[Congressional Record Volume 140, Number 3 (Thursday, January 27, 1994)]
[House]
[Page H]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: January 27, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. NICKLES:
  S. 1806. A bill to rescind the fee required for the use of public 
recreation areas at lakes and reservoirs under the jurisdiction of the 
Army Corps of Engineers, and for other purposes; to the Committee on 
Environment and Public Works.


                  engineers lake user fees act of 1994

  Mr. NICKLES. Mr. President, today I am introducing 
legislation to rescind an onerous new user fee which was created in 
last year's omnibus budget reconciliation bill. This new user fee, 
which is really nothing more than a middle-class tax hike, would apply 
to day use activities at U.S. Army Corps of Engineers lakes.
  Mr. President, my State depends heavily upon corps lakes for tourism 
and recreation. And although camping overnight is very popular, the 
majority of the visitors to our lakes come for the day to launch their 
boats, eat a picnic lunch, swim, or fish.
  In the past, visitors have enjoyed these activities at no cost, which 
is entirely appropriate since the facilities themselves were paid for 
with tax dollars long ago. However, the law now directs the corps to 
collect a fee for the use of boat ramps and swimming beaches.
  Several of my constituents have asked me, ``Senator Nickles, where 
did these fees come from? Who proposed them?'' Mr. President, I will 
include for the Record two pages from President Clinton's budget 
manifesto ``A Vision of Change for America'' which he released nearly 
one year ago. In this document, on page 77, President Clinton asked 
Congress to place user fees on boat ramps and swimming beaches at Corps 
of Engineers lakes. The President's tax bill was then considered and 
enacted by Congress last August. I opposed this legislation in the 
Senate, where it passed after a tie was broken by Vice President Gore's 
vote.
  Mr. President, I am very concerned about the negative impact these 
new lake fees will have on Oklahoma's tourism and recreation industry. 
Tourism is very important to our economy, and even a small fee will 
cause visitors to refrain from using these facilities and spend their 
money elsewhere. This will be especially hard on the many small, rural 
communities which surround our lakes.
  I am also concerned that the cost of collecting and administering the 
fees will consume most if not all the revenue they may generate. The 
corps believes these fees can be collected for little or no extra cost, 
but I believe applying the legendary corps' bureaucracy to this task is 
bound to create more problems than it solves.
  The public outcry against this tax on public recreation is just now 
beginning, Mr. President, and I predict that it will grow very loud 
indeed. Few Members of Congress and even fewer constituents have yet 
deciphered section 5001 of H.R. 2264. However, when the spring crowds 
arrive and the corps begins charging people to launch their boat, there 
will be a great deal of interest in my legislation.
  Mr. President, I urge my colleagues to support this worthy effort.
  Mr. President, I ask unanimous consent that additional material be 
printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                     A Vision of Change for America


                          what we must now do

       Interior/Implement a Federal irrigation water surcharge. 
     Authorize a per acre-foot surcharge on water sales to 
     Reclamation projects throughout the West (except for the 
     Central Valley Project in California, for which a similar 
     surcharge was recently enacted). Revenue from the surcharge 
     would be deposited into a special fund for use (subject to 
     appropriations) in mitigating harm to fish and wildlife 
     caused by irrigation. These costs are currently paid by the 
     Federal taxpayer or repaid by project beneficiaries (without 
     interest) over 50 years. The surcharge would also encourage 
     more rational water use that would reduce the harmful impacts 
     of non-point source pollution. Estimated savings are $15 
     million in 1997, $45 million over four years.
       Army Corps of Engineers/Increase recreation fees at 
     existing Corps of Engineers areas. This proposal would give 
     the Corps of Engineers authority to increase certain camping 
     fees and eliminate free camping sites in order to increase 
     the amount of Corps of Engineers' cost that are offset by the 
     users of these facilities. Additionally, the Corps could add 
     fees for use of some facilities. The fee increases would be 
     in the range of $1 to $3 per site or activity, but in no case 
     greater than $3 per site or activity. Fees would not be 
     charged for wayside exhibits, overlook sites, general visitor 
     information, or comfort facilities. The increased fees would 
     be collected in a special account to be used (subject to 
     appropriation) to offset recreation program costs. No Corps 
     of Engineers entrance fees would be charged. The Corps of 
     Engineers currently charges camping fees, averaging $6 per 
     site, and special-use fees for activities such as use of 
     group picnic shelters. Estimated savings over four years, $72 
     million, including $18 million in 1997.
       Interior/Increase recreation fees at certain national parks 
     and other recreation areas. Authority would be given to the 
     Secretary of the Interior to increase entrance fees for 
     certain National Park Service and Fish and Wildlife Service 
     areas. Also establish entrance fees at other National Park 
     units and Bureau of Land Management developed recreation 
     sites where justifiable. Where appropriate, the Bureau of 
     Land Management would also increase special-use permit 
     charges. With the exception of entrance to national parks, 
     increases in current fees would be no greater than $3 per 
     entry. This proposal would generate an anticipated $147 
     million in 1994-1997 receipts ($45 million in 1997) to be 
     used, subject to appropriation, to maintain and enhance 
     recreational opportunities furnished by the Department of the 
     Interior.
                                 ______

