[Congressional Record Volume 140, Number 104 (Tuesday, August 2, 1994)]
[Senate]
[Page S]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: August 2, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
                    COMPREHENSIVE HEALTH CARE REFORM

  Mr. MITCHELL. Mr. President, and Members of the Senate, tomorrow I 
will introduce comprehensive health care reform legislation. Nine 
months ago, President Clinton sent to the Congress his proposed Health 
Security Act. Since then, the debate on health care reform has been 
intense. Consideration of the issue in the Senate has been extensive. 
The Senate Labor Committee held 20 days of hearings and spent 5 days 
debating and writing its bill. They completed their work on June 9. 
Senators have had nearly 2 months to consider the Labor Committee's 
action.
  The Senate Finance Committee held 31 days of hearings and spent 4 
days debating and writing its bill. They completed their work on July 
2. Senators have had a month to consider the Finance Committee's 
action. The bill I will introduce is drawn largely from the bills 
reported by the Senate Labor and Finance Committees. Their chairmen, 
Senators Kennedy and Moynihan, and all the members of those committees, 
Democrats and Republicans, deserve the gratitude of the full Senate for 
their efforts.
  I believe we will enact health care reform legislation this year, and 
when we do, much of the credit properly will go to Senator Kennedy and 
Senator Moynihan for their leadership.
  In preparing health care reform legislation, I have been guided by 
one principle: The purpose of health care reform is the well-being of 
American families. Health care insurers and health care providers are 
important parts of the system, but they are means to an end; the end, 
our true goal, is the well-being and peace of mind that Americans 
should have with respect to their health care.
  Health care reform is a matter of simple justice. It is the fate of 
human beings to be born unequal in ability, in circumstance, and in 
physical strength. None of us chooses the family into which we were 
born. None of us is immune to the whims of fate. We are all susceptible 
to accident and illness. We all grow old.
  Physical ailments should not define our lives, but in our health care 
system, they often do. Some people cannot get coverage for the health 
condition for which they most need care. Some people stricken with 
serious illnesses find that lifetime insurance limits are used up long 
before their life ends, long before their condition improves. Some 
families whose children have medical needs find themselves red-lined 
out of insurance coverage, so a child's healthy brothers and sisters 
are put at risk. Some families whose parents suffer disabilities as 
they age face years of providing in-home care or the bankrupting costs 
of long-term care because there is no affordable alternative.
  Health care takes 14 percent of our gross domestic product--more than 
in any other developed nation. Americans pay the highest medical bills 
in the world, and the bills keep rising. From 1980 to 1993, the average 
family's health costs rose from $1,749 a year to $5,190. At that rate, 
average family cost will be more than $11,000 a year in another 6 
years.
  All that expense might be worth it if America led the world in the 
lifespan for adults or in low infant mortality rates. But it does not.
  Statistics can guide policy, but people are not statistics. They are 
human beings who experience illness as individuals and as members of 
families. The question is whether the money we all pay into our system 
delivers to those who need it the care they need when they need it at a 
price they can afford. The answer to that question is, No, our system 
does not do that.
  For people with comprehensive coverage, the system works well. For 
Members of Congress, Federal workers, State employees, the employees of 
most large corporations, an accident or illness is compensated by 
insurance, and the individual is not bankrupted. His or her family does 
not face the loss of a home or the erosion of a lifetime's savings.
  But for many other people, the story is far different. For them, the 
difference between financial security and financial devastation can be 
as simple and dramatic as an auto accident or a weak heart valve. That 
is not fair or right. That is why we need reform.
  My proposal builds on the strengths of our system and tries to 
eliminate its weaknesses. It builds on the existing American system of 
private insurance. I propose to expand the system to those not now 
included--Americans who cannot afford insurance, people with an illness 
that insurance companies will not cover, people between jobs. I propose 
to place most of the persons now covered under Medicaid into the same 
system of private insurance and care as the rest of the population.
  My bill includes all of the insurance market reforms on which there 
is broad agreement. Insurance companies will not be allowed to reject 
applicants for preexisting conditions. Insurance will travel with the 
person so Americans will not be locked into a job. Policy renewal will 
be guaranteed so people who fall ill are not cut off from coverage when 
they need it most.

  My bill creates incentives for cost control through the competitive 
pressures of employers and consumers seeking lower price coverage. 
Private price competition among insurers is the best way to determine 
where the fat lies in insurance coverage and where the most cost 
effective shakeouts can occur. As long as there are incentives to look 
for price economies, the private system will shake out those who cannot 
compete by price. My bill is designed to encourage that process because 
that is the best way to serve the public.
  As a backup mechanism, there is an assessment on high-cost insurance 
plans whose prices rise too quickly. It will mean that insurance 
companies will become more price sensitive because high-cost plans will 
be unattractive to the middle class, which is the principal market for 
their product. My bill also lays the groundwork for universal coverage 
through a voluntary system which includes purchasing cooperatives, 
market incentives and targeted subsidies.
  Based on discussions with the Congressional Budget Office, I am 
confident that its provisions will assure that 95 percent of all 
Americans will be covered by guaranteed portable renewable insurance 
over the course of the next 6 years.
  I want to repeat that: The Congressional Budget Office's preliminary 
estimate is that under this plan 95 percent of all Americans will be 
covered by the year 2000.
  I have included a backup mechanism in the bill, if for some 
unforeseeable reason fewer than 95 percent are covered by then. But I 
believe the CBO estimate that this bill will achieve 95 percent 
coverage in a definite neutral way is sound.
  Americans pay more for health care than any other people, without 
getting the universal care commonplace in other countries. That does 
not have to continue. We can get better care for our health dollar.
  All of the plans put forward so far recommend that the reforms be 
phased in. The President's plan includes a 4-year phase-in period, the 
House bill 5 years.
  My plan phases in even more slowly. That is a realistic recognition 
of the enormously complex task of modifying the health care system. It 
makes sense to do this carefully and make certain it is done right.
  Health insurance for all Americans is the key to reform. I repeat 
that. I believe that. It is essential. Health insurance for all 
Americans is the key to reform. Without it, we face a continuation of 
cost shifting and other problems. We must assure health insurance for 
our citizens.
  We have a system today where some have coverage and some do not. 
Everyone who today has health insurance is subsidizing those who do 
not. That is what is called cost shifting. Doctors, hospitals, clinics, 
all other health care providers compensate for unpaid care by charging 
more to the people who have insurance. The added charge is not paid by 
the insurance companies, it is added to the premiums that are paid by 
every insured family and individual.
  Americans with health insurance pay as much as 30 percent more for 
their coverage, a hidden tax to pay for cost shifting. The only thing 
that can cure cost shifting is universal coverage. The claim that we 
can reach universal coverage with incremental changes in law is wrong. 
We have to make coverage available. We also have to make it affordable. 
To make insurance more affordable, my bill provides for the States to 
create voluntary regional or statewide health purchasing cooperatives. 
These will be community-rated purchasing co-ops covering no fewer than 
250,000 persons. Health insurance purchasing co-ops will not be allowed 
to turn down qualified applicants, and they will be required to offer a 
choice of plans to all buyers. So workers in small companies will have 
the same range of choices as do all others.
  Any American in a community-rated insurance pool, in essence any 
American who does not work for a large corporation that provides health 
coverage to its workers and who wants to do so, anyone in that 
situation will be able to enter the Federal Employee Health Benefits 
Plan. It offers many different plans among which to choose. It is a 
good system for the insurers and for those who are insured.
  If it is good enough for us and for all Federal employees, it is good 
enough for, and should be available, to all Americans who do not have 
coverage through their jobs.
  My plan will help make better insurance available to those who work 
and the families who depend on them. In addition to employees, there 
are millions of Americans who are self-employed and millions more who 
are out of work or between jobs. In addition, there are those covered 
by Medicaid, the joint Federal-State system of health care for the 
poor.
  My plan will integrate all of these people into a national system of 
private insurance. Unless we do so, the cost shifting that has sent 
insurance costs skyrocketing will continue and working families will 
pay more and more of the hidden tax of the health care bills of those 
who are not insured.
  Many people will need some subsidy to afford health care coverage. My 
bill extends those subsidies on a sliding scale to those who qualify. 
It will include tax benefits for the self-employed beyond what is 
available to them today. This will not create a new obligation on the 
Federal or State Government. It will reorganize the obligations that 
taxpayers are already shouldering through the Medicaid system and 
through cost shifting to pay for the care of the uninsured.
  The current poverty level for a family of four is about $14,800. My 
bill will provide that by 1997 people at or below the poverty level 
will be helped to buy private insurance. This will end the acute-care 
costs of the Medicaid Program, which these people receive today, and 
will place them into the same systems of coverage and care as the rest 
of the population. For families with incomes up to twice the poverty 
level, there will be a sliding scale of subsidies for the purchase of 
health insurance.

