[Congressional Record Volume 140, Number 36 (Friday, March 25, 1994)]
[House]
[Page H]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: March 25, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
                           HEALTH CARE REFORM

  Mr. NICKLES. Mr. President, I wish to address the Senate on another 
issue not related to Whitewater but, I will say, probably more 
important to most American people, and that is on the issue of health 
care.
  Mr. President, we have a lot of challenges in health care. President 
and Mrs. Clinton undoubtedly deserve some credit for bringing the 
health care issue to the forefront. They have come up with a very 
comprehensive proposal, very extensive proposal, 1,342 pages, a health 
care proposal that I think the more one finds out about, the more 
questions, the more problems most people have with it.
  I, for one, would like to see Congress work together to pass a real, 
significant, quality, health care bill this year, one that will expand 
access to a lot of people who do not have it, one that will bring 
health care costs down.
  The President has a proposal. Many of us also have counterproposals. 
I have looked at the President's proposal from several different 
perspectives, one as an employer. I used to be an employer. And I see 
several major serious problems in President and Mrs. Clinton's 
proposal. I will address those.
  Then I would like to address, just for a moment, some 
counteralternatives or countersuggestions I think would make 
significant improvements.
  Ms. MIKULSKI. Will the Senator from Oklahoma yield for a question?
  Mr. NICKLES. I will be happy to yield.
  Ms. MIKULSKI. How long does the Senator from Oklahoma intend to 
expand his views on what should be a national framework for health 
insurance reform?
  Mr. NICKLES. I could talk as long as necessary, but I will be happy 
to yield some time to my colleague; or I will talk for 10 minutes and I 
will yield the floor and allow my friend and colleague from Maryland to 
have the floor.
  Ms. MIKULSKI. I would encourage the Senator to expand his views; 10 
minutes would be sufficient. I thank the Senator for his courtesy.
  Mr. NICKLES. I will be happy to. I did not realize my colleague was 
wanting the floor. I will try to do it in 10 minutes.
  Mr. President, I mentioned as an employer I had several problems with 
the President's package, one of which I guess would be obvious--an 
employer mandate. But that is just the start. The President's package 
has an employer mandate. It says, employers, you have to pay 80 percent 
of the health care package.
  That sounds simple. A lot of people say, well, why not?
  Well, the President's package is a very expensive package. A lot of 
people in America do not know that the Congressional Budget Office has 
estimated that the cost of the President's package for a family in West 
Virginia, Oklahoma, Illinois, and nationwide is about $5,565 per 
family. That is a very expensive package. It has been estimated at 
about $6,000--$5,950 in 1994 and it escalates every year. So basically 
a $6,000 package per family.
  If you mandate that employers have to pay 80 percent of that, that is 
a big hit. I daresay there are a lot of employers in West Virginia, 
Oklahoma, and every State in the Nation that cannot afford that kind of 
mandate. And if you put that kind of a burden on employers, you are 
going to be putting a lot of people out of work.
  I can speak from experience. I used to run a manufacturing plant. We 
have quite a few employees to whom we provide a health and accident 
plan right now, and it is a lot less expensive than the President's 
package. We are covering our employees. And we have worked and 
negotiated with our employees to find something that is mutually 
beneficial, and it costs less than half of what the President is going 
to mandate.
  Why should our plan be banned? Most people are not aware of the 
fact--this is another major, major problem with the President's 
proposal--it will outlaw 99 percent of the plans in America--outlaw, 
ban, prohibit, replace. In other words, all those plans are not good 
enough. They are going to be replaced with a Government-knows-best 
plan. It is going to be replaced with a plan designed by Washington, 
DC. The benefits are going to be set in Washington, DC.
  Under the President's plan, he has a benefit advisory board appointed 
by the President. They are going to determine what benefits have to be 
in every single plan in America. And they may have a lot of benefits 
that maybe some people do not have. It may have benefits that some 
people already have, and they might not be included in the President's 
plan.
