingered in the hospital for a long
time, was on ventilators, and sadly he passed away.
It is a horrific tragic story, but there is no question
that if we had not passed the American Rescue Plan his widow
would be looking at hundreds of thousands of dollars in terms
of medical bills.
Jenn, the broker, told me another story about a dairy
farmer in our district. Again, who in the private health
insurance market was looking about $30,000 for family coverage,
with the enhancements they were able to bring that down to
about $50 a month. Again, the margins which dairy farms operate
on as many of you know, is you know wafer thin. They qualified
for this assistance.
I mean it is hard to imagine letting those enhancements
lapse, and I just wondered if the O'Neill Center has looked at,
really looked at the damage that would occur if that were to
you know ever happen?
Dr. Keith. Thank you so much for that question. I would
emphasize I think what the American Rescue Plan did is sort of
get rid of that subsidy cliff above 400. It is not a free
giveaway by any stretch. What is says is that no one should be
paying more than 8 and 1/2 percent of their entire income
toward premiums, so I think it is a huge protection, including
for middle-income people.
To your point the biggest benefits have flowed to older,
middle-income people living in rural areas, which is where
premiums were the highest before the Rescue Plan set in. In
terms of the impact, if these subsidies are allowed to expire,
people would see premium shock this fall for coverage next
year.
Many folks who are paying as I mentioned, a third of
healthcare.gov consumers are paying ten dollars or less for
their coverage, they would see those premiums increase. You
would have many of those middle-income folks who have been able
to you know purchase coverage for the first time.
There is data that shows that more middle-income people
came into the marketplace over time as a result of the
subsidies. The impact has been huge. I am deeply concerned that
those impacts you know could be undone if these subsidies are
not extended without more lead time for folks to understand.
Mr. Courtney. Then the evidence is all around us. I do not
care what district you are from. In your testimony, or in your
written testimony Professor, I know you talked about the fact
that a public option, you know, which would help the cost
issues could also be extended to employer-based plans that in
fact you could allow an employer buy-in, which would for I
think a lot of particularly small employers would be incredibly
attractive.
It would help stabilize what is the largest component of
our health care coverage system. By the way, I want to thank
Professor Reich for helping us when we got rid of the Cadillac
tax a couple years go. Your outspoken support for that,
actually I think protected a lot of employer-based plans.
Again, Professor Keith, maybe you could just sort of talk
about whether or not you could design a public option that
would benefit small employers.
Dr. Keith. Yes absolutely. There is a whole range of this
sort of design decisions that would need to be made around the
public option. I think one key one is exactly what you touched
on. Would you want a public option to be limited to the
individual market, available to small employers, or even
extended up into the large group market?
There are also questions about whether to allow employers
to buy in, or even let employees on their own buy in. I think
it is all those would have different implications that need a
lot more study and analysis, but I would emphasize I think
extending some kind of a public option that does in fact lower
cost to the group market is going to have the biggest impact
for Federal savings, for employers, and for families in terms
of really bringing costs down.
Mr. Courtney. Great thank you. I am under the 5-minutes
mark, so.
Chairman DeSaulnier. You must have gotten a really good
schooling. Thank you, Mr. Courtney. I will now be happy to
recognize the Ranking Member Virginia Foxx, Dr. Foxx the floor
is yours.
Ms. Foxx. Thank you, Mrs. Chairman. Dr. Blase, I have
read--and you had mentioned in your testimony that life
expectancy was lower in 2019 than in 2013, despite the
significant rise in government healthcare spending, the
implementation of Obama Care and Medicaid expenditures.
By the way, thank you very much for being here, and I know
you have a piece out today that is very informative, and I
thank all of our other witnesses too. What does this drop in
life expectancy say about the effect of government healthcare
problems and spending on health.
You have already talked a little bit about it with Ranking
Member Allen, so how will proposals like Medicare for All
affect health spending on American's quality of care, maybe
something you have not already said.
Dr. Blase. Thank you, Representative Foxx. It is a very
important question. When you hear things, statistics that
Americans do not live as long as people in other countries that
is true, but there is a lot of differences that account for
that that surround behavior, social circumstances, genetics.
That is really not an indictment on the healthcare system.
When we look at things, like what happens when people get
cancer. The Chairman mentioned that he dealt with cancer. Where
do you want to be if you have cancer? You want to be in the
U.S. Cancer survival rates in the U.S. are much better than in
Europe. If you look at access to care, Americans have much
better access to care than people in a lot of those other
countries, for instance, stacked between the U.S. and Canada.
This is a percent of seniors who waited at least 4 weeks to
see a specialist in the past 2 years. In the U.S. it was 21
percent, in Canada it is 59 percent. We do not have to wait as
long to get access to specialist care in the U.S. Now with
respect to Medicaid expansion, we had a big expansion of the
program starting in 2014.
We had a deterioration in American health outcomes after
that. I think when you have had a big expansion in demand, what
you get from a huge coverage expansion, you are going to
reallocate healthcare services. There is only a fixed amount of
doctors and nurses, and one of the things that we should focus
on, and which I have in my testimony, is what we can do to
expand and increase the supply of healthcare.
If you just increase demand, you are going to reallocate
healthcare services. And you could reallocate healthcare
services in a way that is overall harmful by taking care away
from those who most need it and providing services to people
who least need it. That certainly happened to some degree. We
see with the Medicaid expansion, wait times for care increased,
as well as ambulance response times increased.
I think it is also important to recognize that people who
are uninsured, they can still get healthcare. If you take a
similar person with insurance and to a person without
insurance, the person without insurance is receiving 80 percent
as much care as the person with insurance.
Ms. Foxx. That is an excellent statistic. Unfortunately,
our colleagues on the other side of the aisle totally ignore
the role of individual behavior and responsibility. When you
hold those things constant you see a totally different picture.
Dr. Blase, the Education and Labor Committee was instrumental
in the passage of the No Surprises Act, which increased price
transparency requirements for insurers.
I have also very supportive of the Trump Administration's
regulatory actions to increase transparency within the
healthcare market. How will increased transparency translate to
lower cost coverage for patients and their families?
Dr. Blase. Sure, Congresswoman and thank you for our work
on this. I will keep my answer here brief. Price transparency
helps consumers shop. A lot of services in healthcare are
shoppable. There are huge price variations among providers, so
knowing price information can really matter, and I think the
price information is also really important for employers in
both how they design their benefits, and encourage employees to
go to high quality, high value providers, as well as holding
accountable the insurers that they have administering their
plans.
Ms. Foxx. Quick question. Inflation has hit a 40-year high.
It is a tax on Americans, it has increased every month since
Joe Biden became President. How would healthcare proposals like
those included in the so-called Build Back Better Act,
exacerbate inflation?
Dr. Blase. Sure. The expansion of the ACA subsidies is
inflationary because above a certain point the taxpayer picks
up the full cost, so the insurer can raise premiums with
taxpayers on virtually the full hook. The other part that is
inflationary is the Federal payments to states.
A lot of the Federal support for states goes through
Medicaid financing. States do not need Federal support right
now. They have record revenues, and Medicaid financing just
sort of allows states to increase spending in other areas.
Ms. Foxx. Thank you, Mr. Chairman. I apologize for going
over also.
Chairman DeSaulnier. It is duly noted, Ms. Foxx, and I do
take exception to my friend about totally ignoring personal
responsibility. I do take responsibility for most everything. I
do not know how I became a Member of Congress, but that is my
fault. With that, I will go to Mr. Norcross from New Jersey.
Mr. Norcross. Thank you, Chairman, for leading this
meeting, and to our witnesses. I really appreciate the input.
First of all, I want to start off by thanking those in the
health care industry for helping us during this pandemic, 2
years, almost a million people dying, particularly in the
beginning showing up for work every day to keep us alive. I
very much appreciate what they have done.
What we have seen is that even in the pandemic, and the No.
1 way that health insurance is applied in this country is
through your employer. There was a law passed in 2008 called
the Mental Health Parity Quality Act, which simply says if you
spend it on the physical side, you need to spend it on the
mental side, the mental health.