  Also beginning in 1997, the medically needy who are subsidized by 
some States and those between jobs, would have a 6-month transition to 
the system, during which their premiums would be fully paid. At the end 
of the 6-month period, they would face the same benefits and costs as 
others, based on their incomes.
  A major strength in our system is the element of choice. It creates 
incentives for market-driven efficiencies. Employers can choose the 
plan they offer their workers by shopping among insurers. Individuals 
can find a personal physician or decide instead on the certainty of 
coverage under a health maintenance organization. That element of 
choice spurs health providers to compete by offering better services 
and a wider range of options at a better price.
  My bill will expand those choices and will increase incentives to 
compete by price and quality to those offering insurance coverage.
  Today most people's health care choices are limited to one plan that 
their employer offers. My bill requires every employer to offer at 
least three plans. The employer will not be required to pay any part of 
the costs of coverage, but will be required to make at least three 
plans available to everyone. That is going to widen choices for a 
majority of Americans immediately.
  At least one plan will have to be traditional fee-for-service. Other 
plans could be health maintenance organizations or other group practice 
programs with more flexibility. The goal is to assure that each worker 
has the choice of a lower cost plan as well as higher cost options.
  A lot of attention has focused on the role of employers in our 
system, particularly small companies.
  Most Americans do not work for small companies, but for those who do 
and for the people who employ them, the current health care system is a 
nightmare of unfairly allocated administrative costs, unaffordable 
rates and medical redlining, where all the workers in a company are 
refused coverage because one of their coworkers has a health condition.
  As much as 40 cents of every health insurance dollar paid by a small 
company goes to administrative costs. Smaller firms face rates 30 to 35 
percent higher than larger firms for the same coverage.
  By letting every company with fewer than 500 employees--that is every 
small business in the country--buy insurance through health insurance 
purchasing cooperatives, my bill gives smaller firms the bargaining 
strength that only large ones have today. And it means they can offer 
their employees the same range of choices that other workers have.
  Because I believe primary and preventive care is the key to solving 
enormous cost problems in our health care system, I have designed my 
program to focus in particular on pregnant women and on those 18 years 
of age and younger.
  The costs of low-birthweight babies in this country are astronomical. 
Many infants weighing a few pounds at birth cost all of us hundreds of 
thousands of dollars for immediate intensive care. They often demand 
many more thousands of dollars a year throughout their lives for the 
physical or developmental problems that accompany low birthweight.
  Much of this additional care and its costs are preventable if the 
mothers of these children have decent prenatal care. The General 
Accounting Office found that 63 percent of women who are on Medicaid or 
have no insurance do not get proper prenatal care. About one in eight 
has a low birthweight baby as a result. The annual cost was estimated 
to be $3.3 billion 10 year ago. It is higher today and it will climb 
even higher if we do nothing.
  So my bill focuses on this need, because correcting the lack of 
preventive care for young pregnant at-risk women is the right thing to 
do, and is cost-effective.
  Mr. President, and Members of the Senate, I have a daughter of child-
bearing age. Were she to become pregnant, it would be unthinkable for 
me that she would not be able to see a doctor during her pregnancy, and 
I know in my heart and soul that it would be unthinkable for every 
Member of this Senate. If a daughter of any Member of this Senate 
became pregnant, it would be unthinkable that she should not see a 
doctor. And yet, what is unthinkable that she should not see a doctor. 
And yet, what is unthinkable for us is the reality for thousands of 
young at-risk women. We cannot let this situation continue. We can do 
the right thing and save our society billions of dollars.
  In addition, because preventive and primary care reduces costs for 
everyone, my bill's benefits package will not require copayments for 
preventive care. It creates an incentive for persons to have regular 
annual checkups and to seek early care.
  My bill is intended to integrate everyone into a system where 
everyone who uses a service pays some part of the cost. That way, all 
of us have an incentive to find ways to reduce these costs. It is an 
incentive for greater responsibility. It will not work with all people. 
It is not foolproof. But it will help because it rests on the common 
sense and self-interest of ordinary people.
  The keys to health care reform today are access, affordability and 
universal coverage. Those who say the problem is access, not price, are 
mistaken. It is both access and price.
  Senator Boxer described an all too common occurrence, one that 
happened in California. She told of a young man, 19 years old, a high 
school football star, who was stricken with cancer. His only chance of 
overcoming the cancer was a bone-marrow transplant. But his health 
insurance did not cover it.
  Sick, dying of cancer, he and his family were forced into the all-
too-common spectacle of advertising their need and raising money to 
meet the costs.
  Sick people and their families should not have to make a public 
appeal for money so they can have the medical treatment they need.
  Americans are generous and these fund-raising appeals often succeed. 
But I ask each Senator to ask himself or herself what price do they 
demand of the sick people forced to undertake them? High health care 
costs are driving Americans to choices that none of us should have to 
make.
  A great deal of attention in this debate has focused on employer 
mandates--the requirement that in the future, all employers provide 
what the majority of workers enjoy today--health insurance coverage 
through the workplace.
  Argument against employer-provided health insurance are the great 
smokescreen in the health care debate. I have visited with and spoken 
with the owners of small businesses all across this country. If there 
is one thing most of them would like to do it is to offer health 
insurance to their employees. They know them. They know their families.
  Most businesses want to provide coverage and will, when they can 
afford it. It has been an American tradition for half a century. It is 
something working people expect and employers understand.
  My bill provides a system of subsidies and of community-rated 
insurance that makes it possible, for the first time, for companies to 
challenge insurers to come down in price for their coverage. It will 
enable companies to offer health benefits. For companies just starting 
up or operating with very low profitability, it will permit their 
employees to select an affordable program to cover their needs.
  The politics of health care reform are confusing to most Americans. 
Much of the confusion is intentional. Those who do not want reform have 
a stake in confusing the issues and making the idea of reform 
frightening to as many people as possible.
  But what should frighten people--and what does frighten a lot of 
Americans--is not the change that may come. It is the reality they live 
with today, where health coverage can be abruptly terminated for a 
whole family because one child suffers an illness, where a whole firm 
can be denied affordable coverage because one worker has a health 
condition, where a breadwinner does not dare to look for new job, for 
fear that health coverage will not be available. That is what should, 
that is what does scare most people.
  Health care reform is much more than a political debate. It is about 
a fundamental reality in every human life.
  If the States can demand that auto insurers cover the risks resulting 
from bad driving behavior--behavior that can be controlled and 
influenced and prevented--it is not beyond our ability to require 
health insurance companies to cover those whose conditions often do not 
rise from their behavior but from circumstance and just plain bad luck.
  My bill will do this. Insurers will not be able to reject a person 
because the person had the bad luck to be born with a physical 
malfunction or to contract a disease in childhood, or to suffer an 
accident with long-term effects, or for any other reason.
  There is a crisis in American health care. It is a crisis of 
affordability and access. It has to change. I have proposed legislation 
which I believe will meet the need, and which will make the change with 
the least disruption to the parts of the system that work well for 
millions of Americans.
  Our country has too many people who are victims of disease but who 
are much more victimized by the system of insurance and health care 
than they ever could be by their medical condition.
  Human beings can fight disease and often do. What people cannot fight 
are rules and regulations and policies driven by a desire to avoid risk 
and cost, and directed at the most vulnerable persons among us--those 
who are sick. We should not ask Americans to fight this system any 
longer. We have it within our ability to correct what is wrong. We have 
it within our ability to create a system whose focus is on people.
  We have the ability and today, thanks to President Clinton's efforts, 
we have the public's attention as well.
  It is time to act. The bill I will introduce is a good starting point 
for action. I look forward to the debate. I welcome constructive 
suggestions and alternatives. Let us debate and amend. But in the end, 
let us do what is right for the American people.
  Mr. President, I ask unanimous consent that two documents, one 
entitled ``Sources of Mitchell Health Care Reform Bill,'' 2 pages in 
length, and one entitled ``Mitchell Health Care Legislation, Executive 
Summary,'' 21 pages in length, be printed in the Record immediately 
following my remarks.
  Mr. President, I thank my colleagues for their attention.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