  My point is that it is a Government-knows-best plan. It is saying 
every plan in America, you are out. We are going to replace you with a 
Government plan.
  Now, you could keep your own plan if you had over 5,000 employees. I 
do not have many employers in my State of Oklahoma that have over 5,000 
employees. And even if they did, they would have to subscribe, at least 
have all these benefits the Government says should be in this plan. And 
for that privilege they also have to pay 1 percent of their payroll 
which, if they have 5,000 employees, is a significant contribution as 
well.
  But I have a real problem, and I asked Mrs. Clinton this in one of 
her meetings--and I appreciate the fact that they have invited me and 
many of our colleagues to health care meetings and discussions--but I 
asked her a question. I said, ``Mrs. Clinton, my company, Nickles 
Machine Corp., self-insures for the first several thousand, and then we 
buy a policy to cover the more expensive claims. Can we continue that 
plan?'' She said, ``No.'' Every self-insured plan that is out there 
would be outlawed, would be banned. You could not do it. You could not 
do it if you want to.
  Under the President's package, there is another little provision 
called mandatory alliances. You have to buy your health care from a 
health care alliance.
  Basically, I have heard people say, well, that is a cooperative. I 
have heard people call them a health-type cooperative, purchasing 
cooperative, but it is a Government-controlled entity. If you have the 
standard benefit package where the Government says here is what every 
plan in America has to provide, and then you have a situation where the 
Government says, well, you paid for this by a payroll tax as proposed 
under the President's package or some other method, cigarette tax--and 
God bless the smokers; they are going to have to smoke a lot to pay for 
this package because the President has proposed a lot of new expensive 
programs. I know my friend and colleague from West Virginia and I have 
talked time and time again about the explosive costs of entitlements.
  I will just tell my friend from West Virginia that we have not seen 
anything yet, because the President has at least four new expensive 
entitlements that will explode in cost, and he does not have near 
enough money in the Presidential package to pay for them. I will just 
mention a couple of them. Most everybody is aware of them.
  Early retirement benefits. Under the President's package, we are 
going to have the Federal Government pick up 80 percent of the health 
care costs for people who retire early, between the ages of 55 and 65. 
I do not know why. That has never been an obligation of the Federal 
Government before. If you read the Constitution, it does not say we 
should pick up 80 percent or 85 percent of the cost of early retirees. 
It is a new obligation proposed by President and Mrs. Clinton. I think 
it is ridiculous, and I think the cost of that will only explode.
  It does not take anybody who studies this issue very long to see that 
people between the ages of 55 and 65 have very expensive health care.
  So if they are not paying for it, the Government is going to pay 80 
percent of that cost. That means we are going to have to raise taxes or 
the other producers in society, the workers, are going to have to 
contribute a lot more to pay for it.
  Then I have had some people say, ``This is a benefit that was put in 
to help the big auto companies,'' or the big steel companies or 
whatever. I asked the question. My company that I worked with, Nickles 
Machine, we have not made any money. We have been a nonprofit 
organization, not by design, but we have not made any money for the 
last few years. Our employees have really not gotten any raises, hardly 
any, over the last several years. Their average wage is a lot less than 
what a UAW worker working for Ford Motor Co., makes retired.
  We are going to raise the taxes on some of those employees to pay 80 
percent of the health care costs for retirees? I do not think so. I 
will tell my friends and colleagues that I will speak for a long time 
before we allow that to happen because I think that is grossly unfair. 
That is just one little entitlement.
  We have the Medicare Program that says, well, beyond 65, we will pick 
up health care costs. Now the President's proposal says we will do it 
basically for anybody above 55. That is a major, major expansion of an 
entitlement with the Government saying we are going to come in and pick 
up 80 percent of that. The costs will only explode. I will tell my 
colleagues that there is going to be a lot more early retirees if we 
put a provision like that in.