      By Mr. GRAMM (for himself, Mr. McCain, Mr. Coats, Mr. Brown, Mr. 
        Coverdell, Mrs. Hutchison, Mr. Bennett, Mr. Helms, 
        Mr. Lott, Mr. Faircloth, and Mr. Wallop):
  S. 1807. A bill to guarantee individuals and families continued 
choice and control over their doctors, hospitals, and health care 
services, to secure access to quality health care for all, to ensure 
that health coverage is portable and renewable, to control medical cost 
inflation through market incentives and tax reform, medical malpractice 
litigation, and for other purposes; which was introduced.


           The comprehensive family health access savings act

  Mr. GRAMM. Mr. President, I thank my dear colleagues for letting me 
have an opportunity to introduce a health care bill aimed at helping 
Americans get and keep good health insurance, and trying to fund a 
system that will help every American get health insurance, and trying 
to reform the system, building on the strengths of a system--that, with 
all of its problems, is the greatest system in the history of the 
world--and trying to fix what is broken, without destroying what we all 
love about the American health care system.
  In the last 6 months, together with some of my Republican colleagues, 
I have held town meetings all over America. I held a meeting in Denver, 
as the distinguished Presiding Officer knows. We held public forums in 
San Diego, in Miami, in Indianapolis, and in Houston, basically getting 
an opportunity to listen to Americans and their concerns about health 
care. I think the American people want change in the health care 
system. They want insurance that you do not lose when you change jobs. 
They want insurance that you do not lose when you get sick. They want 
to make the system more efficient, more competitive. They want to deal 
with legal liability. They want to give the consumer more choices. They 
want to bring the pressures of price competition to bear in the health 
care market. But they do not want the Government to take over and run 
the health care system.
  I am introducing a bill today that will make insurance portable, so 
you can change jobs without losing it; that will make insurance 
permanent, so it can never be canceled or taken away, as long as you 
pay your premiums. I am introducing today a bill that will provide a 
system where we can help the working people of this country get and 
keep good private health insurance; cut down on paperwork; cut down on 
litigation, and produce market competition. But there are really two 
impediments to adopting a health care bill in this Congress, and both 
of them come from the President. One is the insistence of the President 
on having the Government take over and run the health care system.
  We can fix what is wrong with the health care system in America today 
without having the Government take over and run the health care system. 
We can fix what is wrong in the health care system today, without 
denying people a right to choose their own health insurance and their 
own doctor. The President talks about private health insurance, but, 
under his bill, private health insurance is canceled, people are forced 
to buy health insurance and buy health care through the Government.

  Under the President's plan, if anybody tries to sell you private 
health insurance in competition with the Government, they are fined 
$10,000. The bottom line with this Comprehensive Family Health Access 
and Savings Act that I offer on behalf of myself and 10 of my 
colleagues is that we can fix what is wrong with the health care 
coverage system in America, making sure it is portable and permanent 
and help working people get it and keep it and promote competition. But 
we can do it without having the Government take over and run the health 
care system. We can do it by preserving the right of people to choose 
for themselves. We can do it by assuring that when people are sick, 
they talk to a doctor, not a bureaucrat. That, I think, is the choice.
  I am hopeful that we will legislate this year. I do believe the 
problems in the health care system need to be fixed. But I do not 
believe that we fix the problems in the health care system by 
destroying the greatest health care system that the world has ever 
known, by tearing down what is right with the health care system to let 
the Government take over and rebuild it in the image of Government. I 
believe in private medicine, and so do the American people.
  If there were only one choice in fixing the problems that exist in 
the American health care system and that choice was the Clinton health 
care plan, Americans might be torn. But there are other choices. We can 
fix what is broken without destroying the things about the system that 
we love: The quality, the choices, the freedom. Who can argue in a free 
society that an American should be denied the right to go out into the 
marketplace and buy private health insurance? Who can argue that in a 
free society we should cancel people's private health insurance against 
their will and force them to pay money to a Government collective to 
buy health care, and if they are unhappy with its services, force them 
to continue to pay and deny them the right to go out and buy private 
health insurance.
  That is what the President's bill does. I think it is wrong, and I 
think we can fix what is broken, without destroying private medicine in 
America as we know it today and as we love it today.
  Mr. President, I ask unanimous consent that additional material be 
printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record as follows:

         The Comprehensive Family Health Access and Savings Act


   I. Enhance security for those presently insured by making private 
                    insurance portable and permanent

                              Portability

       To enhance the capacity of American workers to change jobs 
     without losing their health insurance coverage, existing law 
     under COBRA (which allows individuals temporarily to continue 
     their health insurance coverage after leaving their place of 
     employment by paying their premiums directly) would be 
     modified to allow individuals two additional lower-cost 
     options to keep their health insurance coverage during their 
     transition between jobs. Workers could:
       (A) Continue their current insurance coverage during the 18 
     months covered by COBRA by paying their insurance premiums 
     directly;
       (B) Continue their current insurance coverage during the 18 
     months covered by COBRA by paying their insurance premiums 
     directly, but with a lower premium reflecting a $1,000 
     deductible; or
       (C) Continue their current insurance coverage during the 18 
     months covered by COBRA by paying their insurance premiums 
     directly, but with a lower premium reflecting a $3,000 
     deductible.
       With these options, the typical monthly premium paid for a 
     family of four would drop by as much as 20 percent when 
     switching to a $1,000 deductible and as much as 52 percent 
     when switching to a $3,000 deductible. Also, premium payments 
     made by families would now be excluded from income in the 
     manner described in title III of this bill.
       In addition, individuals would be permitted to make 
     penalty-free withdrawals from their Individual Retirement 
     Accounts and 401(k)s to pay for health insurance coverage 
     during the transition period.
       The transition period of coverage would end once a person 
     is in a position to get coverage from another employer.

                               Permanence

       Health insurance would be made permanent (belonging to the 
     family or individual) by these three reforms:
       Those with Individual Coverage:
       (A) No existing health insurance policy can be cancelled 
     due to the state of health of any person covered by the 
     policy. Insurance companies must offer each policy holder the 
     option to purchase a new policy under the conditions of part 
     B of this section with the terms to be negotiated between the 
     buyer and seller of the policy.
       (B) All individual health insurance policies written after 
     the enactment of this legislation must be guaranteed 
     renewable, and premiums cannot be increased based on the 
     occurrence of illness.
       Those with Group Coverage:
       (A) Existing group policies must provide each member of the 
     group the right to convert to an individual policy when 
     leaving the group. This individual policy will be rated based 
     on actuarial data, but cannot be cancelled due to the state 
     of health of those covered by the policy. In addition, any 
     group policy holder (i.e. employer obtaining coverage on 
     employees' behalf) will have the right to purchase a new 
     group policy under the conditions stated under part B of this 
     section with the terms to be negotiated between the group's 
     benefactor or representative and the seller of the group 
     policy.
       (B) All group policies issued after enactment of this 
     legislation must be permanent, and premiums cannot be 
     increased based on the health of the members covered under 
     the group policy. In addition, similar to part A of this 
     section, new group policies must provide each member of the 
     group the right to convert to an individual policy when 
     leaving the group. However, the premium charges of the 
     individual leaving the new group plan cannot be based on the 
     individual's state of health and cannot be cancelled except 
     for nonpayment of premiums.
       Those with Employer-provided Self-funded Coverage:
       (A) Companies currently operating self-funded plans must 
     make arrangements with one or more private insurers to offer 
     individuals leaving the self-funded plan individual coverage. 
     The individual policy will be rated based on actuarial data, 
     but cannot be cancelled due to the state of health of those 
     covered by the policy.
       (B) All self-funded plans created after enactment of this 
     legislation must (like part A of this section) make 
     arrangements with one or more private insurers to offer 
     individuals leaving the self-funded plan individual coverage. 
     However, the premium charges of the individual leaving the 
     self-funded plan cannot be based on the individual's state of 
     health and cannot be cancelled except for nonpayment of 
     premiums.


 ii. expand family health insurance choices to promote competition and 
                             control costs

       As under present law, employer contributions for the 
     purchase of medical insurance coverage for employees will 
     continue to be excluded from employee income and deducted by 
     the employer; however, to continue receiving the deduction 
     and exclusion, employers who elect to offer their employees 
     health insurance coverage must offer employees at least the 
     following three options:
       (A) Continued coverage under employer-selected health 
     insurance arrangement;
       (B) HMO coverage or any other health care arrangement--such 
     as a voluntary purchasing group, a preferred provider 
     organization, or managed care--where the employer pays the 
     current employer-paid share of health insurance costs to the 
     alternate plan chosen by the employee; and
       (C) Establishment of a Medical Savings Account program 
     where the employer would contribute to the program the amount 
     currently being spent by the employer on the employee's 
     existing health insurance arrangement.
       A new Medical Savings Account program would be established 
     through enabling legislation allowing current employer and 
     employee contributions to go first toward the purchase of a 
     $3,000 deductible catastrophic insurance policy, which would 
     be chosen by the employee from among plans offered by private 
     insurers and paid for by the employer and employee in the 
     same manner conventional insurance is now purchased, with 
     remaining amounts currently spent on conventional insurance 
     coverage going into a Medical Savings Account. Contributions 
     to the Medical Savings Account of up to $3,000 per year by 
     either the employer or employee shall be tax exempt. Such 
     a catastrophic policy will cover expenses such as 
     physician services, hospital care, diagnostic tests, and 
     other major medical expenses once the policy holder meets 
     the $3,000 annual deductible. Tax-free withdrawals from 
     the Medical Savings Account could be made to pay for 
     qualifying out-of-pocket medical expenses which apply 
     toward the insurance policy's deductible. If the funds in 
     the Medical Savings Account are not spent so that as new 
     deposits are made, the sum grows beyond the $3,000 
     deductible, the employee can invest excess tax-free in a 
     long-term care package or withdraw the excess and treat it 
     as income.
       The individual employee would contract with the HMO or 
     Medical Savings Plan and pay those costs in excess of the 
     employer's current contribution for the purchase of health 
     insurance coverage. Employees will have a 2-month period each 
     year (an ``open season'') to choose a new option for the 
     following year. Should the cost of the HMO or Medical Savings 
     Account program be less than the employer currently pays for 
     conventional insurance, the employee can keep the difference.
       Each employer shall determine whether the employer's 
     contribution into the alternate plan shall be based on the 
     average cost of providing coverage for its employees under 
     the current plan or the actual cost per individual employee. 
     Whichever method the employer selects shall apply to any 
     employee leaving the employer's current plan and selecting an 
     alternative plan.