              Sources of Mitchell Health Care Reform Bill


                          1. finance committee

       The following provisions are taken directly, or with minor 
     modification, from the Finance Committee bill:
       1. Medicaid/Medicare.
       2. Financing Mechanisms.
       3. Cost Containment.
       4. Subsidies for Low-income Pregnant Women and Children.
       5. Benefit Approach.


                           2. labor committee

       The following provisions are taken directly, or with minor 
     modification, from the Labor Committee bill:
       1. Public Health Infrastructure.
       2. Workforce Priorities.
       3. Quality Improvement.
       4. Consumer Protections.


                    3. finance and labor committees

       The following provisions are blended provisions based on 
     the Finance and Labor Committees bills:
       1. Insurance Market Reforms.
       2. Health Insurance Purchasing Cooperatives.
       3. Low-income Subsidies.
       4. Federal Employees Health Benefits Program.
       5. Long-Term Care.
       6. Academic Health Centers/Graduate Medical Education.
       7. Fraud and Abuse Program.


                          4. other provisions

       The following provisions were not included in either 
     Committee, or if included, have been subject to modification.
       1. Medicare Prescription Drug Benefit.
       2. Expanded Coverage:
       Additional Coverage for Pregnant Women and Children.
       Coverage for Temporarily Unemployed, Uninsured Workers.
       Incentives for Employers to Expand Coverage to Additional 
     Workers.
       3. Backup Mechanism to Enable Coverage of the Remaining 
     Uninsured.
                                  ____


   Mitchell Health Care Legislation--Executive Summary August 2, 1994


                         1. expanding coverage

       The objective of this health care reform plan is to provide 
     universal coverage through a system of insurance market 
     reforms, voluntary purchasing cooperatives, and incentives 
     and subsidies to those who need them.
       The Congressional Budget Office's preliminary estimate is 
     that, if this plan is enacted, 95 percent of all Americans 
     will have health insurance by the year 2000 with no increase 
     in the federal deficit. The plan will further establish a 
     procedure to provide thereafter health insurance to all 
     Americans.
       A. Subsidies Under a Voluntary System.--Targeted subsidies 
     will be available to encourage certain low income individuals 
     and some firms to purchase insurance. These subsidies would 
     be targeted to people who do not have health insurance 
     coverage today.
       For low income individuals:
       Low-income families. Beginning in 1997, low income 
     individuals and families will receive a subsidy worth a fixed 
     percentage of the average premium in a health care coverage 
     area. For those below 100 percent of the Federal poverty 
     level, the subsidies will cover the full cost of health 
     insurance coverage. The value of the subsidy will be phased 
     out between 100 percent and 200 percent of poverty.
       Low income pregnant women and children. Beginning no later 
     than 1997, pregnant women and children under 19 with incomes 
     up to 185 percent of poverty will be eligible to receive 
     subsidies equal to 100 percent of the premium. The subsidies 
     will be phased out between 185 percent of poverty and 300 
     percent of poverty. Community rated health plans will be 
     required to offer two additional categories of coverage: 
     single child and multiple child, so that child only policies 
     are available in the market.
       Cash assistance recipients. Beginning with the January 1, 
     1997 abolishment of the acute care portion of Medicaid for 
     AFDC, all AFDC cash assistance recipients will receive 
     subsidies equal to 100 percent of the premium.
       Former non-cash Medicaid eligibles. Beginning in 1997, 
     individuals who would be medically needy or other non-cash 
     recipients under the current Medicaid program (except 
     pregnant women, infants and children) will receive subsidies 
     covering 100 percent of the premium for six months, then will 
     be treated the same as others based on income.
       Outreach and enrollment. To maximize health insurance 
     coverage, low income individuals eligible for full subsidies 
     (below 100% of poverty generally, and below 185% of poverty 
     for pregnant women and children) will be permitted to enroll 
     in a health plan at any time of the year (others may enroll 
     only during the 30 day enrollment period). Any pre-existing 
     exclusion rules that apply to the newly insured will be 
     waived for these individuals, and a new system will be 
     developed to sign up such individuals for health insurance 
     coverage when they seek health care service at a hospital or 
     clinic.
       Temporarily unemployed, uninsured. Beginning in 1997 
     individuals who were full time employees, insured for at 
     least six months will be eligible for enhanced income 
     protection subsidies to purchase insurance. Under this 
     program, unemployment insurance benefits and wages earned in 
     a month up to 75 percent of the poverty level, will be 
     disregarded for purposes of determining eligibility for low 
     income subsidies. Individuals will be eligible for this 
     program for up to six months or until they find other full 
     time work. This assists temporarily unemployed individuals 
     purchase insurance by disregarding a portion of their income 
     for the year so that they are eligible for the low income 
     subsidies.
       For employers:
       Employers who expand coverage to additional workers. 
     Beginning in 1997, employers who expand coverage to all their 
     employees in a specific class (i.e., full time, part time) 
     will receive subsidies to make their employees' premiums more 
     affordable. Employers will pay the lesser of 50 percent of 
     the premium or 8 percent of each newly insured employee's 
     wages. The employee will pay 50 percent of the premium. 
     Workers with incomes under 200 percent of poverty eligible 
     for the individual subsidies described above. This subsidy 
     will be available to employers for a maximum of five years.
       B. Trigger to a Requirement.--On January 15, 2000, the 
     National Health Care Cost and Coverage Commission will 
     determine whether the voluntary system has achieved 95 
     percent coverage.
       First Alternative--Coverage Target Achieved. If the 
     Commission determines that, on a nationwide basis, at least 
     95 percent of all Americans had health coverage, it will send 
     recommendations to the Congress on how to insure the 
     remaining uninsured individuals. Congress will consider 
     legislation to insure the remaining uninsured under an 
     expedited process that requires committees to discharge by a 
     certain date and that limits floor debate. The legislation 
     will be fully amendable and require the President's 
     signature. No further action is required.
       Second Altenative--Coverage Target Not Achieved. If 
     coverage is below 95 percent, the Commission will send to 
     Congress by May 15, 2000 one or more legislative proposals on 
     how to insure the remaining uninsured individuals. Congress 
     will consider legislation to insure the remaining uninsured 
     under an expedited process that requires committees to 
     discharge by a certain date and that limits floor debate. The 
     legislation will be fully amendable and require the 
     President's signature. If universal coverage legislation is 
     not enacted by December 31, 2000, an employer requirement 
     will go into effect on January 1, 2002 in those states with 
     less than 95 percent coverage.
       C. Nature of Requirement.--If a requirement is triggered, 
     employers with 25 or more employees will have to pay 50 
     percent of their employees' premium costs, with the employee 
     paying the remainder. Firms employing fewer than 25 workers 
     will be exempt from an employer requirement. Individuals will 
     be required to have health insurance. Under a requirement, 
     the targeted subsidies available under the voluntary system 
     will be replaced with general subsidies designed to make 
     insurance costs affordable.
       Employees with Adjusted Gross Income under 200 percent of 
     poverty will be subsidized on their 50 percent share of the 
     premium on a sliding scale basis, so that those with incomes 
     up to 100 percent of poverty will pay no more than about 4 
     percent of income, rising to no more than 8 percent of income 
     by 200 percent of poverty. No family, regardless of income 
     will pay more than 8 percent of income on their 50 percent 
     share of the premium.
       Non-workers and those in exempt firms will receive the same 
     subsidies for their 50 percent share of the premium as 
     employees in covered firms. Those below 200 percent of income 
     will receive additional subsidies (on a sliding scale) to 
     make the remainder of the premium affordable.