Well record OD's this year, over 100,000, and as many
members have already talked about, it has been rough,
particularly mental health, yet that stigma that they have to
break through access to mental health, even with this law is
still a problem. With the employer-based plans, there is no
enforcement ability to speak of by the Federal Government to
hold these plans accountable.
I recently introduced, along with my colleague, a mental
health parity enforcement, which says that they have the
ability to investigate and to levy fines where this is going
on. People need access to mental health services. It
contributes to more problems in our country than most of us
realize.
Dr. Benjamin, when you look at our health care system and
to quote my chairman, ``Are we getting what we paid for in
mental health?'' Is that happening?
Dr. Benjamin. Congressman Norcross, no, absolutely not.
When I was practicing in the emergency department far too often
patients would come in with somatic symptoms, physical
symptoms, when they really needed help for their mental health.
When I was Secretary of Health, we never had enough resources
to provide services to people in mental health.
In fact, it clogged up our emergency department, people
that required care, and in many cases, people knew that they
needed help, and yet those services just were not there. We
really need to have more services, more resources, and as you
said more enforcement because there are all kinds of service
limits on people receiving mental health services, and we do
not necessarily do that for somatic care.
Mr. Norcross. Well, certainly you bring up a good point.
The way that the system works now. If you are caught you have
to reimburse the system, but there is still no penalty. I just
asked my colleagues when you go down the highway you know there
is no policeman, I am sure each of us will stick to the speed
limit. We know that does not happen, and quite frankly that is
what is happening in mental health.
The earlier the access to mental health services it saves
you money on the physical side. This is something that is
addressed in Medicare because we do not have that problem, and
certainly Medicare for All this wouldn't be a problem. Again, I
want to thank the Chairman for holding this hearing, and I
yield back the balance of my time.
Chairman DeSaulnier. Thank you, Representative Norcross.
Thank you very much for your comments and advocacy, and I know
having driven with you, you always adhere to the speed limit in
New Jersey and other states. All right. Now I recognize Mr.
Walberg from Michigan for 5 minutes.
Mr. Walberg. Thank you, Mr. Chairman, and I thank the
witnesses for taking part as well. While my democratic
colleagues look for ways to increase the government's control
in healthcare, I along with my republican colleagues, believe
we should be promoting policy solutions that expand the ability
for employers to continue offering high-quality health coverage
for their employees.
If the committee is serious about exploring pathways to
affordable health coverage, and not just a Medicare for All
approach, then I would encourage them to take up the
Association Health Plans Act, legislation I have authored with
republican leaders on this committee, that would lower
healthcare costs for hundreds of thousands of small businesses,
employees and sole proprietors.
Indeed, employers are finding health benefits more
important than ever during the ongoing labor shortage as 75
percent of Americans say that coverage played a role in their
decision to accept their current job. Employers want to offer
health coverage to their employees.
However, small employers lack the resources and the
bargaining power of large employers, and therefore struggle to
offer comprehensive coverage at an affordable price. By
obtaining health coverage through an Association Health Plan,
or AHP, small employers will be able to compete with large
employers and offer top quality, affordable plans.
In 2018 the Trump Administration issued a rule that
expanded AHPs dues, that rule has been held up in the courts,
and last year the Biden Administration continued to thwart that
rule by asking the Appellate Court to hold the appeal. On that
basis, Dr. Blase, and it is good to see you again, some critics
of the Trump Administration's rule say that AHPs provide skinny
coverage that fails to adequately meet the needs of employees.
After the rule was released, and AHP's began to form, was
that the case? Second, what kind of coverage did AHPs provide?
Dr. Blase. Thank you, Congressman, it is good to see you
again too. That is not the case. AHP's did not provide skinny
coverage. AHP's provided comprehensive coverage. AHP's are
employer coverage, it is how you explained it in your opening.
It is a way that small employers can get on the same level
playing field as large employers. There is a lot of
efficiencies when they can do that.
There was a study that was done of the AHP's that were
formed as a result of the rule. They were mostly through local
Chambers of Commerce. They provide a comprehensive coverage,
you know there were no pre-existing conditions exclusions,
there was no medical underwriting, it was employer coverage, it
was working well for those small businesses and employees.
Mr. Walberg. It increased health coverage, didn't it?
Dr. Blase. Yes, the projections the CDO did an analysis,
and they projected there would be 4,000,000 people in the new
AHPs and that 500,000 of them, half a million, would otherwise
have been uninsured, so here you're increasing insurance
coverage with no new Federal spending.
Mr. Walberg. I appreciate that information. Dr. Blase, your
testimony discusses how Federal Government policies exacerbate
inflationary pressures in the economy, and you site the
American Rescue Plan's expansion of the premium tax credit as
an example. Could you elaborate on how this policy will drive
up prices throughout healthcare and the economy?
Dr. Blase. Sure. The way the subsidies in the ACA work is
that they limit the amount of household income that a family
has to pay for a benchmark plan. Any price above that benchmark
plan is the taxpayer burden. That enables the insurers, they
know this. Right? They know that they can raise premiums, and
the premium is going to be almost completely paid by the
taxpayer, so it gives insurers pricing power.
It disincentivizes enrollees to premium increases, and it
creates inflationary pressure where you are going to have
higher healthcare prices results from that. You also have the
Medicaid provisions in the proposals that are also
inflationary.
Mr. Walberg. Expanding AHPs really would reduce
inflationary pressure, would it not?
Dr. Blase. It would. It would save the Federal Government
money to the extent that people who use AHP's use employer
coverage, and not the premium cash credits. Ranking Member
Allen talked about the concern with the budgetary cost of the
premium tax credits. If they really--the tax exclusion, so
employer sponsored insurance is not subject to income and
payroll taxes.
That reduces Federal tax revenue by about $2,000.00 for
each person. The premium tax credits in the ACA are much
larger, so as people move from employer coverage to the ACA
market, the overall cost grows. If the subsidies are made
permanent, I think there is a real risk that a lot of employers
are going to drop coverage so that their workers qualify for
these enormous subsidies, and the budgetary cost is going to be
really significant, and the inflationary impacts. Thank you.
Mr. Walberg. I yield back. Thank you.
Chairman DeSaulnier. Thank you. The Chair will now
recognize the sage of Utica, New York, Mr. Morelle.
Mr. Morelle. Wow no one has ever called me a sage, but Mr.
Chairman thanks. I very much appreciate you holding this
valuable hearing to discuss I think one of the most important
topics, and thanks to the witnesses for their testimony.
Prior to coming to Congress, I had the honor of serving in
the New York State Assembly as Chair of the Insurance
Committee, where I worked to expand access to high-quality
health care for tens of millions of New Yorkers, and I was
particularly proud to pass one of the first permanent mental
health parity laws in the country, and I appreciate comments by
my friend Mr. Norcross about that at the Federal level.
We expanded insurance coverage for mental health services
and provided access to those services in our State. We also
enacted prior approval of health insurance rates, strengthened
the states MLR, or medical loss ratio, supported the expansion
of telehealth, required health coverage of people on the autism
spectrum, and enacted the ACA.
When I came to Congress one of the goals of continuing that
work to help people get access to high-quality health care, and
I know that protecting that is how we ensure success at work,
home and school. I wanted to just expand on a couple of
questions that were asked. First of all, Ms. Keith, I
appreciated your comments. Can you talk about how the
Affordable Care Act uses community rating, and the influence of
community on health insurance premiums, and some thoughts
perhaps, as to how the public option, depending on how its
constructed, could be designed to better reflect risk in
consumer premiums.
I just would say Rochester, New York, where I represent is
really the founder of community rating through aggregation of
our business employers decades ago. If you could just comment
on that I appreciate any thoughts you have on that.
Dr. Keith. Sure. The Affordable Care Act's community rating
protections really reshaped most states, perhaps other than New
York. Really only allows premiums to vary based on four
factors, so age up to three to one, geography represent you
know acknowledging that health care rates vary, and the cost of
health care differs by geography, whether it is a single
coverage, or family coverage, and tobacco use, up to a certain
limit.
The idea there was before the Affordable Care Act in those
states you could face higher premiums because of your gender,
because of your health status, because of your family history,
not even your own health status, and the Affordable Care Act
came in and said we're not going to allow that anymore.
