[Congressional Record Volume 140, Number 109 (Tuesday, August 9, 1994)]
[Senate]
[Page S]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: August 9, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
                          HEALTH SECURITY ACT

  The PRESIDING OFFICER. The clerk will report the bill, please.
  The assistant legislative clerk read as follows:`

       A bill (S. 2351) to achieve universal health insurance 
     coverage, and for other purposes.

  The Senate proceeded to consider the bill.
  The PRESIDING OFFICER. The majority leader is recognized.
  Mr. MITCHELL. Madam President, I yield myself such time as I may 
require.
  As noted earlier, I designated Senator Moynihan to control the 
remainder of the debate time this evening and tomorrow.
  Madam President and Members of the Senate, tonight we begin debate on 
health care reform legislation. We will undertake no more important 
task in this Congress. What we do will affect every American family.
  In preparing this legislation, I was guided by one principle: The 
purpose of health care reform is the well-being of American families. 
The insurance industry and health professionals are important parts of 
the system. But they are a means to an end. The end--the real 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. Human beings are 
born unequal in ability and in strength. None of us chooses our family 
circumstances. None of us is immune to bad luck. We are all susceptible 
to accident and illness. We all grow old.
  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. Thirteen years ago, the average family paid about $145 a 
month for health insurance. Today, that family pays over $430.
  If we do not control costs, in 6 years' time, that family will be 
paying more than $900 a month for health insurance.
  All that expense might be worth it if America led the world in adult 
life span or in low infant mortality. But it does not.
  Some people cannot get coverage for the health condition for which 
they need care. Some people stricken with serious illnesses find that 
so-called lifetime insurance limits are used up long before their 
condition improves. Some families whose children have medical needs 
find themselves redlined out of insurance coverage, so a sick 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.
  Everyone engaged in the health care reform effort has heard firsthand 
the stories of people, ordinary working people, middle class 
professionals and high school football stars whose health bills are 
ruining their lives and limiting their futures.
  Senator Reid told us of a man in Nevada who is able and is willing to 
pay for insurance for his college student daughter, but he cannot 
because there is not an insurance company in the country that will 
insure his daughter. She was born with a malfunctioning adrenal gland 
and is a victim of juvenile diabetes. She takes medication every day to 
control her symptoms and sometimes she needs hospitalization.
  Her father wants to pay for insurance coverage. He can afford to pay 
for insurance coverage. But he cannot find anyone willing to sell it to 
him. He told Senator Reid, and I quote, ``Neither Laura or I are 
looking for a government handout. We are willing to pay even at a 
premium price. * * * Isn't it ironic that we mandate automobile 
insurance companies to pool their assets and provide automobile 
insurance to high risk drivers but we do not require the same for 
health insurance companies. Health is far more important than 
driving.'' So said a man from Nevada.
  And he was right. 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 insurers to cover those whose conditions do not arise 
from behavior but from circumstances and bad luck.
  My bill will do this.
  Insurers will not be able to reject a person because that person had 
the bad luck to be born with a malfunctioning gland or to contract a 
disease in childhood or to suffer an accident with long-term effects, 
or for any other cause.
  Senator Kennedy told us about a small company in Massachusetts, a 
family-run company with five workers whose owners have four active boys 
of their own.
  They have been forced to limit the sports their sons can play because 
they cannot afford potential injuries. They have to pay more than 
$1,400 a month for three family policies for themselves and workers. 
They have been forced to delay payments on bills and use personal 
credit cards for business expenses.
  Health insurance costs are in effect running their company. Health 
insurance costs are dictating to the people who own the company what 
they do, how they do it, and when.
  These are typical small business people, trying to create their own 
stake in society, building their own enterprise and doing what the 
rhetoric of entrepreneurship is all about. And yet their efforts are 
being devastated by something entirely beyond their control.
  If this family were running the same business in Germany or Japan, 
they would be able to concentrate on their business, and their sons 
could play football or ice hockey or whatever other sport they wanted. 
Their lives would not be dominated by insurance company policies.
  They are not alone. In every State in our country, there are 
literally thousands of small business owners caught in the vice of 
spiraling, unaffordable costs for health care and unavailable, 
unaffordable insurance coverage for health care.
  Senator Boxer told of a Californian, a young 19-year-old boy who had 
been a high school football star in Sonoma County. Stricken with 
cancer, a terrible disease that every American fears, his only chance 
of overcoming the cancer was a bone-marrow transplant, but his health 
insurance did not cover it.
  Sick, dying of a cancer, he and his family were forced into the all-
too-common spectacle of advertising their need and fund-raising 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 ask yourselves, what price do they demand of the sick people forced 
to undertake them? What kind of a society demands public pity and 
charity for its own people when they are most in need of rest, comfort, 
privacy and personal strength? High costs are driving ordinary 
Americans to choices that no civilized society should tolerate.
  A retired nurse in Rapid City, SD, living on a fixed income, said the 
costs of her heart medication controlled her life: ``You really have to 
choose. Do I eat or do I take my medicine?'' If we do not change this 
system, more and more Americans are going to be forced into that kind 
of choice. Is that what we want? Is it what people deserve after a 
lifetime of honest work? I do not think so.
  A working woman in Cleveland, OH has a form of emphysema that 
requires IV infusions four times a week at the cost of $2,300 a week. 
Who can afford that? She cannot.
  She lost her job and with it her insurance. She had to file personal 
bankruptcy to be eligible for Medicaid. This is a person who worked all 
of her life, paid her bills, played by the rules, but in the end, when 
she needed the help for which she paid premiums for decades, it was not 
there.
  Why is our society willing to allow people to experience the 
degradation and the humiliation of begging for care after a lifetime of 
work and personal responsibility? It is not fair and it should not 
continue. There are too many people forced into this kind of choice.
  There is a crisis in American health care. It is a crisis of 
affordability and price. It has to change.
  I have proposed legislation which I believe will meet the need, which 
will make the change with the least disruption to the parts of the 
system that work well for millions of us.
  The problem is that the money we all pay into our system does not 
deliver to those who need it the care they need when they need it at a 
price they can afford.
  People with secure comprehensive coverage--Members of Congress, or 
Federal workers, and State employees, or the employees of most large 
corporations--are well served by our system.
  But for other Americans the situation is very different. For them the 
difference between financial security and destitution can be as simple 
and dramatic as an auto accident or a weak heart valve.
  The difference between secure coverage and an unaffordable policy can 
be as heartbreaking as one sick child.
  That is not fair or right. That is why we need reform.
  My approach is to build on the existing American health care system 
of private insurance and expand it to those not now included--Americans 
who cannot afford insurance, people with an illness that insurers will 
not cover, people between jobs.
  My plan would move most of the persons now covered under Medicaid 
into the same system of private insurance and care as the rest of us. 
Put another way, my plan would reduce one of the largest Government 
programs--Medicaid--and encourage those in that system to buy private 
insurance policies.
  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 pre-existing conditions. Insurance will travel with the 
person, so Americans will not be locked into jobs. 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 looking for the best priced 
coverage.
  Private price competition among insurers is the best way to find out 
where the fat lies in insurance coverage. 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 without compromising the quality of care.
  As a backup cost containment mechanism I have included an assessment 
on high-cost insurance plans whose prices rise too quickly.
  This will make insurers more price-sensitive, because high-cost plans 
will be unattractive to the middle class which is the principal market 
for their product.
  My bill will create universal coverage through a voluntary approach. 
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 have included a backup mechanism in the bill if, for some 
unforeseeable reason, fewer than 95 percent are covered by them. But I 
believe the CBO estimate--that this bill will achieve 95 percent 
coverage in a deficit-neutral way--is sound.
  Health insurance for all Americans is the key to reform. Without it, 
we face continued cost-shifting.
  We now have a system where some have coverage and some do not. Those 
who have health insurance are subsidizing those who do not. That is 
cost-shifting. Doctors, hospitals, clinics, and all other health care 
providers compensate for unpaid care by charging more to the people who 
have insurance.
  That added charge is not paid by the insurance companies. They add it 
to the premiums that are paid by every insured family and individual. 
As a result, insured Americans pay as much as 30 percent more for their 
coverage to pay for cost-shifting.
  The only way to stop cost-shifting is to cover everyone.
  To make insurance more affordable, my bill provides for the States to 
create voluntary regional or statewide health purchasing cooperatives. 
These coops will not be allowed to turn down qualified applicants, and 
they will be required to offer a choice of plans to all buyers.
  Any American in a community-rated insurance pool will be able to 
enter the Federal Employee Health Benefits Plan. It offers many 
different plans among which to choose.
  Many Americans believe they should have the same health care Members 
of Congress get. My bill provides that opportunity.
  My plan reaches the millions of Americans who are self-employed, the 
millions more who are out of work or between jobs, and those covered by 
Medicaid. My plan integrates all of these people into a national system 
of private insurance. With the end of acute-care Medicaid, there will 
be less government involvement, not more.
  Many working people will need a subsidy to afford health care 
coverage. Employer-paid health insurance is subsidized today through 
the tax system at a cost of almost $74 billion. My bill makes direct 
subsidies to those who qualify. It includes tax benefits for the self-
employed beyond what is available to them today.
  These subsidies, direct and indirect, will not be an entirely new 
obligation on the Federal or State governments. They are largely 
financed by reorganizing obligations that taxpayers already shoulder 
through Medicaid.
  A major strength in our system is the element of choice. My bill will 
expand choice and will increase incentives to compete by price and 
quality to those offering insurance coverage.
  Today, most people's health care choice 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.
  At least one plan will have to be traditional fee-for-service. Other 
plans could be health maintenance organizations or other group practice 
programs. 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 is focused on the role of employers in our system.
  For small companies, the current health care system is a nightmare of 
unfairly allocated administrative costs, unaffordable rates, and 
medical redlining, where all the workers in the 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.
  Despite that, many small companies provide health insurance for their 
employees. Let us give some attention to them, the substantial number 
of small businesses that do provide health insurance for their 
employees. Let us help them with their problems. Those who do not want 
to provide insurance will not be forced to do so by my bill. But surely 
they should not dictate the terms for those who do provide insurance to 
their employees. To sum up, let us help deal with the problems faced by 
small businesses who do provide health insurance to their employees and 
encourage those who do not to do so.
  Because 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 people 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, and many more 
thousands of dollars every year through their lives for the physical or 
developmental problems that accompany low birthweight.
  Much of this additional care and its costs are preventable. The 
General Accounting Office found that 63 percent of women on Medicaid, 
or without insurance, do not get proper prenatal care. About 1 in 8 has 
a low-birthweight baby as a result. The annual cost was estimated to be 
$3.3 billion 10 years 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 right and cost 
effective.
  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 people to have regular 
annual checkups and to seek earlier care.
  The keys to health care reform are access, affordability, and 
universal coverage. Those who say the problem is access and not price 
are mistaken. It is both access and price.
  There is agreement on access. All of us agree that it is wrong for 
insurers to redline sick people, to refuse to cover preexisting 
conditions, and double, triple, or quadruple premiums when an insured 
person becomes ill.
  I know of no Senator willing to defend these now commonplace 
insurance tactics.
  No Senator will stand here on the Senate floor and tell Americans 
directly that he or she thinks it is fine for insurance companies to 
throw sick people off their rolls, to refuse to cover diabetes or 
epilepsy, to turn down children with asthma, or people with cancer.
  Madam President, this should not be a political debate. It should be 
a debate about the best way to deal with the real life problems of real 
life Americans when they fall ill, when their children fall ill, and 
when their parents age and need care. There is nothing political about 
that. Those who are trying to inject politics into it will find 
themselves on the wrong side of history, just as the opponents of 
Social Security did, just as the opponents of Medicare did. Many of the 
arguments used today against health care reform are the same arguments 
used against Social Security and Medicare when they were debated. Some 
of the words are the same. Yet, despite fierce opposition, they became 
law. And who among us today opposes them? Not one. Not one Senator has 
stood on this Senate floor and said: I favor the repeal of Social 
Security. Not one Senator has stood on this Senate floor and said: I 
favor the repeal of Medicare. And I predict not one will. That is 
because Social Security and Medicare work, and Americans know they 
work, and Americans support them.
  As a result, Americans could not be persuaded to repeal Social 
Security and Medicare by the same arguments being made now against 
health care reform. Human beings are made anxious by change. It means 
uncertainty. So it is that every major change in our Nation's history 
has been bitterly fought. Those who oppose change have tried to 
transform people's natural anxiety into fear. It sometimes worked for a 
while. But then when fully informed, Americans have looked to the 
future with the same optimism and courage that have been our Nation's 
distinguishing values. I believe it will be so with health care reform, 
as it was with Social Security and Medicare. They are so strongly 
supported now that across the distance of history it is hard to figure 
out what all the fuss was about. And once we pass health care reform, I 
believe the same thing will happen. Let us be clear about that.
  The arguments being made today against health care reform are the 
same arguments as those made against Social Security and Medicare. To 
the extent that they now work against health care reform, they do so 
because of the public's uncertainty and anxiety about change. But those 
arguments would not work at all against Social Security or Medicare 
now, because there is no uncertainty about them. To the contrary, there 
is knowledge and certainty, based on the experiences of millions of 
Americans over many years. Americans know and understand Social 
Security and Medicare, and they support them. And that is why no one 
will stand and propose that they be repealed. I believe that Americans 
will feel the same way about health care reform once it occurs and they 
experience the improvements it brings.
  Madam President, as we begin this debate, I want to say again what I 
have said several times previously--that I look forward to constructive 
suggestions to improve the bill I introduced last week. Democratic and 
Republican Senators have been active in the health care debate for well 
over a year. Many have valuable contributions to make.
  It is my goal that the Senate pass the best possible health care 
reform bill, not a bill with a Democratic label, or a Republican label; 
not a bill with my name on it, or the name of any Senator on it, but 
simply the best possible bill that will reach the goal we all should 
share, guaranteed private health insurance to provide high-quality 
health care for every American family.
  I believe my colleagues in the Democratic Party want to achieve that 
goal. I believe many of my colleagues in the Republican Party want to 
achieve that goal. And American families do not care about our party 
labels. In this health care debate neither should any of us, because 
health care reform goes to the heart of the quality of life of all 
Americans. If families have to spend a larger and larger share of their 
income to pay higher and higher health care costs, all the productivity 
increases, the hard work, the effort they make, will be swallowed up in 
the years ahead because health care spending will erode all of their 
wage increases. That is why I urge and encourage my colleagues, 
Democrats and Republicans alike, to join in the debate, to offer 
constructive suggestions to improve my bill.
  The future quality of life of millions of Americans depends on how 
firmly we put aside partisanship now and concentrate instead on 
crafting the best possible reform legislation that we can.
  My bill has been criticized as too weak by some and as too strong by 
others. Some say it goes too far. Others say it does not go far enough. 
Some say it moves too fast. Others say it does not go fast enough.
  That is what happens when you are in the middle, where this bill is.
  But I emphasize that despite our differences I believe that we share 
a common goal, all of us--the well-being of American families today and 
the high quality of life for their children in the future.
  And that should be the central issue in this debate.
  There is a crisis in American health care. It is a crisis of 
affordability and access to care. It must change.
  I have proposed legislation which I believe will meet the need for 
change and which will make it with the least disruption to the parts of 
the system that work well for millions of Americans. We have the 
ability and today, thanks to President Clinton's efforts, we have the 
public's attention as well.
  I say to Members of the Senate that it is time to act. I believe my 
bill is a good starting point for action. I welcome constructive 
suggestions and alternatives to it. I look forward to the debate. Let 
us debate. Let us amend. But in the end let us all do what is right for 
the people of this country.


 statement under section 27 of the concurrent resolution on the budget

  Mr. SASSER. Mr. President, on behalf of the Committee on the Budget, 
under section 27 of the concurrent resolution on the budget, House 
Concurrent Resolution 218, I hereby submit revised budget authority and 
outlay allocations to the Senate Committee on Finance and revised 
aggregates in connection with S. 2351, the Health Security Act.
  Section 27 of the budget resolution states, in relevant part:

     SEC. 27. DEFICIT-NEUTRAL RESERVE FUND IN THE SENATE.

       (a) * * *
       (2) Budget authority and outlay allocations and revenue 
     aggregates.--In the Senate, budget authority and outlays may 
     be allocated to a committee (or committees) and the revenue 
     aggregates may be reduced (as provided under subsection (c)) 
     for direct-spending or receipts legislation in furtherance of 
     any of the purposes described in subsection (b)(2) within 
     that committee's jurisdiction, if, to the extent that this 
     concurrent resolution on the budget does not include the 
     costs of that legislation, the enactment of that legislation 
     will not increase (by virtue of either contemporaneous or 
     previously passed deficit reduction) the deficit in this 
     resolution for--
       (A) fiscal year 1995; or
       (B) the period of fiscal years 1995 through 1999.

                           *   *   *   *   *

       (b) * * *
       (2) Purposes under subsection (a)(2).--Budget authority and 
     outlay allocations may be revised or the revenue floor 
     reduced under subsection (a)(2) for--

                           *   *   *   *   *

       (B) to make continuing improvements in ongoing health care 
     programs, to provide for comprehensive health care reform, to 
     control health care costs, or to accomplish other health care 
     reforms;

                           *   *   *   *   *

       (c) Revised Allocations and Aggregates.--
       (1) Upon reporting.--Upon the reporting of legislation 
     pursuant to subsection (a), and again upon the submission of 
     a conference report on that legislation (if a conference 
     report is submitted), the chairman of the Committee on the 
     Budget of the Senate may submit to the Senate appropriately 
     revised allocations under sections 302(a) and 602(a) of the 
     Congressional Budget Act of 1974 and revised aggregates to 
     carry out this section.
       (2) Adjustments for amendments.--If the chairman of the 
     Committee on the Budget submits an adjustment under this 
     section for legislation in furtherance of the purpose 
     described in subsection (b)(2)(B), upon the offering of an 
     amendment to that legislation that would necessitate such a 
     submission, the chairman shall submit to the Senate 
     appropriately revised allocations under sections 302(a) and 
     602(a) of the Congressional Budget Act of 1974 and revised 
     aggregates, if the enactment of that legislation (as proposed 
     to be amended) will not increase (by virtue of either 
     contemporaneous or previously passed deficit reduction) the 
     deficit in this resolution for--
       (A) fiscal year 1995; or
       (B) the period of fiscal years 1995 through 1999.
       (d) Effect of Revised Allocations and Aggregates.--Revised 
     allocations and aggregates submitted under subsection (c) 
     shall be considered for the purposes of the Congressional 
     Budget Act of 1974 as allocations and aggregates contained in 
     this concurrent resolution on the budget.
       (e) Reporting Revised Subdivisions.--The appropriate 
     committee may report appropriately revised subdivisions of 
     allocations pursuant to sections 302(b)(2) and 602(b)(2) of 
     the Congressional Budget Act of 1974 to carry out this 
     section.

  On August 2, 1994, the Committee on Finance reported S. 2351, the 
Health Security Act. Within the meaning of section 27(a)(2) of the 
budget resolution, the Health Security Act constitutes legislation ``to 
make continuing improvements in ongoing health care programs, to 
provide for comprehensive health care reform, to control health care 
costs, or accomplish other health care reforms.''
  The Health Security Act also meets the other requirement of section 
27(a)(2) of the budget resolution that,

     the enactment of that legislation will not increase (by 
     virtue of either contemporaneous or previously passed outlay 
     reductions) the deficit or aggregate outlays in this 
     resolution for--
       (A) fiscal year 1995; or
       (B) the period of fiscal years 1995 through 1999.

  As the Health Security Act complies with the conditions set forth in 
the budget resolution, under the authority of section 27(c)(1) of the 
budget resolution, I hereby submit to the Senate appropriately revised 
budget authority and outlay allocations under sections 302(a) and 
602(a) and revised aggregates to carry out this subsection.
  I want to note, as well, that I shall in all probability be 
submitting further revisions of these allocations and aggregates for 
amendments to the Health Security Act, as required by section 27(c)(2) 
of the budget resolution, which states:

       (c) Revised Allocations and Aggregates.--

                           *   *   *   *   *

       (2) Adjustments for amendments.--If the chairman of the 
     Committee on the Budget submits an adjustment under this 
     section for legislation in furtherance of the purpose 
     described in subsection (b)(2)(B), upon the offering of an 
     amendment to that legislation that would necessitate such a 
     submission, the chairman shall submit to the Senate 
     appropriately revised allocations under sections 302(a) and 
     602(a) of the Congressional Budget Act of 1974 and revised 
     aggregates, if the enactment of that legislation (as proposed 
     to be amended) will not increase (by virtue of either 
     contemporaneous or previously passed deficit reduction) the 
     deficit in this resolution for--
       (A) fiscal year 1995; or
       (B) the period of fiscal years 1995 through 1999.

  As these reserve fund submissions shall accommodate amendments, I 
shall make them for the time that the amendment is either pending or 
adopted (if the amendment is adopted). If the Senate rejects the 
amendment, the reserve fund submission for that amendment shall lapse, 
and the allocations and aggregates shall revert to the levels they 
would have in the absence of that reserve fund submission. I have 
worked out this procedure in advance in consultation with the ranking 
Republican member of the Budget Committee and the Senate 
Parliamentarian. We hope that it will allow deficit-neutral floor 
amendments to the Health Security Act to proceed in a fashion similar 
to deficit-neutral amendments reported by the committee of 
jurisdiction.
  I ask that an explanatory table be printed at this point in the 
Record.
  There being no objection, the table was ordered to be printed in the 
Record, as follows:

 RESERVE FUND FILING PURSUANT TO SECTION 27 OF THE CONCURRENT RESOLUTION ON THE BUDGET FOR FY 1995--RESERVE FUND
                                   FILING FOR S. 2351, THE HEALTH SECURITY ACT                                  
                        [Adjustments to aggregates and allocations; dollars in billions]                        
----------------------------------------------------------------------------------------------------------------
                                                         1995        1996        1997        1998        1999   
----------------------------------------------------------------------------------------------------------------
                                                                                                                
                  AGGREGATE TOTALS                                                                              
                                                                                                                
Budget authority....................................       1.400       1.800      13.900      26.500      25.500
Outlays.............................................       1.400       1.800      13.900      26.500      25.500
Revenues............................................       1.400       1.800      13.900      26.500      25.500
----------------------------------------------------------------------------------------------------------------


------------------------------------------------------------------------
                                                   1995        1995-99  
------------------------------------------------------------------------
                                                                        
         FINANCE COMMITTEE ALLOCATIONS                                  
                                                                        
Budget authority..............................        1.400       69.100
Outlays.......................................        1.400       69.100
Revenue.......................................        1.400       69.100
------------------------------------------------------------------------

  The PRESIDING OFFICER (Mr. Reid). The Republican leader is 
recognized.
  Mr. DOLE. Mr. President, before I make a formal statement, of course 
this is only preliminary because we are going to have a lot of debate 
on this issue and I assume there will be hours and hours and days and 
days and weeks and weeks of debate, so we are not getting into the sort 
of the guts of anybody's particular bill.
  But I listened very carefully to the distinguished majority leader, a 
friend of mine, and we work together. We do not always agree, but we 
have to work together--we do not have to. We do work together. We are 
friends. We understand the necessity for the leaders to try to keep 
things moving.
  I do not doubt for a moment his commitment and his sincerity. But we 
have different views from time to time, and I think in this area at 
least at the moment we have different views.
  I listened particularly to the cases he cited, because without any 
doubt there are people in great need in America. We are trying to 
figure out, all of us or most of us, how we can assist those people 
without damaging the best health care system in the world.
  We all receive a lot of letters on health care and every other issue, 
and probably the most eloquent one I have seen so far on this issue was 
passed on to me by Senator Gregg and written by Dr. John Schermerhorn, 
a constituent of his.
  I would like to share a portion of that letter with you now.

       Recently, my ten year old son was a victim of a near 
     drowning. Thanks to the intervention of people at the scene, 
     he survived the initial incident and was transported to a 
     nearby hospital where he received superb care and treatment, 
     was stabilized, and then sent to the Children's Hospital in 
     Boston--about an hour away from where we were.
       With God's help and the outstanding care and treatment that 
     he received in the intensive care unit at Children's, my son 
     is awake, alert, and sitting up in his room--surviving with 
     virtually all his physical and mental faculties 
     intact* * *
       After the initial crisis had passed, I sat in quiet 
     reflection of the entire episode, and it dawned on me with 
     chilling clarity that, had the Clinton health plan been in 
     effect, the outcome could have been drastically different.
       In the scheme of things that (the President) proposed, we 
     would not have been able to send our son to Boston, but would 
     have been relegated to some other hospital, if any. The 
     penalty for ``going against the plan'' would be a ten 
     thousand dollar fine, and possible jail sentence* 
     * *
       I have no feelings of rancor--just fear that events could 
     have been taken out of my control and put into the hands of 
     some unseen, uncaring, bean counting bureaucrat, whose only 
     concern was compliance to a Government policy that only leads 
     to mundane mediocrity.