                    2. controlling health care costs

       A. Premium Assessment.--A 25 percent assessment would be 
     imposed on ``high cost'' health plans to the extent their 
     costs exceed a target cost. The initial target for community 
     rated plans would be based on average per capita health care 
     costs in the particular community rated market area for 1994 
     trended forward at the rate national health expenditures 
     increase. The target rate of growth thereafter would be CPI 
     plus 3.0 percent for 1987, 2.5 percent for 1988 and 2.0 
     percent thereafter. The initial target for experience rated 
     plans would be based on each plan's actual experience from 
     1997-1999, and then will increase generally by the same 
     target growth rate that applies to community rated plans.
       Plans in a community rated area where the average premium 
     is less than the target would not be subject to the 
     assessment. The health plan would pay half the assessment and 
     collect the other half from providers in reduced 
     reimbursements. The Secretary of the Treasury will have the 
     authority to adjust the reference premium to reflect changes 
     in demographic characteristics and health status. The tax 
     would apply to community-rated plans after 1996 and to 
     experience-rated plans after 1999.
       B. National Health Care Cost and Coverage Commission.--A 
     National Health Care Coverage and Cost Commission will be 
     established to monitor and make recommendations with respect 
     to trends in health insurance coverage and costs. The 
     Commission will consist of seven members to be appointed by 
     the President and confirmed by the senate.
       Beginning in 1998, the Commission will issue annual reports 
     detailing trends in health care coverage and costs, broken 
     down nationally, by state, and by health care coverage area.
       Among other things, the Commission will report on:
       Demographics and employment status of the uninsured and 
     reasons why they are uninsured;
       Structure of health delivery systems;
       Status of insurance market reforms;
       Development and operations of health insurance purchasing 
     cooperatives;
       Success of market mechanisms in expanding coverage and 
     controlling costs among employers and households;
       Success of high cost health insurance premium tax in 
     controlling costs;
       Success and adequacy of subsidy program in expanding 
     coverage through employers and households;
       The Commission will also issue findings on the per capita 
     cost of health care, including the rate of growth by type of 
     provider, by type of payor, within States and within health 
     care coverage areas. Such findings will also include the 
     expected rate of growth in per capita health care costs, the 
     causes of health care cost growth, and strategies for 
     controlling such costs.
       Beginning on January 15, 1999, the Commission will report 
     each year on the affordability of coverage for families and 
     employers and on the success of market incentives and other 
     provisions of this legislation in achieving cost containment. 
     If the Commission finds that coverage is unaffordable or that 
     cost containment efforts are unsuccessful, it will make 
     recommendations for improvements.
       If the Commission finds that fewer than 35 percent of those 
     eligible to enroll in the community-rated health plan are 
     able to enroll in a plan with a premium at or below the 
     target premium for the area, then the Commission will 
     consider and recommend to Congress a means of controlling 
     health care cost growth to the target set in this legislation 
     or to an alternative target if the Commission determines that 
     would be more appropriate. Congress shall consider such 
     Commission recommendation under the same expedited procedures 
     as it considers the Commission recommendation for achieving 
     universal coverage. Consideration of such recommendations 
     under such procedures will not occur more than once in a 
     Congress.


                      3. INSURANCE MARKET REFORMS

       A. Market segments and boundaries.--Firms with fewer than 
     500 workers and individual purchasers (self-employed, 
     nonworkers, AFDC-eligibles) will be in the community rated 
     pool. Firms with 500 or more workers, as well as Taft-Hartley 
     plans and rural cooperatives with 500 or more members, will 
     be permitted to self-insure or purchase experience-rated 
     coverage.
       B. Community rating requirements.--Community-rated plans 
     could modify their rates based on coverage category (e.g., 
     single, family, etc.), geography, and age (with 2:1 band for 
     population under 65 years of age until 2002). Each community-
     rated health plan will be required to establish a single set 
     of rates for the standard benefits package applicable to all 
     community-rated eligible individuals and groups within the 
     community rating area.
       States draw boundaries for community rating areas. In 
     drawing such boundaries, states cannot subdivide metropolitan 
     areas and must assure that a community rating area contains 
     at least 250,000 individuals.
       C. Guaranty fund.--States shall be required to establish 
     guaranty funds for all community-rated health plans and in-
     state, self-insured plans based on federal standards. The 
     Department of Labor would establish standards for and operate 
     a guaranty fund for multi-state self-insured plans.
       D. Health Insurance Purchasing Cooperatives (HIPCs).--The 
     plan allows for multiple, competing, voluntary HIPCs. States 
     certify HIPCs to serve state-established community rating 
     areas. States may certify more than one HIPC for each such 
     area. HIPCs must be non-profit. States and local governments 
     will be allowed to sponsor or establish HIPCs. If a HIPC is 
     not available in a community rating area, the Federal 
     Employees Health Benefits Program (FEHBP) will be required to 
     establish or sponsor HIPCs in such unserved areas (see FEHBP 
     below).
       HIPCs will be responsible for entering into agreements with 
     plans and employers; enrolling individuals in plans; 
     collecting and distributing premium payments; coordinating 
     out-of-coverage with other HIPCs; and providing consumer 
     information on plans' quality and cost.
       HIPCs must accept all eligible individuals and firms; 
     provide enrollees a choice of at least 3 plans, including 1 
     Fee For Service (FFS), 1 Point of Service (POS), and 1 HMO. 
     Requirement of 3 plans could be waived by Governor in rural 
     areas, but FFS must always be available. The Secretary of 
     Health & Human Services will set fiduciary standards for 
     HIPCs. HIPCs will be permitted to negotiate discounts with 
     plans reflecting economies of scale in administration and 
     marketing.
       E. Employer Responsibility.--Small employers (firms with 
     less than 500 workers) must offer to their employees a HIPC. 
     They may also offer a choice of at least three plans 
     (including a FFS, POS, and HMO) to their employees. These 
     small firms could choose from among the HIPCs in their 
     community rating area.
       In order to qualify for an employer premium contribution, 
     employees will be required to purchase health insurance 
     through the three plans or the HIPC chosen by their employer. 
     If an employer chooses to offer a HIPC that is not the FEHBP 
     HIPC in the area, that employer's employees also could choose 
     from the plans offered by the FEHBP HIPC and still qualify 
     for any employer premium contribution.
       Large employers (firms with 500 or more workers) must offer 
     a choice of at least three plans (including a FFS, POS, and 
     HMO) to their employees. Large employers can purchase 
     experience-rated health plans or self-insure. Large employers 
     can join together to form large employer purchasing groups, 
     but cannot join HIPCs.
       F. Self-insured plans.--In general, self-insured plans must 
     comply with the above responsibilities and reforms, including 
     employer and individual premium contribution requirements, 
     coverage of a comprehensive package of benefits, guaranteed 
     issue and renewal, and pre-existing condition limits.
       G. FEHBP.--The Office of Personnel Management will 
     designate a state-certified health insurance purchasing 
     cooperative in each area as the FEHBP HIPC. If a state-
     certified HIPC is not available, OPM will be responsible for 
     setting up a HIPC. A HIPC run by OPM would have all of the 
     powers of a state-certified HIPC.
       Federal workers will select plans through their local FEHBP 
     HIPC. Premiums for federal workers will be based on the 
     current methodology and will not be age-adjusted. OPM will 
     implement rules to blend premiums for federal workers with 
     premiums for non-federal individuals over time. Federal 
     workers and non-federal individuals will pay the same 
     community-rated premium upon the phase-out of age-rating in 
     2002.
       Workers in firms with less than 500 workers, nonworkers, 
     AFDC recipients, the self-employed can also purchase coverage 
     from the same plans as federal workers through the FEHBP 
     HIPC, but at the age-adjusted community rate. National 
     employees plans (e.g., Treasury) will have a one year 
     transition before they are opened to non-federal individuals.
       The federal government and employee and retiree 
     representatives will negotiate to decide whether the federal 
     government will offer and contribute towards supplemental 
     benefits above the standard benefit package for federal 
     workers.
       H. Risk Adjustment.--Risk adjustment will occur between 
     community-rated health plans to account for differences in 
     health costs that result from differences in their enrollees' 
     health status, demographics, socioeconomic status, and other 
     factors. Community rated health plans must also participate 
     in a mandatory reinsurance program run by the states.
       In addition, experienced rated plans will be required to 
     make transfers to the community rated plan pools to adjust 
     for the increased costs in the community rated pools.
       I. Family Coverage for Individuals up to Age 25.--To 
     further maximize coverage, health plans must allow unmarried 
     children to be covered under parents' policies until they 
     turn 25.