  The President also has prescription drugs for Medicare. That cost 
will explode. The President has another provision--and long-term 
disability I should mention. Heaven knows how much that could cost. 
There is no limit to how much that could cost.
  Do we want to help people to have long-term disability? Sure. Is 
there any limit to how much that can cost? No. It could explode and 
grow and grow at an unbelievable rate.
  Mr. President, there is another little subsidy in the President's 
package a lot of people have not looked at, and it is the most 
expensive provision in this bill. He has a little provision called 
employer subsidy. The idea is to help make this package grow or sell. 
He says we are going to limit the cost to small employers, people that 
have little companies, and maybe do not provide any insurance. They 
have low-paid workers. We are going to limit that cost to 3\1/2\ 
percent of payroll. For the big companies, we will limit the cost of 
this health care plan to 7.9 percent of the payroll. The estimated cost 
under the President's bill is $346 billion over 5 years--the gross 
cost, according to his numbers.
  They come back, and say, ``We are going to save in Medicare and 
Medicaid. So it will not cost near that amount.'' But the gross figures 
are $346 billion. And I tell you, I think he has underestimated that.
  How does this work in an individual firm in West Virginia, Oklahoma, 
Illinois, or maybe in Maryland? I used to have a janitor service when I 
was going to school. I had a small business, just a little janitor 
service. We did not provide health insurance for our employees. I 
started out with my wife. We started getting more accounts. We cleaned 
a lot of different places--the cleaners, the ice cream shop; we cleaned 
the barber shop; we cleaned printers; we cleaned anything we could 
find.
  I wanted to make money. I wanted to get through school. I wanted to 
hire more people. This was fun. But we did not provide health insurance 
for our employees. We did not pay a minimum wage either. I contracted 
with them. They made more than minimum wage. They were happy to have 
the job to help them get through school. It worked out well. We 
provided a good service and did some good work.
  I was proud of that little business. But if you put a mandate on that 
company that you have to provide health insurance for your employees, I 
would not be able to afford it.
  Do you know what the cost of the President's plan is if the employer 
pays all the costs? If you are talking about a married person, you are 
talking about something like $6,000 per family. You divide that by the 
number of hours in a year working 40 hours a week. That is 2,080 hours 
a year. You are talking about almost $3 an hour increase in cost. That 
little janitor service could not carry that.
  So you would have to have a subsidy. The President came up and said, 
``We will tell that employer they only have to pay 3\1/2\ percent. We 
will give employer discounts or subsidies to make up the difference; 
3\1/2\ percent, if you have an employee working making $10,000. Three 
and a half percent of that is $350.
  If they are married and have a child--I had a couple that was married 
and had a child that worked for me. Who is going to pay the difference? 
The difference in this case was $5,600. That is a gift. That is not a 
subsidy. That is a gift. That is the Government paying nine times as 
much as the individual or the company.
  The point is this employer subsidy which no one has talked about near 
enough, no one has any idea how much that is going to cost. That is 
just the low income. That is the small business.
  What about the bigger business? I mentioned having some of the auto 
companies in talking to me. They pay a lot more than 7.9 percent of 
their payroll. Now we are going to limit them. You only have to pay 
7.9. Who is going to pay the balance?
  This employer subsidy thing is going to grow, and there is not near 
enough money in the President's package to pay for this benefit. The 
President's package says we will guarantee everybody these benefits. 
Then we are going to tax businesses so much as a percentage. That goes 
into this mandatory alliance.
  What if the alliance does not have enough money? They can roll back 
prices on doctors. They can roll back prices on hospitals, nurses, and 
other providers. But that loan will not work unless they ration care. 
Then the quality of health care will come tumbling down. I do not want 
to see that happen.
  I hope, Mr. President, that we will draw the line that says whatever 
health care proposal we enact, we are not going to do anything that 
causes the quality of health care to deteriorate in this country. We 
have the best quality health care anywhere in the world. Let us keep it 
that way.