  And Dr. Schermerhorn concluded his letter by writing--

       The choice comes down to a simple question: If you were in 
     my place, would you want the freedom to determine your 
     child's care and outcome, or would you rather be forced to 
     accept whatever the Government will give you* * *

  I think that is what this debate is all about.
  America has the best health care delivery system in the world. 
America has the best health care delivery system in the world. America 
has the best health care delivery system in the world. And I repeated 
it three times because I am concerned that actions we might take in 
this Chamber the next couple of weeks or so will mean those words are 
no longer true.
  I was on a talk show last night in my home State in Wichita, talking 
back and forth to business people, working people, and they are afraid. 
I do not know their politics. I never know who calls in on radio talk 
shows. You do not know their party affiliation. You know they are 
probably hard working people.
  They were very determined in their view that the one thing we do not 
need is more Government, more Government control, more agencies, and 
some national board somewhere that is going to make their life 
miserable.
  A lot of people have experienced miracles in health care in America, 
and I have been fortunate to be one of those. And had I returned from 
World War II to any other nation I am not certain what would have 
happened to me. But in America at the time, in my view, I had the best 
treatment possible.
  I am not here to talk about myself, because it was large to me, but 
mine was just one small miracle among the millions who are saved and 
their lives prolonged as are the lives of Americans every day, week, 
and year.
  What makes those miracles possible is the American commitment to the 
freedom of individuals, the freedom of markets, and not the Government.
  There is something else I know from firsthand experience. The fact is 
there is nothing worse than not being able to afford health care for 
yourself and your family, and I think that it is very important we 
understand that there are many people out there, as the distinguished 
majority leader pointed out, who have that problem today.
  And Republicans know very well there are people in need. Republicans 
want to help. In fact, we have been working for a year and a half on a 
bipartisan plan under the aegis and leadership of the distinguished 
Senator from Rhode Island, Senator Chafee. We were probably into the 
health care debate before President and Mrs. Clinton.
  The plan sponsored by myself, Senator Packwood, and 38 other 
Republican Senators as we introduce today will make our system more 
affordable and more accessible to millions of Americans. It is 619 
pages. All these bills are lengthy. We will also introduce an analysis 
of the bill, a section-by-section analysis. If anybody will read it 
carefully instead of passing judgment without reading it they will find 
it does a great deal. And we will be talking about this particular bill 
later on.
  I think the White House and perhaps some of my colleagues on the 
other side think only they want to improve the system and only they are 
for the little guy and Republicans are for the status quo, that we do 
not want to do anything.
  Again, I just suggest you carefully read the summary of our health 
proposal and find out precisely what it does. It is about 30 pages. It 
is a very comprehensive package. We did not put it together overnight, 
and it was not a cut-and-paste job. We spent a lot of time on it and 
had a lot of debate. It took months to get the consensus, and we are 
proud of it. We are not defensive about it at all.
  It is our hope that, before this debate ends, some of our colleagues 
on the other side of the aisle will take a look at it--just as some of 
our colleagues on this side of the aisle are taking a look at Senator 
Mitchell's bill--because we think it has a great deal of appeal, and 
for the right reasons. It has good provisions, deals with Americans' 
problems, deals with real problems Americans are having when it comes 
to health care.
  Affordability and accessibility, in my view are the important two 
words. Forget all the others--affordability; accessibility.
  Everybody wants to help those who are blocked from getting insurance 
because of a preexisting condition.
  We believe we can make health care more affordable and more 
accessible and we can take care of the preexisting condition and 
portability and malpractice reform and pooling for small businesses and 
probably 25 other things that if you had a vote in this Chamber, it 
probably would be 99 to 1; there would be probably 1 that did not get 
the message, but it would be almost unanimous.
  We believe we can do that without new taxes, without having the 
Government tell you what will be included in your health insurance, and 
without, in many areas, putting Federal bureaucrats in charge of your 
health care system.
  And my colleague from Maine, the majority leader, talked about Social 
Security. It was 32 pages long; Medicare was 137. Senator Mitchell's 
bill is 1,410 pages; ours 619. They were not as complicated. Maybe 
times were not as complicated.
  Mr. President, it seems to me, this debate is just too important, as 
has already been stated by the majority leader, to degenerate into 
false accusations and partisan bickering. And it is too important to be 
completed in any rushed or haphazard manner.
  There are a lot of questions that are going to be asked by Members on 
both sides over the next week or several weeks. If we stick to the 
facts, we may find the facts and we may agree on some changes and we 
may come out of here yet with something that the American people would 
accept.
  But what I see developing now is a 51-vote strategy, where we are 
asked to clean up the bill so others can vote for it. I am not certain 
that is a strategy. I am not certain that is a strategy.
  So we ask ourselves questions: Will we trade in a health care system 
based on individual freedom, for one based on Government control? That 
is a legitimate question.
  Will countless small businesses be forced to close their doors and 
countless more working Americans lose their jobs because of Government 
mandates? That is a serious question. I do not care what you say about 
mandates, it is a serious question.
  And if you live in a State like Kansas, where 90 percent of our 
employers have 10 or fewer employees, it is a serious question. Most of 
them have five or six, and most provide all the care they can. They 
should.
  But there comes a time when you have to make choices: Do I have fewer 
employees or do I go into some other line of business? Or what do I do 
with or without subsidies and with or without other efforts to attract 
employers?
  Are you going to be able to choose a policy that fits your budget and 
your needs--that is very important--or is somebody going to tell you 
you are going to get this mandate and you cannot buy any less? That is 
what you are going to be told.
  If you are young, no children, unmarried, you have to buy a basic 
benefits package. You cannot just buy catastrophic. You cannot have a 
medical savings account. You cannot do that, even though you would like 
to spend that money somewhere else.
  And what about all the people who are self-insured and all the 
businesses that are self-insured? Sixteen million are going to be let 
out under the proposal of my colleague if you cut off this 500; so that 
adds up to about 16 million that are going to see their insurance rates 
maybe skyrocket.
  And what about new taxes or increased taxes? Some count 17 new. I 
only count 16. I do not count part B Medicare as an increase in taxes 
because I have long believed if you can afford it, you ought to pay a 
little more.
  And how much is it going to cost? We just received a copy of some of 
the figures from the Congressional Budget Office.
  And it is rather strange, the day after, I guess the very day, maybe 
this morning, I read in the Washington Post about entitlements and 
about the entitlements commission and about their dire predictions, and 
we are about to create more new entitlement programs. We have not 
learned anything. We appoint this commission and they tell us if we do 
not do something by the year 2005 or 2010, we are going to double our 
taxes. So we set out to say, ``Well, that is a terrible problem. Let's 
create some more entitlement programs right now.''
  And we create a new one in our bill--low-income subsidies. But we do 
not include prescription drugs, or long-term care, or early retirees, 
or some of the other entitlement programs that have been talked about.
  So somebody has to explain all of this to us. Maybe we have 
overlooked something. We appoint one commission that says there are too 
many entitlement programs that we ought to do something about, then we 
bring out a bill that creates three or four more big ones. These are 
big ones. Maybe 100 million more Americans are going to be subsidized; 
100 million or more, much bigger than Social Security or Medicare 
combined.
  Some of us live in rural areas and we have to ask a question: Are 
hospitals or inner cities going to have the resources to survive? Will 
there be enough specialists trained in our medical schools? Will you be 
free to seek them out, wherever they may be? Legitimate questions. Are 
we going to have quotas?
  We do need more primary care physicians. In our bill we do it through 
incentives. In others, they do it through quotas.
  You cannot be a cardiologist, you cannot be a specialist, because we 
do not need you anymore. Well, we do not need you right now, but if we 
need you next week, you are not going to be trained for it.
  We need to ask these questions of the Senate Finance Committee.
  But I guess, the bottom line is quality of care--the quality of care 
that Americans have come to expect. And what is going to happen to the 
quality of care? What is going to happen to the ability of our doctors 
and hospitals and research facilities to produce the miracles that have 
made our system the envy of the world? No doubt about it, it is the 
envy of the world.
  Now my point is--and there are hundreds of other questions; I may not 
even have the important ones--but all of these questions deserve 
lengthy debate, because I am certain my colleague from Maine is going 
to say, ``No, that is not quite right,'' or whatever, and he may want 
to ask us some questions, which is certainly fair.
  But we are talking about all these questions and more and more and 
more.
  Mr. President, before a patient has surgery or is given some new 
experimental treatment, the doctor must explain in plain English the 
treatment's benefits, the risks, the costs, and alternatives.
  This is called informed consent, and it is crucial to the trust 
between the patient and the doctor.
  Health care reform is an experimental treatment, too. If there is 
going to be any trust between our Government and the public, then the 
public must have a chance to grant or not to grant their informed 
consent.
  And I think we could ask a very legitimate question. Maybe the public 
should not have a right to know, but I think the public does have a 
right to know. Has the American public had an opportunity to offer 
their informed consent on the majority leader's bill or any other bill, 
the Labor Committee bill, the Dole-Packwood bill, the Finance Committee 
bill, and other bills that have been introduced? And I do not think 
anybody can honestly say the answer is yes.
  There have been no hearings on this particular bill--well, on the one 
pending, but there have been no hearings on the majority leader's bill. 
We are told by the CBO that changes are being made as we speak, and 
that is not unusual. We probably will make changes in ours as other 
people speak. So it is hard to nail it down: What does it cost? What 
does it do, precisely?
  I hope we do not have developing here a fear that the American people 
are going to learn too much about health care if we debate it. My view 
is the American people want to know precisely what is in this bill. It 
is a lot different than car insurance. We are talking about your 
children, your family, and you want to be very careful.
  Maybe it is different in Kansas, but many people from Kansas, when 
they come to see me here or when I am in Kansas, say: ``Bob, why don't 
you just fix the 15 percent and not worry about the 85 percent, or not 
try to change the 85 percent that people are fairly satisfied with? Why 
don't you fix the 15 percent?''
  It is not a bad question. I have not got the answer yet. But that is 
where most Americans, who are satisfied with what they have, are 
concerned their premiums are going to go up. I think that is a 
legitimate question. Are they? And how much, if any?
  Once the American people had what we called informed consent on the 
President's bill it went down and down and down. Regardless of the 
efforts by many in the liberal media who bought into the program and 
tried to sell it every chance they had--on the evening news, in the 
newspapers--the American people were not buying because they understand 
that little tilt out there in the media sometimes. They are all good 
people, but they have a little different view.
  So the American people said, ``Wait a minute.'' And it was not Harry 
and Louise. It was not the Republicans. They said, ``Wait a minute, I 
don't understand the President's bill.''
  If you walk into a drug store or grocery store and read the label on 
some product and you do not understand it, I will bet you walk on. You 
do not pick it up. You do not buy it. And the American people did not 
buy the Clinton health plan because it was too complicated, too 
bureaucratic, too many taxes, too many controls, too many mandates, and 
mandates are taxes. I cannot recall any piece of legislation in my 
memory that got as much media attention as the President's bill. It was 
discussed and debated and dissected in townhall meetings and kitchen 
table discussions all across the country.
  Despite the fact that the President and the First Lady had the full 
use of the White House bully pulpit, and despite the fact they were 
both very eloquent, they just did not have a good product. But they 
tried hard. They went out there every day, but public support went down 
and down and down. And finally, as we all know, just a few weeks ago 
Senator Mitchell and Speaker Foley and Congressman Gephardt went to the 
White House. I do not know what they said but in effect: We have to 
come up with something new. So now we are going to focus on Senator 
Mitchell's bill.
  I repeat, again, my good friend, Senator Mitchell--your name is on it 
so I have to refer to it that way. When you go after my bill, I will 
understand that, too, if you find anything wrong with it--which you 
probably will.
  So we are being asked to trade in the best health care system in the 
world for a 1,410-page bill that we are now in the process of 
analyzing. I will stipulate those of us on the Finance Committee 
probably have an edge on other Members in the Senate. There are only 20 
of us and there are 100 Senators. We know pretty much what is in the 
leader's bill because we had extensive hearings. Senator Moynihan and 
Senator Packwood did an outstanding job. We had a lot of hearings. I do 
not know how many.
  Mr. MOYNIHAN. Thirty-one.
  Mr. DOLE. Thirty-one--I need that for my next speech; 31 hearings. 
And they were long and they were extensive and we learned a lot.
  So, what we are going to try to do on our side of the aisle is try to 
invite Americans to take a look at all these proposals. The American 
people have a right to know, and I agree with Senator Mitchell, we are 
not going to rush anything. What we are going to do, I guess, as Ross 
Perot said, is we are going to kick the tires and look under the hood 
and we are going to discover whether or not this is really a new plan 
or whether it is the Clinton plan with a new coat of paint and a rolled 
back odometer. If it is, it is in trouble, because the American people 
are not buying.
  I will tell you what Herman Cain, the CEO of Godfather's Pizza said 
about delaying mandates. He said, ``It doesn't matter whether you kill 
me now or whether you phase in death over a period of time.'' And he 
had it about right.
  President Clinton said, ``Well, just raise the price of pizza.''
  It does not work that way.
  We would like to do something about job-killing mandates. There have 
been estimates from 600,000 to 3.8 million. The truth has to be 
somewhere in the middle, I assume.
  We have to worry about taxes. As I said, there are different 
estimates. Some say 17, some say 16 new taxes totaling billions of 
dollars--maybe less, maybe more.
  I have already talked about the entitlements, and 100 million 
Americans, and who is going to pay for them, and nobody knows for sure. 
But I think probably the underlying point is that all these plans--with 
a few exceptions--are based on the principle that Government knows 
best; that somehow, when people have a problem the Government ought to 
be there to help them. It is very compelling. You watch the news, you 
watch television, you know of personal cases, you know people who need 
help, and I think there ought to be ways to do that. That is why many 
of us agree on many of these things--without creating a new Federal 
bureaucracy and a new proposal where the Government would have broad, 
sweeping new powers in almost every aspect of health care.
  We are going to have a one-size-fits-all standard benefits package. 
The Government is going to have the power to say, whether you are young 
or you are old, you are going to pay the same price. Everybody wants to 
be fair to senior citizens.
  But what about their children or their grandchildren? Maybe the 
Senator from New York will comment on this, but in New York--maybe 
there is another reason--25,000 young people have dropped out of the 
program because they were paying four or five times as much as they 
should have. Is that fair? Talk about fairness--every State has young 
people. They do not have lobbyists around here. Nobody is around to 
talk about their special interests. We do not have anybody saying, ``I 
am here to represent the 18-to-25-year-olds, and we have to tell you 
what we do not like about your bill or this bill or the other bill,'' 
because nobody speaks for them. We figure it is fair because when they 
get old somebody will pay higher premiums and they will pay lower 
premiums, so it just all works out that way.
  So you are going to pay the same price whether you are young or old 
or healthy or not so healthy. And for a lot of people that means higher 
rates--for a lot of people it means higher rates.
  As I said earlier, the Government is going to have the ability to 
tell medical schools how many specialists they can train each year. 
Maybe there ought to be a change in the mix. We put a lot of money into 
those programs, as the chairman of the Finance Committee knows. I think 
there are ways to create some incentives without creating dictates or 
quotas.
  Then we are going to have the seven-member board. I do not know how 
they are selected. They are not elected. They are not accountable, I 
guess, to anybody. They are going to have the power to determine 
``medical necessity.'' That means, I think to many Americans--we are 
not certain what it means, yet. We want to get into the Q and A. It 
probably means many Federal bureaucrats--not you and your doctor--will 
determine what type of treatment you receive and whether you will 
receive it at all.
  Senator Mitchell's bill is not all bad. Parts of it do make our 
system more affordable and more accessible. And therein lies, I think, 
the seeds of some agreement if, in fact, that is what we want.
  We believe in our bill. Some may say it is all bad or does not do 
enough. We call our bill The American Option. Not the Democrat option 
or the Republican option. We tried to avoid it being just a partisan 
Republican proposal. We have contacted Democrats. We have suggested to 
our colleagues who were talking to Senator Mitchell, why do they not 
talk to us? ``Are there not similarities in our bill that you can 
support?''

  We are speaking with House Democrats and House Republicans because we 
believe there is a lot in our bill and a lot in Senator Mitchell's bill 
and a lot in the other bills and that we can go in the back room and in 
2 or 3 days, have a bill that I say may be 99 to 1.
  I discovered in the years I have been here, Congress meets every 
year. The American people are not too happy about it. If we ever put it 
to a vote, we might not meet at all. Go back and check Social Security, 
read the history of Social Security, read the history of Medicare. They 
did not do it all at one time. They added farmers, they added different 
workers, they enriched the benefits. They did a lot of things over the 
years.
  Later in the debate, I am going to bring out the list of all the 
things we have done in the Senate Finance Committee on health care, and 
I know other Members on both sides of the aisle have been very active 
in health care.
  We just have not waited for 20 years to deal with health care. We 
passed a lot of good legislation. It cost a lot of money. It did a lot 
of good things for people in need in America, and we want to let the 
American people know we have not stood still for 20 years. We did not 
stand still on Social Security in 1983 when the system was about on the 
brink of disaster. I was proud to join my colleague from New York, 
Senator Moynihan, in putting together what we thought was a rescue 
effort. The system is much, much better now. But I think we have to go 
back and look at the history of Medicare and how far it has come, not 
just what happened initially.
  I want to say about our bill--and I want to yield the floor and 
introduce our bill along with the summary--again, I would like to think 
that at least before people reject it, they read the summary of it. It 
helps those Americans who are unable to afford health care insurance. 
We cut off 150 percent of poverty.
  It is my understanding there is a similar bill now being put together 
on the House side where it may go to 200 percent of poverty. It is a 
question of finances. If you have the money, obviously, you can go 
higher. Ours cuts off at $22,200; 240 percent of poverty is $35,500 for 
a family of four. We also have a fail-safe mechanism in our bill that 
if you do not have the money, you cannot pay the benefits, you just 
cannot keep running up the deficit.
  We take care of preexisting conditions. It makes insurance more 
affordable for small business, and it does much more. We will be 
talking about the American option throughout this debate.
  I do not want to be misunderstood. There are quite a few things you 
will find in the majority leader's bill which you will not find in our 
proposal.
  You will not find the National Health Board. You will not find price 
controls. You will not find mandates, and you will not find new taxes. 
You will not find these because our bill is not based on the principle 
we have to get more Government. I think it is based on the principle 
that the American people know best.
  Let me make it clear that Government is into health care now--
Medicare, Medicaid, Veterans Administration, Public Health Service, 
CHAMPUS, you name it. So it is in pretty deep right now, and I think 
most Americans will say, ``Wait a minute, maybe that is 40 percent; 
let's not go the other 60 percent. Let's not turn one-seventh of our 
national economy over to the Government and say, OK, you run the health 
care system.''
  So I renew my plea to the President and anybody else: Why are we not 
sitting down together; why are we not making that list we talked about 
6 months ago? In fact, he mentioned it one night at a White House 
dinner. Why do we not make a list of all the things we agree on, 
Democrats and Republicans? You would have a pretty long list. I bet you 
would have 20, 30, 35 items that would do a lot for millions of 
Americans this year and next year. Why not make that list? And then why 
not come back and say, ``OK, we would like to add A, B, C, D, whatever, 
and see if we can negotiate.'' Put in 10 things you can agree on and 
see what you can negotiate.
  That would make insurance more accessible and more affordable for 
millions of Americans. We could have done it a year ago, 6 months ago; 
and we can do it today or next week or the next week. And next year, 
when the Congress is here, and the year after that, and the year after 
that, we can take a look again.
  Now we are told that universal coverage is 95 percent. And we are 
told, I think accurately, you are never going to cover everybody. We do 
not do it in Social Security; we do not do it in Medicare; we do not do 
it in food stamps; we do not do it with a lot of these Federal 
programs, even though that may be a goal, and I do not quarrel with 
everybody being covered. It is how do you get there; what does it cost 
in jobs and dollars?
  If 95 percent is where we want to end up, and we are told by some we 
can get to 92 percent without mandates, without the other things, we 
are fighting over 3 percent. We go from 95 to 92 or 93 percent, and 
then in 4 years maybe say, ``OK, how do we get the other 2 percent, 3 
percent, 4 percent,'' or whatever we can, on the way to 100 percent.
  Go back and read Social Security, go back and read Medicare. We will 
read some of it for everybody later in the debate on how it progressed 
through the years. It did not all happen at once. And they are good 
programs.
  I thought there was a better program, but they are good programs.
  I hope we are not just going to roll the dice here and say, ``OK, 
this is it. If we can squeeze 50 and 51 votes, this is it. Maybe pick 
off two or three Republicans, this is it.''
  I do not believe the President would turn down a bill that 90 of us 
voted for or 85 of us voted for that did not have anything he wanted, 
but that had maybe the goals he wants. So we are ready to make health 
care more accessible and more affordable.
  But I think we have to say one thing, in conclusion--we will say a 
lot of things before it is over--somebody has to pay for all this 
sooner or later. Maybe if we pass it this year, we might sneak through 
this year's election because it is not going to take effect.
  Many of these provisions in the majority leader's bill do not take 
effect until the year 1997. So there is not much cost up front. But 
somebody is going to figure out that sooner or later we cannot do all 
these things without costing some money in our bill or in any of the 
other bills. Somebody has to pay.
  If you have a fail-safe mechanism, as we do, if you cannot pay, you 
do not get the benefits and people are not going to like that. The 
self-employed would like to deduct 100 percent, not 50 percent. 
Ranchers, farmers, small businessmen, small businesswomen, why should 
they only deduct 50 percent, in the majority leader's plan? Why not 100 
percent? Because it costs money, and I assume the majority leader 
determined you cannot do everything.
  So my view is that as we start this debate--and this is preliminary 
only, and I hope we have 4 hours of debate tomorrow and maybe, if we 
work out the agreement, 4 hours of debate on Thursday before we get 
into the bill. But we have a number of Members on this side who wish to 
speak, and I am certain many Members on the other side who wish to 
speak, because I think every constituent--they do not agree with all of 
us, but they are going to expect us to be here and to be participants. 
I do not think this is one on which you can be a spectator. You cannot 
be a spectator in the health care debate. We are not going to please 
everybody once we get into the arena. Somebody is not going to like 
what you say or how you vote.
  But I cannot recall any more important legislation than this 
particular legislation, any more important problem.
  So, Mr. President, I now send to the desk--I have not had ours 
weighed, and I will be happy to do that later, but it is more than 
zero. It is a meaningful piece of legislation.
  I ask unanimous consent that the analysis be printed in the Record. I 
do not think I want the bill printed in the Record. It costs too much 
money.
  There being no objection, the analysis was ordered to be printed in 
the Record, as follows;

            Summary of Dole/Packwood Health Reform Proposal


                    i. guaranteed access to coverage

                          A. Insurance reforms

       1. There are two health insurance market sectors:
       a. Individuals and small employers size 1 to 50.
       b. Large groups (employers with more than 50 employees or 
     members, and associations and MEWAs with at least 500 
     participants).
       2. The insurance market reforms apply to all health plans, 
     including self-insured plans, with the following exceptions:
       a. Accident, dental, vision, disability income, or long-
     term care insurance;
       b. Medicare supplemental policies;
       c. Supplements to liability insurance;
       d. Workers compensation insurance;
       e. Automobile medical-payment insurance;
       f. Specific disease or illness policies; or
       g. Hospital or fixed indemnity policies.
       3. Guaranteed issue and guaranteed renewal:
       a. A health plan may not deny, limit, condition, or refuse 
     to renew a health benefit plan except as indicated in (c) 
     below.
       b. A self-funded health plan sponsored by an employer 
     cannot deny, limit, condition, or refuse to renew coverage 
     for any employee (and family) except as indicated in (c) 
     below.
       c. Exceptions:
       i. Pre-existing condition limitations can be imposed on 
     individuals who do not maintain continuous coverage as 
     described in (4) below.
       ii. Failure to pay premiums;
       iii. Misrepresentation of information to the insurer, or 
     fraud;
       iv. The health plan doesn't serve the area;
       v. The health plan withdraws the health benefit plan from 
     the market entirely.
       vi. The health plan does not serve the market sector to 
     which the person or group belongs.
       vii. The health plan has insufficient capacity to enroll 
     new members.
       d. A health plan that has approached its capacity 
     limitations can refuse to accept new enrollment, or limit 
     enrollment based on a first-come, first-served basis.
       e. Individuals will have an annual open enrollment period 
     of at least 30 days prior to the expiration of their health 
     plan policy, during which individuals can change health plans 
     without being subject to pre-existing condition exclusions. 
     Individuals can make changes between open enrollment periods 
     for certain qualifying events like changes in family status, 
     employment, residence, etc.
       f. Newborns are covered automatically on the parent's 
     policy at birth.
       g. Insurers or employers cannot impose waiting periods for 
     coverage beyond a reasonable time necessary to process 
     enrollment, except in accordance with the standards for pre-
     existing condition exclusions described in section 4 below.
       4. Portability and Pre-existing Conditions:
       a. Health plans may not impose pre-existing condition 
     limitations on individuals enrolling as a member of a group, 
     except in cases where the individual has not been insured 
     during the previous 6 month period.
       i. The maximum allowed pre-existing condition exclusion for 
     a condition diagnosed or treated during the 3 months prior to 
     coverage is 6 months.
       ii. The maximum is reduced by one month for every month the 
     individual had coverage during the preceding 6 month period.
       b. Health plans may not impose pre-existing condition 
     limitations on individuals who are not enrolling as a member 
     of a group, except in cases where the individual has not been 
     insured during the previous 12 month period.
       i. The maximum allowed pre-existing condition exclusion for 
     a condition diagnosed or treated during the 6 months prior to 
     coverage is 12 months.
       ii. The maximum is reduced by one month for every month the 
     individual had coverage during the preceding 12 month period.
       c. Amnesty period.
       i. Each state will set an initial 90 day open enrollment 
     period during which individuals who have not previously had 
     health benefit coverage can enroll without being subject to 
     pre-existing condition limitations.
       ii. A state may establish a limit on the number of new 
     enrollees a health plan must accept during the amnesty open 
     enrollment period. The limit should correspond 
     proportionately to the total number of enrollees the plan has 
     in that market sector.
       5. Modified community rating (applies to all products in 
     the individual and small group market only):
       a. Uniform age and family classes will be defined by the 
     National Association of Insurance Commissioners (NAIC).
       b. NAIC will recommend allowed discounts for health 
     promoting activities.
       c. The ratio of rates between the highest and lowest age 
     factor (ages 18-64) may not exceed 4:1 for the first 3 years 
     after implementation, and 3:1 for years thereafter.
       d. NAIC to recommend allowed variations in administrative 
     costs (not to exceed 15 percent of premium) based on size of 
     group.
       e. States will define community rating areas subject to the 
     following:
       i. Minimum area population of 250,000.
       ii. May not divide metropolitan statistical areas within a 
     state.
       iii. May cross state boundaries if states agree.
       6. Every health plan selling in the individual and small 
     group market sector must offer the FedMed package:
       a. An insurer must at least offer one of the following 
     versions of the FedMed package:
       i. Fee-for-service,
       ii. Preferred Provider Organization (PPO), or
       iii. Health maintenance organization (HMO).
       b. Health plans may offer any other health benefits 
     packages in addition to the FedMed package.
       c. Health plans may offer supplemental packages to the 
     FedMed package, but may not require an individual or a group 
     to purchase supplemental coverage or link the pricing of a 
     supplemental benefit package to that of the standard package.
       7. There is no restriction on the number of different 
     benefit packages that can be offered by a health plan. 
     However, the rates for all of the health benefit packages 
     offered by the health plan must be based on the health plan's 
     total enrollment in the individual and small group sector. 
     Rating variations are allowed only to the extent of the 
     difference in actuarial value of the specific benefit 
     variations for that same population.
       8. Health plans and purchasing cooperatives may require 
     payment of premiums through payroll deductions. Employers 
     must comply with employee request for payroll deduction and 
     remittance of premium.
       9. Risk adjustment (applies to the individual and small 
     employer market only.) States are to risk adjust community-
     rated health plans and reinsurers of health plans for small 
     employers who self-insure. All self-insured small employers 
     are required to carry ``stop-loss'' insurance.
       10. Standards developed by the NAIC for the individual and 
     small groups market shall be uniform for all carriers.
       11. Each state will publish annually and disseminate a list 
     of all of the health plans in the state offering the FedMed 
     package and their modified community rate for the package. 
     This effort will be coordinated with the information on 
     health plan quality.
       12. Neither the states nor purchasing groups would be 
     permitted to interfere with the ability of health insurers to 
     establish and pay adequate compensation to licensed agents 
     and brokers.
       13. Taft-Hartley health plans, rural electric and telephone 
     cooperative health plans and church association health plans 
     shall be subject to the insurance reforms applicable to large 
     employer plans.