We are going to protect people with pre-existing conditions
who are not going to face higher rates. It really constrained
the factors that insurance companies could use, and sort of
leveled the playing field for sick and healthy people if you
will.
Mr. Morelle. Great. Thanks so much for your answer. I
wonder if Dr. Benjamin, I lead a project back in Rochester,
which is trying to have an integrated delivery system for
health, education and social services--you talk about social
determinants. One of the things that I struggle with, and
perhaps you can offer some insight to, and maybe the other
panelists as well.
How would you pay for social determinants? How would we
find a sustainable way of making sure that those social
determinants which are so critical to health care quality, how
we would pay for those in a sustainable way?
Dr. Benjamin. You know one of the things that we do not pay
enough attention to is managing policy and spending other
people's money. What I mean by that is there is a fair amount
of money in the social services system. We just do not
coordinate it very well with the health care side of the House.
First of all, doing a much better job of coordinating the
systems between the health care system and the social services
system we already have, and leveraging those dollars.
We also spend a lot of money between those two systems
redetermining people that are already eligible for one system,
and we used to only accept that eligibility for the other
system, so we spent a lot of--we frankly waste a lot of time
and effort, and staff time, in doing these kinds of things that
don't necessarily result in really excluding people. It just
costs more money.
Mr. Morelle. Well, I would love to come back to you and
talk to you a little bit about that because we are--our goal is
to have a single platform where integrated benefit eligibility
for health care, for social services, and really utilize
expenditures and investments in the social determinants to
lower health care costs, have better outcomes, better
experience for people who are in the system.
The challenge is, and I think it is probably a value-based
payment system, or somehow using some of the insurance premium
to be able to pay for it. It is a bit of the sustainability of
the model we are building that continues to confront us, and I
do think it is probably using health insurance premiums, at
least a percentage of it to help pay for the sustainability of
an integrated system of delivery.
Dr. Benjamin. One way you might want to think about it
because using those dollars to help pay for workers for
example, paying the salaries of folks could help.
Mr. Morelle. Yes. Well, thank you very much. Mr. Chair, I
yield back and thank the witnesses.
Chairman DeSaulnier. Thank you, Mr. Morelle. The Chair will
recognize the gentleman from Indiana the floor is yours.
Mr. Banks. Thank you, Mr. Chairman. Mr. Blase, I wonder if
you could speak for a moment about the effects of monopolies
and the healthcare sector have on the overall costs of medical
services.
Dr. Blase. Yes, thanks for that question. I have actually
done a lot of work in the State of Indiana on hospital prices
there. Consolidation raises prices. It is clear. Consolidation
has been growing. It is actually one of the things that we know
has happened after the ACA was enacted between 2009 and 2014.
Hospital consolidation increased, hospitals applying for
physician practices increased. When hospitals acquire physician
practices, one of the problems is you get referrals within that
hospital system without competition. It is a clear sort of
evidence agreement across health economics, that consolidation
significantly increases prices.
Mr. Banks. Can you quantify it? Is there an easy way to
quantify what the share of healthcare price inflation is
related to, or explained by hospital monopolies?
Dr. Blase. Congressman, it is not a particular datapoint
that I am familiar with. I think at top of head within a local
area if hospitals merge, I think that leads to higher prices
around you know 10 to 15 percent. I am doing that off of sort
of memories and studies I have read.
Mr. Banks. You mentioned the efforts at the State House in
Indiana this year addressing some of these important issues.
What would be your recommendation at the Federal level for
Members of Congress to address what is obviously a major driver
of increased healthcare costs and hospital monopolies?
Dr. Blase. Yes, so I think some of it could be anti-trust
policy, so and I would prefer resource. In 2018 the Departments
of HHS Labor and Treasury released reports called Reforming
America's Healthcare System to a choice of competition that has
50 recommendations. Allowing FTC to scrutinize the mergers of
non-profits, right now they are excluded from looking at non-
profits.
Reversing the ACA's prohibition on physician-owned
hospitals. Physician-owned hospitals can serve as a competition
to traditional hospitals. Price transparency efforts, codifying
price transparency, so that consumers and employers are able to
put more pressure and sort of bring greater benefit design to
their healthcare spending.
Honestly, there are a lot of things that states do that are
anti-competitive, where the Federal Government could look at
trying to incentivize states to get rid of things. Probably the
most insidious is something called certificate of need loss
where they were to expand healthcare in many states, you have
to go before a Board, a government Board, that is often
dominated by incumbent providers in order to bring on more
hospital beds, or you know, expand MRI machines.
Mr. Banks. Can you unpack a little bit further? The Federal
Government continues to ignore hospital monopolies, and what it
does to drive up overall health costs on all American families.
What can states do without actions of the Federal Government?
You mentioned the common laws, but what else?
Dr. Blase. States can make sure they do not enact these
things called certificates of public advantage, and actually
some states have done this, and certificates of public
advantage allow hospitals to escape Federal anti-trust scrutiny
and it's a move by a lot of hospitals. We have seen this
actually in Indiana over the past year with a couple of
hospitals there that are trying to enact these.
I think things like expanded telehealth, expanded scope of
practice can help lighten some of the problems caused by
consolidation. You are right to focus here. It is a real
problem in American healthcare.
Mr. Banks. Thank you very much. I agree, incredibly
important and very helpful. Thank you very much, Mr. Chairman.
I yield back.
Chairman DeSaulnier. Thank you, Mr. Banks. We will now go
to Representative Wild for 5 minutes.
Ms. Wild. Thank you, Mr. Chairman. My question is for Ms.
Keith. Ms. Keith, last Congress I introduced the Family Health
Care Affordability Act, which would fix the family glitch, a
loophole that has prevented some workers from being able to
access the subsidies they need to afford health coverage for
their spouse and their children.
I am proud to say that it passed the House as part of the
Patient Protection and Affordable Care Enhancement Act, but it
has not yet gotten through the Senate, and I will keep fighting
until we get that done. You wrote about the family glitch in
Health Affairs just last year, and I would appreciate it if you
could tell the committee how the family glitch has prevented
workers and their families from accessing affordable coverage.
Dr. Keith. Thank you so much for this question. It is such
an important issue and thank you for all your work and
leadership here. Under the family glitch if anyone in your
family is offered affordable job base coverage for themselves
as an individual worker, it unfortunately bars their entire
family from accessing marketplace premium tax credits, even if
that employer offers unaffordable family coverage.
The offer of affordable coverage for one person, and only
one person, bars the entire family from accessing affordable
coverage through the marketplace. The most recent data that I
am aware of on this comes from the Kaiser Family Foundation.
It is about 5.1 million people have been affected by this
family glitch, more than half of those 2.8 million are
children, and this is primarily you know family members of low-
income workers who do not have any sort of affordable option at
this point, and again are barred from marketplace access, so I
think this is a huge incredible issue, and would be able to
lead to increased coverage significantly.
Ms. Wild. Well, thank you. My next question was going to be
you know how important it is in the whole context of providing
high-quality affordable health coverage, but I think you just
answered that. Do you have any thoughts on other things that
can be done to solve the family glitch, other than me
personally trying to convince members of the Senate to pass
this bill?
Dr. Keith. I think there is some you know potential
administrative options that the Biden Administration could look
into, as well, that would be sort of a narrower fix, but there
might be some room to fix it there.
I guess the one thing I would emphasize in terms of the
impact is that you know these 5.1 million people, again
primarily children that I am talking about, they got no relief
under the American Rescue Plan Act either, so again I think
there is a lot of urgency to extending coverage here so that
these families have some relief.
Ms. Wild. Thank you so much for that information. I think
it is vitally important. As I said I will continue to work and
press forward on this, and I look forward to interacting with
you in the future. With that, Mr. Chairman, I yield back.
Chairman DeSaulnier. Thank you, Congresswoman. The Chair
will now recognize Mr. Fitzgerald from Wisconsin. There we go.
Mr. Fitzgerald, the floor is yours.