                   4. national health plan standards

       A. State Certification of Plans.--States will certify 
     health plans based on federal guidelines. Health plans will 
     be subject to the following market reforms: guarantee issue 
     and renewal, open enrollment, limit pre-existing condition 
     exclusions to six months, and exit from market rules. 
     Supplemental health benefits plans must be priced and sold 
     separately from the standard health plan.
       B. Any-Willing-Provider.--The plan does not include ``any-
     willing-provider'' provisions. The anti-discrimination 
     provision prohibits a provider network from discriminating 
     against providers on the basis of their profession as long as 
     the state authorizes that profession to provide the covered 
     services. However, this provision does not require standard 
     health plans to include in a network any individual provider 
     or establish any defined ratio of different categories of 
     health professionals.
       C. Balance Billing.--Each standard health plan must have 
     arrangements with a sufficient number and mix of health 
     professionals that will accept the plan's payment rates as 
     full.
       D. Access to Specialized Treatment Expertise.--Standard 
     health plans that use gatekeeper or similar process must 
     ensure that such a process does not create an undue burden 
     for enrollees with complex or chronic health conditions. Each 
     standard health plan must demonstrate that enrollees have 
     access to specialized treatment expertise.
       E. Utilization Management.--Each standard health plan must 
     disclose the protocols and financial incentives which they 
     are using to control utilization and costs.


                          5. benefits package

       A. The Benefit Package.--There are 16 legislatively-defined 
     categories of covered services in a ``standard'' benefits 
     package, including:
       1. Hospital services;
       2. Health professional services;
       3. Emergency and ambulatory medical and surgical services;
       4. Clinical preventive services;
       5. Mental illness and substance abuse services;
       6. Family planning and services for pregnant women;
       7. Hospice services;
       8. Home health services;
       9. Extended care services;
       10. Ambulance services;
       11. Outpatient laboratory, radiology and diagnostic 
     services;
       12. Outpatient prescription drugs;
       13. Outpatient rehabilitation services:
       14. Durable medical equipment, prosthetics and orthotics;
       15. Vision, hearing, and dental care under 22 years of age;
       16. Investigational treatments.
       The scope and duration of services are not specified in 
     legislation, but will be defined by a National Health 
     Benefits Board. For mental illness and substance abuse, the 
     board is instructed to seek parity (same copays, coinsurance, 
     deductibles). If the Board cannot initially design a benefit 
     package with parity, it is permitted to place limits, first 
     on hospitalizations and subsequently on outpatient 
     psychotherapy for adults. No copayment will be required for 
     clinical preventive and prenatal services.
       B. Cost sharing schedules.--The value of the standard 
     benefits package will be equivalent to the actuarial value of 
     the Blue Cross/Blue Shield standard option under FEHBP. The 
     Benefits Board will specify three cost sharing schedules:
       A low cost sharing schedule, resembling an HMO.
       A high cost sharing schedule, resembling fee-for-service.
       A combination cost sharing schedule, resembling a point-of-
     service plan, in which in-network services would have lower 
     cost sharing schedules similar to an HMO or PPO, and out-of-
     network services would have higher cost sharing schedules 
     like fee-for-service.
       C. The ``alternative standard'' benefits package.--
     Individuals will have the option of purchasing an alternative 
     benefits package. With a higher deductible, this plan will be 
     offered at a lower actuarial value than the standard plan. 
     While it resembles a catastrophic plan in the size of the 
     deductible, it differs in that it must cover all 16 
     categories of services. It will not be offered through 
     employers, and supplemental policies will not duplicate 
     services or pay for cost sharing below the deductible. 
     Enrollees selecting this plan will be included in the 
     community rating pool. These provisions are designed to limit 
     the potential for risk selection.
       D. National Health Benefits Board.--The seven member 
     National Health Benefits Board will determine the scope and 
     duration of services and the details of each cost sharing 
     schedule. In addition, the Board will develop criteria and 
     procedures for defining medical necessity and 
     appropriateness. Members will be appointed by the President, 
     with the advice and consent of the Senate, to staggered six 
     year terms.
       E. Cost Sharing Subsidies.--AFDC recipients enrolling in a 
     lower or combination cost sharing plan at or below the 
     average premium in the area will pay on 20 percent of the 
     regular cost sharing schedule (e.g., instead of a $10 copay, 
     they pay only $2). If no such plan is available, they can get 
     a cost-sharing reduction in a higher cost-sharing plan (e.g., 
     instead of a 10 percent copay on a doctor's visit, they pay 
     only $10).
       For people who are under 150 percent of poverty and are not 
     receiving AFDC, cost sharing is only available if they cannot 
     buy a lower or combination cost sharing plan. If such a plan 
     is unavailable, the person can enroll in a higher cost 
     sharing plan and have their cost sharing reduced to the lower 
     cost sharing level.
       For people under 150 percent of poverty and not working, 
     cost sharing is only available if they cannot buy a lower or 
     combination cost sharing plan. If such a plan is unavailable, 
     the person can enroll in a higher cost sharing plan and have 
     their cost sharing reduced to the lower cost sharing level.
       For people under 150 percent of poverty who enroll in a 
     plan through an experience-rated employer, no cost sharing is 
     available if the person can enroll in any lower or 
     combination cost sharing plan offered by their employer 
     through which they enroll. Otherwise, the person can enroll 
     in a higher cost sharing plan and have their cost sharing 
     reduced to the lower cost sharing level.