     B. Purchasing cooperatives, FEHBP, MEWAs and association plans

       1. Nothing in this bill required the establishment of a 
     purchasing group--nor prohibits the establishment of more 
     than one--in an area.
       2. Purchasing groups established to serve the individual 
     and small employer market must be open to all individuals and 
     small employers who wish to join.
       3. Any health plan offering a benefit package through a 
     purchasing cooperative must offer at least the FedMed benefit 
     package through the cooperative.
       4. Insurers are prohibited from establishing a purchasing 
     cooperative but may administer one under contract with the 
     purchasing cooperative.
       5. Federal Employees Health Benefit Plan:
       a. Self-employed individuals and small employers (sizes 2 
     to 50) may purchase health benefit plans offered through FEHB 
     program.
       b. Insurers shall offer self-employed individuals and small 
     employers the same benefit plan(s) that are available to 
     federal employees at the same premium price (government and 
     employee share) plus an administrative fee.
       c. Health plans may impose group participation requirements 
     as long as they are standard for all groups.
       6. MEWA and Association Health Plans:
       Limited rules are applied to existing MEWAs and Association 
     health plan offering health plans on 1-1-94 (i.e. 
     ``Grandfathered plans'') and a more comprehensive regulatory 
     scheme is applied to all new MEWAs and association plans. 
     Grandfathered plans and all new plans that meet the following 
     rules shall be treated as a large employer for insurance 
     reform purchases.
       a. Grandfathered plans (both insured and self-insured) must 
     have at least 500 participants. In addition, grandfathered 
     plans cannot:
       i. Condition its membership on health status or health 
     claims experience of a potential member.
       ii. Exclude an employee or dependent of a member based on 
     their health status.
       b. Grandfathered plans that self-insure must:
       i. File written notification with the Secretary of Labor 
     that:
       (1) includes a description of the plan; and,
       (2) names a plan sponsor.
       ii. Meet minimum financial solvency and cash reserve 
     requirements for claims established by the Secretary of 
     Labor.
       iii. File annual funding reports (certified by an 
     independent actuary) and financial statements with the 
     Secretary of Labor and all participating employers in the 
     plan.
       iv. Appoint a plan sponsored that would be responsible for 
     operating the plan and seeing that it complies with all 
     federal and state laws.
       c. All new MEWAs and association health plans must:
       i. Cover at last 500 participants.
       ii. Complete a certification procedure established by the 
     Secretary of Labor.
       iii. Meet all the requirements in 6.a. and if self-insured, 
     meet the additional requirements in 6.b.ii. through iv. 
     above.
       iv. Be formed and maintained for substantial purposes other 
     than obtaining or providing health insurance to members.
       v. Be offered or sponsored by a permanent entity which 
     receives a substantial majority of its financial support from 
     its active members.
       vi. Not be owned or controlled by an insurance carrier.
       vii. Has a constitution, bylaws, mission statement or other 
     similar governing documents.
       viii. All persons involved in operating, administering and/
     or handling money with respect to plan would have to be 
     bonded for theft and other intentional acts.
       ix. Pay a $5,000 certification fee to the Secretary of 
     Labor. The Secretary may also charge a reasonable annual fee 
     to cover the cost of processing and reviewing annual filings.
       d. The Secretary of Labor shall develop regulations 
     implementing the requirements of this section including 
     expedited registration, certification, review and comment 
     procedures.
       e. The Secretary may enter into agreements with states to 
     enforce the provisions of the section to the extent that the 
     delegation does not result in a lower level or quality of 
     enforcement. Such delegation may include certification and 
     registration of MEWAs and association plans.
       f. Associations and MEWAs must provide written notice to 
     each contributing employer as to whether it has met the 
     applicable requirements of this section 6.
       g. All individuals operating or administering or involved 
     in the financial affairs of association health plans or MEWAs 
     must be bonded.
       h. Taft-Hartley health plans, rural electric and telephone 
     cooperative health plans with 500 or more participants and 
     church association health plans with 100 or more participants 
     are exempt from all requirements described in section 6 and 
     are subject to the insurance rules applicable to large 
     employer plans.

                         C. Affordable coverage

       1. Tax Deduction for Self-Employed: Self-employed 
     individuals and other individuals who do not get health 
     insurance from their employers would get a deduction equal to 
     100 percent of the cost of insurance phased in as follows:
       1994 and 1995--25 percent
       1996 and 1997--50 percent
       1998 and 1999--75 percent
       2000 and after--100 percent
       2. Medical Savings Accounts:
       a. Medical savings accounts (MSAs) are linked with the 
     purchase of catastrophic health insurance converage (health 
     insurance policy with a minimum $1,000 annual deductible for 
     single, and $2,000 for family coverage).
       b. Employer contributions to MSAs are excludable from an 
     employee's income and not subject to payroll taxes. Employer 
     can deduct its contributions.
       c. Contributions by self-employed and individuals (whose 
     employers do not provide employer-subsidized insurance) are 
     deductible from income and excludable from payroll taxes.
       d. Annual limit on contributions--$2,000 single person and 
     $4,000 for families (one account per family).
       e. No lifetime limit on amounts contributed.
       f. Distributions from the account would be tax-free and 
     penalty-free if used for medical expenses not reimbursed 
     under the catastrophic policy, premiums for catastrophic 
     coverage during ``COBRA'' continuation coverage, and for 
     premiums and medical expenses for long-term care. Premiums 
     for catastrophic coverage cannot be paid out of MSA unless 
     the individual qualifies for COBRA continuation coverage.
       g. MSAs subject to prohibited transaction, reporting and 
     certain other rules applicable to IRAs.
       h. Tax-free rollovers between MSAs but not between MSAs and 
     IRAs.
       i. Non-qualified withdrawals are taxable and subject to a 
     10-percent penalty.
       j. Not transferable at death and taxable to decedent.
       k. No tax-free build-up.
       l. Distributions on account of divorce to follow rules 
     applicable to IRA's.
       3. Low-income Subsidies:
       a. Creates a new safety net subsidy program for low-income 
     individuals and families not covered by employer-provided 
     insurance or public programs. Subsidies would be financed by 
     the Federal government consistent with the Budget Fail-Safe 
     mechanism (described later).
       b. Subsidies would not be provided to:
       i. Individuals/families who are not U.S. citizens or 
     permanent resident aliens;
       ii. Medicaid eligibles;
       iii. Medicare beneficiaries; or
       iv. Individuals who receive employer-financed coverage.
       c. An employer that finances health care coverage for any 
     employee would not be allowed to discriminate against any 
     employee based on his/her eligibility for a low-income 
     subsidy. Employers who violate this rule would be assessed a 
     penalty equal to the maximum subsidy amount for the 
     geographic area multiplied by the number of affected 
     individuals.
       d. In the case of an employee working for an employer 
     providing employee-only coverage (not including the 
     employee's dependents) and whose family is otherwise eligible 
     for a subsidy, the employee would have the option to take the 
     employer's coverage or subsidized family coverage.
       e. Subsidies will be applied only to the purchase of the 
     FedMed package defined by the Secretary of HHS. By 
     regulations, the Secretary shall establish a FedMed benefits 
     package that includes, at a minimum, the categories of 
     benefits described in Title 5 of the United States Code for 
     the Federal Employees Health Benefit program and in the HMO 
     Act of 1973 (Section 1302(1) of the Public Health Service 
     Act). In so doing, the Secretary shall take into account, the 
     following priorities:
       i. Parity (with respect to cost-sharing and duration of 
     treatment) for mental health and substance abuse services, 
     managed to ensure access to medically appropriate treatment 
     and to encourage use of outpatient treatments to the greatest 
     extent feasible;
       ii. Consideration for needs of children and vulnerable 
     populations, including those in rural, frontier, and 
     underserved areas; and
       iii. Improving the health of Americans through prevention.
       f. In general, health plans will determine the medical 
     appropriateness of specific treatments. Coverage decisions 
     about new procedures and technologies will be made by health 
     plans, which may refer to criteria for medical 
     appropriateness developed by the Secretary.
       g. The Secretary shall vary cost sharing arrangements to 
     accommodate different delivery system models through which 
     subsidized individuals may receive health care services. All 
     versions of the FedMed package shall have reasonable cost-
     sharing (including an out-of-pocket limit) appropriate to the 
     delivery system.
       i. For a moderate cost sharing version, cost sharing shall 
     be similar to the health plan in the Federal Employees Health 
     Benefit program with the highest enrollment that uses a fee-
     for-service delivery system.
       ii. For a low cost sharing version, cost sharing shall be 
     similar to the HMO plan in the FEHB program with the highest 
     enrollment.
       iii. For plans with provider networks, higher cost-sharing 
     sufficient to encourage use of the network shall be allowed 
     for out-of-network, nonemergency services.
       h. In defining the initial benefits package, the Secretary 
     shall ensure that the actuarial value of the package in its 
     fee-for-service version be equal to the actuarial value of 
     the highest-equal enrollment plan offered under the Federal 
     Employees Health Benefit program in 1994, assuming a national 
     population under age 65. Managed care health plans shall 
     offer the same set of services defined by the Secretary for 
     fee-for-service health plans.
       i. Subsidies would be provided for premiums only, up to a 
     maximum amount. The maximum subsidy amount would be the 
     amount the Federal government uses to calculate its maximum 
     (75%) contribution for Federal employees' insurance under 
     FEHBP, calculated without the population 65 and older. The 
     maximum amount would be determined annually. Nothing shall be 
     construed as preventing an individual or family from buying a 
     health plan covering the FedMed package that is more 
     expensive than the maximum subsidy amount. The individual 
     would have to pay the difference between the health plan's 
     premium and the maximum subsidy amount.
       j. The Secretary of HHS will specify maximum subsidy 
     amounts for each geographic market area for the same age 
     groups and family composition classes in the Small group 
     market. The Secretary would use appropriate factors to adjust 
     the maximum amount for:
       i. Geographic differences in health care costs;
       ii. Age; and,
       iii. Family composition (there would be no poverty 
     adjustment for family size greater than 4).
       k. Individuals and families with income below 100 percent 
     of the Federal poverty level (if funding is available) would 
     receive a full premium subsidy.
       l. If additional funding is available, individuals with 
     income above the poverty level would receive a partial 
     premium subsidy. Individuals above 150% of poverty would not 
     be eligible for a subsidy.
       m. For individuals with income above the poverty level, but 
     below 150%, the subsidy percentage would decline on a stepped 
     basis as income increased. The amount of the subsidy would 
     be a percentage of the maximum subsidy amount for 
     individuals below poverty.
       n. Eligibility for subsidies will be calculated on an 
     annual basis. Tax return information will be used in 
     determining eligibility to the extent possible.
       o. An individual or family that has an approved application 
     for a subsidy must file an end-of-year income reconciliation 
     statement. Failure to do so will result in ineligibility for 
     subsidies until the statement is filed, unless there is good 
     cause.
       p. States would determine eligibility for subsidies. States 
     will be liable to the Federal government for subsidy payments 
     made in error. The Federal government would share the 
     administrative expense of determining eligibility for 
     subsidies at a rate of 50 percent Federal/50 percent state.
       q. States would designate appropriate agencies/
     organizations that would determine eligibility and enroll 
     individuals in health plans on-site. States would be required 
     to provide information on all health plans offering the 
     FedMed benefit package in the geographic area.
       r. The Secretary of HHS will develop standards to assure 
     consistency among states with respect to data processing 
     systems, application forms, health plan information, and 
     other necessary activities to promote the efficient 
     administration of subsidies.
       s. The Secretary will study and make recommendations to the 
     Congress regarding use of state-adjusted poverty level 
     guidelines instead of the Federal poverty level guidelines 
     when determining eligibility for subsidies.

                    D. Report on Health Care System

       By January 15, 1998, the President must submit to the 
     Congress findings and recommendations on each of the 
     following:
       1. Characteristics of the insured and uninsured, including 
     demographic characteristics, working status, health status, 
     and geographic distribution.
       2. Steps to improve access to health care and increase 
     health insurance coverage of the chronically uninsured.
       3. Effectiveness of insurance reforms on access and costs.
       4. Effectiveness of federal assessments of new technology 
     on the cost and availability of new products.
       5. Effectiveness of cost containment strategies at the 
     federal and state level and in the private sector.
       6. Effectiveness of efforts to measure and improve health 
     care outcomes in the public and private sector.
       7. Effectiveness of new federal subsidy programs, including 
     recommendations to restrain future growth.
       8. Effectiveness of initiatives targeted to underserved 
     urban and rural populations.


                ii. improved health care delivery system

                   A. Consumer value in health plans

       1. A ``Consumer Value'' program will be developed by the 
     states for the purposes of:
       a. Assuring minimum quality standards for health plans;
       b. Making available comparative information about health 
     plan offerings; and
       c. Establishing certain consumer protections.
       2. The Secretary of Health and Human Services will assist 
     the states in carrying out these activities by:
       a. Consolidating research activities for quality and 
     consumer information areas;
       b. Developing minimum guidelines for use in certifying 
     health plans in the areas of quality assurance, consumer 
     information, consumer protections, and financial practices 
     and performance; and
       c. Requiring states to establish a consumer value program 
     that results in comparative information on health plan 
     offerings and quality distributed to all consumers.
       d. Offering grants to states to set up the consumer value 
     program.
       3. Consolidating Research Functions for Quality and 
     Consumer Information:
       a. Current federal research activities supporting quality 
     and consumer information will be consolidated within HHS and 
     called the Agency for Quality Assurance and Consumer 
     Information. The agency will carry out its activities in 
     close consultation with expert private and public entities in 
     quality and consumer information. Research priorities will be 
     set in consultation with expert groups.
       b. The focus of the new consolidated research area will be 
     to support activities in the areas of:
       i. Effectiveness and appropriateness of health care 
     services and procedures;
       ii. Quality management and improvement;
       iii. Consumer information and surveys concerning access to 
     care, use of health services, health outcomes, and patient 
     satisfaction;
       iv. Development, dissemination, applications, and 
     evaluation of practice guidelines;
       v. Conduct effectiveness trials in the private sector in 
     partnership with expert groups;
       vi. Assure the systematic evaluation of existing as well as 
     new treatments and diagnostic technologies in a continuous 
     effort to upgrade the knowledge base for clinical decision-
     making and policy choices;
       vii. Recommend minimum guidelines for quality measures, 
     consumer information categories, and access (to health 
     services and practitioners) for use in health plan 
     certification;
       viii. Recommend standards and procedures for data and 
     transactions related to quality, consumer information, 
     access, effectiveness, and other areas as appropriate to 
     assure a smooth coordination with the administrative 
     simplification framework; and
       ix. Oversee basic and applied research, with equal 
     attention to each.
       c. Funding will be $250 million a year by the year 2000 
     (phased in). Spending will be split to support research and 
     the application of research in the private health care 
     delivery system.
       4. Process for Certification:
       a. Secretary of HHS Responsibilities
       i. The Secretary, in consultation with NAIC and expert 
     groups in the areas of quality assurance (such as the Joint 
     Commission on Accreditation of Healthcare Organizations, the 
     National Committee for Quality Assurance, and the Peer Review 
     Organizations) will set minimum guidelines for the 
     certification of health plans. The Secretary is to complete 
     the guidelines within 6 months of enactment of the bill.
       ii. Special Federal rules would apply to self-insured 
     multi-state employer plans and MEWAs.
       iii. The Secretary will approve certifying organizations 
     that are qualified to complete health plan certifications in 
     any state.
       b. States' Responsibilities
       i. States will be responsible for implementing the 
     guidelines;
       ii. States are expected to coordinate public health 
     department and insurance commissioner offices' (and other 
     relevant agencies) responsibilities in designing the 
     certification process (and enforcement procedures);
       iii. States shall consult with expert private entities in 
     designing their certification and enforcement processes;
       iv. States may contract with private entities (giving them 
     deemed status) for carrying out the certification activities; 
     and,
       v. Health plans must absorb the costs of certification, 
     however, the State and/or the Secretary may provide monies 
     for technical assistance for health plans serving vulnerable 
     populations to pay for certification or to assist these plans 
     in preparing to be successfully certified.
       5. Minimum Guidelines for Health Plan Certification: The 
     Secretary of HHS will develop minimum guidelines for 
     certification of health plans in these areas:
       a. Quality Assurance Guidelines
       i. Quality management
       ii. Credentialling
       iii. Utilization management
       iv. Governance
       v. Policy and quality processes
       vi. Provider selection and due process
       vii. Guidelines and protocols
       b. Consumer Protections
       i. Comparative consumer information
       ii. Marketing-agents and materials
       iii. Non-discrimination
       iv. Continuation of treatment (in the event of insolvency)
       v. Grievance procedures
       vi. Advanced directives
       vii. Financial practices that interfere with quality of 
     care
       c. Reasonable Access
       i. Assuring access to services for vulnerable populations-
     ProPAC will complete recommendations within one year, 
     including:
       (i) Anticipated impact of health reform on access to 
     services for vulnerable populations; and
       (2) Safeguards required to assure continued access to 
     services and reasonable payment for services for vulnerable 
     populations.
       ii. Anti-redlining rules
       iii. Provider non-discrimination (e.g., discrimination 
     solely based on the provider's academic degree)
       d. Financial standards (using NAIC model standards)
       i. Solvency
       ii. Other financial standards including liquidity, 
     accounting, and reporting
       iii. Guaranty fund participation
       In establishing minimum guidelines, the Secretary (in 
     consultation with the NAIC) will address the issues (and 
     recommend customized guidelines for each) of certification 
     for various models of health plans, taking into 
     consideration:
       a. Multi-state insured plans,
       b. Frontier, rural and inner city considerations (and other 
     start-up issues for small delivery systems in underserved 
     areas), and
       c. Commercial insurance, managed care plans, and delivery-
     system (provider-based) plans.
       6. Consumer Value Program:
       a. States shall begin immediately, upon enactment, to 
     establish a consumer value program that results in the 
     distribution of comparative information on health plan 
     offerings and quality outcomes to consumers;
       b. States may designate an independent organization to 
     carry out the consumer value program (giving it deemed 
     status);
       c. The Secretary of HHS will provide to states the minimum 
     guidelines for the consumer value program (see minimum 
     guidelines for comparative consumer information (5.b.i.), 
     including a model ``report card'' to assure a level of 
     standardization to allow state to state comparisons;
       d. States may exceed the minimum guidelines-federal grants 
     will be available to states for demonstrations experimenting 
     with guidelines beyond the federal minimum;
       e. If the Secretary determines that states have not 
     established a consumer value program within six years, the 
     Secretary may implement such in the state.
       7. Pre-emption of State Anti-Managed Care Laws: State anti-
     managed care laws are preempted, such as:
       a. ``Any wiling provider'' laws;
       b. Corporate practice medicine;
       c. Health benefits mandated;
       d. Cost-sharing mandates;
       e. Utilization review mandates; and,
       f. Involuntary denial of life-saving medical treatment.
       8. Administrative Simplification:
       a. Secretary of HHS will adopt standards for health data 
     and transactions (from common practices in the private 
     sector). Categories of standards may include:
       i. Financial, administrative transactions;
       ii. Enrollment information;
       iii. Financial and administrative data;
       iv. Unique identifiers (subject to strict patient 
     confidentiality requirements).
       b. Use of and access to standard transactions and standard 
     data through the National Care Data Network.
       i. Health plans, providers must keep data available for 
     authorized access and comply with transmission standards set 
     by the Secretary. Clearinghouses may be used to comply.
       ii. Penalties apply for noncompliance to standards.
       c. State ``Quill Pen'' laws are preempted.
       d. Entities operating in the national health care data 
     network. Secretary develops standards for the Health Care 
     Data Clearinghouses. Private entities may be designated to 
     certify such systems and clearinghouses.
       e. The Secretary of HHS will set standards for providers 
     and health plans to access information from the network, 
     including standards for privacy. Only minimum data necessary 
     will be disclosed and only when authorized by privacy laws..
       f. A Health Care Date Advisory Panel will be established to 
     assist the secretary in all standards and processes, 
     including standards for privacy.
       g. Secretary may authorize grants for demonstration 
     projects.
       h. Administrative simplification standards and processes 
     will coordinate with the quality and consumer information 
     process and certification areas.
       i. The Medicare/Medicaid data bank (from OBRA93) will be 
     repealed once the administrative simplification system is 
     operational.
       Authorization of Appropriations: This bill would authorize 
     appropriations for the activities described above.
       10. Fraud:
       a. The Secretary of HHS and the Attorney General shall 
     jointly establish and coordinate a national health care fraud 
     program to combat fraud and abuse in government and certified 
     health plans.
       b. Monies raised from anti-fraud and abuse penalties, 
     fines, and damages will be dedicated to an account to pay the 
     costs for anti-fraud and abuse efforts.
       c. To give greater guidance to health care providers (so 
     they can comply with fraud and abuse laws), there will be 
     established:
       i. New safe harbors;
       ii. Interpretive rulings; and,
       iii. Special fraud alerts.
       d. The current Medicare and Medicaid penalties for health 
     care fraud and abuse will apply to all health care fraud 
     affecting Federal subsidies or other Federal outlays. These 
     include exclusion from participation in Federal health 
     programs and the imposition of civil money and criminal 
     penalties.
       e. The Secretary will comply with certain requirements to 
     communicate violations anti-fraud and abuse laws.
       f. A new health care fraud statute will be developed 
     modelled after the mail and wire fraud statutes.