Mr. Fitzgerald. Thank you, Chair. Something that we talked
about earlier I guess, and that would be Dr. Blase I am a
member of the Small Business Committee, and that means that I
hear from a lot of these small business owners in my district
as well.
The trouble that they are having hiring people, this is
kind of shocking, but providing health insurance is obviously
one of the incentives that is oftentimes goes along with
hiring. In fact, there was an AHIP study recently reported that
three-fourths of Americans said that employer provided health
benefits played a role in their decision to accept the job.
Clearly, employees want health benefits from their
employers. What do you think we could do as Members of Congress
to enable more small businesses to provide more health benefits
to their employees? I will just tell you a quick story. Many of
the Chambers of Commerce in my district, which I also
represented a good portion of the State legislature, that was
one of the things that many of those Chambers had worked on was
devising a plan that included their members so they could
continue to expand coverage.
I know this is all in light of the Affordable Healthcare
Act, but I just would like your opinion on that. What
specifically could we do?
Dr. Blase. Sure. Well, thank you for that question,
Congressman. One of the things that inspired the AHP rule, and
another rule that I will talk about, Individual Coverage HRA's,
is that small employers were increasingly not offering coverage
after the ACA.
I think off of that I would say you could codify that 2018
Department of Labor rule that allows small employers to join
together and get the same advantages that large employers get
when they offer coverage. Again, CDO said that would be 4
million individuals making access of that coverage, reduce the
number of people without health insurance by half a million.
These employers, and more importantly employees, would be
better off. They have coverage that is better for them, and
many of them would have coverage that they wouldn't otherwise
have. The other thing that was really attractive to small
businesses was to just get small businesses out of the business
of dealing with health insurance so that the could focus on
their core business purpose.
The Trump Administration finalized the rule in 2019 that
would have allowed employers to offer a contribution that their
workers could take to buy coverage that worked best for them in
the individual market. This is one way to expand worker choice
over insurance plans. A lot of workers only get one option when
it comes to their health insurance.
It really does not make a lot of sense for a lot of
reasons. What other major financial project do people only get
one choice over? This would have allowed employers to make this
kind--it is really the analogy would be like 401K's. The
employer provides a contribution on its tax-deferred, it has
the same tax advantage as traditional employer sponsored
insurance.
The worker takes that contribution and buys a plan that
works best for them in the individual market. That rule is
expected, we are expected to get about 11 million people using
that rule, when it is in full effect. It will also reduce the
number of people that do not have health insurance by
potentially up to a million.
Mr. Fitzgerald. Correct me if I am wrong. Rules to expand
association health plans for short-term limited duration plans,
and the individual coverage HRA's. I mean, there must have been
a decision as to why that was a good move. It sounds like you
just mentioned some of those. Is there anything else that was
considered?
Dr. Blase. Yes. I mean, I think it was about maximizing
options for middle class families that have been priced out of
coverage because of these ACA, as well as for small employers,
and their employees that were increasingly not getting enough
coverage through the workplace.
It was giving them more options. They still have the
options of the status quo nothing affected the options that
were already available to them, but just giving them new ways
to obtain health coverage that for many of them would be more
affordable and attractive.
Mr. Fitzgerald. Very good. Thank you, and I yield back
Chairman.
Chairman DeSaulnier. Thank you, Mr. Fitzgerald, and the
Chair will now recognize the gentlelady from Georgia,
Congresswoman McBath for 5 minutes.
Mrs. McBath. Thank you, Chairman, DeSaulnier, and thank you
to all the witnesses for being here today to talk about this
very, really vitally important topic. At a time when so many
are suffering financially, lowering the cost of health care so
everyone can afford the treatment they need is just absolutely
essential. Health care now accounts for about 20 percent of our
total gross domestic spending.
That is a staggering number, and we continue to see it rise
across all services. For my question, I want to focus on the
cost of prescription drugs. We have seen costs continue to rise
at rates much faster than inflation. Prices that have become
seemingly divorced from innovation, with even previously
inexpensive generic drugs, subject to random changes.
These are life-saving medications, which I myself as a two-
time breast cancer survivor, have had the advantage to be able
to use. People are having to make unthinkable decisions about
whether to purchase their medications, or put food on the
table, or gas in their car.
The American people, they are just sick, and they are tired
of seeing endless price increases while pharmaceutical
companies see record profits. We know that this market needs
reform. Drug companies often argue that we already have a
system in which prices are negotiated by health plans, and
pharmacy benefit managers, and therefore it is not needed for
the Federal Government to negotiate directly.
However, I can clearly see that the system is as it is, is
currently designed, it is just failing millions of patients in
my district, and throughout the country.
I just hope we can all be clear. You know it is taxpayer
dollars that go into the discovery of many of these drugs, and
its taxpayer dollars and wages that go toward paying for these
outrageous prescription drug prices. My question is for
Secretary Reich.
How would addressing out of control drug prices to bring
them more in line with those paid by other countries create a
fairer system for the American people? Secretary Reich?
Mr. Reich. Yes, I am sorry. Let me just say, Congresswoman,
that retail prescription drug spending per capita by country,
and I have in my testimony a chart to this effect, is relative
to any other advanced country. The United States is spending
far more per person, we are up to about $1,000--$1,500 per
person, and there is no doubt, and there are a number of
studies that if the Federal Government were to use its
bargaining power through primarily Medicaid and Medicare, but
also veterans, that bargaining power would be substantial in
terms of lowering drug prices.
Having worked in and around Congress, and being Secretary
of Labor and so on, I can tell you something that obviously is
an open secret. One of the reasons that the pharmaceutical
companies are so opposed to allowing the Federal Government to
have that kind of negotiation power at the Federal level is
because they are afraid that the Federal Government could
actually reduce the increase in drug prices or reduce drug
prices overall.
Mrs. McBath. Thank you. Secretary Reich given this
significant taxpayer support for the development of new drugs
so that you know, how do you respond to the argument by drug
companies that high prices are needed to foster innovation?
Mr. Reich. Well, I do not think that that is true. There is
a great deal of innovation by drug companies in other
countries, Switzerland would be a good example. The National
Institutes of Health provide American drug companies with
extraordinary health and basic research, not the development
side.
That's up the individual companies. But the basic research
is paid for by taxpayers, and it strikes me as unfair for
Americans to on top of that bear the highest drug prices in the
world.
Mrs. McBath. Well, thank you so much for your answers, and
I believe it is past time that we have addressed the rising
cost of health care and make coverage affordable to all
Americans. Access to health care is a right, you know, it is
definitely a right, and we need to do what is necessary to make
universal health coverage a reality. Thank you so much,
Chairman. I yield back.
Chairman DeSaulnier. Thank you, Congresswoman McBath. The
Chair will now recognize the gentleman from Michigan for 5
minutes, Mr. Levin.
Mr. Levin. Thank you, so much, Mr. Chairman. Secretary
Reich, let me start with you. I have very fond memories of
working for you sir when I was a staff attorney for the Dunlop
Commission, and then under your direction we fended off Newt
Gingrich's effort to undermine the 40-hour work week, and so
forth.
Let us talk about health care. We are all united by the
difficult reality that we are going to have a loved one, we
ourselves are going to face a serious health scare in our
lives. Health care is an absolute necessity. It is a
fundamental human right.
This pandemic has illustrated the importance of quick and
easy access to life-saving cures and preventative medicines,
right? The question remains. If we can make COVID vaccines
widely available, and free at the point of use, why cannot we
do the same for other cures and treatments?
We still have, despite all of our efforts, 30 million
people uninsured. There is just no question that we need
Medicare for All, a national health program to afford everyone
excellent health care from when they are born to when they die.
Mr. Secretary, you are an economist.
The U.S. spent 4.1 trillion dollars on health care in 2020,
according to the data from the Department of Health and Human
Services. That means that health care spending accounts for
nearly a fifth of our gross domestic product. That is a lot of
money, so building off of your testimony, I wanted to ask you
to break this down a little more.
When we add up the taxes, the premiums, the deductibles,
the prescription drug costs, even after you pay all of your
other stuff, then they start hitting you with coinsurance and
stuff right? Spending by public and private sectors together,
are we not already paying as much as we would nationally for
universal health care?