           6. expanded benefits for the elderly and disabled

       A. Long Term Care.--The plan includes several new 
     initiatives to provide long term care services to the elderly 
     and disabled. New programs include:
       New Home and Community Based Care Program. The plan 
     provides a capped federal entitlement to states to provide 
     home and community-based services to individuals with 3 or 
     more deficiencies in Activities of Daily Living (ADLs), 
     severe mental retardation or severe cognitive or mental 
     impairment regardless of age or income. Funding over the 
     1995-2004 period totals $48 billion.
       Long Term Care Insurance Standards. Private long term care 
     insurance policies will be subject to Federal model standards 
     to be developed by the Secretary of HHS in consultation with 
     the National Association of Insurance Commissioners within 
     one year of enactment.
       Tax Clarification for Long Term Care Insurance. Expenses 
     for long term care services and insurance premiums shall be 
     treated as medical expenses. Other tax clarifications are 
     also included.
       Life Care Program. The plan establishes a voluntary public 
     insurance program to cover the costs of extended nursing home 
     stays. Individuals will be given the option of purchasing 
     coverage when they reach the age 35, 45, 55, or 65. The 
     program is self-financed and pre-funded.
       PACE Program. The plan expands Medicaid's Program of All-
     Inclusive Care for the Elderly (PACE), increasing authorized 
     demonstration sites from 15 to 40. The Secretary of HHS is 
     required to develop provider and service protocols.
       B. Medicare Drug.--This initiative gives Medicare 
     beneficiaries three drug benefit options: a fee-for-service 
     plan, a Prescription Benefits Management (PBM) option, and an 
     HMO option--all effective January 1, 1999. Under this new 
     program, beneficiaries will have an annual deductible to be 
     determined by the Secretary of HHS; a 20 percent copay; and 
     an annual out-of-pocket limit of $1,275 in 1999. Medicare 
     Part B premium would be increased by 25 percent of the cost 
     of the drug benefit estimated to be about $10 in 1999, with 
     Medicare paying the remaining 75 percent.
       Drug manufacturers will sign rebate agreements with HHS in 
     exchange for no formulary under the fee-for-service option. 
     Drugs used as part of HMOs or capitated drug plans and drugs 
     for the working aged will not be subject to rebates.
       Rebates for single source and innovator multiple source 
     drugs will be 15 percent; rebates for generic drugs would be 
     6 percent; the Secretary could establish a sliding scale from 
     2 percent to 15 percent for generic drugs as long as the 
     effect was equal to a 6 percent. From 1999-2004, this program 
     will cost $94.4 billion.
       C. Enrollment of Medicare Beneficiaries into Managed Care 
     Plans.--Individuals who become eligible for Medicare may 
     choose to remain in their current health plans if such plan 
     is a Medicare Risk Contracting plan under section 1876 of the 
     Social Security Act, or is eligible to become such a risk 
     contract. Payments will be made beginning in the first month 
     in which the individual is Medicare eligible. Payments under 
     this provision shall be the sole Medicare payment to which 
     the beneficiary is entitled.


                          7. MEDICAID PROGRAM

       A. Integration of Medicaid Recipients.--(See Coverage 
     section above) Under this plan, the AFDC and non-cash 
     population will be integrated into the general health care 
     reform program and treated like other low-income people 
     eligible for federal subsidies and enrollment in certified 
     health plans. States will be required to make general 
     maintenance of effort payments for services covered under the 
     standard benefit package.
       AFDC. Cash Medicaid recipients (AFDC) will be eligible for 
     full premium subsidies as will other families with incomes 
     less than 100 percent of poverty;
       Non-cash. Full premium subsidies will be available to all 
     pregnant women and children up to age 19 with incomes up to 
     185 percent of poverty.
       B. Cost sharing for Integrated Medicaid recipients.--AFDC 
     recipients in HMOs will pay only 20 percent of the cost 
     sharing amount otherwise required. If no HMO is available, 
     AFDC recipients will pay the cost sharing amount that would 
     apply in an HMO, but not reduced to 20 percent. Noncash 
     recipients will receive cost sharing subsidies like all other 
     low-income individuals--up to 150 percent of poverty.
       C. State and Federal Premium Payments for Integrated 
     Recipients.--The federal government will pay all of the 
     premium subsidies for integrated Medicaid recipients. States 
     will pay the federal government maintenance of effort 
     payments for these integrated recipients. Specifically:
       Cash: States will be required to pay an amount equal to: 
     (1) the adjusted, fiscal year 1994 per capita cost of 
     services covered (based upon the state's current Medicaid 
     payment rates) under the standard benefits package for AFDC 
     recipients multiplied by (2) the number of AFDC recipients 
     receiving a subsidy in a given year. Disproportionate Share 
     (DSH) payments attributed to Cash recipients are not included 
     in the calculation of a state's per capita cost of covered 
     services. The per capita cost of services in fiscal year 1994 
     will be adjusted for future years by the growth in per capita 
     national health expenditures.
       Non-cash: States will be required to make general 
     maintenance of effort payment for services (based upon the 
     state's current Medicaid payment rates), in fiscal year 1994, 
     covered under the standard benefits package for non-cash 
     recipients. State DSH payments which are attributable to the 
     noncash population will be included in the calculation of 
     general maintenance of effort payment. Such MOE payments will 
     increase at the same growth rate as national health 
     expenditures.
       D. SSI/Disabled Medicaid Recipients.--SSI/Medicaid 
     recipients will not be included in the community rated 
     market. Medicaid will be retained as a separate program, with 
     current rules, for SSI and long-term recipients. States will 
     have the option to pay a per capita amount for each SSI/
     Medicaid recipient (who is not enrolled in Medicare) that 
     chooses to enroll in a certified health plan. States shall 
     negotiate with certified health plans for rates for the SSI 
     population that are separate from the community rate. No 
     certified plan can have more than 50 percent of its 
     enrollment composed of SSI/Medicaid recipients.
       E. Dual Eligible Recipients.--Dual eligibles--persons 
     eligible for Medicare and Medicaid--will remain under 
     Medicaid and not be enrolled in health plans.
       F. Non-SSL, Non-Dual Eligible Recipients aged 18-64 
     years.--These individuals will remain under Medicaid, but as 
     the low-income subsidies phase-in (e.g., 100 percent to 125 
     percent), these recipients (currently about 240,000) shall be 
     integrated and treated like other low-income individuals.
       G. Supplemental Services.--Current Medicaid rules governing 
     covered services and recipient eligibility will be retained 
     to cover services not otherwise provided through certified 
     health plans. The current flexibility provided to States to 
     determine the optional services and groups it will cover will 
     also be retained.
       H. Miscellaneous Medicaid.--In addition, the plan:
       Allows states to expand eligibility for home-based Medicaid 
     long term care services for single persons by increasing the 
     asset limit from $2,000 to $4,000 for services including 
     personal care attendant services, the Sec. 1915 waiver 
     programs, and the frail elderly home care option.
       Eliminates the institutionalization requirement as a 
     condition of eligibility for habilitation services under a 
     home and community based waiver.
       Eliminates the ``cold bed'' rule for home and community 
     based waiver programs.
       Requires State Medicaid programs to reimburse directly for 
     services by certified registered nurses and anesthetists or 
     clinical nurse specialists that are authorized to practice 
     under State law, whether or not they operate under the 
     supervision of a physician or other health care provider.