         B. Building Primary Care Capacity in Underserved Areas

       1. Purpose:
       a. Safeguards to assist vulnerable populations to access 
     local health services and practitioners;
       b. Funding in certain areas to assist providers and health 
     plans to reconfigure services and establish networks to 
     compete in the changing market;
       c. Funding to increase primary care capacity in underserved 
     areas; and
       d. More flexible Medicare rules for providers in 
     underserved areas.
       2. Redefining Underserved Areas in the Changed Market: 
     States to designate frontier, rural and urban areas as 
     underserved taking into account:
       a. Lack of access to health plans; and
       b. Lack of access to quality providers and health care 
     facilities in such areas.
       The designations must be approved by the Secretary of HHS. 
     Underserved areas do not need to meet MUA or HPSA 
     definitions. The designation is for no longer than three 
     years. Underserved areas receive priority for special funding 
     included in this section.
       3. Network Development Funds:
       a. Planning funds:
       i. Medicare and Medicaid waiver demonstrations to form 
     health care networks; and,
       ii. Grants to private entities and states for use in 
     planning and development of networks of providers and plans.
       b. Technical assistance funds--to comply with health plan 
     certification guidelines, administrative simplification data 
     and transaction standards, quality assurance activities, 
     consumer information programs, insurance reforms, and other 
     reform requirements; and
       c. Capital (low interest loans) assistance for the 
     reconfiguration of facilities, start-up capital, establishing 
     reserves, and setting up information systems for entities in 
     networks.
       4. Increasing the Numbers of Services, Practitioners, and 
     Plans:
       a. Loan repayments for primary care practitioners in 
     geographic areas recognized by the Federal Office of Shortage 
     Designation.
       b. Tax incentives:
       i. A physician who provides primary health services in 
     underserved areas would be eligible for a nonrefundable 
     credit against Federal income taxes of up to 60 months.
       ii. A physician who provides primary health services in 
     underserved areas would be eligible to take an additional 
     $10,000 per year as section 179 deduction for health care 
     property placed in service during the tax year.
       c. Increase Federal support for primary and preventive 
     health care services aimed at segments of the population most 
     likely to be uninsured and at high risk:
       i. Comprehensive Maternal and Child Health coordination 
     aimed at improving health;
       ii. School-based Health Education--Increase assistance for 
     pre-school and elementary programs that provide comprehensive 
     health education to children; and,
       iii. Special grants to frontier areas for preventive health 
     services.
       d. Increase Public Health Act funding for:
       i. Grants to Community Health Centers, Migrant Health 
     Centers, FQHCs and look-alikes;
       ii. Increase funding for AHECs through 2000; and
       iii. Fully fund the National Health Service Corps;
       e. Funding for telemedicine and related telecommunications 
     technology support for frontier and rural areas; and
       f. Funding for medical transportation in frontier and rural 
     areas.
       5. Payment Flexibility:
       a. Extending EACH/RPCH to all states and making technical 
     corrections;
       b. Creating the REACH program;
       c. Extending Medicare Dependent Hospital classification 
     through 1998;
       d. Extend the MAF demonstration to all states; and,
       e. Increase Medicare reimbursement to physician assistants 
     and nurse practitioners in rural and urban areas.
       6. Studies, Responsibilities:
       a. ProPac will make recommendations within six months on 
     the need for any transitional provisions to assure access for 
     vulnerable populations;
       b. The Secretary will study the need for and design of a 
     ``supplemental rural benefits package'' within six months of 
     enactment; and
       c. An Office of the Assistant Secretary for Rural Health 
     will be established (elevates an existing position) to advise 
     the Secretary on all rural provisions in reform.
       7. Anti-Trust Clarifications:
       a. Mechanisms for clarification of anti-trust treatment for 
     providers:
       i. Certificates of Review--providers may apply to the 
     Attorney General for certificates of review to be granted 
     case-by-case.
       ii. Notification--providers may file a notification of 
     their joint venture activities with the Attorney General. 
     Certain rule of reason analysis and damage rules shall apply 
     in any subsequent suits.
       iii. Guidelines--the Department of Justice shall issue 
     guidelines clarifying legitimate collaborative activities of 
     health care providers responding to community needs.
       iv. Safe Harbors--The Department of Justice shall develop 
     ``safe harbors'' in certain health care delivery areas by 
     soliciting input through notice and comment procedures. The 
     safe harbors shall help to reduce both the costs and 
     administrative burdens of antitrust regulation reviews. 
     Certain rules of enforcement and defense shall apply for 
     organizations and ventures falling within the safe harbors. 
     Certain areas must have safe harbor clarifications by the 
     Justice Dept.

                        C. Health Professionals

       1. Education:
       a. Oversight:
       i. Establish Independent, Advisory Commission on 
     Workforce--
       (1) Federal oversight will be limited to an independent, 
     non-governmental advisory council to the Congress, modeled on 
     ProPAC and PPRC. COGME will be discontinued, with its funds 
     used to partially finance the new Commission.
       (2) The composition of the board will include experts in 
     medical education, teaching hospitals, health plans, and 
     other relevant parties.
       (3) Sets in law the role of the Commission and a timetable 
     for reports on specific questions of workforce policy and 
     payment, including but not limited to:
       (a) Profile the composition of the physician and non-
     physician workforce and address how the composition (numbers 
     and mix) fits market needs;
       (b) Amounts and process for funding;
       (c) Future payment policy for Medicare for graduate medical 
     education;
       (d) Incentives for primary care and underserved areas;
       (e) Foreign medical graduates' policy;
       (f) Future direction and coordination of grants, 
     demonstrations, and other funding affecting the workforce.
       b. Increasing Primary Care Practitioners and Ambulatory 
     Training:
       i. Consortia demonstrations to increase primary care. The 
     Secretary will conduct 10 Medicare demonstrations for the 
     purposes of increasing the numbers of primary care 
     practitioners trained (graduate education). The 
     demonstrations may be multi-state. All Medicare DME funds 
     historically used in the geographic area may be 
     distributed to consortia. Criteria for consortia will be 
     established by the Secretary. Additional incentives 
     dollars may be paid to consortia from any savings from IME 
     reductions.
       ii. Non-hospital-owned ambulatory sites will be eligible to 
     receive DME payments.
       c. Biomedical and Behavioral Research. A voluntary check-
     off on individual income tax returns will be established to 
     contribute dollars to a national research fund.
       2. Malpractice:
       a. Cap on Non-Economic Damages at $250,000, with entity 
     established to study a schedule of caps for congressional 
     consideration.
       b. Several Liability for non-economic and punitive damages.
       c. Periodic Payments for damages of over $100,000, with 
     judge given discretion to waive in interests of justice.
       d. Collateral Source Rule--collateral sources are deducted 
     from award to plaintiff.
       e. Limits on Attorney Fees--Limited to 33\1/3\ percent of 
     the first $150,000 and 25 percent of amount over $150,000, 
     after taxes.
       f. Statute of Limitations--two years from date of discovery 
     and no later than 5 years after occurrence. Claim may be 
     initiated for minors under age six if two years from date of 
     discovery and no later than six years after occurrence or 
     before minor turns 11, whichever is later.
       g. Clear and Convincing Standard for first seen obstetric 
     cases.
       h. Punitive Damages Reform. Includes Clear and Convincing 
     Standard of proof; elements of proof; pleading and process 
     requirements; cap on punitive damages (lesser of 2x 
     compensatory damages or $500,000); dedication of 50 percent 
     of award to health care quality assurance program.
       i. Right of Subrogation or Automatic Subrogation under 
     Collateral Source Rule.
       j. Prohibition on Vicarious Liability.
       k. All provisions cover all defendants in any Health Care 
     Liability Action.
       l. Consumer Protection--Require Risk Management by health 
     care professionals, providers and insurers; permits licensure 
     boards to enter agreements with professional societies to 
     license and review health care professionals; liability 
     protection for state licensure boards.

                           D. Long-Term Care

       1. Tax clarification:
       a. All long-term care services are treated as medical 
     expenses under the tax law, meaning that--
       i. Long-term care expenses and insurance premiums above 7.5 
     percent of AGI would be deductible from income; and,
       ii. Payments under long-term care insurance policies would 
     not be taxable when received.
       b. Insurance companies can deduct their reserves set aside 
     to pay benefits under long-term care insurance policies.
       c. Permit long-term care riders on life insurance policies 
     and treat like long-term care, not like life insurance.
       d. Do not permit tax-free exchange of life insurance 
     contract to long-term care.
       e. Exclude certain accelerated death benefits from taxable 
     income.
       2. Minimum Standards for Long-Term Care Insurance: In order 
     to receive favorable tax treatment, long-term care insurance 
     policies would have to meet certain consumer protection 
     standards. These standards include provisions based on the 
     NAIC Model Act and Regulation (as of January, 1993) and 
     supported by the insurance industry.
       3. A nonrefundable tax credit of up to 50 percent of an 
     employed individual's personal assistance expenses of up to 
     $15,000 per year will be provided.
       4. Modifications to Medicaid long-term care (see below).
       5. Acute/LTC integration demonstration project.


                 iii. improved federal health programs

                              A. Medicaid

       1. Acute Care:
       a. Beginning 1/1/00, all AFDC and non-cash Medicaid 
     recipients will be integrated into the low-income subsidy 
     program. These individuals will no longer be entitled to 
     acute care benefits under Medicaid, but would receive 
     private health insurance through the low-income subsidy 
     program. Supplemental benefits will be provided under a 
     capped entitlement to the states. Nothing in this section 
     should be construed as affecting an individual's 
     eligibility for long-term care services under Medicaid.
       b. Individuals eligible for AFDC and non-cash Medicaid 
     recipients whose income exceeds the income thresholds of the 
     low-income subsidy program would be grandfathered, i.e., 
     deemed to have income below 100 percent of the Federal 
     poverty level, and therefore eligible for a full premium 
     subsidy.
       c. Like all other individuals eligible for the low-income 
     subsidy program, AFDC and non-cash Medicaid recipients would 
     receive premium subsidies, up to a maximum amount, for the 
     purchase of a certified health plan covering the FedMed 
     benefit package.
       d. Medicaid acute care (non-long-term care) services not 
     covered by the FedMed benefit package would be provided as 
     supplemental benefits under a capped entitlement program to 
     the states, based on historical Medicaid spending for these 
     services, plus a growth factor.
       i. States could provide these supplemental benefits to any 
     individual qualifying for the low-income subsidy program.
       ii. States may give priority for the supplemental benefits 
     to children, pregnant women, and individuals in medically 
     underserved areas.
       iii. At the end of each Federal fiscal year, states may 
     apply for any Federal funds for supplemental benefits not 
     allocated to other states.
       e. SSI and SSI-related (e.g., state SSP) recipients would 
     generally remain eligible for services under the traditional 
     Medicaid program. However, states would be given additional 
     flexibility to enroll SSI and SSI-related recipients in 
     Medicaid managed care programs, or in certified health plans 
     covering the FedMed benefit package at a negotiated premium 
     rate. The number of individuals electing to enroll in a 
     certified health plan will be limited to 15 percent of the 
     eligible SSI and SSI-related Medicaid population in the state 
     in each of the first 3 years (beginning 1/1/97), increasing 
     by 10 percentage points (e.g., 25, 35, 45, etc.) in each year 
     thereafter.
       f. State maintenance of effort:
       i. States will make ``maintenance of effort'' (MOE) 
     payments to the Federal government in an amount equal to each 
     state's spending on acute care services covered by the FedMed 
     benefit package for AFDC and non-cash recipients under 
     Medicaid in the year prior to integration.
       ii. Each state's MOE payment will be increased annually 
     from the previous year by the weighted average increase in 
     the maximum premium subsidy amounts in the state under the 
     low-income subsidy program, plus the change in the state's 
     population.
       iii. Federal spending for the supplemental benefits will be 
     based on Federal spending for AFDC and non-cash recipients 
     for non-long-term care, non-FedMed-related Medicaid acute 
     care services in the year prior to which the state's AFDC and 
     non-cash recipients become eligible for the low-income 
     subsidy program. Federal expenditures will increase annually 
     from the previous year by the weighted average increase in 
     the maximum subsidy amounts in the state under the low-income 
     subsidy program, plus the change in population.
       iv. At least 3 months prior to the date AFDC and non-cash 
     recipients are integrated into the low-income subsidy 
     program, the state must have an integration plan approved by 
     the Secretary of HHS. The final plan will specify the state's 
     MOE obligation.
       g. Transition:
       i. The bill establishes a Medicaid risk contract program 
     which would allow states (at their option) to enter into risk 
     contracts with organizations that meet Federal standards for 
     access, enrollment, and quality assurance.
       ii. Upon enactment, states would be permitted to:
       (1) Enroll any groups of Medicaid recipients in Medicaid 
     risk contract programs or private health plans (states would 
     be required to offer recipients a choice of at least 2 
     plans); or,
       (2) Apply for 1115 demonstration waivers.
       iii. States with existing 1115 demonstration waivers would 
     be allowed to continue until the state or the Secretary 
     terminates the waiver, or until 1/1/00, whichever is earlier.
       iv. At any point after enactment, states may apply for a 
     waiver from the Secretary of HHS to integrate its AFDC and 
     non-cash recipients into the low-income subsidy program when 
     the low-income subsidy program begins (1/1/97). All states 
     must integrate their AFDC and non-cash recipients into the 
     low-income subsidy program by 1/1/00.
       v. Beginning 1/1/97, Federal and State expenditures for 
     FedMed-related acute care services would be capped on a per 
     capita basis at the Federal and state matching rates 
     multiplied by the weighted average maximum premium subsidy 
     amount in the state. Federal expenditures for non-long-term 
     care, non-FedMed-related acute care services would become a 
     capped entitlement to states, based on Federal expenditures 
     for such services in the state in the base year, increased 
     annually by the increase in the weighted average maximum 
     premium subsidy amount in the state.
       vi. For states that integrate AFDC and non-cash recipients 
     into the low-income subsidy program before 1/1/00, states 
     will make ``maintenance of effort'' (MOE) payments to the 
     Federal government in an amount based on each state's 
     spending for acute services covered under the FedMed benefit 
     package for AFDC and non-cash recipients in the year prior to 
     which the state's AFDC and non-cash recipients become 
     eligible for the low-income subsidy program.
       vii. Each state's MOE payment for the FedMed-related 
     services will be increased annually form the previous year by 
     the weighted average increase in the maximum premium subsidy 
     amounts in the state under the low-income subsidy program, 
     plus the change in the state's population.
       h. Federal Medicaid DSH expenditures will be reduced by 25 
     percent. The Secretary shall make recommendations regarding 
     phasing out the DSH program or integrating the DSH 
     expenditures into the per-capita amount as coverage 
     increases.
       i. Federal match rates would not be changed except to fix 
     inequities for Alaska.
       2. Long-Term Care:
       a. Eliminates the need for waivers to provide home- and 
     community-based long-term care services under Medicaid (i.e., 
     make them a state plan option).
       b. Codifies that the ``cold bed rule'' does not apply 
     (i.e., states can provide services to more individuals than 
     there are nursing home beds in the state).
       c. Allows On-Lok/PACE to expand sites and to be afforded 
     provider status under Medicare/Medicaid.
       d. Allows states to pursue public-private partnership 
     programs that link Medicaid eligibility to the purchase of a 
     qualified private long-term care insurance policy. Policies 
     would have to meet Federal standards described in the tax 
     code (see also ``Long-Term Care'').

                              B. Medicare

       1. Medicare remains a separate program.
       2. The Secretary of Health and Human Services will make 
     recommendations to Congress, with one year of enactment, on 
     the following:
       a. Allowing Medicare beneficiaries the option of:
       i. Enrolling in private health plans; and,
       ii. Establishing Medical Savings Accounts.
       b. Allowing Medicare-eligible military retires to enroll in 
     health plans sponsored by the Department of Defense or other 
     appropriate federal health programs.
       3. Improve risk contracts:
       a. The Secretary shall provide Medicare beneficiaries 
     information on Medicare options available in a beneficiary's 
     area.
       B. Improvements in Medicare risk contract payment 
     methodology:
       i. The Secretary shall establish Medicare rating areas to 
     replace the current county based system. Metropolitan 
     Statistical Areas may not be divided into different rating 
     areas.
       ii. In determining the amount of payment for Medicare risk 
     contracts, the Secretary shall use a direct calculation 
     methodology applied to each rating area, adjusted to reflect 
     the use of military, veterans, and other federal health 
     program services.
       c. HMOs will have the option of requiring Medicare 
     beneficiaries that enroll in risk contract plans to disenroll 
     only during an annual enrollment period. HMOs choosing this 
     option must inform Medicare beneficiaries of the 
     disenrollment limitation prior to enrollment.
       d. The Secretary of HHS may waive 50/50 rule (at least 50 
     percent of enrollment be non-Medicare) for Medicare risk 
     contractors that meet certain quality standards.
       4. Medicare Select will be a permanent Medigap option in 
     all states.
       5. The Social Health Maintenance Organization demonstration 
     project is extended for two years.

                          C. Veterans Affairs

       1. Grants VA sufficient flexibility to enable the VA to 
     respond rapidly and effectively to Federal and state market 
     reforms.
       2. Grants the Department of Veterans Affairs the necessary 
     legal authority and resources to respond effectively.


                             IV. Financing

                          A. Spending Savings

       1. Medicare Savings:
       a. Reduce Hospital Market Basket Index Update. This 
     proposal reduces the Hospital Market Basket Index Update by 1 
     percent. Currently Medicare changes the inpatient per-
     discharge standardized amount be a certain amount every year 
     to reflect input costs changes in Congressional direction. 
     OBRA 1993 reduced the Index in Fiscal Years 1994 through 
     1997. This proposal would reduce the updates by 1 percent for 
     Fiscal Years 1997 through 2000.
       b. Adjust Inpatient Capital Payments. This proposal 
     combines three inpatient payment adjustments to reflect more 
     accurate base year data and cost projections. The first would 
     reduce inpatient capital payments to hospitals excluded from 
     Medicare's prospective payment system by 15 percent. The 
     second would reduce PPS Federal capital payments by 7.31 
     percent and hospital-specific amount by 10.41 percent to 
     reflect new data on the FY 89 capital cost per discharge and 
     the increase in Medicare inpatient capital with a 22.1 
     percent reduction to the updates of the capital rates.
       c. Revise Disproportionate Share Hospital Adjustment. This 
     proposal phases down, but does not eliminate, the current 
     disproportionate share hospital adjustment over five years.
       d. Indirect Medical Education (IME). This proposal lowers 
     the IME adjustment for teaching hospitals from 7.7 percent to 
     6.7 percent. (The IME adjustment recognizes teaching 
     hospitals' higher costs for offering a wider range of 
     services and technologies, caring for more severely ill 
     patients, and providing more diagnostic and therapeutic 
     services to certain types of patients than other hospitals.)
       e. Partially Extend OBRA 93 Provision to Catch-up after the 
     SNF Freeze Expires Included in OBRA 93. Sets SNF cost limits 
     at 106 percent of the mean. OBRA 93 established a two-year 
     freeze on update to the cost limits for skilled nursing 
     facilities. A catch-up is allowed after the freeze expires on 
     October 1, 1995. This bill allows a partial catchup for 
     nursing homes while still realizing savings.
       f. Partially Extend OBRA 93 Provision to Catch-up After the 
     Home Health Freeze Expires. Sets cost limits for home health 
     at 106 percent of the mean. OBRA 93 eliminated the inflation 
     adjustment to the home health limits for two years. This bill 
     allows a partial catch-up for home health after the freeze 
     expires on July 1, 1996.
       g. Moratorium on New Long-term Care Hospitals. This 
     proposal eliminates new designations of PPS-exempt long-term 
     care hospitals.
       h. Change the Medicare Volume Performance Standard to Real 
     Growth GDP. This changes the formula that is used to 
     calculate the target rate of growth for Medicare physician 
     services. This change directly connects the growth in 
     physician services to the growth of the nation's economy.
       i. Establish Cumulative Growth Targets for Physician 
     Services. This changes the formula used to calculate the 
     target rate of growth for Medicare physician services. Under 
     this provision, the Medical Volume Performance Standard for 
     each category of physician services would be built on a 
     designated base-year and updated annually for changes in 
     beneficiary enrollment and inflation, but not for actual 
     outlay growth above and below the target.
       j. Reduce the update in the Medicare Fee Schedule 
     Conversion Factor by 3 percent in 1995, except Primary Care 
     Services. The conversion factor is a dollar amount that 
     converts the physician fee schedule's relative value units 
     into a payment amount for each physician service. This 
     provision reduces the 1995 annual update by 3 percent.
       k. Establish outpatient prospective payment system for 
     hospital outpatient departments. The Secretary of HHS is 
     directed to establish a prospective payment system for 
     hospital outpatient department services by January, 1995. If 
     such a system is not established by that time, the Secretary 
     would reduce hospital outpatient department payments 
     sufficiently to achieve the anticipated savings.
       l. Extend the requirement that the Part B premium cover 25 
     percent of Part B costs.
       m. Extend OBRA 93 Medicare Secondary Payor Data Match with 
     SSA and IRS. OBRA 93 included an extension of the data match 
     between HCFA, IRS and SSA to identify the primary payers for 
     Medicare enrollees with health coverage in addition to 
     Medicare.
       n. Extend OBRA '93 disabled provisions. Extends the OBRA 
     '93 provision making Medicare the secondary payor for 
     disabled Medicare beneficiaries who have employer sponsored 
     coverage.
       o. Extend the End-stage renal disease secondary payor 
     provision. Makes Medicare the secondary payer for ESRD 
     patients with employer sponsored health insurance for 24 
     months, instead of the current 18 months.
       2. Medicaid Savings:
       a. Federal Medicaid expenditures will be reduced by 
     integrating AFDC and non-cash recipients into private health 
     insurance plans, with a capped entitlement for supplemental 
     benefits.
       b. Medicaid payments for disproportionate share hospitals 
     (DSH) would be reduced by 25 percent (starting in 1997) to 
     help pay for subsidies for low-income individuals and 
     families without health insurance.

                   B. Budget ``Fail-Safe'' Mechanism

       1. To ensure that new spending for health insurance 
     subsidies for low-income persons and the Health insurance tax 
     deductions (including MSAs) do not exceed projections and 
     increase the federal budget deficit, a fail-safe mechanism is 
     included.
       2. A baseline consisting of current projected spending for 
     Medicare and Medicaid expenditures is established in the 
     bill.
       3. In any year that the Director of the Office of 
     Management and Budget (OMB) notifies Congress that total 
     federal spending for:
       a. Medicare,
       b. Medicaid,
       c. Low-income health insurance subsidies, and
       d. New tax spending for health insurance deductions 
     (including MSAs)

     will exceed the statutory baseline, the following will occur:
       a. The phase-in of the tax deductions will be frozen at 
     whatever percentage it is;
       b. The deduction for contributions to MSAs will be reduced; 
     and,
       c. The low-income subsidy phase-in will be slowed or rolled 
     back to the extent necessary to assure no deficit spending.
       4. Congress may enact alternative savings measures to avoid 
     the automatic reduction in subsidies.

  The PRESIDING OFFICER. The bill will be introduced as in morning 
business.
  Mr. DOLE. We will be explaining that bill in detail as the debate 
develops in the next several days.
  Thank you.
  Mr. MOYNIHAN addressed the Chair.
  The PRESIDING OFFICER. The Senator from New York.
  Mr. MOYNIHAN. Mr. President, we have opened a historic debate in a 
historic manner. I have been 18 years now in the U.S. Senate. I have 
never seen an issue of this sensitivity addressed by the respective 
leaders with as open and welcoming a suggestion of compromise and 
accommodation.
  If I could say to the Republican leader, my distinguished friend, 
there are the seeds of agreement in this Chamber, and there is 
legislation that could command 99 votes. And let us not forget for a 
moment that we begin this debate with the Republican leader talking 
about making a list of things we agree on, and the Democratic majority 
leader saying he welcomes constructive suggestions.
  If I could just say one last thing, Mr. President, we are now, for 
the moment, on Calendar 539, a bill reported from the Committee on 
Finance in a bipartisan way, with many provisions which I think by 
definition we have found have support on both sides. I think we will 
find more of them. I think we recognize--and if I again can cite the 
Republican leader--there have been a great many events on the way to 
this moment in the area of health care. They go back to 1935 and the 
Social Security Act when President Roosevelt charged Frances Perkins, 
the Chair of his Committee on Economic Security, with undertaking a 
study of national health care reform then and there. That is 1934. And 
here we are 60 years later with a very great deal accomplished and 
within reach of the goals we set forth in the Finance Committee bill 
which for the moment is before us.
  I would take the liberty, Mr. President, of reading you those goals.
  Short title: ``Health Security Act.''

       It is the purpose of this Act to achieve universal health 
     insurance coverage through--
       (1) subsidies for the purchase of health insurance;
       (2) affordable standardized health insurance;
       (3) elimination of exclusionary practices by health 
     insurance companies;
       (4) a permanent National Health Commission which, beginning 
     in 1996, will make recommendations every two years to the 
     Congress on how to increase the number of people covered by 
     health insurance;
       (5) reduction of health costs through more open competitive 
     markets and continued advances in medical education and 
     research; and,
       (6) health care provided under the medicare and medicaid 
     programs and health programs of the Department of Defense, 
     Department of Veterans Affairs, and Indian Health Service.