  iii. provide equal tax treatment for the self-employed and uninsured

       Self-employed workers, who currently are permitted to 
     deduct 25 percent of their expenses for medical insurance 
     coverage will now be allowed to exclude from gross income a 
     percentage of their medical insurance coverage costs equal to 
     the national average that employers contribute. Those 
     individuals without employer-provided health insurance 
     coverage will be accorded similar tax treatment. This 
     percentage will be recalculated annually and will ensure that 
     anyone without employer-based health insurance coverage will 
     be treated equitably. The exclusion will be phased in over 
     five years up from 25 percent to the national average for the 
     employer's payment. The tax exclusion will apply to the 
     purchase of conventional health insurance, HMO coverage, 
     Medical Savings Account contributions, or any other prepaid 
     medical plan.


  iv. allow shall businesses to pool their health insurance purchases

       Regualtory and legal impediments that restrict the ability 
     of small businesses and other organizations (trade and 
     professional groups, churches, etc.) to group together 
     voluntarily to allow their employees or members to pool their 
     health insurance purchases will be removed.


v. assist individuals with pre-existing conditions in purchasing health 
                               insurance

       Individuals uninsured due to pre-existing conditions that 
     preclude affordable insurance cannot be denied coverage. The 
     federal government will pay that amount of the premium which 
     exceeds both 150 percent of the average for those of the same 
     age, sex, and geographic area and 7.5 percent of the 
     individual's or family's income. This assistance shall be 
     given for the purchase of a high-deductible catastrophic 
     policy and private insurers shall bid for the policy in a 
     risk pool. Such a catastrophic policy will cover expenses 
     such as physician services, hospital care, diagnostic tests, 
     and other major medical expenses once the policy holder meets 
     the $3,000 annual deductible. The subsidy for pre-existing 
     conditions does not cover premiums that are higher due to 
     current behavior that is risky or unhealthy.


     vi. encourage responsible behavior by the financially capable

       Financially capable individuals (those with incomes above 
     200 percent of the poverty level--$13,864 for individuals and 
     $27,848 for a family of four) who choose not to purchase at 
     least a catastrophic insurance policy that covers physician 
     services, hospital care, diagnostic tests, and other major 
     medical services with a deductible no higher than 20 percent 
     of their adjusted gross income or $3,000, whichever is 
     higher, will not be eligible to receive federal premium 
     assistance based on any pre-existing condition after the 
     first year of enactment of this legislation. In addition, 
     such an individual who incurs medical expenses will be the 
     ``payer of first resort.'' All state and federal laws 
     governing the collection of unpaid debt shall apply to 
     medical expenses incurred by individuals who were financially 
     capable of purchasing health insurance but who refused to do 
     so.


  vii. provide assistance to low-income workers in purchasing health 
                               insurance

       85 percent of Americans currently have health insurance 
     coverage. By providing equal tax treatment to those who 
     purchase their own insurance coverage without employer-
     provided assistance, by having the federal government 
     partially subsidize the cost of insurance coverage for high-
     risk individuals, by providing incentives for financially 
     capable individuals to obtain health insurance coverage now, 
     and by making all health insurance policies portable and 
     guaranteed renewable, we will ensure that most of the 
     remaining 15 percent will have health insurance coverage. In 
     addition, this proposal will not displace Community Health 
     Centers, the Indian Health Service, the VA Health system, or 
     CHAMPUS.
       To achieve total coverage, a credit will be available to 
     families and individuals not eligible for Medicaid and having 
     income below 200 percent of the poverty level. For families 
     below the poverty level, the credit will allow them to fully 
     fund the cost of a catastrophic insurance policy covering 
     physician services, hospital care, diagnostic tests, and 
     other major medical services with an annual deductible equal 
     to the higher of 20 percent of adjusted gross income or 
     $3,000 and a preventive package for immunizations, routine 
     physicals, pap smears, mammograms, prostate exams, and other 
     basic preventive care. This credit will be reduced as family 
     income rises and will be eliminated at 200 percent of the 
     poverty level. This credit will be phased in over five years.
       Those eligible to receive a total or partial credit who 
     refuse to purchase at least a catastrophic policy will not be 
     eligible to receive federal premium assistance based on any 
     pre-existing condition after the first year of enactment of 
     this legislation. In addition, if such an individual incurs 
     medical expenses, he shall be the ``payer of first resort.'' 
     All state and federal laws governing the collection of unpaid 
     debt shall apply to medical expenses incurred by individuals 
     who were eligible to receive a total or partial credit for 
     the purchase of health insurance but who refused to do so.