If we are paying that much, why is not the system universal
for all that money?
Mr. Reich. Well, Congressman, that is the most important
question I have heard today in the sense that we are not
getting nearly our money's worth, the 30 million people who are
uninsured, have no health insurance at all, and they do not
have any preventive care. Even those who do have insurance are
paying copayments and deductibles that are so high that they
are deterred from seeing doctors.
That means that they are not getting the preventive care
they need, which is driving up the total costs. In the
background of a lot of this discussion is an understandable
concern about Federal bureaucracy. I want to just bring
everybody's attention to the fact that the two most popular
programs in history in the Federal Government are social
security and Medicare.
I mean people rely on Social Security and Medicare. There
is nothing socialist about these things. Social Security and
Medicare are paid for out of basically payroll taxes. They are
universal in the sense that they are available to everybody who
meets certain criteria with regard to Medicare.
It is a--I should know. I am now eligible for my age. Why
not continue to lower the age of eligibility of Medicare? Why
not expand what Medicare can do for people? Why not use the
models that are available to us? I think the Affordable Care
Act is enormously helpful. It is a step in the right direction,
but given the scale of the problem, and given how much we are
spending as a society, as you say, more than 20 percent of our
entire gross national product, gross domestic product, we can
do so much better.
Mr. Levin. All right. What about overhead? What is the
overhead and the administrative costs of Medicare compared to
you know the private insurance?
Mr. Reich. Well as I suggested in my testimony, there have
been a number of studies looking at the specific issue. What
they show is that the overhead, that is basically the
administering costs for private, for-profit health insurance,
are substantially higher than the administrative costs of what
might be called Medicare for All, or Medicare generally.
The other aspect of these administrative costs, I mean
because you have got one-third of nurses' time for example,
looking at billing, and you have got all sorts of marketing,
and advertising costs, but there is another aspect of this that
was brought up by one of your members just a moment ago, and
that is the consolidation.
We see in private for-profit health insurance, more and
more consolidation, which means more and more market power to
drive up these costs, and that is another additional burden on
many, many Americans.
Mr. Levin. Well, thanks. Mr. Chairman, unlike
Representative McBath and many others, I am a bad child, and I
went slightly over, so I wanted to ask Dr. Benjamin questions
too, but we will submit them for the record, and I appreciate
maybe he can answer them in writing, and I appreciate your
indulgence. I yield back.
Chairman DeSaulnier. Thank you. Duly noted, Andy, and there
will be consequences outside of the hearing.
Congresswoman Haley Stevens.
Ms. Stevens. Well, thank you, Mr. Chair, and thank you to
our distinguished group of panelists. I could not agree with
the conversation more that we have a serious problem in the
United States of America, even post ACA with millions of
Americans still struggling to afford health care, individuals
not receiving coverage if they experience a job loss.
We saw this play out in the middle of the pandemic, even in
a State like Michigan, which embraced the Medicaid expansion,
and halved the uninsured rate we still have the sticking point
of 6 percent of Michiganders not receiving adequate health care
coverage, or getting on those junk insurance plans, which is
something that this subcommittee, and our full committee have
explored at length.
I actually because this hearing has been so elucidating,
and important, just jumping in. How we give folks adequate
coverage. I wanted to drill down on an area that is continuing
to expose Americans and Michiganders alike, and that is with
regard to the cost of prescription drugs.
If you cannot afford your prescription drug you are not
getting the health care you need, and time and time again I
hear from individuals, particularly older Americans as I spend
time volunteering for Meals on Wheels, or at our various senior
centers, and folks tell me you know they are afraid to go to
the pharmacy to get their prescription drugs refilled that they
you know worked hard all their life, and saved for retirement,
and now they have got to go back to work just to cover the cost
of the prescription drug, be it for arthritis or obviously,
very famously we see insulin costs going through the roof. We
know we have a plan to lower the cost of prescription drugs,
but Dr. Benjamin specifically, I wanted to ask you given your
role with the American Public Health Association, how does
delaying, or skipping medications negatively impact patients,
because we know that this happening.
Dr. Benjamin. Well, people get sick. We know not only do
they skip their medications, but they also split them. You see
husband and wives for example, and you know, partners sharing
medication. I will take this one today, I will give you the
other one tomorrow.
Then you see real significant clinical consequences, their
diabetes does not get well controlled, their hypertension does
not get well controlled. That is a big issue. Then if you are
totally uninsured, you know you pay the full costs of that
medication.
Ms. Stevens. Right.
Dr. Benjamin. For example, you know Trulicity is a diabetic
medication. It is a shot you take it once a week. It is a great
medication. It is for type 2 diabetes; its list price is over
$800. If you are insured the price can be anywhere from
nothing, depending on the plan you are in, to $30--$40 a month.
These things can be very, very expensive, and the big
problem is that when you do not have those dollars you do not
take your medications.
Ms. Stevens. Right. I will tell you, I am in Oakland
County, Michigan, and at least I had talked about retirees, I
know folks who have retired and gone back to work to get that
job to just cover the extra cost. The other point is families.
If you have got a kid with a rare disease, or is taking
medication and you lose your job, and then you are paying that
full cost, and you are just stressing and stressing.
I heard folks on the other side of the aisle talk about
inflation right, and we know costs are going through the roof,
and we know we have got a plan to lower the cost of
prescription drugs. We have got it in Build Back Better. We are
certainly waiting to take that vote.
Are there other ways in which we could rein in out-of-
control drug costs to improve public health in this country?
Dr. Benjamin. Well, as the Secretary said, allowing the
Federal Government to negotiate for prescription drugs is the
way to do this. It is clear with capitalism that we can get
these negotiations done, and the volume of those negotiations
would control them to a great deal degree.
The other thing of course is limiting their ability to
advertise.
Ms. Stevens. Yes.
Dr. Benjamin. That would make a big difference. I have got
to tell you they spend a lot of money advertising for
medications, and that drives up utilization. People are now
going to their doctors saying I want to get drug A, which may
or may not be the best drug for them.
Ms. Stevens. Yes. Well, I think it is clear if you do not
have affordable universal health care coverage, you do not have
access to prescription drugs, you know, you are really left out
to dry as a result, so thank you so much Mr. Chairman, and
thank you to our distinguished group of panelists for being
here today. I yield back.
Chairman DeSaulnier. Nice job. Thanks, under time. I am now
pleased to recognize the Chairman of the committee, Chairman
Scott, the floor is yours.
Mr. Scott. Thank you. Thank you, Mr. Chairman. Mr. Blase, I
was intrigued about the option you had where the employer could
make a contribution to the costs. I did not see any barrier to
doing that now. As I understand your plan, the employer would
make a contribution. The employee would go on the Marketplace,
get a plan, and use the money.
Do you expect that contribution to be tax-exempt to the
employee on the plan?
Dr. Blase. Mr. Chairman, thank you for that question. It
was actually rule changes in the Obama administration made it
illegal for employers to make contributions that employees
could take to buy individual market coverage. The policy change
we did reversed that and set up a set of rules where employers
can make these contributions, so that the workers can buy
coverage in the market, and yet those are totally tax deferred,
so these contributions aren't subject to Federal income or
payroll taxes.
Mr. Scott. Well, that means they would be getting a benefit
from the first, from the tax-free income for the contribution,
and then go and get benefits in the Marketplace, so they would
be kind of double dipping.
Dr. Blase. I am sorry. You cannot qualify for both the
premium tax credit and the employer contribution. It works just
like normal employer coverage. If you take the employer
contribution, you are precluded from receiving a tax credit
with the changes.
Mr. Scott. You would be buying the Exchange at the sticker
price with no credits?
Dr. Blase. You would use the employer contribution, which
would be you know for a family it could be $10,000.00 or more.
You take that employer contribution, and you would use it to
buy an individual market plan. For the most part their----
Mr. Scott. Wait a minute, at sticker price with no credits?
Dr. Blase. Well, you are taking--there is no premium tax
credit. You are taking the employer contribution. Basically,
what this did was it equalized the tax treatment between plans
that employers select for all the employees, and the employer
contributions.