  Mr. President, we are already well on our way to these goals. We 
learned a very great deal in the Finance Committee, in the course of 
half a year's hearings, and most importantly we established that our 
health care problems in this country really are at one removed health 
care itself, that indeed we are in the great age of medical discovery 
in health care. I have remarked to colleagues at what physics was at 
the beginning of this century when the nature of matter was finally 
discovered, a great moment. It all took place in Europe, or almost 
entirely. The great discoveries in health and in biology, health 
technology, nature of human life are taking place in this country now--
ours.
  I had occasion last January, on the Evans and Novak television show 
to comment that ``American medicine is the best medicine on Earth and 
in the history of mankind. Our insurance system is klutzy and complex 
and inadequate and incomplete.''
  And very shortly thereafter, our First Lady, Hillary Rodham Clinton, 
who has been so extraordinarily devoted to this enterprise, put the 
matter in almost the same words. She said, ``We are confusing the fact 
that we have the finest physicians and hospitals in the world with the 
fact that we have the stupidest financing system for health care in the 
world.''
  Now, that is a distinction we can make, and to great advantage. Both 
the majority leader and the Republican leader have pointed out that 
almost the first thing we must do is address insurance matters. Many of 
the heartbreak cases you hear about, we have been shown on television, 
we have read about, are cases of persons who are denied insurance 
coverage for health care which did not exist 30 years ago.
  I believe the majority leader spoke of a person in California who 
required a bone marrow transplant. Bone marrow transplants did not 
exist 30 years ago. The whole field of oncology has come into being in 
the last 30 years. And finding the financing for it, finding insurance 
for it is our first challenge. The majority leader's bill meets that 
challenge. It is time we did it. Indeed, Mr. President, we did it 2 
years ago in H.R. 11, did we not, when it passed the Senate?
  Now, the majority leader has made clear that his measure is open to 
constructive suggestions, and in that spirit and to demonstrate that we 
are not a monolith on this side of the aisle at all, I would like to 
respond to the Republican leader, my friend, Senator Dole, the question 
he raised about the provisions which have been in all the bills so far 
reported as well as the one which I introduced last November on behalf 
of the President, the question of providing a ratio between primary 
care practitioners and specialists, and then also providing that the 
present ratio of residents to medical graduates drop from 134 percent 
to 110 percent. And I would say, and open to discussion on both sides, 
that I think those are wrong, those are mistakes.
  I think my distinguished friend and comrade in all this, Senator 
Packwood, agrees.
  And I will give you a simple example here, the most important one, 
which is that we are making a mistake--it is easy to do if you do not 
pay attention but easy also to comprehend when you do--that the number 
of primary care physicians ought to be and is basically determined by 
demography, population. You need about 60 to 70 per 100,000 persons, 
and we have just about that. And most advanced countries have just 
about that. That is based on population, how many doctors need to be 
around to serve normal health care.
  Now, the number of specialists is an independent variable that has 
nothing to do with primary care. It is driven by science. It is driven 
by discovery of new possibilities that did not exist before science 
came along. I give you an example, if I may, Mr. President.
  In 1960, you arrived in a hospital, and your heart had stopped 
beating. The diagnosis was death. Today, the diagnosis is cardiac 
arrest. And you go to a cascade of treatments that did not exist 30 
years ago. You can go to a defibrillator. You can go to cardiac 
catheterization.
  You can go to angioplasty, you can go to heart transplant, things 
that did not exist. They change by the hour, and specialties arise in 
consequence. And you have to have them. Dr. Peter Budetti, who is on 
the floor tonight, has worked with our Finance Committee staff, noted 
that when he did his residency at Columbia Presbyterian in New York, 
there were no intensive care units for children. The kinds of things 
you can see today are miracles of medicine for premature babies, and 
children. They did not exist. Neither did the specialties that now have 
arisen in providing that care.
  Oncology. There was no oncology in this country 30 years ago. It 
began in 1964 with the discovery of chemotherapy. It goes on to 
extraordinary prevention. There are high-risk measures now which become 
more routinized and less problematic. Who knows but that we will have 
cures for Alzheimer's disease on the edge. That again will be a 
specialty, or will likely be. Perhaps it will just be a pharmaceutical. 
Just as medical science brings in new procedures, it also gets rid of 
old ones. Fifteen years ago, a quarter of the operations performed in 
American hospitals were for one or another form of ulcer disease. One 
pharmaceutical took all of that away.
  Just so, Mr. President. One of the great features of American 
medicine at this point is that it is at the center of medical discovery 
in the world; that medical graduates come from all over the world to 
take their residencies here. Some stay, and others return to their 
country. There are some things which, if you want to learn, you can 
only learn in an American hospital, in an academic health center.
  So the idea of fixing the number of foreign residents trained in this 
country seems self-defeating. If we are concerned about health cost 
containment, surely we do not want to limit the number of doctors, and 
particularly doctors trained in the high academic centers of the 
country. So we want to take up issues like that.
  The New York Times remarked this morning that Washington did not know 
how many surgeons the country needs now, let alone 10 years from now.
  So we will proceed. But I hope we proceed in a sense of how much we 
share, how many ideas we have worked through, and understand and can 
agree on.
  President Clinton established a goal of universal health coverage, 
and we have been working very hard for months to craft an approach to 
meet these challenges. Even an affluent country does not have resources 
to do this overnight. We get closer by the day. Insurance coverage is 
falling off to be sure, largely in my view because of cost displacement 
when we decide our Medicare program for example will not pay the true 
costs of the treatments.
  But there are other matters to be dealt with. There are issues. 
Senator Dole raised one. He pointed to the State of New York where we 
have stipulated, required, community rating citywide, and statewide. 
Indeed, a fair number of young persons dropped out of the insurance 
system altogether because benefit costs were raised.
  Under the legislation Senator Mitchell has introduced, under the 
legislation in our Finance Committee bill right there, we provide 
subsidies for young persons in that situation. The Finance Committee 
bill, Mr. President, is a bipartisan bill, and would provide subsidies 
for about 8 million New Yorkers alone. Being sensitive to the costs and 
the consequences is entirely appropriate. But to many of these seeming 
dilemmas, there is an answer. I think that answer will be found in the 
majority leader's bill as we collaborate, as we exchange views, and we 
come to similar conclusions.
  Mr. President, I am hugely hopeful on this moment. And I am equally 
looking forward, as I see my dear friend, the ranking member of the 
Committee on Finance, the former chairman, has risen. I propose to sit 
down at this moment in order to hear and listen to him.
  Thank you, Mr. President.
  Mr. PACKWOOD addressed the Chair.
  The PRESIDING OFFICER (Mr. Mathews). The Senator from Oregon.
  Mr. PACKWOOD. Mr. President, Dr. Garfield reached through the open 
window of his car, opened the glove compartment, and he took out a 
bandana. He sat down on the running board. He wrapped the bandanna 
around his head as a sweatband, a trick he had learned from the 
construction workers earlier when he had been working on the Los 
Angeles aqueduct. As he sat looking at the Columbia River --he had 
never seen the Mississippi--he thought to himself. ``That is some big 
river.'' He also thought to himself, it is hot. God, is it hot. It has 
to be 110 degrees. Then he thought to himself about the debate that 
went on in the Corps of Engineers about whether or not they could build 
a dam this big across the river, the Grand Coulee. Well, that was not 
his problem. He was not an engineer. He was a doctor.
  He had an interesting background. While he had been a medical 
student, he had managed an apartment house. When he was a resident, he 
had a Buick dealership. He was an entrepreneur. He thought there was a 
way to meld management and business and medicine. He had a little 
tryout on it on the Los Angeles aqueduct project. He had been hired as 
the medical officer.
  It was an interesting situation. It is a long ribbon from the 
Colorado River to Los Angeles, but a long, thin ribbon. He wondered how 
he was going to provide medical service for this construction crew. He 
juryrigged a little 6-bed hospital on skids, and skidded along with the 
construction.
  He was very conscious about worker safety, and even spent some of his 
own money teaching the workers about worker safety and preventive 
medicine, preventive health. But in comparison, what he was now about 
to undertake was a goliath.
  He had never met the boss, the principal contractor on the dam, Henry 
J. Kaiser. But this is what he had to do with 15,000 workers, 
dependents and families. The nearest big town was Spokane, 90 miles 
away. There were no significant medical facilities in that summer of 
1938 as he was looking out over this river in that 110 degree weather. 
He thought to himself, had he undertaken more than he could achieve?
  A few days later he met Mr. Kaiser. He admitted he was nervous. He 
explained his plan. He said what it would take. He had to argue with 
Mr. Kaiser about whether there would be air conditioning in the 
hospital. He knew from the aqueduct in the desert that this was not a 
luxury, this was a necessity. Mr. Kaiser thought this was a luxury, 
that they were not going to have air conditioning in eastern Washington 
in the summer. So he paid for it himself, and in one way or the other 
he got the money out of Mr. Kaiser.

  He actually could not use the hospital in Spokane except for 
extraordinary circumstances. So he had to go to the couple smaller 
towns, in the middle of the Depression, in 1938. The hospitals were 
bankrupt. He had to do the best he could to more or less renovate the 
hospitals. But most importantly, he knew that he had to take 15,000 
people--men, women, and children--who were going to be living in this 
area for 3 years in what would probably be close to a tent city and 
give them health care.
  Second, he had problems with the union. The union did not trust any 
of its employer providers. They would figure out some way to do it. So 
Sid Garfield went directly to the men. There were no women workers of 
any consequence in those days, in the construction days. He explained 
what he wanted to do and they listened.
  Within a month of starting, 90 percent signed up. Fifty cents a week 
for complete coverage. Pretty soon, the men were asking about their 
wives and children, and with no actuarial experience to go on, he 
convinced Mr. Kaiser to say, ``OK, 50 cents for the wife, 25 cents for 
each kid.'' There was an immense sign up. And then pretty soon, he 
discovered that rather than--and he learned this from the aqueduct, and 
should have realized, except there he had changing work force personnel 
as they moved west, and here he was going to have a consistent work 
force for 3 years.
  The wives and kids and others began coming to him, not in the later 
stages of breast cancer but in the early stages, because this was 
capitated, this was paid for ahead of time. He was able to convince the 
other doctors in the area, who had always had a suspicion about this 
kind of prepaid medicine, that it would be good for them, because with 
what he was discovering, they would get increased business.
  Pretty soon, the townspeople in the areas were allowed to join the 
plan. They heard about it from their neighbors and wanted to know if 
they could get in.
  It worked, by and large, pretty well. But what you had was basically 
a company town on the project. Almost everybody there was a Government 
employee or part of the Government contracting, or part of the Corps of 
Engineers.
  They finished. World War II started, and Sidney Garfield was drafted 
into the Medical Corps, but soon received a phone call indicating that 
he was going to be immediately discharged if he was willing to go out 
and meet with Mr. Kaiser again and set up the medical facilities in 
Richmond, CA, and in Portland, OR. This was not going to be 15,000. 
Richmond grew from 25,000 to 125,000 in 9 months. It became an immense 
naval construction facility. In Portland, OR, he had three shipyards. 
At the height of World War II, they employed 40,000 people. They were 
30 percent of the entire adult work force in Portland during World War 
II.
  Well, the experience in the aqueduct, and the experience on Grand 
Coulee, and what Mr. Kaiser said when they first met, ``Young man, if 
your plan is as good as you say it is, it is not only good for my 
company, it is good for this country.'' When the shipyards closed at 
the end of World War II, the workers wanted to continue coverage; 
hence, the start of the Kaiser Health Plan, as we know it, and as it is 
known much more in the West than in the East.
  In the late 1950's and the early 1960's, I was a labor lawyer. I was 
low man on the totem pole in a large Portland law firm, the lowest 
person in the labor law section. They were contracting with Kaiser for 
their health care. I was impressed, first with the fact that most of 
the employees seemed satisfied. Secondly, I was impressed with the fact 
of what Kaiser would attempt to do. They would bring their little 
mobile clinic out to the factory and run people through an annual 
physical, the kind of things people just do not do.
  I remember what one of the Kaiser people said at the time. He said, 
``We do not really have any cheaper hospital costs than anybody else. 
What we try to do is avoid hospitalization by preventing it.'' Kaiser 
was not popular, and I do not mean Henry himself, but the plan was not 
popular with community doctors. Believe it or not, Dr. Ernest Saward 
had an ethical misconduct charge brought against him by the State 
Medical Society when he put up a sign in the shipyard that said ``A 
Community Medical Center, the Kaiser Plan.'' That is all it said. 
Unethical conduct.
  In 1961, doctors that worked for the Kaiser Permanente Clinic were 
not allowed to join the Multnomah Medical Society. They were pariahs, 
inferior medicine. There was a threatened antitrust suit, and that soon 
ended. But they, by and large, were not welcome.
  Now, today, in Oregon, Kaiser has 400,000 enrollees. But to put it in 
perspective, Blue Cross/Blue Shield has about 1.1 million. Our 
population is 2.9 million. In California--here is Blue Cross the 
biggest health coverage organization in the United States--in 
California, Blue Cross has 3 million enrollees, Kaiser has 4 million 
enrollees, to give you an idea of the dominance and success they have 
had. To put it in perspective in Oregon, Kaiser now has two hospitals, 
17 outpatient clinics, 12 dental offices, 545 physicians, 99 dentists, 
and 7,441 employees. These are all employees. It is managed care at its 
best. Sid Garfield was an absolute prophet when he said competition can 
work.
  You might ask, ``Does managed care work?'' People will give you 
examples to prove that it does not. But you must be careful when you 
are trying to do any kind of comparative health costs in the market 
system for this reason: We have had a market system in health in the 
United States for barely a decade. Realize that it is only about 10 
years ago that Medicare quit reimbursing hospitals for cost. What is 
your cost? Here is the payment. No wonder you had no cost control. I 
mean, that was World War II, cost plus. What does it cost you to do it? 
Here is your 10 percent, here is the cost.
  We really have not had a market system in the United States for 
health care until the last decade. There may be a few exceptions in 
some areas, in some States. So you have to be very careful in 
comparisons, especially when you study costs in different States. You 
have to ask yourself, ``Where did the State start from 10 years ago?'' 
If it was a high-cost State 10 years ago and it got into managed care--
and California did, and it is still, relatively speaking, a high-cost 
State; it is coming down, doing better, but it started way up here--and 
if you compare that against a low-cost State 10 years ago that has no 
managed care, they are still probably lower in cost. But they are 
closing. They are closing because the managed care works.
  So you have some low-cost States, such as Montana, Idaho, and Maine, 
but they are basically low-cost everything. Wages are lower, costs are 
lower, health services are lower. We can almost say as a rule of 
thumb--and it is not always true, but almost as a rule of thumb--the 
bigger the area the more expensive the health costs.
  Maybe it should not be true, but this on average is true. In a bigger 
city like Albuquerque, I bet it costs more than a smaller town in New 
Mexico. I am just taking a guess.
  The bulk of the studies that have been done recently, though, pretty 
much conclude that managed care works to reduce the increase in costs. 
I do not want to say reduced costs. I have yet to see any studies that 
say we have gone down. But reduced cost.
  In Dr. James Robinson's study ``HMO Penetration and Hospital 
Inflation in California,'' the conclusion in California is the areas 
with the highest health maintenance organization penetration had the 
slower growing and lower hospital costs.
  The recent Lewin-VHI study concludes managed care is cheaper. The 
best I have seen, and it has not been published yet, Dr. Glenn Melnick, 
Ph.D., with the UCLA study, ``Health Care Expenditures Under 
Competition and Regulation--1980-1991.'' It has not yet been published, 
but it is available. It came out in July. Dr. Melnick studied five 
States, one of which was a managed-care State, and that is California. 
The president of the UCLA Medical Center, when testifying, said for all 
practical purposes, there is no indemnity payment left in southern 
California. It is all managed care. Dr. Melnick studied California, and 
then to compare it, he studied four States with regulated hospital 
costs: Maryland, Massachusetts, New Jersey, and New York.
  Now, they did not all start from the same base in 1980. That is what 
you have to remember. But far and away, the increases from 1980 to 1991 
were much, much lower in California than any of the regulated price-
control States. And two of those states, New Jersey and Massachusetts, 
have now abandoned price controls.
  I will give you just one other chart--per capita growth in hospital 
expenditures, 1980-1991, for the United States; 54 percent is the 
aggregate. California, 27 percent; Maryland, 34 percent; Massachusetts, 
45 percent; New Jersey, 85 percent; New York, 57 percent. That is the 
increase for those years.
  So every study I have seen indicates that where there is competition 
it works, if we will give it a chance to work, and not throttle and 
strangle it with a bill that wants to see it stillborn.
  We are all conditioned by our own experiences, so I will take Oregon, 
having lived all of my life there. Our per capita health costs are the 
lowest in the country. We are tied with Utah for the lowest, at 15 
percent below the national average. Our Medicare per capita cost is the 
lowest in the country, tied with Wyoming, 30 percent below the national 
average, and our indemnity health plan cost in Portland--we still have 
it--is 15 percent lower than the national average. On hospital stays, 
Oregon's hospital stays are less than one-third the national average, 
281 days per 1,000 population versus the national average of 872 days. 
Our average length of stay in a hospital is 2 full days below the 
national average: 5.1 in Oregon; 7.1 in the Nation.
  If the rest of the country did nothing more than manage its 
hospitals-- not the rest of its health care, just managed its 
hospitals--as efficiently as Oregon, you would have 5.5 million fewer 
hospital admissions and $50 billion a year in savings on just hospital 
costs.
  It can be done. And Oregon is one of the leading managed care States.
  I am going to take just a moment to explain what managed care is, 
because for those who are watching, we often speak in acronyms and 
speak in terms that to the public are arcane, justifiably arcane, to 
the public.
  Managed care is a system of health delivery that tries to gather 
patients and doctors and bring them together in more or less of a 
collective manner. There are a variety of ways of going about it.
  The principal one, best known perhaps, is the health maintenance 
organization, HMO. Kaiser is a classic example of that. The patient 
pays a fixed dollar amount. You must use the health maintenance 
organization's facilities and doctors, but they take care of all of 
your health needs for a fixed amount.
  So it is of great interest to the provider while providing good 
health care, and Kaiser does, to restrain their costs. They have a 
fixed amount. They are not going to get any more money out of you. Here 
is the contract. I will pay $250 a month whether I am sick or healthy. 
You take care of me whether I am sick or healthy. And Kaiser has to 
live with that or go bankrupt. That is one kind of managed care.
  Another is the so-called PPO, the preferred provider organization. 
Here, an insurance carrier selects a panel of doctors who are 
preferred, and they say of the 1,000 doctors in the area, we have 600 
on our panel and if you go to those doctors, we have worked out 
contractual relation with them, and they will do an appendectomy for 
$1,000. Or if you go to the other 400 doctors, and they may charge you 
more, we are not going to pay any more. If you go outside the network, 
you pay more. That is a preferred provider organization.
  The third one is called point of service. This is sort of like a 
health maintenance organization, but you are allowed to go outside the 
organization and use other doctors. But the HMO pays a much smaller 
percentage then of our health costs, and you pay more of it yourself. 
You can do it if you want, and the health maintenance organization will 
let you do it so long as you understand it is going to cost you more 
money.
  It is your choice. Those are the three principal kinds of managed 
care.
  The reason I say it needs to be given a chance--remember what I said 
earlier--we have not had competition in the health industry in this 
country for much more than the last 10 years. We really are only 
getting at it. In Oregon again, Blue Cross/Blue Shield, in a State with 
a population of 2.9 million people, Blue Cross/Blue Shield, of the 2.9 
million people in the State, enrolls 1.1 million. Ten years ago, in 
1984, they had zero enrollees in managed care. None. Today, 10 years 
later, they have 65 percent in managed care. They expect by 1998 to 
have 90 percent in managed care.
  Kaiser, of course, is complete managed care, and it has 400,000 
enrollees. In Oregon, we have today eight major health maintenance 
organizations competing against each other. We have 19 preferred 
provider organizations. No wonder it is a dog-eat-dog competition, and 
I use that in the best sense of the word. We have even in Portland 
managed to get 56 percent of our Medicare population to sign up for 
managed care. And three of the five Medicare health maintenance 
organizations in Oregon have had no premium increase for the last 4 
years. That is the kind of competition Oregon has. It is working.
  In California, California even exceeds Oregon in terms of its 
membership in health maintenance organizations. And, as I said, the 
president of the Medical Center at UCLA says there is no more indemnity 
payment. And here is the funny thing that happened. Doctors still do 
not like this kind of practice. They still have some misgivings about 
group practice.
  I was intrigued that just last month, the D.C. Chapter of the 
American Medical Association has sued the regional Blue Cross/Blue 
Shield, claiming that doctors are being arbitrarily excluded from the 
Blue Cross/Blue Shield preferred provider organization. They will not 
let us all in.
  I might just quote:

       The lawsuit, filed in the U.S. District Court here, 
     represents the latest salvo in the widening battle between 
     doctors and insurance carriers in the Washington area and 
     across the country over whether insurers should have the 
     power to nudge patients toward certain doctors.

  The same thing happened in Multnomah County in Oregon. Doctors were 
worried about unethical conduct when they put a sign up for a community 
health plan. They still do not like it.
  But within the same week that this lawsuit is filed, the same week, 
along comes this story about D.C. area doctors setting up their own 
managed care.

       Dozens of Washington area physicians are forming their own 
     health care network, saying they want to free themselves from 
     insurance companies and other large health plans that try to 
     tell them how to practice medicine.
       To ensure the quality of care . . . the group is enrolling 
     doctors on an invitation-only basis, adopting its own 
     variation of the exclusive postures other health plans have 
     taken.

  The same thing. It reminds me of Russell Long. He does not want to 
have anything to do with any conspiracy he is not a part of. Let him 
in. Let them in.
  But let them in. It is all right.
  This is why we are having this tremendous battle about the so-called 
``any willing provider'' clause.
  What that means is, if the doctors can have their way, that every 
health maintenance organization, every Kaiser Health Plan, every Blue 
Cross-Blue Shield preferred provider plan has to let any doctor in that 
will agree to meet their prices. At the very same time the doctors want 
to set up an organization that says, ``We are not going to let 
everybody in.''
  Well, you are not going to have managed care if the Kaisers of the 
world, if the Blue Crosses of the world cannot have some discretion as 
to who they let in and who they do not let in. They may not need every 
doctor from the area, they may not need every thoracic surgeon in the 
area. So that battle continues.
  Now I do not know how much evidence we need that the market works, 
but there is more in the newspapers.

  Here is another one from the New York Times. Here is the story. It is 
about an Israeli doctors' strike.

       Both the striking doctors and leading health administrators 
     want a system of graduated fees in place of the current 
     arrangement, which provides free medical care and medicine at 
     Government hospitals and at over 1,000 neighborhood clinics.
       ``Israelis have been exploiting the medical system because 
     it is free,'' said Asher Yadlin, the director of * * * the 
     Israeli equivalent of Blue Cross, in which more than 70 per 
     cent of the population is enrolled.
       ``* * * During the strike, Israelis have either gone to 
     hospital emergency rooms for medical attention or sought out 
     the striking doctors in their homes or private offices. In 
     either case, they have had to pay a fee, ranging from $8 to 
     $12 a visit. * * *''
       A result of this arrangement has been a drastic reduction 
     in the number of Israelis seeking medical attention.

  If they have to pay for it, they might slow down.
  This is Mr. Yadlin again:

       The fact that they have had to pay a few pounds for visits 
     during the strike has been enough to discourage most Israelis 
     from seeing their doctors. * * * And yet there has been no 
     increase in the number of serious illnesses.
       It proves what we have suspected all along--that most of 
     these visits were unnecessary. They merely went because it 
     was free.

  Now here is my favorite sentence:

       During the strike * * * death had decreased more than 20 
     percent.

  Market forces work.
  The Washington Post, last July:

       The two broad alternatives for containing costs are market 
     forces * * * and government controls * * *. Congress * * * 
     seems disposed to try market forces * * *. Rather than try to 
     control costs itself, the government will try to strengthen 
     the ability of the market to do it. That's an all right place 
     to start; let's see how it works * * *.

