[Congressional Record Volume 140, Number 107 (Friday, August 5, 1994)]
[Senate]
[Page S]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: August 5, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
                             HEALTH REFORM

  Mr. DURENBERGER. Mr. President, when the President of the United 
States waved his veto pen in the State of the Union Address last 
January, he stated very clearly:

       If the legislation you send me does not guarantee every 
     American private health insurance that can never be taken 
     away, I will take this pen, veto that legislation, and we'll 
     come right back here and start over again.

  Well, Mr. President, get ready to veto the Gephardt bill and the 
Mitchell bill. Neither of these bills meets your test. Much of what you 
have said since then fails the test--except one cogent answer you gave 
to a Governor in Boston last month at the NGA meeting.
  Mr. President, all the rhetoric has been focusing on the guarantee.
  In all the talk about promises, about universal coverage, about 
mandates, about triggers--hard, soft, and in between, I have not 
forgotten your insistence on private heatlh insurance--for every 
American.
  Mr. President, the bills presented by you, by Mr. Mitchell and Mr. 
Gephardt don't guarantee private health plans to all Americans. I hope 
you promise to veto every one.
  The only way to make good on your guarantee is to give everyone an 
opportunity to buy a private health plan. Are you a man of your word?
  The only way to make good on your guarantee is to make that plan 
affordable to each person to whom the guarantee is made. Otherwise, 
it's an empty promise. Are you a man of your word?
  The only way to get affordable prices is to reduce medical and 
insurance costs while maintaining and improving quality of care and 
expand access to services. Are you a man of your word?
  The only way to improve quality and lower prices is through market 
competition.
  So, as I began looking through the 1,400, or so pages, of the latest 
Democratic proposal, the Mitchell bill, I went on a hunt for the 
marketplace.
  I've been through this drill before. I searched for market forces in 
the Clinton bill during a snowstorm last December. I found vestiges of 
market principles entangled in a web of Federal and State government 
regulation, mandates, civil and criminal penalties.
  I searched in vain for real market forces in the Labor Committee 
product. Same result.
  Now, here I go again. Same problem. The difference is that the 
regulatory structures, the mandates, the rules, the regulations, are 
more subtle. But then I'm getting experienced at this. The Mitchell 
bill is awash in hidden-cost shifts, and nimble ways of taking 
productivity incentives out of markets.
  But all's not lost. There is a bill at the desk right now. The 
Finance Committee bill, the only truly bipartisan bill in the U.S. 
Senate. S. 2351. It capitalized on the wave of market forces now at 
work all over this country. If you want to find how to guarantee 
private health insurance and to encourage medical markets, I urge you 
to read that bill.
  To make markets work, you need informed and active buyers negotiating 
in the marketplace the way growing numbers of self-insured employers 
are today. The market rules must encourage value-conscious buying. 
Firms must be motivated to comparison shop on the basis of price and 
quality. Buyers must not be insulated from the cost consequences of 
their decisions.
  Like other partisan Democratic bills, the Mitchell bill is full of 
ways to prevent employers from being good buyers. Here are few 
examples.
  Employers up to 500 employees are forced into community-rated 
purchasing pools. In most communities in America, that represents 80 
percent of employers or more. These employers cannot negotiate. They 
must accept the community-rated prices.
  What was designed to encourage group buying for small firms, with 
little leverage in the market, has been converted into a mechanism to 
centralize pricing. All these employers are also required to offer a 
purchasing cooperative--doesn't sound voluntary to me.
  The bill requires all community-rated plans to participate in a risk-
adjustment process with the experience rated plans. This is simply a 
sophisticated vehicle to transfer dollars from cost-effective health 
plans to less cost-effective ones, undermining competition. Forcing the 
wise shoppers to pay for the unwise shoppers.
  Functioning markets require sellers actively competing for business. 
The Mitchell bill imposes lots of new Government in what was once a 
private market. A standard health benefit package is intended to be a 
tool to facilitate markets by allowing consumers to compare similar 
products on the basis of price and quality and to annually compare 
plans on the basis of service performance.
  The Democratic bills, including the Mitchell bill, expand the 
National Benefit Commission into a big regulatory bureaucracy that has 
the power to substitute its judgment for the judgment of doctors and 
health plans. Government will tell us what is medically necessary; not 
the doctors.
  I am afraid that the expansion of the FEHBP means that more people 
will buy their private health plans through the Federal Government. Why 
anyone in Minnesota would willingly want a Government buyer in 
Washington, DC, to select their local health plan choice is beyond me. 
Especially when they could own a piece of a private, local purchasing 
coop without any cost. That's what the Finance Committee bill allows 
Minnesotans to do.
  The Mitchell bill does not have any incentives for purchasers to buy 
wisely. There is no limit on tax-sheltered health spending. The bigger 
the company, the richer the buyer, the more tax subsidy.
  There is no means test on high-cost plans, a variant on the tax cap. 
Instead, we get a Government-imposed price-control mechanism with a 
penalty tax as an enforcement of the Government controls.
  Where is the market? Its lost in regulation.
  Remember, the President promised the American people private health 
plans. The Finance Committee bill extends that promise to the elderly. 
For nearly 30 years America's elderly have been forced, at age 65, to 
join the Federal Government's single-payer system we call Medicare.
  The Finance Committee bill gives seniors a way out of this wasteful 
Canadian system back into America--private health insurance that can 
never be taken away. The Government will pay a share of that premium.
  The Mitchell bill drops out all those provisions. Instead, it slashes 
payments to doctors and hospitals who serve the Medicare patients, 
using all the proceeds for a new drug benefit. The unbelievable fact is 
that America's largest organization of seniors [AARP] has encouraged 
this denial of choice--in order to be able to benefit from its sale of 
both unnecessary supplemental plans for the 87 percent who need to add 
to the benefits in the Government plan, and a new line of profits--the 
prescription drug business.
  The result, fewer people will have a choice of a private plan. And 
the debilitating cost shift from the underfunded Government programs is 
made worse not better.