        viii. reward preventive medicine and healthy lifestyles

       Insurance companies may charge different rates based on the 
     willingness of the insured family to live healthy lives and 
     use preventive medicine, including vaccines and physical 
     exams.
       Individuals with moderate incomes who receive federal 
     assistance will be required to pay more if they are 
     overweight, smoke, drink excessively, or engage in other 
     activities that are harmful to their health. These extra 
     payments will be based on the risk differentials that develop 
     in the private insurance market.


           ix. reform medicaid and expand choices in medicare

       (A) Medicaid payments to states will be made on a per 
     capita basis. That is, states will receive an annual payment, 
     indexed for medical inflation, from the federal government 
     equal to the average federal cost per Medicaid enrollee on a 
     state-by-state basis. The payment will vary by major risk 
     categories. States will then be allowed the flexibility to 
     design their own systems which could:
       (1) continue the existing Medicaid coverage;
       (2) enroll recipients into a private Health Maintenance 
     Organization or other health care arrangements; or
       (3) establish a Medical Savings Account plan to cover the 
     recipient's medical expenses, where, except for qualified 
     medical expenses, no amount can be withdrawn from the Medical 
     Savings Account which takes the account below the annual 
     catastrophic deductible amount.
       Also, states would be permitted to develop other 
     innovations and requirements, including use of copayments.
       (B) Those currently covered by Medicare could keep their 
     present coverage or receive annual government assistance up 
     to the expected cost of their annual Medicare coverage (based 
     on age, sex, and geographic area) for the individual retiree 
     to enroll in a private Health Maintenance Organization or 
     other health care arrangement or buy a Medical Savings 
     Account.
       Those choosing to opt out of the current Medicare system 
     who are able to purchase comparable health care coverage for 
     less than the federal Medicare payment coverage will be 
     permitted to keep one-half of the difference. In addition, 
     retirees may keep the entire difference if it is invested in 
     a long-term care package.
       Upon becoming eligible for Medicare (currently at age 65), 
     individuals would have one year to decide whether or not to 
     stay in the current Medicare system. This decision to opt out 
     of the traditional Medicare program and to employ any private 
     health care coverage arrangement is final.
       Under the Medical Savings Account option, the federal 
     Medicare annual payment would be used to purchase the 
     retiree's catastrophic coverage from a private vendor, with 
     the remaining funds going into the retiree's personal Medical 
     Savings Account. Additional Medical Savings Account 
     contributions or out-of-pocket expenses could be made by the 
     retiree or anyone else on the retiree's behalf. The Medical 
     Savings Account would also be established and maintained with 
     a private vendor.


           x. enhance efficiency through paperwork reduction

       (A) Medicaid, Medicare, and all other federal entities 
     involved in the funding or delivery of health care shall 
     standardize their health care forms and must reduce their 
     total health care paperwork burden by 50 percent within two 
     years of enactment of this legislation. The paperwork burden 
     must be reduced by another 50 percent over the following 
     three years, achieving a total paperwork reduction of 75 
     percent over a 5-year period.
       (B) State agencies involved in the funding or delivery of 
     health care, like federal entities, shall standardize their 
     health care forms. Also like federal entities, within five 
     years of enactment, states must reduce their total health 
     care paperwork burden by 75 percent in order to remain 
     eligible for federal health assistance.
       (C) A private commission will be established to develop, 
     within 12 months from enactment, standardized forms to be 
     used by private health care providers and private insurers. 
     In order to receive federal reimbursement, private health 
     care providers and private insurers must use these 
     standardized forms. This commission shall be comprised solely 
     of private health care providers and private insurers.


            xi. provide meaningful medical liability reform

       (A) Any claim of negligence not ``substantially justified'' 
     or which has been improperly advanced will result in an 
     automatic judgement against the plaintiff rendering the 
     plaintiff liable for the legal fees incurred by the health 
     care provider, as well as any losses as a result of being 
     away from the practice.
       (B) The liability of any malpractice defendant will be 
     limited to the proportion of damages attributable to such 
     defendant's conduct.
       (C) A health care provider can negotiate limits on medical 
     liability with the buyer of health care in return for lower 
     fees.
       (D) Non-economic damages cannot exceed $250,000 adjusted 
     annually for inflation.
       (E) Lawyer's contingency fees will be capped at 25 percent.
       (F) Malpractice awards will be reduced for any collateral 
     source payments to which the claimant is entitled, and the 
     claimant will be required to accept periodic payment as 
     opposed to lump sum on awards in excess of $100,000 adjusted 
     annually for inflation.
       (G) No malpractice action can be initiated more than two 
     years from the date the alleged malpractice was discovered or 
     should have been discovered, and no more than four years 
     after the date of the occurrence.
       (H) No punitive damages will be awarded against 
     manufacturers of a drug or medical device if such drug or 
     medical device has been approved by the Food and Drug 
     Administration as safe and effective.