  We do have some problems. I happen to think health care costs too 
much, and, unfortunately, there are a lot of people that do not have 
health care. There are 37 million people uninsured. How can we help 
them? I think there are some things we can do, and things we should do.
  I might mention to the President, half of those 37 million people 
will have insurance within 6 months. They are between jobs--maybe like 
my daughter. She just turned 22. She used to be a student under my 
plan. Now she is 22, and on her own. She has to buy her own policy. She 
has done that. But there was maybe a period of a month or so when she 
was between jobs.
  Maybe somebody lost a job, between jobs. But half of that 37 million 
people will have insurance within 6 months.
  What about the chronically uninsured, people that are really on the 
low end of the scale? How can we help them?
  I have a proposal that is a little bit different than the 
President's. We called it the consumer choice health bill. I am happy 
to say we have 25 cosponsors on this bill. I hope we will have some 
more. I hope people will look at it because it is a very viable 
constructive alternative.
  We have done some things that are a little different. We say, ``Wait 
a minute. Let us look at the Tax Code.'' The present Tax Code benefits 
individuals who work for an employer who subsidizes their health care. 
They get to have tax-free health benefits. Whatever the amount, the 
employer subsidizes their health care. But not all employers can do it, 
not all employers do it, and not everybody works.
  So the Tax Code helps those people who work for generous employers. 
But it does not help those working for a company that cannot afford it 
like my little janitor service. It does not do anything for people 
unemployed.
  You have a lot of people who can afford health care, but they do not 
have a job. But they do not get anything from the Tax Code. Some people 
have a nice, cushy job, and their employer pays half or all of their 
benefits. They get a tax-free benefit.
  Under our proposal, we take that tax exclusion for health care, and 
we say let us replace that with tax credit. But it makes it universal. 
Let us give it to everybody, regardless of whether or not they have a 
job. If Uncle Sam decides we are going to make an attempt to use the 
Tax Code to help people buy health care, let us make it apply to 
everybody, not just somebody who happens to be fortunate enough to work 
for a generous employer.
  Then for those people who are really on the lowest end of the 
economic ladder and still has high health care costs, let us give them 
a greater tax credit. Under our proposal, we give everybody a 25-
percent tax credit. But for somebody who is really low income, no 
income, we can give them a greater tax credit, maybe 50, or 75 percent 
of the total cost, not only of the insurance, but of their other out-
of-pocket health care costs. That will help reach out and solve a lot 
of the problems for that 37 million people.
  Then, I believe, and almost everybody in this body believes, let us 
make some insurance reform. Let us make sure no one is denied insurance 
because they have a preexisting illness. I know a lot of my colleagues 
that are serving right now that have had cancer, prostate cancer.
  I had bladder cancer a few years ago. One of the first things the 
doctor told me was, ``You will not be able to buy insurance.'' We ought 
to change that. We can. We can pass that tonight.
  Let us make another insurance change, and say no one will lose their 
insurance because they became ill. Let us make insurance truly 
portable. And under the provision or the bill that I have, individuals 
would actually own or control the insurance. They would not have to be 
totally dependent on their employer. They could keep their insurance 
with their employer if they wanted to, but they could also take the 
money the employer was subsidizing, giving them, and buy it from the 
Farm Bureau, from the REC. They could buy it from the bowling league, 
any group that they want to. They would have the option.
  But, Mr. President, one of the vital and most important things--and I 
see my friend from Maryland. She represents a lot of Federal employees. 
Federal employees have lots of choices in health care--dozens of 
choices. Included in Federal employees are every Congressman and every 
Senator. We get to choose once a year from the whole multitude of 
plans.
  Let us give that same option to every single person in America. I 
know President and Mrs. Clinton say their bill has consumer choice. I 
hate to say this, but that is very misleading and inaccurate. The only 
choice under the President's package is you get to buy the benefit that 
is designed by Washington, DC, and have almost no control over the 
cost, and it is going to be inordinately expensive. That is about the 
only option--buy an HMO or a fee-for-service. HMO's are estimated to 
cost about $6,000 per family. If you buy a fee-for-service and that 
means you get to keep your own doctor, you have to pay a lot more. If 
$6,000 is not enough--it is about $500 a month per family--if you want 
to keep your own doctor, you have to pay more than that. Most people do 
not know that. But they need to know that.