Mr. Scott. Wait a minute. They would get on the
Marketplace, so they would buy the sticker price with no
credits?
Dr. Blase. Well, they would have the employer contribution.
So----
Mr. Scott. Right, okay, so----
Mr. Blase. Employers right now contribute to family plans
about $15,000.00 on average. You can take that $15,000.00 that
the employers provide, and instead of the employer buying the
plan for the employee, they give that money in one of the
HRA's, the employee takes that $15,000.00, and buys a plan in
the individual market.
Mr. Scott. At sticker price? Wait a minute, at sticker
price with no tax credits, no reductions for income?
Dr. Blase. If the premium is $20,000.00.
Mr. Scott. Right.
Dr. Blase. The employer contribution would be $15,000.00,
and then the employee would pay the $5,000.00 on their own. It
would work just like the way a regular employer plan would.
Mr. Scott. Let me get to the simple question that I think I
got the answer, I am not sure. On the HSAs can an association
insure a low-risk group? The problem with the association plans
of course is that they pull out a healthy group and pay less,
and by simple arithmetic, everybody else pays more. That is the
part that people do not talk about.
Dr. Blase. The AHP determines who the membership is, but
there is no underwriting within that group.
Mr. Scott. Yes, but it could be a group of healthy people
just by virtue of their employment. There is no barrier to
insuring healthy groups. If it is not a healthy group, if it
costs more than average, then nobody is going to buy the
product.
You have a healthy group, you pay less, and does not
everybody else pay more?
Dr. Blase. It works the same way as employer provided
coverage works. If you are a large employer, and you like have
younger, healthier workers, then you are going to pay less, you
are self-insured. You are paying less than workforces that are
older and sicker. The thing with AHPs is it is basically just
an extension of employer coverage.
Mr. Scott. The answer is yes, you would pull out healthy
people. They would pay less, everybody else would pay more. Do
they have to cover pre-existing conditions?
Dr. Blase. Yes.
Mr. Scott. They have to?
Dr. Blase. Yes.
Mr. Scott. Essential benefits?
Dr. Blase. I mean all the AHP's are covered comprehensive
health insurance benefits.
Mr. Scott. Wait a minute, essential benefits?
Dr. Blase. Yes, I mean they are subject to----
Mr. Scott. Can they place lifetime limits, or annual limits
on coverage?
Dr. Blase. No. They are subject to the ACA requirements.
Mr. Scott. There is no limit. There is no annual limit.
There is no lifetime limit.
Dr. Blase. Correct.
Mr. Scott. My time has expired, Mr. Chairman.
Chairman DeSaulnier. Mr. Chairman, I am not going to cut
you off if you want to followup please.
Mr. Scott. Well, if there is no lifetime limit to these
HSAs you have a very serious problem of financial stability
because one sick person can bust the whole operation. You have
said that you cannot limit just like a marketplace policy
cannot limit annual, or lifetime benefits, that was your
testimony.
Dr. Blase. AHPs are going to be subject to the same
regulations that apply to ACA regulated plans, and that apply
to employer plans.
Mr. Scott. Ms. Keith, is that your understanding?
Dr. Keith. I would say that AHPs have to comply with the
large group market rules, at least the way I understand the
2018 rule that Dr. Blase has been talking about, so could not
use pre-existing conditions exclusions, but you are absolutely
right Chairman, could restrict eligibility, it could restrict
benefits, and could do selected ratings, so higher rates based
on age, based on industry, based on gender would not have to
sort of comply with those core what we think of as individual
and small group market protections that were put in place by
the ACA, so some may see reductions, but narrow.
Mr. Scott. What about annual benefits?
Dr. Keith. The limit on lifetime annual dollar limits does
apply to the large group market, and so that would apply here,
but again there is very few ACA requirements that apply to the
large group market, which is where these association health
plans visit.
Mr. Scott. On an ACA policy, there is no limit. You have to
keep paying. You cannot stop at a certain level you have to
keep paying? Is that right?
Dr. Keith. Correct. There are no dollar limits on annual or
lifetime care.
Mr. Scott. Can an AHP have an annual limit?
Dr. Keith. It should not have, at least not on essential
health benefits, but it does not have to cover essential health
benefits. You can keep people out. Everything you said about
the ability to select risk and healthier people, and cause
premiums to increase for everyone else is exactly right.
Mr. Scott. Okay. Thank you, Mr. Chairman. I have gone way
over.
Chairman DeSaulnier. You are entirely welcome. Nice job for
a BC graduate, law school graduate. I would like to pursue
this. We have done a lot of work with this in California, and I
know other states have tried to help small businesses,
particularly restaurants, of which I am familiar, you know
coming out of COVID. With that, I will now recognize the
Congresswoman from Washington, Congresswoman Jayapal, welcome
to our subcommittee.
Ms. Jayapal. Thank you so much, Mr. Chairman. Thank you for
allowing me to participate in this incredibly important
hearing. Many important points that have been made, and I share
Representative Bank's concern about hospital consolidation
increasing health care costs, and Mr. Blase's suggestion that
the FTC be able to scrutinize mergers among non-profits is
actually exactly what my forthcoming bill would do, something I
think will have tremendous bipartisan support.
Let me also put an emphasis on Secretary Reich's comment
that it would be hard to invent a more complicated and
expensive health care system than what we currently have, and
one that produces some of the worst health outcomes compared to
other peer countries in spite of what we spend.
During COVID-19, an estimated 27 million people lost their
health insurance due to job loss, a perverse tie in that put a
double whammy on working people. Medicare for All would have
prevented that and would have ensured that all workers have the
health care they need from birth to death, regardless of
employment status, or socio-economic status, or race,
ethnicity, gender, or any other classification that is now used
to deny people health care.
The committee has a chart that I want to share, and so
Banyan if you could put that up, thank you so much. This chart
is from the Institute of Medicine, and it shows the ranking of
U.S. mortality by age group among peer countries. The United
States has the highest mortality rate for all ages up to 65
when we rise to the top of the rankings with one of the lowest
mortality rates.
It is no coincidence that this happens as soon as Medicare
coverage begins. Dr. Benjamin, as one of the Nation's leading
voices on public health issues, can you explain how having
stable universal health coverage such as Medicare improves
health outcomes?
Dr. Benjamin. Yes. You know coverage matters. The fact that
you actually get the care that you need when you need it makes
a big difference. The number of times that people do an
insurance card biopsy when you first show up to the health care
center asking what your insurance plan is, and it drives a
whole lot of things.
Quite frankly, the cheapest way to reduce health care costs
to everybody is to make sure that everybody's covered.
Ms. Jayapal. Thank you so much Dr. Benjamin. Dr. Reich, a
couple of questions for you. I want to talk about this tie in
between health care and insurance. What harms does a system
that tethers health insurance to employment, even with the
presence of a public option present? That's the first question.
Then second, researchers at the Economic Policy Institute,
which you cofounded, found that Medicare for All would increase
wages and salaries for workers. Right now, labor unions
struggle to bargain for increased wages, while they also have
to bargain for adequate health insurance. Can you talk about
the effect that Medicare for All would have on labor union
bargaining and the wages and benefits that are bargained?
Mr. Reich. Yes. First of all, Congresswoman, by tying
medical insurance to employment as we now do, we find ourselves
more and more people are tied to their employment. At a time
when not only have we been through a pandemic, and we have seen
how fragile that employment relationship can be, but also, we
have more and more people who are working part-time, who are
contract workers, who are self-employed.
We have probably the largest portion of our workforce in
terms of growth right now, are people who are not tied to
individual employers. They really get shut out of a health care
system that is employer based. We need if we are just looking
at trend lines, and if we need to make sure that they have
affordable health insurance.
Labor unions you asked, labor unions have limited
bargaining power obviously. What they are now doing is using
part of that limited bargaining power not on wages and working
conditions, but on health care. This is something that you know
if it were, if we had an established health care system, a
Medicare for All system, like most other peer nations do, labor
unions would not have to utilize their bargaining power on this
particular issue, they could seek higher wages and better
working conditions instead.
Ms. Jayapal. That is why we have so many labor unions that
are now supporting and have endorsed the Medicare for All Act.