  Competition works.
  The New York Times again. Wonderful story. This is involving New York 
Medicaid recipients. As my good friend from New York knows, some years 
ago New York passed a law that allows Medicaid recipients to join 
managed care organizations if they wish to join. This is the story:

       New York law allows Medicaid recipients, if they want, to 
     purchase managed care coverage through private carriers.
       ``New York City's public hospital system is losing some of 
     its Medicaid patients--patients nobody else used to want * * 
     *.''
       ``Of the more than 300,000 New Yorkers who have signed up 
     for Medicaid managed care--about 13 percent of the state's 
     Medicaid population--almost all have chosen H.M.O.'s aligned 
     with private hospitals.
       Only 8 percent have joined the public hospital system's 
     managed care program, the Metropolitan Health Plan, Dr. 
     Siegel said: ``And that's horrible news for us.''
       ``We used to have a monopoly on poor people, and we're 
     losing it,'' said Dr. Siegel. ``We're seeing our patients 
     being recruited into H.M.O.'s that don't use our hospital, so 
     for the first time we're competing.''
  They are going to spend over $1 million on advertising to try to 
bring patients back. The system works. This is Medicaid. This is for 
the very poor.
  You know, the poor are not dumb. They are just poor. They understand 
a good deal when they see it. And they understand they are getting a 
better deal from a private carrier in a health maintenance organization 
in New York City than they are getting from the free New York City 
hospital that pays no taxes to anybody. They are smart. They 
understand.
  Do we have any other evidence that the market works; that when people 
are given a choice, they might choose something that either saves them 
money, or they will not choose something that will cost them money?
  Medical saving accounts, which the leader's bill has totally written 
out. They are gone. They are not allowed.
  Medical saving accounts--and I am going to refer to it is as the 
Golden Rule Insurance Co. That is where we first heard it, in the 
Finance Committee. There is an insurance company in Indiana called the 
Golden Rule Insurance Co. Their president testified. This is what they 
did and other companies are now following them.
  You basically have two kinds of health insurance policies, what we 
call a traditional policy--you may have a $200 or $300 deductible and 
then maybe you pay 20 percent of the first $1,000 and 10 percent of the 
second $1,000 and the policy pays the rest. It is what we call a 
traditional policy.
  Then you have what is known as a catastrophic policy. In a 
catastrophic policy, you agree to pay all of the costs yourself up to a 
certain amount, then the catastrophic policy pays everything else after 
that.
  It is really what insurance means. Insurance is to insure you against 
the things you cannot afford. Insurance is not meant to pay for 
everything you can afford.
  So the question is, what do people choose?
  When given the option at the Golden Rule Insurance Co.--and you have 
to understand, this is cheaper for the company, also. Catastrophic 
insurance, catastrophic anything, catastrophic fire insurance, 
catastrophic auto insurance is not very expensive to underwrite. Not 
many people actually go to hospitals during the year and not many 
people have $100,000 or $200,000 hospital stays. That is usually what 
we read about. We read about the poor devil who crashes his motorcycle 
and costs the hospital $500,000; we read about the premature birth that 
costs $500,000. Those are the exceptions. Most people do not have 
catastrophic costs.
  So the Golden Rule Insurance Co. made this deal with their employees.
  Now I am going to round off the figures and I am going to use it for 
purposes of illustration. I have not taken the exact dollar amount. I 
mean, I am very close, but I will round it off. I am going to use only 
a policy that would involve a single person.
  For the traditional policy, you are a single person, this is the one 
with a little copayment, few deductions and what-not, costs the company 
about $1,600 a year; single person.
  The catastrophic policy has a $2,000 deductible. That is not very 
high. Catastrophic, $2,000, you pay everything up to $2,000, after that 
the policy pays everything.
  That costs the company only $400, because not many people have bills 
over $2,000. So the company saves $1,200 in the difference between the 
policies--$1,200.
  Now the company therefore agrees to put $1,000 in your medical 
savings account. They are still saving $200, because otherwise it would 
cost them $1,200 more. So they have put $1,000 in your medical savings 
account.
  Now here is the double intriguing thing.
  If a company buys you health insurance, buys you a traditional policy 
for $1,600, that is a total deduction for the company and none of it 
counts as income to you. If the company, however, buys you a 
catastrophic policy, $400, that is deductible to the company and it is 
not income to you. But if they put $1,000 in your account and you do 
not spend it for health, that is income to you. You have to pay taxes 
on it.
  I would assume an insurance company would have a lot of people they 
are paying $15,000 to $20,000 a year. Let us assume they are in the 20 
percent bracket.
  So you have $1,000. Right away, $200 is gone for taxes if they do not 
spend it. Given that, with this $1,000 and paying taxes on it, the 
average employee was taking out $602 a year out of their account at the 
end of the year, which means they spent a couple hundred dollars for 
health, a couple hundred dollars in taxes and took $600 out. When given 
a choice between having the money and not having the money, they chose 
the money.
  Now the argument might be made, ``Well, they did not undertake the 
health services they needed. They don't know any better.''
  Baloney. What this company found was that people began to shop 
around. They would be talking at the cafeteria and one of them would 
say, ``Well, the doctor wanted to charge me $9,000 and I asked around 
and I found a hospital that would do it for $5,500.''
  Even the president of the company says he had a medical condition 
that required him to get a prescription, as I remember, that was $55 or 
$60 a month, and he found he could get it for $12.
  This is the kind of thing people will do when they are given the 
chance to do it. And this bill does not allow them.
  Unfortunately, this is the bill we are going to consider. This is 
Senator Mitchell's bill and the medical savings are not in it.
  Other companies do it. I will use only one other--Forbes, Forbes 
Publishing. We are all familiar with that company: 425 employees. Their 
medical savings account works slightly differently but it is the same 
theory. They call it bonus dollars, and at the end of the year they 
match your bonus dollars. They put a certain amount of money in your 
account and if you do not spend it they will match it.
  The company saves money. In 1992, Forbes spent--they only have, bear 
in mind, 425 employees--they spent $398,000 less in 1992 than 1991, and 
$417,000 less in 1993 than 1992 on bonus payments to employees; 
$204,000 in 1992, $320,000 in 1993; 166 employees, 40 percent of the 
entire work force participated in this program and received bonus 
payments.
  Does the system work? You bet it does. When you are given an option. 
And the Clinton-Mitchell bill eliminates this alternative.
  What does the Clinton-Mitchell bill promise? I do not have time to go 
through this entire bill. I am going to zero in on just one major 
thing. During the rest of this debate I will zero in on some other 
major things. What it does promise is more regulation, more Government 
price control, more Government bureaucracy, less freedom of choice. I 
am going to take the issue of price controls right now. Price controls 
do not work. I have not found anybody who says price controls work. We 
thought they would work in Medicare. Do you know what the two biggest, 
most rapidly, continually growing programs are? The two that are under 
Government price controls: Medicare and Medicaid. That is price control 
for you. And it is no wonder. It is no wonder.
  Remember I said the poor are not dumb. The rich are not dumb either. 
You tell a doctor we will give you $1,000 under Medicare for a physical 
exam. All right. How much will they give me for a blood test, $50? How 
much for an EKG, $150? It is amazing how many tests you can add up, 
that are not part of the physical, that are added up. The well educated 
are smart, too
  I do not know why we have to learn this over and over. I could come 
here with a litany from Barry Bosworth. He used to support price 
controls. Remember Jackson Grayson during the Nixon price control days? 
It does not work. He says, ``Things crop up you cannot imagine, you 
cannot control it. It is like putting your finger on mercury.''
  But the Clinton bill wants to try it. The Clinton-Mitchell bill. What 
did Dr. Reischauer say? I remember Dave Durenberger so clearly the day 
Dr. Reischauer was testifying. He says, ``If we enact the Clinton 
bill''--this is before we had the Mitchell bill--``If we enact the 
Clinton bill we'll reduce our health expenditures by 1 percent. We will 
reduce them from 20.5 percent to 19.5 percent of gross domestic 
product.'' Senator Durenberger says, ``But they are at 14 percent now. 
That is going in the wrong direction.'' Then Dr. Reischauer adds, 
``That is if the Clinton bill works perfectly.'' That is if the price 
controls work. That is if the subsidies do not cost more than we think. 
That is if everything went right. We try to regulate, regulate, 
regulate and you cannot regulate enough. You cannot get your arms 
around it.
  Why do we not learn? Did you ever read the first appropriations bill 
this Congress ever passed--not this Congress, the country ever passed: 
The 1789 appropriation bill?

       Be it enacted by the Senate and the House of 
     Representatives of the United States in America in Congress 
     assembled, That there be appropriated for the service of the 
     present year, to be paid out of the monies which arise, 
     either from the requisitions heretofore made upon the several 
     states, or from the duties upon impost and tonnage, the 
     following sums, vis. A sum not exceeding $216,000 for 
     defraying the expenses of the civil list under the late, and 
     present government;

  That is the salaries of the employees.

       a sum not exceeding $137,000 for defraying the expenses of 
     the Department of War;
       a sum not exceeding $190,000 for discharging the warrants 
     issued by the late board of treasury, and remaining 
     unsatisfied;

  That is paying off the debt. I wish we would do the same thing now.

       and a sum not exceeding $96,500 for paying the pensions to 
     invalids.
       Approved, September 29, 1789.

  That is it. We ran the Government on that bill for a year. We did not 
have written in here how much each person working in the executive 
branch is going to get. We did not have departments with regulations. 
This is how we ran the Government for 1 year, and we left it to the 
President pretty much to determine how much different people got paid 
in his department. I do not know what Senators got paid in those days.
  Now what do we have? The chairman referred to it. What do we have 
now? Thank God, not in the chairman's bill. This bill--this bill, S. 
2357, which we only got--and as I understand the cost estimates that we 
have today are not the cost estimates for this bill, as I am told. It 
is the cost estimates on new things that are being drafted that we have 
not seen that will go as amendments to this bill; 62 pages of this bill 
relate to this allocation of residents-in-training programs. Or as we 
call them, ``academic health centers''--62 pages. We could run the 
whole Government on one page.
  Let me read you some of this gobbledygook.

      CHAPTER 1--OPERATION OF APPROVED PHYSICIAN TRAINING PROGRAMS

     SEC. 3031. FEDERAL FORMULA PAYMENTS TO QUALIFIED ENTITIES FOR 
                   THE COSTS OF THE OPERATION OF APPROVED 
                   PHYSICIAN TRAINING PROGRAMS.

       (a) In General.--In the case of a qualified entity that in 
     accordance with section 3032 submits to the Secretary an 
     application for calendar year 1997 or any subsequent calendar 
     year, the Secretary shall make payments--

  And it goes on.

       (2) Entities included.--The term ``qualified applicant'' 
     may include an approved physician training program, teaching 
     hospital, medical school, group practice, an entity 
     representing two or more parties engaged in a formal 
     association, a community health center or another entity 
     operating an approved physician training program.
       (d) Treatment of Podiatric and Dental Residency Programs.--
     Except as provided in section 3034, for the purposes of this 
     subpart, an approved physician training program includes 
     training programs approved by the Commission on Dental 
     Accreditation or the Council of Podiatric Medical Education 
     of the American Podiatric Medical Association. This 
     subsection shall not apply for purposes of subpart B.

     SEC. 3032. APPLICATION FOR PAYMENTS.

  And as specified by the Secretary--meeting the condition as specified 
by the Secretary--as the Secretary may require. As the Secretary 
determines.
  And ``Certain entities--If an applicant under paragraph (1) is an 
entity representing two or more parties, (A) the application''--on it 
goes, 62 pages of this stuff.
  Mr. MOYNIHAN. Will my friend yield for a question?
  Mr. PACKWOOD. On that subject? I will try to.
  Mr. MOYNIHAN. We are not going to have that section.
  Mr. PACKWOOD. All right. We are not going to have that section. I 
hope we are not going to have that section.
  But think what we have come to in this country if that is what we 
have to do to make sure that some medical student is willing to live in 
Mingo County, WV. Why do we just not have a doctors' draft? Why do we 
not just draft them and say you are going to Mingo County, WV? It is a 
lot cheaper than this system.
  Now I want to go to cost containment. I tell you I spent all weekend 
on this section of the bill, trying to figure out how it works. I went 
on the Finance Committee 20 years ago. I introduced President Nixon's 
bill 20 years ago. I spent 20 years dealing with Medicare and Medicaid. 
I have a reasonable knowledge--reasonable--of this subject. And I could 
not grasp exactly how this cost containment section works.
  I thought, well, maybe the Democrats will help me. So I got this 
book, ``Health Care Reform Briefing Book,'' put out by the Democratic 
Policy Committee, dated yesterday. I turned to the cost containment 
section. Do you know what it says? ``No contents were included for this 
section.'' No wonder, they cannot understand it either.
  So here goes, here is my understanding of it as best I know. And it 
relates to a concept called ``community rating.'' Before we go any 
further, we should understand sort of what community rating is. Let us 
take automobile insurance, for example. Let us say you have a wild 20-
year-old who has three driving while intoxicated convictions and seven 
wrecks and 31 tickets. And you have a 55-year-old teetotaling 
grandmother who has never had a ticket and never had a wreck. Under 
community rating they would get the same insurance. That is pure 
community rating.
  Mr. DOMENICI. Same cost.
  Mr. PACKWOOD. The fact that he is going to cost an insurance company 
$15,000--if they are lucky--a year and the grandmother is going to cost 
them nothing means they will each pay $7,500. That is community rating. 
We do not do that with auto insurance. What we say is that the kid is 
going to pay a lot more than the grandmother. And not only do we say 
that, we have different rates within States. We pay a lot more in 
Washington, DC, than you pay in Richmond, VA. You pay a lot more in New 
York City than you do in Elmira. We do not have pure community rating. 
We do not even have it within States because we say it is not fair. 
And, if we had pure community rating on health--pure--what we would say 
is a healthy 20 year old--to be very frank, young males on average are 
not very expensive.
  There are the occasional ones you read about, they crash their 
motorcycle. But the average 20-year-old is pretty healthy. He does not 
cost people much. He does not cost insurance companies much if he's 
insured.
  But if you had pure community rating, you would take this healthy 20-
year-old and you would take a sick 50-year-old and you would say--and 
it is about a 4\1/2\-to-1 ratio in insurance adjusting now. If the kid 
cost you 1,000 bucks, the 50-year-old cost you about $4,500. Round it 
off to six and we have a total of $6,000. We charge each $3,000. That 
would be community rating for health.
  We do not do that. We charge older people more than we charge younger 
people. We do not even do it in the health provider area. It costs more 
to get health care in Miami and New York City than it does Minneapolis 
and Portland, and their rates reflect the different geography. So here 
is what this bill, I think, has tried to do with price controls.
  First, they come to the community. You are going to have a community 
rate. Everybody with 500 or fewer employees, every association, every 
multiple employer welfare association--MEWA's as we call them--are 
swept into this community rate. About 30 million people now have 
insurance they like. They may be self-insured. They may be companies 
smaller than 500 but buying from Continental Casualty, Aetna, or 
somebody else. They are swept into this community rate whether they 
like it or not.
  Now, the Clinton-Mitchell bill lets each State set up its own 
communities, geographic areas. And for all of you and all of us--we all 
do it here--that have ever served anyplace, one of the great games, 
legerdemains of legislating, is how do you carve out and save your 
little area from having to share the expenses of some other area.
  Florida, which has its own State health system, has 67 different 
community rating areas. They have one for each county--67. This bill 
says a community has to have at least 250,000 people. But that means 
California could have 120. I do not think they would have that many, 
but I guess California could have 40 or 50. New York could have 72; 
Texas could have 72; Pennsylvania could have 48.
  I do not think they are going to have that many, but I am telling 
you, you are in a State, you are the Governor, you are in the 
legislature, every one of us knows that the smaller, less expensive 
areas do not want to be lumped in with the big city.
  I would wager in my own State of 2.9 million people, we will have 
five to seven geographic areas. Portland, the metropolitan area, is 
about 1 million people. That would be one. The rest are what we call 
the Willamette Valley, south of Portland but reasonably populous, will 
be another; the coast will be another; southern Oregon is a fourth one; 
eastern Oregon is a fifth, and you might split that in two because it 
is a big area. So five to seven in a relatively smaller State.
  I do not know how many of these geographic areas we are going to have 
in the Nation, because each State will get to choose their own, but I 
am going to take a guess at hundreds in the Nation.
  Now, in each geographic area, the Secretary of the Treasury, in 
conjunction, in consultation with the Secretary of Health and Human 
Services, is to community rate six different classifications: Single 
adult, single adult with children, married couple without children, 
married couple with children. And then we added two new ones because of 
an amendment from the Senator from Michigan: Single child and two or 
more children. The reason we have this is because in the Mitchell bill, 
we go up to, I recall, 200 percent of poverty for a family, but for 
this particular amendment Senator Riegle covers, we go to 240 percent 
of poverty. Therefore, you can have a family above the 200 percent, but 
they have a child and the child is eligible, so you have to have a 
class for that child.
  Here are six classifications. The last two have never had insurance 
policies written for them. Never. These are brand new. You have six of 
these in each geographic area and then--I love this:

       The Secretary--

  In determining these classifications--

     shall use information of the type described in subparagraph 
     (B), establish an adjustment for each community rating area 
     which takes into account the differences among community 
     rating areas, including variations in health expenditures, in 
     rates of uninsurance and underinsurance, and in the 
     proportion of expenditures for services provided by academic 
     health centers.
       (i) information on variations in premiums across States and 
     across community rating areas within a State (based on 
     surveys and other data);
       (ii) information on variations in per-capita health 
     spending by State, as measured by the Secretary;
       (iii) information on variations across States in per-capita 
     spending under the medicare program and in such spending 
     among community rating areas within a State under such 
     program; and
       (iv) area rating factors commonly used by actuaries.

  What is that? We now have six different plans we have to rate. We now 
have several hundred different geographic community areas. You are 
going to have different rates in different States.
  Then you know what else we are supposed to do? Now we are supposed to 
take each plan that an insurance company writes and age-adjust it. So 
that if Aetna has a policy and their average person is 52 years of age, 
and Met Life has one and the average person is 41 years of age, Aetna's 
is going to be more expensive because the people are older. And you 
have to adjust for that variation in every area on every plan.
  Now what happens? If an insurance company sells a policy that exceeds 
the permissible rate--the permissible rate is this blended premium that 
you have finally come to after all of these figures have been thrown in 
for every one of these geographic areas. Let us say that the policy for 
a married couple without children in Portland is $2,700. In Eugene, OR, 
it is $2,400. In Burns, OR, it is $1,900. These are all in different 
areas.
  Now you are Metropolitan Life, or you are Prudential. What do you do? 
You pay 25 percent of the difference between what this blended average 
rate is supposed to be and what you charge. There is a tax of 25 
percent.
  So let us say you are in Eugene and it is $2,400 and you sell a 
policy for $3,000, $600 too much, 25 percent tax, $150 to be split 
between the insurance company and the providers on every policy: $75 
from the providers--Dr. Jones, Dr. Smith, Sacred Heart Hospital, the 
local chiropractor, if they are included--and you as the insurance 
company are to pay the whole tax. You are then to go back and get it 
from the hospital or get it from the doctor. If they do not pay you, 
you can sue them.
  Now you are a doctor and you are treating people. You are an 
appendectomy specialist. You are treating people. You charge $1,000. 
You do not realize, you poor dumb fool, that Aetna can pay $1,000, but 
if Prudential does, you are going to have to be taxed on it because 
they have a different policy and a different base. That is what is in 
this bill on cost containment alone.
  I could go on the rest of the night on this subject. This bill is 
full of this kind of mischief.
  If we would just sit back and let the market work--it is going to 
work well for the next 5 to 6 years. The competition is just setting 
in. The reason I say for the next 5 or 6 years is because at some place 
you are going to reach an irreducible minimum below which a hospital 
cannot operate and it goes bankrupt. You are going to reach an 
irreducible minimum in which a doctor says, ``I'm no longer going to 
practice medicine, I'm going to be a plumber and make more money.'' He 
goes out and becomes a plumber.
  At that stage, competition cannot squeeze any more out. No bill--not 
the Mitchell bill, the chairman's bill, not Dole-Packwood--addresses 
the ultimate problem which is really a theological problem. It is not a 
medical problem. How much of our gross domestic product do we want to 
spend on medicine?
  The doctor can tell you, in all likelihood, how long you are going to 
live or how long your parent might live. The decision whether to keep 
them alive for 3 months or 9 months, and maybe the difference in 6 
months is a couple hundred thousand dollars, is not a medical decision. 
Maybe it is a financial one for you or a theological decision.
  America has not come to that yet. Interesting, most of the socialized 
medicine countries have. They cannot afford not to. In England, you 
might not get kidney dialysis if you are over age 65. They have better 
things to do with the money.
  I plead with this Congress, this Senate, do not pass a bill that 
attempts to regulate us into what cannot be regulated.
  And the danger is once we start down this road, as every other 
country has learned, trying to undo it becomes almost impossible.
  Mr. President, in the remainder of this debate, I will have other 
examples like cost containment. I do not want to trouble this Senate 
more tonight, but I wanted to use that as an example of the folly and 
foolishness we will perpetrate on this country if we pass this bill.
  I thank the Chair.
  Mr. MOYNIHAN addressed the Chair.
  The PRESIDING OFFICER. The Senator from New York.
  Mr. MOYNIHAN. I ask unanimous consent that the following individuals 
be permitted access to the Senate floor during consideration of the 
Health Security Act: Sheila O'Dougherty, employee of the Department of 
Health and Human Services, who is on detail to the Committee on 
Finance; and Drs. Bill Braitwaite and Karen Hein, who are assisting the 
Finance Committee during the consideration of the health care 
legislation.
  The PRESIDING OFFICER (Mr Wofford). Without objection, it is so 
ordered.
  Mr. MOYNIHAN. I thank the Chair.
  Mr. President, nobody, no person in the Senate, few persons in 
American history, have given as much of their time and intelligence, 
energy and conviction, to the question of health care reform than the 
senior Senator from Massachusetts, my good friend, the Honorable Edward 
M. Kennedy.
  I yield to him such time as he may require.
  Mr. KENNEDY. Mr. President, I thank the Senator from New York very 
much for his very kind and generous comments. We have had a long and 
continuing friendship. I have, as do all the members of our family, 
great respect for the Senator's contributions not only in the Senate 
but the public life of this country.
  Mr. President, I know we will have an opportunity to respond to some 
of these points that were made at some length a little earlier, but I 
think before we get into a discussion of the alleged problems of 
community rating you ought to understand that all Medicare is community 
rated.
  And when we start talking about how we are going to encourage medical 
schools to try to provide family physicians which are necessary to 
treat working families in this country, we should understand that much 
of medical education is paid for by the public and they ought to be 
able to have some voice in the decision.
  When we are talking about all those young, healthy people that we are 
so concerned about, in listening to our minority leader saying that 
tonight I speak for all those young Americans that are not covered, let 
us understand that when they do get in that automobile accident, they 
only pay 21 cents out of every medical dollar that is necessary for 
their health care. Who pays for the other 79 cents? It is the working 
families of this country that are playing by the rules day in and day 
out.
  So we will have a good opportunity to go through many of these 
points, some of which have been raised and others that will be, and 
they should be debated and discussed.
  Mr. President, I am struck by this historic moment. I think every 
year the Members of this body cast hundreds of votes. All of them have 
an impact on the future of the Nation, but few will ever be as 
significant as the choices we make in the next several weeks.
  When President Franklin D. Roosevelt rallied the Nation to deal with 
the Great Depression, he declared, ``This generation has a rendezvous 
with destiny.'' This week, the Senate also has a rendezvous with 
destiny.
  This Sunday, August 14, marks the 59th anniversary of the Social 
Security Act. President Roosevelt's comment on signing the Act applies 
equally to the work that lies before us:

       Today, a hope of many years' standing is in large part 
     fulfilled. . . . If the Senate and the House of 
     Representatives in this long and arduous session had done 
     nothing more than pass this Bill, the session would be 
     regarded as historic for all time.