               8. health workforce and education/research

       A. Graduate Medical Education/Graduate Nurse Training/
     Academic Health Centers/Medical Schools
       Creation of an all-payer account. Currently, only Medicare 
     supports graduate medical education. By supplementing this 
     with a 1.5 percent premium assessment, and allocating the 
     total pool to residency training programs and academic health 
     centers, this plan spreads medical education costs across all 
     of the insured.
       Health professional workforce policy. This initiative 
     consists of: (1) phasing in primary care residency positions 
     from 39 percent in 1998 to 55 percent in 2001; (2) reducing 
     the number of total residency positions from 134 percent of 
     US medical school graduates in 1998 to 110 percent in 2001; 
     (3) creating a National Council on GME to implement these 
     policies and modify the goals beginning in 2001; and (4) 
     providing transitional funding to residency programs which 
     reduce their number of residency positions.
       Creation of funding accounts. Funding by account is as 
     follows:
       GME Account: $27 billion over 5 years;
       AHC Account: $42 billion over 5 years;
       Medical School Account: $2 billion over 5 years;
       Graduate Nurse Training Account: $1 billion over 5 years;
       Dental School Program: $250 million over 5 years;
       Public Health School Program: $150 million over 5 years.
       B. Biomedical and Health Services Research Fund
       Creation of Biomedical and Health Services Research Fund. 
     This fund is designed to supplement National Institutes for 
     Health and Agency for Health Care Policy and Research 
     funding, which is currently sufficient to finance only a 
     fraction of the peer-reviewed grant submissions.
       Funding levels. The plan's premium assessment will provide 
     additional funding for the NIH and AHCPR.


                        9. health infrastructure

       A. Public Health Service.--To strengthen our public health 
     infrastructure, the following programs receive new or 
     additional funding:
       Core Public Health. Grants to states to improve and monitor 
     the health of population.
       Health Promotion and Disease Prevention. Grants to eligible 
     providers to develop and implement innovative community-based 
     strategies to provide health promotion and disease prevention 
     activities.
       Mental Health and Substance Abuse. Grants to help integrate 
     state MH/SA services with those provided by health plans.
       Comprehensive School Health Education. Grants to state 
     education agencies to integrate comprehensive education 
     programs in schools.
       School-Related Health Services. Grants to develop school-
     based or school linked health service sites.
       Other initiatives. Other initiatives include domestic 
     violence and womens' health; occupational safety and health; 
     and border health improvement.
       B. WIC.--The bill supplements existing appropriations for 
     the supplemental food program for women, infants and children 
     (WIC) with $2.4 billion in direct appropriations which will 
     allow the program to serve all of the pregnant women, infants 
     and children eligible for WIC benefits.
       C. Indian Health Service.--The programs of the Indian 
     Health Service are strengthened with grants and loans to 
     improve and expand services. Greater flexibility allows the 
     programs of the IHS to contract with health plans to provide 
     services and receive third party reimbursement. Furthermore, 
     IHS health programs are eligible to apply and receive funding 
     under the public health programs.


              10. UNDERSERVED/ESSENTIAL COMMUNITY PROVIDER

       A. Access to Care for the Underserved Population
       Community Health Plan and Network Development. Grants and 
     contracts are awarded to eligible health providers to develop 
     community health groups to provide the standard benefit 
     package in health professional shortage areas or directly to 
     medically underserved population. Grants and contracts are 
     also made to expand existing health delivery sites and 
     services, and to develop new ones.
       Capital Development. Grants and loans are awarded for the 
     capital costs of developing community health groups and 
     expanding or developing new health delivery sites.
       Enabling and Supplement Services. Grants and contracts are 
     awarded to eligible entities to assist in providing enabling 
     and supplemental services to the underserved population.
       B. Essential Community Providers.--Designed to ensure that 
     vulnerable populations enrolling in health plans have access 
     to traditional, safety-net providers (e.g. community health 
     centers and AIDS providers), the essential community provider 
     provision requires that health plans offer a contract or 
     agree to pay essential community providers in their service 
     area.
       The plan creates two categories of essential community 
     providers and requires all plans to contract with every 
     essential community provider listed in Category I and one 
     from each category listed in Category II.
       Category I include Migrant Health Centers, Community Health 
     Centers, Family planning grantees, Homeless Program 
     Providers, Ryan White grantees, State HIV drug programs, 
     Black Lung Clinics, Hemophilia Centers, Urban Indian 
     programs, STD and TB Clinics, Nonprofit and public DSH 
     hospitals, Native Hawaiian Health Centers, School Based 
     Health Service Centers, Public and nonprofit mental health/
     substance abuse providers, Runaway homeless youth centers and 
     transitional living programs for homeless young Public and 
     nonprofit Maternal and Child Health providers, Rural Health 
     Clinics, and Programs of the Indian Health Service.
       Category II providers include Medicare dependent small 
     rural hospitals and Children's hospitals.
       In 5 years, the Secretary will make recommendations to 
     Congress on whether or not the program should continue; and 
     if so, with what changes. Congress would then vote up or down 
     on the recommendation.


                           11. STATE OPTIONS

       States that want to move ahead early with the 
     implementation of Federal health care reforms will be allowed 
     do so on a fast track. The bill will also allow states to 
     implement a single payer system. Existing state waivers will 
     be grandfathered.


                  12. QUALITY AND CONSUMER PROTECTION

       A. Quality
       National Quality Council. This 15 member Council, comprised 
     of consumers, health plans, purchasers, States, health care 
     providers and quality researchers, will set national quality 
     goals/standards and establish regional and State-based 
     organizations to implement the goals.
       Performance Measures for Health Plans. The National Council 
     will establish performance measures for health plans, 
     including measures of access (waiting times, patient/provider 
     ratios), consumer satisfaction, health plan report cards for 
     consumers and quality improvement. The Council will conduct 
     surveys of consumers and develop quality reports.
       Research in quality improvement. The Council will make 
     research recommendations to the Agency for Health Care Policy 
     and Research for outcomes studies and guideline development.
       Quality Improvement Foundations. These non-profit, non-
     governmental, regional or State-based organizations will get 
     federal grants for quality improvement (involving health 
     plans and practitioners) on the local level. QIFs will look 
     at practice variations between health plans and different 
     geographic regions. They will engage practitioners in 
     lifetime learning techniques and provide technical assistance 
     to health plans to develop their own quality improvement 
     programs.
       Consumer Information and Advocacy Centers. These State-
     based, non-profit, non-governmental organizations will 
     disseminate consumer report cards about health plans; open 
     local offices to hear grievances; and provide consumer 
     education. A National Center for Consumer Information and 
     Advocacy will also be established to train local and State-
     based consumer advocates.
       The National Practitioner Databank. This Bureau of Health 
     Professions databank will be opened for public access.
       B. Simplicity.--The enormous amounts of paperwork that 
     insurance companies now generate and process will be reduced 
     through streamlined and computerized systems. Many consumers 
     will no longer have to submit claims to their insurance 
     company, but if they did, they could use one, uniform claim 
     form. Insurance companies will be required to use a standard 
     form to inform consumers of their claim status.
       Because benefits will be standardized, consumers will be 
     able, for the first time, to easily compare plan prices. To 
     help consumers compare prices, states will be required to 
     distribute easy-to-read and understand report cards on health 
     plans.
       Consumers will also have information about the results of 
     health care provided by each provider and plan in their area 
     which can help consumers make informed choices when selecting 
     providers and plans.
       C. Remedies and Enforcement.--These provisions require 
     health plans to give notice of benefit denial, reduction or 
     termination and to establish an expeditious appeals process 
     within the plan. They will create State-run claims review 
     offices to provide claimants with options for alternative 
     dispute resolution. State and federal judicial review are 
     also possible.
       D. Fraud and Abuse.--The bill creates an all-payer fraud 
     and abuse program, including State-based fraud control units 
     funded wholly from settlement revenues.
       E. Privacy.--Consumers are assured that their individually 
     identifiable health information is protected by a law which 
     prevents inappropriate disclosures and punishes unlawful 
     disclosures severely. Consumers have uniform legal rights to 
     inspect, get copies, and make corrections or amendments to 
     their health records. Patients have the right to restrict 
     disclosure of specific health information.
       F. Antitrust.--Repeal of the McCarran Ferguson Act with 
     respect to health insurance will subject health insurance 
     companies to antitrust actions. The bill does not include 
     increased antitrust exclusions or safe harbors.
       G. Malpractice Reform.--Malpractice reforms include: 
     mandatory State-based alternative dispute resolution; a 
     certificate of merit requirement; a limitation on the amount 
     of attorney's contingency fees to 33 percent of the first 
     $150,000; and 25 percent above that amount; and periodic 
     payment of awards. Studies and demonstrations are proposed on 
     medical negligence; the use of practice guidelines; and 
     enterprise liability demonstration project.