One last question. One in six Americans stay in a job that they
do not like to maintain health coverage even worse some people
are forced to stay in unhappy and dangerous relationships to
keep their health insurance.
Secretary Reich, how would Medicare for All affect workers
who want to leave their jobs, or start a small business, or do
many other things, but feel that they are unable to?
Mr. Reich. Well, the ``job lock'' is the term we use. That
does mean that many people simply cannot get better jobs, they
cannot get worker training, they cannot get out of
relationships that might be abusive, and they cannot get out of
workplaces that they find abusive. They are locked into jobs
that they otherwise really should not be locked into for a
whole variety of economic and sociological reasons, but it is
because of the health care.
Ms. Jayapal. Thank you so much, Secretary Reich and Mr.
Chairman. I hope we just continue to add to the number of
people that understand we have got to revamp our system, and
Medicare for All would provide real health care for everyone in
this country. Thank you, Mr. Chairman, I yield back.
Chairman DeSaulnier. Thank you, Congresswoman. Thank you
for your passion and leadership on this issue. Next, I would
like to welcome our newest member to the committee, and welcome
you to this subcommittee, from Florida Congresswoman Cherfilus-
McCormick please.
Ms. Cherfilus-McCormick. Thank you, Mr. Chairman and thank
you for allowing me to participate today. My question is for
Secretary Reich. Opponents of universal health care often use
scare tactics to describe what such a system would look like.
They often say that it will cost too much, that the public
sector is less efficient, and that private sector, or the
government bureaucrats will get in between you and your doctor.
Secretary Reich, how would you--
[inaudible].
Mr. Reich. I am sorry Congresswoman; I couldn't hear the
question. I do not know whether it was my server, or not, but
can you repeat it please?
Chairman DeSaulnier. Yes, she froze up for a moment, so.
Mr. Scott. Right at the end just froze up right at the end.
Ms. Cherfilus-McCormick. Okay. They often say that it costs
too much, that the public sector is less efficient than the
private sector, the government bureaucrats get in the way
between you and your doctor. How would you respond to these
claims?
Mr. Reich. Well, you know if you look at our for-profit
private insurance system, and you ask about bureaucracy, a
concentration, administrative costs, all of the things that
people complain about, or the goblins that are created with
regard to government. It is really a maze, M-A-Z-E. Anybody who
has ventured into the system knows how complicated and
impossible it is to get through.
One thing I tried to emphasize before is that Social
Security and Medicare are the most popular programs in the
Federal Government, but they are popular across the board. I do
not care whether you are a Republican or a Democrat, where you
live. I mean, they are popular because they work because they
are relatively simple for people to navigate.
Why do we not take something that works like Medicare and
expand it to deal with a problem that we all have, that we all
understand, that really makes our entire system less efficient
and less humane, and that is Medicare for All.
I want to again compliment those of you who are leading the
charge on this, there are very few things that are more
important to average working people.
Ms. Cherfilus-McCormick. Thank you so much Secretary Reich
for brining that up. As a health care executive for the last 15
years, I have watched insurance companies become increasingly
more confusing for working class people to even try to exercise
to get covered, or even go through the preauthorization
process, we move them without health insurance.
I am happy that you brought up how, and in some instances,
it is actually simpler to move toward a Medicare for All
system. Now do these experiences of the other countries that
have universal health care systems resemble the scenarios
described by our opponents?
Mr. Reich. If you are still asking me Congresswoman, there
have been a number of studies, very good studies, and I am
happy to refer you to them, that compare the United States
system to many other advanced systems, and other advanced
countries. They are not exactly alike. They are different in
many respects. They are not all single payer for example, they
are not all what we would consider Medicare for All, but they
all have elements of Medicare for All.
They are you know they are not all great. I mean there are
some waiting times, there are some inefficiencies obviously,
but it is all relative. I mean you have got to compare what
they have, what they cost, and how many people they reach, and
what job they do with our system.
I think that anybody looking at the data and making that
kind of comparison cannot possibly conclude anything other than
the reality that most other advanced countries do it better,
cheaper and reach more people.
Ms. Cherfilus-McCormick. Thank you so much, and Mr.
Chairman, I yield my time.
Chairman DeSaulnier. Thank you. Welcome again to the
committee.
Mr. Scott. Did she yield her time?
Ms. Cherfilus-McCormick. Yes, I yielded it to Chairman.
Mr. Scott. Thank you. Chairman Secretary Reich, I know the
Ranking Member mentioned we can get things done. We did the
surprise billing together, and so we might be able to do
something. Let me ask you about the public option. You
indicated in your testimony that the Medicare for All could
save 21 trillion over 10 years.
The public option would not cover as many people, but could
we expect similar cost reductions with a public option that we
could with a Medicare for All?
Mr. Reich. Well, I am not sure that it would be similar,
but the key with the public option, and that is definitely a
step that could be taken, should be taken in my view. The key
is to make sure that the public option provides the same sort
of insurance coverage that Medicare would provide.
That is and we cannot create a kind of Medicare Advantage
situation which you have for profit insurance companies that
are raking off and seeking to rake off through their marketing
and advertising, just skimming the cream. If it is a genuine
public option, I think that could be a major step in the right
direction.
Mr. Scott. Could I have one followup, Mr. Chairman?
Chairman DeSaulnier. Of course, Mr. Chairman.
Mr. Scott. Thank you. If the public option is less
expensive and more effective, would we necessarily have to
eliminate private insurance?
Mr. Reich. No. I think that this is a false sort of goblin
here. It is possible to do Medicare for All itself, and still
have private insurance, I mean just like with Social Security,
just like with Medicare itself. There are private insurance
options, people can supplement what they get, and they keep
their same doctors under Medicare, Medicare for All.
It is--it can be designed in a variety of ways. I think the
key to it is to try to get the private for-profit insurers out
of the picture, so that people do not have to pay a fortune for
the administrative cost and marketing, the advertising, the
profits, you know the shareholders, the private equity
managers, and everybody else who is making a fortune off of our
people, and our government right now.
Mr. Scott. When this idea came up first one Senator said it
would be unfair competition because the public option would be
able to charge less and provide more. My reaction to that is if
that's the question, if that is the issue, let us just call the
question.
Mr. Reich. Well, that is my--bring. Mr. Chairman you could
say in effect bring it on. I mean that is what we want. That is
what the public needs.
Mr. Scott. Thank you. Thank you, Mr. Chairman.
Chairman DeSaulnier. Thank you, Mr. Chairman, and just a
comment on that last line of questions. Your predecessor and my
predecessor, who's portrait hangs above us, Congressman Miller,
he was influential in creating Contra Costa Health Plan in his
40 years in Congress. I am a member. I have had to use it
extensively as you know in the last few years.
It is not perfect, but it works, and Kaiser and private
insurer companies compete with it on a level playing field. You
go to the exchange right now in our area, you can go into it.
As a former employer I offered this to my employees, and as a
former small business employer, in spite of the fact that
Kaiser is very competitive, many of them chose it.
It is very frustrating, I hate to be parochial and
personal, but knowing that a program works, and this committee
helped make it work. Right now, and for 25-30 years is
extremely frustrating. Anyways, with that I want to really
thank everyone for participating. A terrific, terrific hearing.
Let me read what I am obligated as Chair to read, and then
I will go to the ranking member for closing comments. Then
myself. Again, thank you all. I want to remind my colleagues
that pursuant to committee practice materials for submission
for the record must be submitted to the committee clerk within
14 days following the last day of the hearing, so by close of
business on March 3, 2022, preferably in Microsoft Word format.
The materials must be submitted and address the subject
matter of the hearing. Only a member of the subcommittee or an
invited witness may submit materials for the inclusion in the
hearing record. Documents are limited to 50 pages. Documents
longer than 50 pages will be incorporated into the record via
an internet link that you must provide to the committee clerk
within the required timeframe, but please recognize that in the
future that link may no longer work.
Pursuant to House rules and regulations, items in the
record should be submitted to the clerk electronically by
emailing submissions to [email protected].
I have one submission that was just texted to me before I
give a closing on this part, I would like to submit for the
record a letter from Families USA.