  This Congress has the opportunity to prove itself worthy of similar 
praise in the weeks to come.
  We stand here today with the health of 260 million Americans at 
stake. We must decide whether we will guarantee health insurance for 
every citizen--or whether we will continue to let millions of fellow 
citizens suffer every year from conditions they can't afford to treat, 
while millions more worry about losing their insurance.
  On a personal level, this is a special moment for me. I introduced my 
first universal health care plan in 1970, and I have been working on 
this issue ever since.
  One of my strongest memories is a series of hearings we held aound 
the country in the 1970's, where we learned of the health care 
tragedies affecting Americans all over the country.
  I remember especially one family, the Corbetts of Massachusetts. The 
child had spina bifida. The Corbetts' insurance did not cover the costs 
of therapy for their son, and their unpaid bills mounted rapidly. 
Hounded by bill collectors, Mrs. Corbett began to worry about the cost 
whenever her children needed care.
  Once, her daughter urgently needed hospitalization after a 
convulsion. She did what she had to do. But I'll never forget what she 
told me, ``I put my child in the hospital, and I cried. I thought we 
were going to be wiped out for the rest of our lives.''
  Think of the pain suffered by the Corbett family almost two decades 
ago. Multiply it by all the American families who have faced similar 
crises since then. Hasn't there been enough fear and worry?
  Should we study the problem for another year, or another decade, so 
that more American families find themselves in the Corbetts' shoes? 
Think of all the suffering of so many millions of Americans that could 
have been avoided if we had acted before now.
  I held another round of hearings around the country in 1989. Whether 
we were in New York, California, Missouri or Georgia, the issues were 
the same. Too many people without insurance. Too many people denied the 
care they needed.
  Too many people bankrupted by the cost of the care they received.
  I still remember Joseph Sheppard of Sparta, GA, who endured a great 
deal of pain, because he had to ignore his doctor's advice that he 
needed hospitalization and surgery. As he told me, ``I am a proudful 
man, and I did not want to make a bill that I could not pay out of my 
pocket and would put in debt for the rest of my life.'' No American 
should ever have to make that choice.
  Great as the need was for universal health insurance in those years, 
the need is far greater today. The number of uninsured is higher and 
rising faster. Costs continue to escalate. No American family can feel 
secure that the health insurance protecting them today will be there 
tomorrow if a serious illness strikes. Yet, some still say there is no 
health crisis in America.
  When earthquakes struck California, when floods swamped the Midwest, 
when hurricanes hit Florida and South Carolina, we called it a crisis.
  Senators from those States stood here and called for emergency 
assistance. We acted swiftly to aid the sick and wounded, to repair the 
damage, to help devastated families and businesses get back on their 
feet.
  But the crisis we face in our health care system dwarfs these natural 
disasters. More than 10 million children have no health coverage. They 
don not get the preventive care they need.
  Too often, sicknesses that could be prevented or cured at little cost 
develop into life-threatening conditions that cost vast sums to treat, 
if treatment is possible at all.
  Every minute, 46 Americans lose their insurance. Should chronic 
illness happen to strike them, they may never obtain coverage again, 
due to their pre-existing condition. How will they pay for treatment on 
their own?
  Premium costs are soaring out of reach for the middle class.
  Since 1980, the average family's health insurance bill has more than 
tripled. To keep up with the bills, many families are giving up dreams 
of their own home or college for their children. Others are giving up 
their insurance, gambling that they will not get sick.
  Older Americans on fixed budgets are struggling with the costs of 
medication.
  Too many have to choose between buying food and buying prescriptions. 
It is a crisis for them. It is a crisis for the country. If anyone in 
this body visits a senior citizens' home and asks them to raise their 
hands about how many of the seniors are paying more than $25 a month 
for their prescription drugs, 75 percent of the hands will go up. If 
you ask them $50, or $75, 30 or 40 percent of the hands goes up, and 
the numbers are increasing.
  This crisis is different in one obvious way. It cannot be captured 
easily on television. Instead of rising rivers and rushing winds, it 
comes quietly, a little piece of paper in the mail canceling a family's 
coverage or raising their premiums. But its consequences are just as 
devastating. People are losing their hopes, their homes, their savings, 
and even their lives.
  Every Member of the Senate I am sure has talked to as many people as 
I have, people, who through no fault of their own, face crushing health 
and financial burdens because the health insurance system has let them 
down.
  As we approach each vote, I ask you to remember these individuals. 
They desperately need your help. They are not Harry and Louise. They 
have no trade organizations. They have no lobbyists. They cannot spend 
hundreds of thousands of dollars in advertisements to fight reform. The 
only power they have lies in our votes and in our commitment to serve 
the people, not the special interests.
  We in Congress are fortunate. We have guaranteed health insurance 
paid for in large part by our employer. Is it not about time we did the 
same for the people who employ us?
  We heard a Senator yesterday demand that we wait until next year to 
act. We know the difference it will make if we put health reform off 
for another year. We have put it off for too many years already. This 
is not an academic debate. Peoples' lives and health are at stake. 
Every year we delay, we condemn more American children, women, and men 
to needless suffering and hardship. The American people know that the 
time for study is over, and the time for action has come. And no 
excuses are in order.
  It has been 80 years since Theodore Roosevelt first proposed national 
health insurance as part of the Progressive Party platform in 1912. 
Franklin Roosevelt considered such a plan again in the 1930's, and 
Harry Truman called for it in the 1940's. We finally made progress in 
the 1960's when President Kennedy proposed Medicare and President 
Johnson signed it into law. Medicare was a large step toward meeting 
the Nation's health care crisis in those days. That crisis primarily 
affected the elderly, and it would have been irresponsible for Congress 
not to have acted. But as important as it was, it did not go far enough 
because too many were left out.
  President Nixon knew that. So did Senator Packwood. That is why they 
introduced the Comprehensive Health Insurance Program legislation 20 
years ago. They based this bill on the principle of shared 
responsibility, requiring employers to offer and contribute to health 
insurance for their employees. We had hearings with Elliot Richardson 
and Joe Califano pointing out what President Nixon suggested with 
regard to shared responsibility. That was part of the American 
responsibility and was suggested and recommended by President Nixon a 
number of years ago.
  Unfortunately, the rhetoric of the naysayers has not changed much in 
all these years. A generation ago they said Medicare was ``socialized 
medicine.'' And so today they are recycling the same, old, tired 
charges against the Mitchell bill.
  While we have delayed and debated, every major industrial nation in 
the world, except South Africa, has acted to ensure that all its 
citizens have health insurance. And President Mandela has pledged to 
make comprehensive health insurance for all one of his top priorities 
in South Africa. These countries have already made the fundamental 
right to health care reality for all of their citizens. If Germany, if 
France, if Canada, if Great Britain, if Italy, if Ireland, if Denmark, 
and if Spain can provide coverage for all their citizens, we can do it, 
too. And we can do it and must do it now.
  We have been debating health insurance since the beginning of this 
century. Now we stand poised to enter a new century, and there are 
still those in this body who say, ``We need more time. We have to study 
it further. This is so complicated. Can't we just wait another year or 
maybe the year after that or the next century? Is it really that far 
off?''
  The American people deserve a comprehensive response to this crisis. 
They deserve it this year, and the Mitchell bill that the Senate is now 
considering is a serious, substantive proposal to deal with the crisis.
  During the course of this debate, the guardians of the status quo 
will try to mislead the American people about the contexts and 
consequences of this legislation. They will distort it. They will 
misrepresent it. The powerful, vested interests opposed to meaningful 
change have already spent tens of millions of dollars trying to 
discredit the President's plans. Now that the final decision on health 
reform is at hand, they will stop at nothing to scare the American 
people into rejecting it.
  We have heard it even in the course of the discussion this evening--
talking about bureaucrats, appeals to fear; do not do it now; what we 
propose is bad; what is in the Mitchell bill is bad; it is complicated; 
it is going to cost too much; let us just have modest adjustments and 
not confront the central challenge.
  Mr. President, the debate in the House and Senate in the weeks ahead 
is the best possible antidote to these misrepresentations. The American 
people will hear the phony objections, and the outright lies. But they 
will have the opportunity to hear the truth and make up their own 
minds.
  I would like to begin the process right now by outlining clearly for 
the American people the five biggest myths about the Mitchell bill so 
that people can recognize them when they are repeated over and over and 
over and over and over in the weeks ahead.
  The first big myth about the Mitchell bill is that it will deny the 
American people the right to choose their own doctor and hospital. The 
truth is that the Mitchell plan will guarantee every American the right 
to choose their own doctor and stay with their own doctor. That right 
will become as rare as the American buffalo if we do not act now to 
protect it. It will be lost. It will be gone.
  Today, half of all Americans offered coverage by their employers have 
no choice of health plan. If the plan offered by their employer does 
not cover their family doctor, they are simply out of luck. Under the 
Mitchell bill, every worker must be offered at least three health plans 
by their employer, and at least one of those plans must guarantee 
freedom of choice of doctor and hospital. No one has that guarantee 
today. And in the unlikely event that someone wants to bypass their 
insurance plan altogether and pay a doctor directly out of their own 
pocket, the bill clearly grants that right as well.
  The President's plan was criticized because it required most 
Americans to buy their coverage through large mandatory health 
alliances. In the Mitchell bill, mandatory alliances are rejected and 
replaced by voluntary purchasing cooperatives, like credit unions, and 
co-ops. No American is required to buy coverage through them if they do 
not want to.
  The second big myth about the Mitchell bill is that it will reduce 
the quality of American medicine. In fact, the bill will improve 
quality. The proposal will invest additional billions of dollars in 
biomedical research, in the academic health centers and medical schools 
that train doctors of the future, and provide the most advanced care to 
the American people and in outcomes research so that the most effective 
treatments can be identified.
  The most important guarantee of quality in the Mitchell bill is that 
most Americans--everyone except those who work for the largest 
businesses--will be entitled to buy their coverage from the same 
Federal Employees Health Benefit Program used by every Member of 
Congress and the President too--10 million Federal employees are in it 
today. I do not hear any complaints during the course of this debate 
from any of our colleagues on the other side about their Federal 
employees' insurance that is shared by 10 million of our fellow 
citizens, and that the Mitchell bill makes available to the American 
people.
  I have long felt that every American should be entitled to the same 
standard of care that we in Congress demand for ourselves and our 
families. And this bill will guarantee it. If it is good enough for the 
President, good enough for the Senate, and good enough for the House of 
Representatives, it is good enough for every man, woman, and child in 
America. That is in the Mitchell bill.
  The third myth about the Mitchell bill is that it imposes massive new 
taxes on the American people. The fact is that the vast majority of the 
financing in this bill comes from savings in existing Federal health 
programs. Some of the savings under the bill will be used to finance 
long-term care and prescription drug benefits that senior citizens need 
and deserve.
  The opponents of the bill propose to cut Medicare, but they do not 
provide the benefits that elderly need in return. There are new taxes 
in this bill, but they are not the major source of financing, and they 
are a price well worth paying to achieve health security.
  The two most important and significant new taxes are a phased-in 
increase of 45 cents a pack on cigarettes and the 1.75 percent 
assessment on health insurance premiums.
  In view of the $68 billion in health costs that smoking adds to our 
national health bill and the savings that can be achieved by 
discouraging young people from smoking, the cigarette tax is one tax 
increase that I am confident the vast majority of the American people 
support.
  The 1.75 percent assessment is to expand biomedical research and to 
support the teaching hospitals and medical schools that contribute so 
much to assuring that America has the world's best quality care. I 
think it is money well spent.
  The fourth myth about the Mitchell bill is that it imposes 
unaffordable mandates that will damage small business. I support shared 
responsibility for health care coverage between business and workers. 
This is the way we finance Social Security and Medicare. Shared 
responsibility on Social Security. Shared responsibility on Medicare. 
This is the way most people get their coverage today--shared 
responsibility. Every American job should carry with it a guarantee of 
affordable health care. In fact, I would like to see the bill 
strengthened as the debate moves forward.
  But the Mitchell bill is not a mandate bill. It is a universal 
coverage bill. It is a cautious, moderate bill that follows the 
recommendations of many conservative critics of the President's program 
by providing subsidies to low-income citizens while reforming the 
health insurance market to make it more competitive and attempting to 
achieve universal coverage in a voluntary manner. Required 
contributions by business are a last resort, applied only if everything 
else fits.
  The final myth about the Mitchell bill is that it sets up burdensome 
regulations and bureaucracy that will put the Government too deeply 
into the practice of medicine. It is utterly nonsense to call this a 
Government takeover of the health care system. Clearly, there are new 
regulations in the Mitchell bill. But those regulations are designed to 
prevent the insurance company abuses that have contributed to the 
disgraceful state of the health care system today.
  Here are some of the things that the regulations in the Mitchell bill 
do:
  No health plan can turn you down because you are sick or unemployed, 
or because of the color of your skin, or because of where you work or 
live. I think that is a regulation most American people will support. 
They cannot turn you down if you are sick, or unemployed, or because 
the color of your skin, or because of where you work or live. That is 
one regulation. Let us hear the opposition to that.
  If a health plan is available to some of the people in a geographic 
area, it has to be available to all of the people in the geographic 
area. It cannot be just sold in the suburbs and not in the farm 
communities or in the cities. The American people understand that kind 
of regulation. I think the American people would feel that that is a 
fair regulation.
  Once you have signed up with an insurance company, they cannot drop 
you because you are sick. The American people overwhelmingly support 
that kind of reasonable regulation. Too many of them are being dropped 
today in every community of this country. We do not permit it, by 
regulation. Let us hear those that are opposed to that type of 
regulation.
  Every insurance plan must have a time when you can enroll if you want 
to and must let you know that it is available. They cannot send out 
their brochures only to the people they think are healthy. They cannot 
tell you when you ask to enroll that there is no more room in the plan, 
because they do not like the way you look. We are not going to permit 
that. Maybe, you should not have to have a regulation, but you do 
because that is the practice today by too many insurance companies and 
that will be addressed.
  I could go on and on. These are the regulations in the bill, but they 
are regulations to protect the people's right to health care. The 
special interests may want to continue their current abusive practices 
without public oversight or control. But that is not what the people 
want. There is not one word in this bill that would provide any new 
restrictions on the ability of a doctor and patient to decide together 
what treatment makes the most sense for the patience--none.
  The tactics of the opponents of reform are not new. When I first came 
to the Senate in 1963, the country was in the middle of the debate over 
Medicare that finally resulted in the passage of that program in 1965. 
We heard then from the prophets of doom and division that Medicare was 
socialized medicine. They said the country could not afford it. They 
said it would put a bureaucrat in every doctor's office and in every 
examining room. They said health care would be rationed, and the 
hospital doors would be shut on December 1 of every year because the 
money would run out. I have the statements right here. Those 
preposterous charges were not true then about Medicare, and they are 
not true about the Mitchell bill today.
  As we discuss the Mitchell bill, it is important to understand the 
two alternatives. The first is to do nothing, and that is simply 
unacceptable. The second is to adopt the Republican proposal, and that 
would be equally wrong.
  Senator Dole's proposal has already been cosponsored by 38 of his 
Republican colleagues even before it was written in legislative 
language. But the outline of the program makes it clear that the Dole 
bill will not guarantee universal coverage. It will do little for the 
hardworking middle class families who cannot afford to insure their 
families, and who need help the most. It will not control costs. It 
will cut Medicare while offering nothing to the senior citizens--not 
long-term care, not prescription drug coverage. It is another example 
of too little, too late.
  It is clear where the American people stand. The vast majority 
support universal coverage, despite months of irresponsible attacks by 
those who profit from the status quo. Most Americans support a system 
that shares costs between employers and employees as well.
  The key questions that face the Senate now are these: Are we 
listening to the pleas of the American people or to the special 
interest pleaders? Will we guarantee affordable health insurance for 
all, or settle for partial steps that will only make our current 
problem worse? Will we remember the people of this country, or will we 
bow to the special interests? Will we seize this moment to make history 
and establish a landmark that will rank with Social Security and 
Medicare, a milestone that will be honored and remembered for years to 
come? Or will we let the opportunity slip from our grasp because we 
lack the courage to do what is right for the American people?
  Medicare was a defining test for a Congress a generation ago. Social 
security was a defining test in the years of the depression. This 
legislation is the defining test for Congress today. This is the job 
the American people elected us to do, and I urge the Senate to get the 
job done.
  Mr. MOYNIHAN. Mr. President, will the Senator from Massachusetts 
allow me to thank him for his extraordinary statement that comes out of 
30 years of effort in this area. No one else in this Chamber can say as 
much. I want to say thank him.
  I yield the floor.
  Mrs. KASSEBAUM addressed the Chair.
  The PRESIDING OFFICER. The Senator from Kansas [Mrs. Kassebaum] is 
recognized.
  Mrs. KASSEBAUM. Mr. President, as the ranking member of the Labor and 
Human Resources Committee, I would like to acknowledge the comments of 
the Senator from Massachusetts [Mr. Kennedy]. As chairman of the Labor 
Committee, he has certainly spent years dedicated to national health 
care policy. I do not agree with him on his interpretation of what we 
need in terms of health care policy, but there is no one who has cared 
more compassionately and passionately about this issue.
  As one who introduced, along with Senators Danforth and Burns in the 
Senate and Congressmen Glickman and McCurdy in the House, Congress' 
first bipartisan comprehensive health care reform bill 2\1/2\ years 
going, I remain deeply concerned about the problems in our health care 
system--particularly rising costs.
  As an outsider I note, Mr. President, that the bill we introduced 
2\1/2\ years ago, which we believed to be a substantive comprehensive 
bill, was just 190 pages long.
  Today we are looking at the majority leader's bill, which is 1,410 
pages long. It has grown in strange and mysterious ways.
  It is with deepening disappointment that I have watched the evolution 
of the reform debate in recent months. The leadership legislation that 
is now before us reflects an unfortunate accumulation of missed 
opportunities.
  We had an opportunity to simplify the current administrative 
nightmare that is health insurance. Instead, the bill before us is a 
1,400-page tangle of new bureaucracy, red tape, and Government 
regulation.
  We had an opportunity to focus on the root of the public's concern, 
namely, rising costs. Instead, the bill before us, like the Clinton 
plan that preceded it, has been constructed almost as if cost were no 
object. Far from streamlining the costly promises in the Clinton 
proposal, the Mitchell bill would create at least four new entitlements 
and cost taxpayers a projected $1.1 trillion over the next decade.
  Regrettably, the prospects for reasonable reform have been 
jeopardized, both by those who do not believe any bill goes far enough 
and by those who believe every bill goes too far. Meanwhile, interest 
groups of all stripes have spent over $100 million doing their best to 
arouse the fears and worries of the public.
  Mr. President, critics will be spending much time in the coming weeks 
pointing out flaws and problems in the Mitchell proposal. In 
particular, the issue of the employer mandate and its accompanying 
trigger will probably take center stage in some of the debate.
  I oppose employer mandates because they would threaten both wages and 
jobs, and I intend to vote against any provision that would establish 
such mandates, either directly or indirectly.
  However, I do not consider the employer mandate to be the most 
alarming aspect of the Mitchell bill. Indeed, I worry that heavy focus 
on the mandate may divert needed attention from other, more serious 
problems in the bill.
  The ranking member of the Finance Committee, Senator Packwood, gave a 
dramatic illustration of some of those other problems. I think they are 
enormously important for us to consider.
  Far more troubling than the mandate, in my view, is the fact that the 
Mitchell bill would impose an unprecedented forest of new Government 
regulations on our health care system, but with little or no 
consideration of the dramatic changes already taking place in the 
marketplace,  independent of Federal legislation.

  Mr. President, the traditional world of free choice of doctor, the 
independent practitioner, home visits, and the community hospital, is 
rapidly disappearing, bowing to pressure from ever more sophisticated 
purchasers of care, especially employers looking to restrain costs.
  In its place has come an aggressive expansion of managed care and a 
seemingly endless progression of mergers and consolidations as 
insurers, doctors, and hospitals link up in the formation of massive 
networks of care.
  Some of these changes are positive. Many are troubling. But either 
way, they are redrawing America's health care map just as Congress is 
struggling to chart a course for reform. The danger is real that 
Washington may soon pass a bill that could be obsolete before it 
becomes law.
  The startling upheaval in the health care system is very much in 
evidence in my part of the country. I believe it is very important that 
we understand, Mr. President, what is indeed happening. This spring, 
for example, the third-largest insurer in Kansas City, CIGNA, announced 
plans to terminate its HMO contracts with nine area hospitals and 500 
physicians. To many, CIGNA's move was a chilling illustration of 
managed care's growing power to dictate terms to doctors and hospitals, 
and to limit patient choice. Defenders counter that such selective 
contracting with health care providers is essential to a health plan's 
ability to manage costs and to offer reasonable rates to its 
subscribers. Ten years ago, managed care represented less than 5 
percent of the health insurance market. Today, over 40 percent of 
Americans are enrolled in some kind of managed system, and the number 
is growing.
  Managed care's main attraction, especially for employers, is its 
ability to contain costs, mainly by creating integrated systems of care 
in which participating health care providers share a financial stake 
with the insurer in managing costs.
  Mr. President, the once clear lines distinguishing those who pay for 
insurance from those who provide it is becoming increasingly blurred. 
Indeed, even as we in Congress try to write legislation to regulate 
doctors, hospitals, insurers and employee benefit plans, it is becoming 
ever more difficult to determine where one ends and the other begins.
  The downside, many say, is that managed care's heightened attention 
to the bottom line sometimes compromises the personal connection 
generations of Americans have come to expect from their family doctor, 
community hospital, or local visiting nurse. The insurance industry's 
``Harry and Louise'' television ads would have us believe that it is 
legislation in Congress that threatens America's choice of doctor. The 
truth, however, is that this is already happening as the health care 
market changes, and it will continue to do so even if Congress does 
nothing.
  Similarly, many of those who complain loudest about the evils of 
socialized medicine are themselves the pleased beneficiaries of 
Medicare, which, as many forget, is run by the Federal Government and 
financed substantially by tax dollars.
  Increasing cost pressure is also triggering a virtual frenzy of 
consolidations and mergers in the health care industry. Perhaps, the 
most viable example is the case of Columbia/HCA, which has recently 
moved aggressively in markets across the country. Specifically, a 
series of acquisitions over the past year has propelled the Louisville-
based Columbia into the largest hospital system in the country, with 
nearly 200 hospitals nationwide and annual revenues of more than $10 
billion.
  In my State, Columbia has recently purchased five hospitals and 
several outpatient surgery facilities, and the company is currently 
exploring further purchases elsewhere in Kansas.
  In Kansas City, all of the hospitals in the metropolitan area have 
now become part of one or another health network or chain. The 
Government-owned facilities, like the VA, are the only exceptions. Even 
in Wichita, KS, the transactions have become so numerous that the local 
paper has published a telephone line asking readers to call in 
information about impending health care deals.
  To some extent, a shakeout of the health care industry is overdue and 
probably healthy. For years, hospitals and doctors competed not on the 
basis of efficiency, but rather on who could provide the highest volume 
of care. The result, unfortunately, has been the creation of 
significant and expensive overcapacity in the system.
  According to some estimates, there are as many as 250,000 underused 
hospital beds in the United States, about 30 percent of the total. In 
Kansas City, which has 25 hospitals, some  facilities regularly dip 
below 50 percent occupancy.

  On the other hand, no one yet knows what the end result of the 
current consolidations will be. The power of giants, like Columbia, is 
approaching the point that in some parts of the country whole markets 
are becoming dominated by a single health care conglomerate.
  What happens if the company goes bankrupt? Who picks up the pieces? 
In a marketplace of giants, can we have confidence there will be enough 
competition to keep the players responsive and honest?
  Congress is rarely shy about tinkering with things it does not fully 
understand, and health care is no exception.
  Mr. President, I believe caution is in order. We might do well to 
hold off enacting sweeping reforms we do not understand long enough to 
see what kind of health care system emerges from the current market 
changes. We may just find that much of the streamlining and efficiency 
we hoped to achieve through legislation has happened on its own. If 
not, we will at least have a clearer picture of the kinds of problems 
that we need to fix.
  The Mitchell legislation is especially Byzantine in the complexity of 
Government regulation it would impose on our changing health care 
system. In this regard, it is even more heavy-handed and 
bureaucratically burdensome than the original Clinton proposal.
  I do not quite understand actually how it has come to be so much more 
complicated, or why.
  In talking about health reform, it is tempting to focus on the high-
profile questions, such as taxes, mandates, or price controls. In the 
case of the Mitchell bill, however, it is the bill's extensive 
regulatory underbrush that is likely to have the greatest impact on the 
kind of health care average Americans will have to deal with in decades 
to come.
  The leader's bill provides for the creation of more than 30 new 
Federal agencies or commissions, and establishes a central national 
health bureaucracy whose specific regulatory functions number well over 
500. Some of those were dramatically illustrated, as I said before, by 
the Senator from Oregon.
  This bill also mandates that State governments assume hundreds of 
new--and largely unfunded--regulatory authorities, from subsidy 
administration to risk adjustment to enrollment outreach.
  One of the most burdensome of these authorities is the administration 
of the complex individual subsidy scheme in the Mitchell bill. 
Specifically, the legislation would set up five separate categories of 
persons eligible for premium subsidies--and each of these categories 
would come with its own separate income eligibility standards.
  These separate subsidy streams include:
  General subsidies for low-income individuals and families; separate 
subsidies at a higher level for pregnant women and children; 
subsidiaries for AFDC recipients; subsidies for non-AFDC, but Medicaid-
eligible individuals; and a new subsidy program for persons who are 
temporarily uninsured due to unemployment.
  States would be responsible for calculating subsidies for individuals 
and families and making payments directly to health plans on their 
behalf. States would then apply to the Federal Government for funding 
for these payments.
  In addition, the bill provides for a separate system of subsidies to 
employers, as an incentive for them to provide coverage to their 
employees.
  Mr. President, to help illustrate the extent of regulatory complexity 
in this bill--particularly in the area of the individual and employer 
subsidies--I would like now to walk through just a few of the most 
troubling provisions.
  To begin with, procedures for calculating the subsidy levels are 
extremely complex. States would first have to determine a subsidy 
percentage for each individual, which would vary depending upon which 
of the five subsidized classes to which he or she belonged. Then, and 
let me read directly from page 1082 of title VI:

       The amount of premium subsidy for a month * * * is--the 
     least of:
       I. The subsidy percentage for that individual multiplied by 
     \1/12\th of the annual premium paid for coverage under a 
     standard health plan in which the individual is enrolled.
       II. The subsidy percentage for that individual multiplied 
     by \1/12\th of the weighted average annual premium rate * * * 
     for all community-rated standard plans offered in the 
     community rating area in which the individual resides; or
       III. The subsidy percentage for that individual multiplied 
     by \1/12\th of the annual reference premium for the community 
     rating area in which the individual resides; minus the amount 
     of any employer contribution made or offered to be made on 
     behalf of the individual for coverage under the standard plan 
     that is available to the individual through an employer.