xii. promote efficiency in the health care market by removing antitrust 
                                barriers

       By limiting certain antitrust impediments that restrict 
     cooperative efforts, communities and providers will be given 
     an opportunity to coordinate the delivery of health care and 
     enter into joint ventures that promote greater efficiencies, 
     and expand access.


         xiii. guaranteeing offsets to health care reform costs

       The taxpayer costs of the three new health care benefits 
     contained in this proposal--the universal health insurance 
     tax exclusion; the high-risk insurance pool subsidy; and the 
     low-income worker tax credit for insurance purchase--will be 
     put into effect under the following conditions:
       (A) None of the benefits shall take effect until savings 
     accrued by the reforms contained in this plan have actually 
     occurred.
       (B) Phase-in priorities based on achieved savings shall be 
     as follows:
       (1) high-risk insurance pool subsidy.
       (2) universal health insurance tax exclusion will be phased 
     up in annual 10 percentage point increments to 75 percent.
       (3) low-income worker tax credit for insurance purchase 
     will be phased in first for families in poverty, then singles 
     in poverty, and lastly, for families and singles above the 
     poverty level.


costs and savings of the comprehensive family health access and savings 
                                  act

                                 Costs

                             PHASED-IN COSTS                            
                        [In billions of dollars]                        
------------------------------------------------------------------------
                        1995   1996    1997   1998   1999   2000   Total
------------------------------------------------------------------------
High-risk pool.......  .....    $4     $4.2   $4.2   $4.2   $4.2   $20.8
Health insurance                                                        
 exclusion...........  .....     6.2    8.7   11.4   14.6   18.2    59.1
Low-income worker tax                                                   
 credit..............  .....     0      4.3   10.3   19.6   30.1    64.3
                      --------------------------------------------------
  Total costs........  .....    10.2   17.2   25.9   38.4   52.5   144.2
------------------------------------------------------------------------

                                Savings

       (A) Medicaid:
       Medicaid savings are achieved in three ways. First, 
     Medicaid spending is ``capitated,'' meaning that states would 
     receive an annual federal payment based on the number of 
     Medicaid recipients and the risk classes they fall into. 
     States would then be given the flexibility to institute the 
     reforms outlined in section IX. The payment to states would 
     grow each year by the increase in the medical price inflation 
     index.

                                                     SAVINGS                                                    
                                            [In billions of dollars]                                            
----------------------------------------------------------------------------------------------------------------
                                                           1995   1996    1997    1998    1999    2000    Total 
----------------------------------------------------------------------------------------------------------------
Medicaid savings from capitation and state flexibility..   $7.4   $13.8   $19.8   $26.3   $33.5  \1\n.a         
                                                                                                      .   $100.7
----------------------------------------------------------------------------------------------------------------

       Second, with the introduction of price competition in 
     health care through expanded consumer choice contained in 
     sections II and IX, the current differential between the 
     medical price inflation index and the consumer price index is 
     projected to decrease by one-half over five years. The 
     resulting Medicaid savings are as follows:

                                 SAVINGS                                
                        [In billions of dollars]                        
------------------------------------------------------------------------
                        1995   1996   1997   1998   1999   2000    Total
------------------------------------------------------------------------
Medicaid savings from                                                   
 lower medical                                                          
 inflation...........  .....    $.3    $.9   $2.0   $3.8  \1\n.a        
                                                               .      $7
------------------------------------------------------------------------

       Third, with the introduction of a high-risk individual 
     subsidy and a universal tax exclusion, some Medicaid 
     recipients will be brought under private plans. The resulting 
     savings are as follows:

                                 SAVINGS                                
                        [In billions of dollars]                        
------------------------------------------------------------------------
                        1995   1996   1997   1998   1999   2000    Total
------------------------------------------------------------------------
Transfer out of                                                         
 Medicaid to private                                                    
 insurance...........  .....    $.6   $1.3   $1.4   $1.5  \1\n.a        
                                                               .   $4.8 
------------------------------------------------------------------------
\1\``n.a.'' refers to not applicable. Savings in the sixth year are not 
  applicable because the first five years of achieved savings will be   
  used to fund benefits paid in each of the following years.            

       (B) Medicare:
       The introduction of price competition in health care 
     generated by the reforms in sections II and IX is assumed to 
     cut the current differential between the medical price 
     inflation index and the consumer price index by one-half over 
     five years. Further, the cumulative effects of this package 
     are assumed also to cut the current difference between the 
     rate of growth in Medicare and the medical price inflation 
     index in half over five years. With this change, we assume 
     savings of only half of the Medicare savings assumed by the 
     President:

                                 SAVINGS                                
                        [In billions of dollars]                        
------------------------------------------------------------------------
                      1995   1996   1997    1998   1999    2000    Total
------------------------------------------------------------------------
Medicare savings....   $3.5   $7.5    $11   $16.5    $23  \1\n.a        
                                                               .   $61.5
------------------------------------------------------------------------

       (C) Other offsets:
       With creation of the risk pool coverage and universal 
     access to catastrophic health care coverage, the use of the 
     present deduction of health care costs in excess of 7.5% of 
     income will drop dramatically. This estimate assumes a total 
     reduction of 50%.