[The letter from Families USA follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Again, I want to really thank you all. It has been a
terrific, terrific hearing, and one I think the subcommittee
and the full committee can work on to answer the question do
Americans get what they pay for, and clearly, we can agree that
they do not. Whatever we can do to make sure that the
investment Americans make in their health care system gets
results that are worthy of this country.
Thanks again one last time to this panel. All of you have
been great. I really appreciate and look forward to following
up in our staff. I want to remind once again my colleagues that
pursuant to committee practice, witness questions for the
hearing must be submitted to the majority committee staff or
committee clerk within 7 days.
The questions submitted again must subject the matter of
the hearing. Now I want to recognize our distinguished ranking
member, and thank Representative Allen as always, for working
with me to make these hearings successful, and a good product
subsequent to the hearings, Mr. Allen.
Mr. Allen. Thank you, Mr. Chairman. I ask unanimous consent
to enter into the record statements from the American Hospital
Association, the Coalition to Protect and Promote Association
Health Plans, and the Partnership for Employer Sponsored
Coverage.
I also request to enter into the record letters opposing a
government takeover of private healthcare from the following
organizations: Corporate Healthcare Coalition; Council for
Affordable Health Coverage; Job Creators Network; National
Association of Health Underwriters; National Federation of
Independent Businesses, the U.S. Chamber of Commerce.
In addition, I request to enter articles opposing Medicare
for All from the American Enterprise Institute, the Grace Marie
Turner, the Mercada Center, and the National Taxpayers Union
Foundations.
Last, I would like to enter into the record public survey
showing that Americans prefer employer sponsored coverage to
government plans from the Alliance to Fight for Healthcare,
Americans for Prosperity, and the Heritage Foundation.
Chairman DeSaulnier. Thank you, Mr. Allen. I take it you
are yielding back. Thanks again.
Mr. Allen. No, I am not. I am waiting for you, without
objection, and then I will finish.
Chairman DeSaulnier. Without objection, I am sorry.
Mr. Allen. No problem.
[The information from Mr. Allen follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Mr. Allen. Okay. Well listen, I want to thank the
witnesses. We had some great discussion. Frankly, nobody at
this hearing knows what it costs to take care of a patient. We
know that healthcare is a partnership between your physician,
and the patient. That is the problem, and frankly I think that
is the problem with any type of Federal program is taking away
that relationship.
It is a real problem out there, and you know if we like
Obama Care. We promised the American people you can keep your
doctor, and we were going to reduce the cost. Look what
happened. We are here talking today about the explosive costs,
but less outcomes.
We are talking about more government programs. I am deeply
concerned with the enthusiasm with my democratic colleagues in
their support for Medicare for All, or single payer options.
More government intervention will not improve quality of care.
It will only increase the cost of healthcare, which we have
seen since the government got in this business.
According to the Mercada's Center Medicare for All will
cost roughly 32.6 trillion over the next, over the first 10
years of implementation, which would require more than doubling
all Federal, individual and corporate income taxes. I mean we
cannot even pay for our Medicare today. It is running out of
money.
The non-partisan Congressional Budget Office has said that
a single payer option would reduce the amount of care supplied,
and also reduce the quality of care. Over 155 million Americans
get their health insurance from their places of work, and the
vast majority of them are pleased with their coverage, and
their care on these employer sponsored health plans.
In fact, a poll from the Alliance to Fight for Healthcare,
found individuals with employer sponsored health insurance
ranked their care 19 percent higher than those on Obama Care.
Congress should be looking for ways to improve this system. Let
us get the real data out there.
Let us find out--let us peel the onion back, find out who
is getting the money here, and rather than replacing this with
a more expensive, and less effective system like Medicare for
All. As we have discussed today there are many options to real
healthcare reform.
For example, Association Health Plans would allow small
businesses and sole proprietors to offer lower cost health
insurance, saving workers upwards of 50 percent of healthcare
costs. I look forward to working on these solutions to expand
access and improve the quality of employer sponsored health
coverage.
Thank you again to all the witnesses and Mr. Chairman, it
has been a real pleasure to be with you today and thank you for
conducting this great hearing. With that I yield back.
Chairman DeSaulnier. Thanks, Rick. I appreciate it, and
forgive my not paying attention to my cursor, and prepare for
closing comments. I apologize. Again, I just want to thank you.
This has been a terrific hearing. I want to thank all my
colleagues. The subcommittee I have been very proud to be chair
of and be a member of. We have our differences of opinion, but
we work in a way that I think that Congress should work, to try
to find where our commonalities are, and mostly--and this
subject is probably the--no it is the most important one.
How do we make the system work better knowing that we have
different perspectives, and not biases, but different
perspectives. To the Republican witness, Mr. Blase, we would
like to followup in a conversation with you Mr. Allen and Mr.
Fitzgerald. Professor Keith, I thought the dialog between you
and the Chairman was a good one.
If we wanted, I really worry about small businesses having
spent 35 years in the restaurant business and having many dear
friends still in that business coming out of COVID. They are so
important. Small businesses are important. I was a member of
the California Restaurant Association for a long time, one of
the Board members used to refer to me as their communist
member, but I took that as a badge of honor.
There is got to be a way that we can help small businesses,
and they need that help to be efficient and effective, whether
it is through associations or not, I would say I am not a
supporter as we currently are talking about, but I thought that
exchange was a good one.
If we keep our eye on the ball if we want to help
Americans, in this case the small business owners come out of
COVID, come out of it successfully, this is a big, big issue
for small business. I personally think it should be non-
partisan.
I also want to comment on the conversation of prescription
drugs just because it is personal to me. This drug keeps me
alive. We have had hearings on I think both Elijah Cummings,
because we have many conversations about this when I was
diagnosed almost 8 years ago with stage four leukemia.
Elijah and I, and now Chairwoman Maloney, we have had
hearings about this and brought the CEO here. This drug that
keeps me and a lot of people with chronic lymphocytic leukemia
alive, costs $150,000 a year. In Europe it is less than half of
that. In Australia, a fully loaded rather than $150 a day, it
is $40 a day.
Clearly, when I look at that particular drug and the
history of it as much of the research started in the Department
of Defense. It started in World War I actually with blood
cancers. Then the American Cancer Institute, so trying to
figure out where the base level of research on drugs like this
came from, and the benefit we get.
The Wall Street Journal did a couple of interesting stories
on this drug, and it just talked about upper income--imagine
poor Americans making life decisions. Dr. Benjamin talked about
families sharing drugs. This is frequent on this particular
drug. Why does it have to be that way?
These American taxpayers are risking their lives, dying
because of our system on prescription drugs, and it is fixable.
Even more and I would think my Republican colleagues would
agree with that, clearly we are subsidizing other countries on
this drug in particular, so I would love to have further
conversation about that.
Just last, since I mentioned Elijah and somebody else said
this. As he used to say, ``We're better than this.'' This
subcommittee on this subject, we are better than this.
Americans pay way too much for what they get, and I can speak
with experience, and I can speak with experience about
bureaucracy and government bureaucracy in my experience.
This system saved my life. Two years ago, my sons were told
by ICU doctors at George Washington after they flew across the
country that I would die within the next 48 hours. I am here
because of the health care system in Providence, but we can do
better. We can do much better, and Republicans and Democrats
can do better.
With that, I would really like to thank everybody. I look
forward to continuing to work together. This is not the ending
this is a beginning for this subcommittee. Mr. Allen and
Representative Foxx, let us work together. We can save people's
lives and provide a system that we can all be proud of, and
particularly for lower income Americans wherever they live.
Trying to get the resources they need is really unthinkable
in the wealthiest country in the history of this planet. I look
forward again to working with all of you. Thank you again the
witnesses, and if there is no further business, without
objection this subcommittee stands adjourned, thank you.
[Whereupon, at 2:19 p.m., the subcommittee adjourned.]
[Additional submissions from Chairman DeSaulnier follows:]
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[Questions and responses for the record by Dr. Benjamin
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[Questions and responses for the record by Ms. Keith
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[Questions and responses for the record by Secretary Reich
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