  So we should give everybody in America what we have, and that is 
consumer choice. We can choose from dozens of different plans, and we 
can change plans every year. Nobody is going to deny us insurance 
because we happen to have cancer, or heart disease, or AIDS, or some 
other problem. You can get into a different health care plan if you are 
a Federal employee. Federal employees like that option.
  Give that to everybody in America. That is why we call our plan the 
consumer choice plan. That is a significant reform, which would help 
eliminate a lot of problems in that 37 million uninsured.
  So, again, let us work on attacking the problem, but let us not 
destroy the system that in many cases has worked well for about 85 
percent of the population. Let us not take away the individual's 
choice. Let us not go into Illinois or Idaho and tell an employer and 
employee that we do not care what your health care plan is, it is not 
good enough. We are going to replace it, and here is the bill. People 
need to know that if Congress mandates a very expensive package, that 
is going to come right out of the hide and out of the wallet of the 
working men and women of this country.
  If you tell an employer you have to pay 80 percent of a package that 
costs $6,000 a year, that is about $4,800. If that employer can afford 
it, is making money and maybe he is paying it, that is great. 
Congratulations. A lot of employers cannot afford it, and maybe are not 
making any money. So either they are going to lose employees, which 
will happen. Maybe they will go bankrupt and lose the entire company, 
and that will happen. That could be the thing that would put people 
over the edge; or, conversely, maybe they will be a survivor and will 
provide the insurance they have to provide, as mandated. But they are 
going to cut wages to do it. They are going to tell the employee: We 
were paying you $20,000, and we are paying maybe a couple thousand for 
health care. So your total compensation package, fringes and wages 
together, may be equal to $22,000.
  Now the Government is coming up with a package to mandate the 
employer to pay $4,800. He can say: I calculate that to a $2,800 raise. 
I cannot give that to you. That is a 10 percent increase, and I have 
not made that money, therefore your wages are going to be reduced. Or: 
You are not going to get an increase next year, or a bonus. Or: We are 
going to eliminate the cafeteria plan where you choose your plan.
  The President's bill eliminates all cafeteria plans. That is a 
mistake. Ask employees that participate in those; they want to choose 
different benefits. Maybe they want dental or something else. They will 
have that option. That is not available under the President's package, 
or under any of the packages, including the Cooper package that people 
talk about, because it has a standard benefit.
  So, Mr. President, I mention this not to be partisan, because I want 
health care to be bipartisan; I want us to pass positive health care 
reform and to pass medical malpractice reform, so we can get health 
care costs down. I want us to pass antitrust reform so we can get 
hospitals from oversupplying services--like every hospital having an 
MRI, and so on. We should not have to do that.
  We can pass positive health care reform this year. We can help a lot 
of people that do not have insurance, maybe through a refundable tax 
credit, as I have proposed. But let us make sure that we give people a 
lot of options and not come in with the idea that the Government knows 
best, and your plan is illegal, and we are going to prohibit you from 
having a self-insured plan or another plan. That would be a serious 
mistake. We would have severe economic consequences if we made that 
mistake.
  I am afraid it would cost a lot of people their jobs. A lot of people 
today have a job with no health insurance. If we came up with that kind 
of a mandate, I am afraid a lot of people would not only not have 
health insurance but would not have a job. That would be a serious 
mistake.
  Again, I want to say let us draw and underline and make sure that 
whatever we do does no harm. Let us make sure that whatever we do is a 
positive, constructive improvement to the quality health care system 
that we have today.
  I thank my friend and colleague from Maryland. I talked a little more 
than 10 minutes. I yield the floor.

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