                                 SAVINGS                                
                        [In billions of dollars]                        
------------------------------------------------------------------------
                       1995   1996   1997   1998   1999    2000    Total
------------------------------------------------------------------------
Less use of medical                                                     
 deduction...........   $2.8   $2.9   $3.1   $3.3   $3.6  \1\n.a        
                                                               .   $15.7
------------------------------------------------------------------------


                                                  TOTAL SAVINGS                                                 
                                            [In billions of dollars]                                            
----------------------------------------------------------------------------------------------------------------
                                                          1995    1996    1997    1998    1999    2000    Total 
----------------------------------------------------------------------------------------------------------------
                                                          $13.7   $25.1   $36.1   $49.5   $65.3  \1\n.a         
                                                                                                      .   $189.7
                                                                                                                
                                        Deficit reduction: $45.5 billion                                        
----------------------------------------------------------------------------------------------------------------
\1\``n.a.'' refers to not applicable. Savings in the sixth year are not applicable because the first five years 
  of achieved savings will be used to fund benefits paid in each of the following years.                        

       Cost and savings estimates and assistance provided by the 
     National Center for Policy Analysis using the NCPA/Fiscal 
     Associates Health Care Model, static estimates.
  Mr. COATS. Mr. President, I rise today to join with the distinguished 
Senator from Texas in sponsoring the comprehensive Family Health Access 
and Savings Act.
  Senator Gramm's involvement with the health care reform debate is not 
new. In fact, it dates back to his days as a University of Texas 
professor of economics, and so I am pleased that he is taking a lead on 
this issue.
  This week during his State of the Union Address, the President's 
health care rhetoric about the importance of good health care was 
impressive.
  Unfortunately, it bears no resemblance to the realities of the 
Government-run, bureaucratic health care plan he is proposing.
  While the American people know that our health care system needs 
reform, they also recognize that we have the best health care system in 
the world.
  In America, there are no waiting lists for desperately needed 
operations; we are not forced to visit impersonal clinics, or reexplain 
our health problems to a different physician every time we visit the 
doctor's office. We know that if we need a specialist, or a special 
procedure, that service is available, without wait, without red tape.
  That's why we need to build upon the strengths of our current 
system--Fix what's wrong, but retain what's right.
  That's why Senator Gramm's bill is so important.
  Unlike the President's plan, which places its faith in government 
bureaucracy, Senator's Gramm's unique, market-based solution, is 
founded upon the principle Americans have always valued: consumer 
choice.
  I am especially pleased that many major parts of Senator Gramm's 
legislation were born and bred in Indiana.
  Two of those key provisions are medical savings accounts and 
malpractice reform.
  Last year, I sponsored an Indiana-inspired health reform proposal 
called Healthsave.
  Under this market-based reform plan, small medical bills are covered 
by funds set aside each year in a special tax-free account, while major 
expenses are still covered under high-deductible catastrophic 
insurance.
  One of the greatest strengths of this proposal is that it directly 
addresses the problem of cost containment by encouraging patients to 
become more responsible health care consumers.
  Changing consumer behavior is key to health care reform, because 
unless patients have an incentive to be prudent shoppers, health care 
costs will never be contained.
  And unlike a government-run or managed competition system which 
places additional layers of bureaucracy between doctor and patient, 
Healthsave accounts eliminates most of the middlemen.
  Under Healthsave, the decision about whether a service is ``medically 
necessary'' is made by patients and their doctors, not by gatekeepers 
or government bureaucrats.
  My Healthsave legislation, which spurred debate about the role of 
market-based health care reforms, is one of the centerpieces of Senator 
Gramm's bill.
  The second key provision of the Gramm plan, which was also fostered 
in Indiana, is medical malpractice reform.
  Indiana was one of the first States to tackle the malpractice reform 
debate, and this Hoosier plan has been a model for the reform efforts 
of many other States, and it inspired many provisions in Senator 
Gramm's bill.
  I commend my colleague for his efforts to promote meaningful and 
responsible reform of our Nation's health care system, and I am pleased 
that Indiana initiatives have influenced his proposal.
  Mr. McCAIN. Mr. President, I strongly support the Comprehensive 
Family Health Access and Savings Act introduced today by Senator Phil 
Gramm. This bill will substantially enhance the health security of all 
Americans without compromising choice or quality in our health care 
system or the vitality of our economy.
  There is no question that too many Americans have no health coverage, 
and that aspects of the system need reform. What should not be 
overlooked, however, is that 85 percent of Americans do have insurance, 
and more than 81 percent of these individuals are satisfied with their 