  Working people are forced to pay more in three ways: First, higher 
payroll taxes for the nearly bankrupt Medicare trust fund; second, 24 
billion dollars' worth of cost shifts from the underfunded public 
programs; third, community-rated employer pools which make young people 
pay three times as much as older people based on percent of income.
  Of course, Mr. Gephardt's Ways and Means-inspired Medicare Part C 
takes the President even closer to his veto threat. It would move 
millions more people out of the private system into a Government-run 
single-payer system. The President has said that Medicare is a private 
system because you can see a private doctor. By that definition, so's 
Canada.
  No, Mr. President. Medicare is a Federal Government program, funded 
right here in Congress with tax dollars. It has price-controlled 
payments to doctors and hospitals, and Government-determined access to 
items and services, with an 11 percent growth rate while the American 
system is growing at only at 6 percent including the costs shifted on 
it from Government's Medicare and Medicaid programs.
  Mr. President, you promised private health insurance. I've seen 
private health insurance. Medicare Part C is not it.
  Mr. Mitchell, there are many in this body who will oppose your 
proposal because it has a triggered employer mandate.
  Unfortunately, the media and the White House have focused on this 
issue. They've made a vote on the mandate trigger an article of faith.
  The real problems go much deeper. They go to the heart of what the 
Republican task force members have been working toward for 4 years. 
They go to the heart of what the bipartisan mainstream group has been 
discussing for months. They go the heart of what is best for the people 
of America and for the best health care system in the world: the 
guarantee to every American of private health insurance that can never 
be taken away.
  The Democratic bills simply do not meet the President's own test. In 
fact, they take us farther from his goal.
  Here's the truth they won't tell you. When it comes to insurance that 
can never be taken away from you, they know that politicians can't be 
trusted not to take it away. Politicians won't pay for their promises 
and you'll lose. So, if they force employers to pay, then they can say 
they delivered on their promise. Someone else can pay. And politicians 
take the credit. But the dirty little secret is employers don't pay. 
People do. You do.
  There is an answer to this deceit. It is close at hand. The Finance 
Committee bill, while not perfect, will get us there.
  I cheered the President when he asked Congress to produce a bill that 
would guarantee private health insurance. If he wants to make good on 
that promise, he must look to the bipartisan middle in the Senate. We 
can deliver you a bill that can pass the Senate. More importantly, we 
can help you make good on your promise to the American people.
  I don't have a veto pen. But, I do have a vote. And I hope to cash it 
in favor of a bill that will accomplish that test. I will not cast it 
in favor of a bill that does not.

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