                           13. RELATED ISSUES

       A. Veterans Affairs
       Enrollment. The Department of Veterans may offer a VA 
     health plan to veterans, individuals eligible for CHAMPVA, 
     and their family members.
       Eligibility. All compensable, service-connected, disabled 
     veterans, low-income veterans, veterans who are ex-POWs, and 
     veterans who have been exposed to Agent Orange, radiation, or 
     unknown toxins in the Persian Gulf, who chose a VA health 
     plan will receive the standard benefits without a cost-
     sharing requirement.
       Fiscal Matters. VA will continue to receive appropriations 
     to its medical care account. VA will retain the premiums, 
     copayments and deductibles it receives from higher income, 
     nonservice-connected veterans and dependents, the premiums VA 
     collects from the sale of supplemental health plan, and 
     payments it receives from other plans for the furnishing of 
     care to other plans' patients. It also will retain Medicare 
     reimbursement for care furnished to higher-income, Medicare 
     eligible veterans who have no service-connected disabilities, 
     and dependents. (VA health plans will be considered to be 
     Medicare HMOs).
       Administration Flexibility. VA health plans will have 
     expanded authorities to enter into contracts and sharing 
     agreements for the furnishing of services to enrollees. VA 
     facilities not operating as part of a VA health plan will 
     continue to furnish health care services under current law.
       Note: Because of technical Budget Act requirements, certain 
     VA program changes may have to be made on the floor.
       B. Worker's Compensation.--The plan creates a Commission on 
     Worker's Compensation Medical Services consisting of 15 
     members charged to consider a number of issues related to the 
     relationship between health plans and workers compensation 
     medical services. The Commission will report to the 
     President, as well as the House Education and Labor and 
     Senate Labor and Human Resources Committees by October 1, 
     2000. The plan also authorizes a number of State 
     demonstrations with respect to work related illnesses and 
     injuries.


                             14. financing

       This plan will not increase the federal deficit over the 
     1994-2004 period.
       A. Medicare.--Medicare savings total about $54 billion over 
     five years, and $278 billion over 10 years. About $140 
     billion of that total would finance a new Medicare 
     prescription drug benefit and a long term care entitlement 
     for the elderly and the disabled.
       B. Medicaid.--The plan eliminates the acute portion of 
     Medicaid and instead provides subsidies for low income 
     individuals to purchase health insurance from private plans 
     (this new subsidy absorbs $387 billion in ten year Medicaid 
     savings). In addition, the plan saves another $129 billion in 
     Medicaid DSH payments by reducing the number of uninsured. 
     Finally, states will be contributing about $232 billion in 
     subsidy payments over the ten year period which represents 
     their existing Medicaid costs, growth each year at national 
     health expenditures. Since states' existing Medicaid costs 
     are growing at a much higher 12 percent, this MOE represents 
     substantial savings for the states.
       C. Revenues
       Increase in excise taxes on tobacco products. The plan will 
     increase the excise tax rate on small cigarettes by 45 cents 
     per pack (for a total of 69 cents per pack), phased in over 
     five years on the following schedule: 15 cents in 1995 and 
     1996, 25 cents in 1997, 35 cents in 1998, and 45 cents in 
     1999 and thereafter. The excise tax on other currently 
     taxable tobacco products would be increased proportionately.
       Premium assessment. The proposal will impose a 1.75 percent 
     assessment on health care premiums. The net revenues derived 
     from the imposition of this premium assessment would be used 
     to fund the Graduate Medical Education and Academic Health 
     Centers Trust Fund and the Biomedical and Behavioral Research 
     Fund. The assessment would be effective after December 31, 
     1995.
       High cost premium assessment. As discussed earlier, a 25 
     percent assessment would be placed on health plans to the 
     extent they exceed the target rate of growth.
       Cafeteria plans. The proposal will eliminate the exclusion 
     for employer-provided accident or health benefits provided 
     through a cafeteria plan or flexible spending arrangement, 
     effective on and after January 1, 1997, with a delayed 
     effective date for collectively bargained plans.
       Finance Committee provisions. The following provisions are 
     taken from the Finance Committee bill.
       Additional Medicare Part B premiums for high-income 
     individuals.
       Increase excise tax on certain handgun ammunition.
       Modification to self-employment tax treatment of certain S 
     corporation shareholders and partners.
       Extending Medicare coverage of, and application of hospital 
     insurance tax to, all state and local government employees.
       Modify exclusion of employer-provided health care.
       Repeal of volume cap for 501(c)(3) bonds.
       Self-employed deduction.
       The 25-percent deduction for health insurance expenses of 
     self-employed individuals will be reinstated and extended for 
     taxable years beginning after December 31, 1993, and before 
     January 1, 1996. Beginning January 1, 1996, self-employed 
     individuals who are not eligible for employer-subsidized 
     health coverage will be entitled to deduct up to 50 percent 
     of the cost of the standard benefits package. In the case of 
     a self-employed individual with at least one full-time 
     employee who has been employed for at least 6 months, the 50-
     percent deduction will be reduced based on the contributions 
     the self-employed individual makes with respect to coverage 
     of the individual's employees.
       Limitation on prepayment of medical insurance premiums.
       Tax treatment of voluntary employer health care 
     contributions.
       Tax treatment of organizations providing health care 
     services and related organizations.
       Tax treatment of long-term care insurance and services.
       In addition, reserves for long-term care insurance 
     contracts that constitute noncancellable accident and health 
     insurance generally will be determined in accordance with the 
     reserve method prescribed by the National Association of 
     Insurance Commissioners (NAIC).
       Tax treatment of accelerated death benefits under life 
     insurance contracts.
       Definition of Employee.
       Increase in penalties for failure to file correct 
     information returns with respect to non-employees.
       Nonrefundable credit for certain primary health services 
     providers.
       Expensing of medical equipment used in health professional 
     shortage areas.
       Tax treatment of funding of retiree health benefits.
       Tax credit for the cost of personal assistance services 
     required by individuals.
       Disclosure of taxpayer return information for 
     administration of health subsidy programs.


                15. controlling federal costs--fail safe

       The bill's fail safe guards against future unanticipated 
     deficit increases due to this legislation. After enactment, 
     OMB will publish an initial health care baseline including 
     its most up-to-date estimate of the net outlays and revenues 
     from the health reform bill, as well as all Medicare and 
     Medicaid spending. Starting with fiscal year 1997, the 
     President's budget will include an updated version of the 
     initial health baseline. If the updated baseline (excluding 
     non-health-reform-related differences) exceeds the initial 
     baseline, reform spending (with the exception of the 
     subsidies for pregnant women and children) would be cut back 
     to eliminate the overage. Changes made by the sequester order 
     would not be permanent, and the sequester would be suspended 
     during a recession.

  Mr. MITCHELL. Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. FORD. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER (Mr. Feingold). Without objection, it is so 
ordered.

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