coverage. Even among the 15 percent of the population who lack 
insurance, fewer than half are uninsured for extensive periods of time. 
Moreover, the care that is received by all Americans--including the 
uninsured--is the envy of the world. Consequently, the approach to 
health care reform that we should take is to build upon what is good in 
the system, and correct what is flawed.
  America is now at a crossroads. We can reform the health care system 
to contain costs and enhance access while expanding the vitality of our 
economy. Alternatively, we can reform the system in a highly regulatory 
and bureaucratic manner that will damage our health care system and 
harm our prospects for economic growth.
  Unfortunately, the Clinton administration chose the latter course. 
Rather than building on the strengths of the system, their proposal 
would fundamentally restructure the entire health care industry--one-
seventh of our economy. Its reform proposal relies on mandatory quasi-
governmental purchasing cooperatives to induce competition, backed up 
by global budgets and premium controls. History has taught us that such 
controls cannot work. They will ultimately reduce competition, reduce 
quality, and when removed, will increase costs.
  Moreover, by mandating coverage of the entire population and offering 
a Cadillac standard benefits package, the Clinton plan ensures that it 
will expand demand and costs dramatically. Our experience with Medicare 
demonstrates that cost projections for such programs are typically 
highly underestimated. It was initially projected that Medicare would 
cost $10 billion in 1990, while it actually cost about 10 times that 
amount--$100 billion. If we make a similar mistake with respect to 
health care reform, we will substantially increase our budget deficits 
and national debt, imposing enormous harm to our economy.
  Perhaps the most disturbing aspect of the Clinton proposal is that it 
will severely limit choice for consumers, with the vast majority of 
Americans being relegated to a managed care plan. According to a recent 
report of the General Accounting Office, this approach is unlikely to 
save substantial costs. The Clinton plan's standard benefits package 
will prevent consumers from choosing the coverage that they need and 
want. For example, a person who does not drink alcohol will be forced 
to have coverage of treatment of alcoholism.
  The Clinton plan mandates all employers to pay for the coverage of 
their employees. Even the insurance of part-time employees must be paid 
by employers on a pro-rata basis. These provisions are the direct 
equivalent of a new payroll tax on all employers up to 7.9 percent of 
payroll. Anything beyond that amount will be subsidized by the American 
taxpayer.
  The Clinton plan will damage many small and marginal businesses. Many 
will have no choice but to cut back on operations and lay off workers. 
Like Senator Gramm, I believe that the only thing worse than being 
without health coverage is being without health coverage and out of 
work. Low wage workers will be most at-risk of losing their jobs, 
because health benefits constitute a large percentage of their overall 
wage and benefits package.
  As I indicated earlier, we do not have to take this highly 
bureaucratic, regulatory, and anticompetitive approach. We can reform 
our health care system in a manner that will actually help the economy 
while containing costs and enhancing access. This is precisely what the 
Comprehensive Family Health Access and Savings Act does.
  Our bill does not include any mandates, employer or individual. 
Instead, it offers strong incentives through the tax system for 
individuals to obtain coverage either through their employers or the 
individual market. It offers tax credits for individuals up to 200 
percent of the poverty level to assist them in purchasing health 
insurance. It also gives self-employed individuals tax benefits similar 
to those available to other individuals.
  The bill includes the insurance market reforms that were included in 
the bill which passed twice in the Senate last year, only to be voted 
down in the House. This includes a prohibition against insurers 
excluding an individual on the basis of a preexisting condition, and a 
requirement that all policies are renewable and may not be canceled 
unless the enrollee fails to pay the premium. In addition, insurers may 
not raise premiums based on the occurrence of an illness. People with 
preexisting conditions resulting in high premiums would receive a 
subsidy to help them purchase coverage.
  Under our plan, an individual who currently has employer provided 
coverage could either keep his current coverage or take the amount 
being spent for that coverage to purchase any other private health 
plan. One cost-effective option would be to obtain a low cost $3,000 
deductible catastrophic policy with excess funds applied to a medical 
savings account--similar to an IRA. At the end of the year, the 
individual could keep what has not been spent in the medical savings 
account.
  Our approach will be good for the economy because it addresses the 
root causes of our health care cost problem. It does this by focusing 
an catastrophic coverage in conjunction with medical savings accounts, 
which will substantially increase the cost consciousness of consumers. 
It also fundamentally reforms our malpractice system, which will make 
doctors' premiums affordable and reduce expensive defensive medicine. 
Because our proposal is financed soundly, and no costs would be 
incurred until savings accrue, it will not have a negative effect on 
our budget deficit or our overall economy.
  The Clinton health reform plan will harm our health care system by 
taking choices and responsibility away from consumers, and will harm 
our economy by imposing large costs on our businesses and taxpayers.
  Our proposal, which is based on the noncoercive free market, personal 
choice, and individual responsibility, will achieve all of the 
objectives of health care reform without hurting our economy. It will 
be good for our health care system and good for our country.

                          ____________________