  Am I the only one to think that this might be just a little bit 
difficult to administer efficiently?
  Am I the only one to think that this sounds extremely confusing and 
would be very difficult for many people to understand?
  Also, if I am reading the bill correctly, section 6004 on page 1093 
requires individuals and families to notify the State each time there 
is a change in estimated family income, such as a change in employment 
status--or perhaps a raise or pay cut. The State, in turn, is required 
to recalculate the monthly premium subsidy payment to the plan.
  Since the size of the subsidy also depends on whether or not a person 
is pregnant or a child under 18, would individuals and families have to 
inform the State about pregnancies, the termination of pregnancies, 
children turning 19, and other very personal information?
  Further, would States have to calculate differing subsidy levels for 
members of the same family, depending on whether they were pregnant or 
included children under or over the age of 18?
  In calculating the subsidies, States would also have to factor in any 
payments made or offered to be made by employers to health plans on 
behalf of individuals.
  Would this require States to obtain such information--on a per-
individual or family basis--from all employers in the State and from 
multistate employers operating in the State?
  Would States not also have to establish a new system to track non-
AFDC Medicaid-eligible individuals, since their initial subsidy would 
last only 6 months and would then have to be redetermined?
  Similarly, would States not also have to have in place systems for 
tracking persons eligible for the unemployed/uninsured subsidy to 
determine when each individual's 6-month eligibility period has ended, 
or whether he or she has obtained employment during that period?
  In addition to all of these responsibilities, States would also be 
required to calculate cost-sharing subsidies and make corresponding 
payments to plans on behalf of individuals and families. This is 
separate and on top of all of the premium subsidies.
  Further, the States are held responsible for collecting against 
individuals in the event overpayments occur or if a person has filed an 
inaccurate subsidy application. In effect, this makes the States 
collection agents for the Federal Government.
  Importantly, the bill does not provide any Federal funds to the 
States for carrying out these many new administrative responsibilities. 
Instead, States would be authorized to tax insurance premiums in the 
State to raise the funds needed to pay for the new bureaucracy and 
management.
  Has anyone estimated how much it will cost the States to implement 
and administer all of these new subsidies and responsibilities? Given 
the extent and complexity of these requirements, I expect that the 
premium tax that States would have to impose could well be pretty 
hefty?
  What might sound complicated at this point would only grow even more 
complex as we move into implementation.
  This bill also provides for a separate system of subsidies to 
employers as an incentive for them to provide coverage to their 
employees. This system, too, should raise serious concerns about 
administrative complexity and cost and personal privacy, as well as 
about fairness.
  Beginning in 1997, employers who expand coverage for the standard 
benefit package to all employees in a class (such as all part-time 
workers) would be liable for the lesser of 50 percent of the cost of 
that coverage or 8 percent of each newly insured employee's wage. This 
subsidy would be administered by the Department of Labor.
  The administrative burdens associated with the subsidy may discourage 
many employers from applying. For example, since the subsidy is paid 
according to each newly insured employee's wage, the employer must, 
under section 6104 of title VI--page 1113--of the bill, file a separate 
application with the Department of Labor for each employee for whom he 
wants a subsidy.
  Second, for this program to work, the employer would have to notify 
the Department of Labor when an employee received a raise which 
increased overall income to a point at which 8 percent of that income 
equaled or exceeded the amount of the 50-percent employer-premium 
payment.
  I wonder how many Americans would be comfortable with the 
Government's being notified each time they receive a raise?
  Third, section 6104 of title VI--page 1113--indicates that the 
subsidy is paid over a 5-year period. It is unclear what happens if the 
employee leaves or is terminated during that period. The employer would 
clearly have to notify the Federal Government in any case, again 
raising the issue of personal privacy.
  Finally, there is a critical issue of fairness here. This subsidy 
places businesses that currently do provide health insurance for their 
employees at a competitive disadvantage. Is it fair to reward only 
those who have chosen so far not to offer insurance?
  Mr. President, my purpose in highlighting examples like these is not 
to nitpick details, but rather to underscore that this bill contains 
much more than meets the eye in a quick summary or newspaper overview.
  There is danger that we will spend the next few weeks debating high-
profile issues like the employer mandate. And meanwhile, great tracts 
of regulatory detail will slide into law without the careful review 
they deserve and demand.
  Also buried in this bill are dozens, if not hundreds, of provisions 
that may take up little space in the legislation itself, but that will 
have profound effects on the lives of Americans.
  Section 1602, for example, contains a seemingly innocuous requirement 
that health plans, employers, and providers may not discriminate 
against persons based on a variety of personal characteristics, 
including language, income, and sexual orientation.
  What may not immediately be apparent to some is that this is a 
dramatic expansion of current civil rights law. Perhaps such expansions 
may be justified, but burying them in the middle of health reform 
legislation is not an appropriate way to consider such an important 
social change.
  More immediately, the antidiscrimination provisions as drafted would 
expose all businesses, doctors, hospitals, and insurers to lawsuits if 
there is so much as an inadvertent instance of a person being 
disadvantaged.
  For instance, under this provision, a doctor practicing in a suburban 
community could be sued because the location of his practice results in 
a mix of races, languages, or sexual orientations that does not 
correspond to the mix in the larger metropolitan area. Potentially, 
this doctor could be ordered by the courts to practice a certain number 
of hours a week elsewhere in the city to assure that his practice mix 
is appropriate.
  Certainly, the issue of distribution of health care providers in our 
health care system is an important one, but I believe it is both 
dangerous and inappropriate to make plaintiffs' attorneys and the local 
courts the decisionmakers in our health care system.
  Mr. President, greater opportunity for litigation is the last thing 
the American health care system needs right now. In addition to the 
specific antidiscrimination provisions I have just described, this bill 
also rejects any cap on damage awards in malpractice cases--a 
significant factor in driving up everyone's health care costs today.
  Even worse, the bill would allow persons to sue for unlimited damages 
for the perceived wrongful denial of insurance claims. Clearly, 
appropriate grievance structures are needed, but subjecting every 
health care decision to a potential lawsuit poses a serious threat to 
any meaningful restraint of health care costs.
  I agree that fair recourse and remedies can and should be made 
available. However, I am very troubled that virtually every new 
requirement imposed by this bill comes with accompanying legal rights 
of action and administratively complex structures for grievance and 
appeal.
  Mr. President, today's issue of the Washington Post carries a box 
outlining the highlights of the Mitchell bill. Reading only this 4-inch 
by 5-inch version of the plan, one can hardly find fault with it. Who 
could quarrel with the concepts of: Striving to provide insurance 
coverage for at least 95 percent of Americans by 2000; prohibiting 
discrimination against people with preexisting medical conditions; 
allowing other Americans to sign up for the same policies offered to 
Federal workers; offering subsidies to help the poor buy insurance.
  In fact, many of these same goals are embodied in other reform 
proposals--proposals which take approaches that differ dramatically 
from the Mitchell bill.
  Mr. President, there should be a responsible middle ground in this 
debate, but it isn't found in the bill before us.
  Quite simply, there are other ways--better ways--to accomplish health 
care goals which enjoy broad support.
  We all want health insurance available to Americans. However, we need 
to move toward universal coverage through straightforward subsidies 
based on income, not through an expensive and rickety structure of 
complex subsidies and triggered mandates.
  We all want to control health care costs. I contend we should do so 
through market disincentives against high-cost health plans--not by 
using heavily regulatory limits on prices in the market.
  We all want to protect people against discrimination based on health 
status, and every reform proposal before Congress attempts to address 
this concern. We do not, however, need to suffocate the market in 
endless regulation to achieve this goal.
  We all want to provide for responsible pooling of purchasers. What we 
do not need are the mandatory, State-established cooperatives required 
in the Mitchell bill.
  We all want to help low-income Americans in need of health insurance, 
and most of us are willing to commit serious resources to subsidizing 
those in need. At the same time, we need a firm fail-safe guarantee 
that expenditures must not exceed available revenues and worsen our 
Federal deficit.
  The Senator from New York concluded that he was optimistic that, 
indeed, we could reach some agreement. I however, I am not optimistic 
that a reasonable bill can emerge from the debate we are beginning 
today. I am committed, however, to doing what I can to pursue the goals 
of reform I have advocated for many years, many of these are shared by 
nearly every one of us here. But clearly, it is going to take a lot of 
give and take that I have not seen in the legislation before us.
  Mr. President, I yield the floor.
  The PRESIDING OFFICER. The Senator from New York.
  Mr. MOYNIHAN. Mr. President, I congratulate the distinguished Senator 
from Kansas, the ranking member of the Committee on Labor and Human 
Resources, and say I hope she becomes more optimistic as the debate 
proceeds. But I know how carefully she has thought about this subject.
  Mr. President, I yield 5 minutes to the distinguished Senator from 
Washington, Senator Murray.
  Mrs. MURRAY. I thank the Chairman for all his work on this bill and 
for Senator Mitchell's work.
  Mr. President, toady, the American people are reclaiming their 
Government. After so many years of being ignored, you and I, our 
friends and neighbors, being asked to speak out on the most important 
public policy issue of the day--health care reform.
  And, as we begin this process on the Senate floor, let us not forget 
why this debate started. People want a voice. We are tried of someone 
else always having more say in decisions that affect our lives. We want 
health care decisions made by ourselves, not by big business, insurance 
companies, and rich politicians.
  Over the next several weeks the American people will hear many 
personal stories and I know that many of my colleagues do not want to 
hear these. But I want to share with you my personal story, which will 
push me throughout this legislation.
  I remember the day--when I was growing up back in Bothell, WA--when 
my father was diagnosed with multiple sclerosis. He had to quit his 
job, and my mother was forced to take a job as a bookkeeper.
  She did not get health benefits with her job, and my parents had to 
buy their own plan. The premiums were astronomical. The benefits were 
meager. And, the list of disqualifying preexisting conditions, a mile 
long.
  This experience shaped my life. I remember the struggle. My mother 
spent all day behind a desk. And, she spent many long sleepless nights 
caring my father and worrying how my family ever would make ends meet.
  My six brothers and sisters and I put ourselves through school. We 
watched our parents grow old, spending all their disposable income on 
doctor's bills and escalating insurance premiums. While their friends 
sail to Hawaii enjoying their golden years, my parents count the number 
of times a week they eat macaroni and cheese for dinner.
  My parents are ordinary people. With simple wishes. They do not want 
to be a burden on any of us. They do not want their health care costs 
to bankrupt their children.
  And, we only want them to be free of these worries. And, not to pass 
them on to our children.
  But, as long we continue under the present system, my parents will 
worry.
  And, so should all Americans, because the same thing could happen to 
any one of us.
  So, when someone tells you universal coverage and cost containment do 
not matter, tell them my family's story. Until the time when all 
Americans are responsible for health care, it will just cost more for 
those who are being responsible today.
  Mr. President, there are many stories but I want to share with you 
another one because it strikes home in this debate. For many years I 
was a preschoolteacher and we hear today about the 10 million American 
children who do not have health care.
  Let me tell you how it affects them. Not long ago when I was teaching 
preschool, I had a 3-year-old child with behavior problems. He was a 
terror and disruptive to the other 24 kids in the class.
  And, he quickly gained a reputation around my school as ``the bad 
kid.'' This reputation would take many years to overcome. He single-
handedly brought the level of instruction down for everyone. Education 
was being squandered.
  Observing him, I noticed the problem was not that he would not 
listen, but that he couldn't hear. I called his mother. And she cried. 
She told me he had an ear infection, and agreed to take him to the 
doctor.
  Three weeks later, his behavior remained unchanged. I called the 
mother, and she was distraught. She told me the family was uninsured 
and could not afford a doctor. Clearing up his ear infection would have 
been simple. It would have solved a problem affecting two dozen other 
children's ability to learn.
  But instead, because his family was uninsured, this child's future 
was jeopardized.
  Mr. President, there are millions of children like this around this 
Nation. The social cost is incredible. The time for this debate is 
right.
  I heard the Republican leader say earlier that we have the best 
health care system in the Nation and we should not jeopardize it. Yes, 
we have the best health care system in the Nation, but the problem is 
fewer and fewer of us believe that we will have access to that health 
care system. That is what this debate is all about. Those are the 
people I will remember throughout this debate, and I urge every 
American to think about the people they know who do not have health 
care insurance, who are afraid to lose their jobs, who are fearful for 
their own children and their grandchildren, who will not have the kind 
of lives that they have had themselves.
  I look forward to the debate, Mr. President.
  The PRESIDING OFFICER (Mr. Rockefeller). Who yields time? The Senator 
from New York.
  Mr. MOYNIHAN. Mr. President, I thank the Senator from Washington for 
a very graphic description of what we have before us, the opportunity 
we have before us. Great gratitude.
  I yield to the Senator from Minnesota, the very able, distinguished 
Senator from Minnesota, 5 minutes.
  Mr. WELLSTONE. Mr. President, I thank the Senator from New York. I 
congratulate my colleague from Washington for her fine statement.
  I hear voices and I see faces as I speak on the floor of the U.S. 
Senate tonight in this historic debate:
  ``Senator, my mother has Alzheimer's disease, and if you don't pass a 
reform bill, it's going to bankrupt our family.''
  ``Senator, my child is a diabetic, and when she graduates from 
college and is no longer on our health insurance plan, I don't know 
whether she can obtain insurance.''
  ``Senator, I lost my job and now I've lost my health care coverage. 
What am I going to do?''
  ``Senator, I'm a small business person. I want to be able to cover my 
employees. I can't afford to. I can't afford to cover myself.''
  ``Senator, we live in rural Minnesota, rural America, and not only 
can we not afford a doctor, we can't find one.''
  And ``Senator,'' or rather, ``Paul, our son,''--my mother and father, 
Minnie and Leon--``we both have Parkinson's; we have worked hard all 
our lives; we never made much money. We want to, Senator Moynihan, 
leave our savings for our grandchildren to go to college. It is all 
going to be depleted because of nursing home expenses.''
  ``Senator, I'm a person who is struggling with MS, and I want to be 
able to live at home in as near a normal circumstance as possible with 
dignity.''
  These are the voices that I hear as we debate this reform bill. It is 
a fact that the vast majority of people in our country are affected by 
our failure to finance and deliver humane, dignified, affordable health 
care. Either people are without the health insurance, or they are 
underinsured, or they are but one job or one illness away from losing 
their coverage. That is the majority of people in this country. Another 
formulation, they are not poor enough for Medicaid, which is not 
comprehensive. They are not well off enough for Medicare, which does 
not cover catastrophic expenses, and they do not have a job that 
provides them with the coverage that they can count on.
  That is the vast majority of people who fall between the cracks. And 
to argue otherwise and say we have the best health care system in the 
world and we do not need any fundamental change is an ostrich-like 
approach to this issue. I wonder whether or not some of my colleagues 
perhaps have too much distance from the problems of regular Americans.
  Mr. President, this is the standard that I go by: We should not 
separate the legislation that we introduce from the words that we 
speak. And I have heard my colleagues over and over and over again say 
we ought to have as good a health care plan for the people we represent 
as the plan which we have.
  Each and every one of us is covered; it is universal. There is no 
preexisting conditions because it is universal. Our employers 
contribute a fair share, and it is fairly comprehensive, good coverage 
that we can count on. That is what we should be doing on the floor of 
the U.S. Senate. That is the standard. That is what I am prepared to 
fight for.
  Let me just conclude this way--there will be plenty of time for 
debate, and 5 minutes does not give me much time--let me just conclude 
this way: Humane, dignified, affordable health care. Let the children 
go to school without abscesses, because they cannot afford dental care; 
let them go to school with decent dental treatment. Let the people who 
struggle with mental illness no longer suffer from the kind of stigma 
that they have to suffer. Let middle-income Americans not have to worry 
about premiums they cannot afford. Let older people live the end of 
their lives with dignity. Let people with disabilities live with 
dignity. Let us deliver good primary care, good preventive health care 
out in our communities, be they urban or rural.
  Mr. President, I am not talking about Heaven on Earth. I just turned 
50. I just had my second grandchild. I do not know whether I believe in 
Heaven on Earth. But I do believe in a better Earth on Earth, and I 
believe that if we pass a significant health care reform bill, we will 
be making a positive contribution and we will be doing something that 
vastly improves the lives of the people we represent throughout the 
United States of America.
  I do not want to see this reform effort hijacked. I do not want to 
see us move away from what I think is bold, important, significant 
reform. That is what I am going to be fighting for.
  The PRESIDING OFFICER. Who yields time?
  Mr. MOYNIHAN. Mr. President, I thank the Senator from Minnesota for 
his passionate statement, and we will hear more of that voice before 
this debate is over. A good thing, too.
  I see the very distinguished chairman, the Senator from Maryland, has 
risen and, as always, we look forward to hearing from her. Given our 
constraints, if I can yield 5 minutes to Senator Mikulski.
  Ms. MIKULSKI. Mr. President, I thank the chairman. I would like my 
remarks to be associated with his earlier remarks this evening, and 
with those of the distinguished chairman of our committee on Education 
and Human Resources.
  I rise today to add my enthusiastic voice to the debate and passing 
of the majority leader's bill, and to pass health insurance reform 
before the 59th anniversary of the establishment of the Social Security 
System. In fact, I challenge the United States Senate to pass health 
insurance reform on the day that Social Security was enacted so that we 
would have that legacy.
  I rise today to say to my liberal colleagues, do not make the perfect 
the enemy of the good. We need to compromise; we need to synthesize; 
and we have a core bill in the Mitchell bill that meets, I think, our 
standards.
  And to the naysayers on the other side of the aisle, I urge you to 
say yes--yes to change, and yes to embrace the future. Because change 
is here, and we either face it and embrace it or it will overtake us. 
And here, what we have in the Mitchell bill is a framework for 
universal coverage by a date certain.
  It provides health insurance that is affordable to business and 
families. It takes steps to assure that the middle class will be better 
off. It emphasizes prevention, primary care, and personal 
responsibility. It puts an end to the worst insurance practices that 
penalize and hurt families. It makes health insurance portable. It 
rewards work. It ensures that health insurance can never be taken away 
if you get sick; there are preexisting condition prohibitions; it 
ensures Americans will be able to choose their own providers; and this 
bill will help contain skyrocketing health costs.
  It says yes to those who believe we must reform health insurance in 
order to achieve universal coverage. It says yes to Americans who work 
hard and play by the rules.
  I say to those who say the bill does not go far enough, we must 
remember the history of social programs and of Social Security.
  When Social Security was being debated, they said we needed to give 
it time; we needed to be able to phase it in, and that is exactly what 
happened. And at the same time there were those who said give the 
marketplace a chance.
  Mr. President, I am going to tell you a story about a guy named 
Willy. He lived in East Baltimore and was married in August of 1935. 
That man was my father. When he married my mom, they had just opened a 
small grocery store and had been proud of the fact that they had voted 
for Roosevelt. They were strong, unabashed and enthusiastic supporters 
of Roosevelt. My father believed in Roosevelt, and he also believed in 
the private market. He was not covered under Social Security until the 
year I graduated from high school in 1954.
  Yes, he bought private insurance. He was a good man. He wanted to 
take care of my mom. He had an annuity. And then because of the 
Democrats working with Eisenhower, he had Social Security.
  By the time my dear father died of Alzheimer's, while I was a 
Senator, the annuity had gone, while he was in the nursing home, to the 
nursing home; it did not go to my mom, and upon his death that annuity 
was terminated. During all those years, Social Security was there for 
my mother as were her beloved children.
  Now, what would have happened if we had followed the rules of the 
naysayers, if it only had been for the market? My father would have had 
the annuity but my mother would not have had the annuity.
  We face, as many do with Alzheimer's, I say to the Senator from 
Minnesota, Mr. Wellstone, that difficulty that while we practice family 
responsibility, our families often face family bankruptcy.
  We believe there needs to be a role of Government and a role of the 
private sector. This is what this bill does.
  I will tell you, if we want to have a legacy, if this Congress on the 
eve of the new century wants to have a legacy, I think the legacy is to 
pass the Mitchell bill, to say yes to change, to say no to the 
naysayers, and to be sure on this 59th anniversary of the establishment 
of Social Security we take one more step in which a democratic society 
says there is nothing to fear but fear itself because your Congress is 
not fearful of acting.
  Mr. President, I yield the floor.
  Mr. MOYNIHAN addressed the Chair.
  The PRESIDING OFFICER. The Senator from New York.
  Mr. MOYNIHAN. I think we are all in the debt of the Senator from 
Maryland for her good counsel and for her very graphic histories.
  It is to be noted--it has not been noted tonight--that a provision in 
the Mitchell bill which was taken from the Finance Committee bill 
establishes a trust fund for medical education and for medical 
research, and the day will come when we will have solved the problem of 
Alzheimer's disease. That day will come. And we are insuring a flow of 
resources to bring it about.
  We have seen in the last 30 years developments in medical science 
that you did not have a sentence for 50 years ago, and they are now 
common practice. There are more to come. This legislation will bring 
them.
  I see the Senator from Connecticut is here, and we very much look 
forward to his remarks. Five minutes is our practice.
  Mr. DODD. Mr. President, first of all, let me thank the distinguished 
Senator from New York. I commend him and the majority leader for the 
work that they have brought us, the product of this legislation, as 
well as the distinguished Senator from Massachusetts, whom the Senator 
from New York most appropriately described as someone who has spent 
three decades engaged in the debate over reform of the health care 
system.
  Mr. President, I think it is appropriate to note that some 40 Members 
of this body, if my count is correct, have been engaged over the past 2 
years in a significant set of hearings and markups--roughly 50 percent 
of the Senate. I heard the distinguished chairman of the Finance 
Committee mention that there were some 31 hearings which the Finance 
Committee has held on health care reform. In our Committee of Labor and 
Human Resources, we held at least 45 hearings on health care. That is 
76 hearings. We spent some 9 or 10 days--and I turn to the chairman of 
the committee--10 days--in the Labor and Human Resources Committee in a 
markup of the health care bill, Republicans and Democrats working 
together to fashion a bill. I am told that the Finance Committee spent 
significant time in their markup--40 Members of the Senate, 76 
hearings, and countless hours of markup that brought us to this 
juncture.
  So those who would suggest that this product is somehow a miraculous 
conception which has occurred out of nowhere have been living someplace 
other than in this Nation over the past 2 years.
  I would argue, Mr. President, after many years--we go back some 7 
Presidents, some 30 Congresses and almost 60 years--of debating whether 
or not we ought to have a health care system in this country that 
includes all Americans, it is tragic that we arrive at a point in this 
Nation's history where we exclude 12 million children. Many may argue 
about adults and their inability or ability to provide for health care 
coverage. I know of no one in this Chamber who believes that children 
ought to be excluded from receiving the adequate kind of health care 
that they need if they are going to mature to adulthood and become 
productive citizens of our society. And yet the present conditions are 
such in this Nation that 12 million of the children of our society 
under the age of 21 are without health care coverage this evening.
  As we sit here tonight, there are millions of people who are on 
welfare. They have health care. As we gather here tonight, regrettably, 
there are thousands of people in this country incarcerated in our penal 
system. Every one of them--God forbid that some illness befalls them--
gets health care coverage. It has been noted here this evening that 
Members of this body and the other, as well as some 10 million people 
under the Federal employee benefit program, are covered.
  Now, when people are incarcerated and can get health care, if you are 
on welfare and can get health care, and are members of the Federal 
employees benefit program and can get health care--is it really asking 
too much that 12 million children and working poor should not also be 
covered with a basic health care package that protects them and their 
families from the catastrophic problem of a health care crisis?
  That is where we really are. We can argue about the peripheral issues 
of when do we do it, how soon, how late, when do you bring them in, 
when do you exclude. Those are all legitimate points of debate. But I 
would hope, Mr. President--I said this the other day--that for 21 days 
or 28 days we might drop the labels Democrat, Republican, Liberal, 
Conservative, Moderate, and come together here as representatives of 
our constituencies, of the citizens of this country, and for a mere 21 
days work together to try to fashion a health care bill that serves the 
needs of the American public.
  In 1992, Mr. President, the American people asked for an end to 
gridlock in this country. They wanted their Congress to work on their 
problems--not on our problems--on their problems. In the waning days of 
this Congress, in the waning hours of this Congress, after hours and 
hours and hours of debate and discussion in fashioning this product, 
can we not in these remaining 21 days work on this product and fashion 
a health care bill that serves the overwhelming majority of people's 
needs in our society?
  That is the challenge before us. The decks are clear. Other than one 
or two other bills, there is no other business before this Congress. My 
fervent hope this evening is that Democrats and Republicans will come 
together, that we will shed those labels, and we will, for the first 
time in this century, craft a health care bill of which all of us can 
be proud regardless of party, regardless of political persuasion, and 
do something that the American public has long, long sought--that is a 
national health care reform package.
  I yield the floor.
  Mr. President, we stand now on the edge of history--an opportunity 
that has defied seven presidents and 30 Congresses over the past 60 
years. I suspect that this is one of the most important debates most of 
us will ever take part in as U.S. Senators.
  The hearings are over. And in this Congress alone there have been 76 
such hearings. In the Senate and Human Resources Committee we spent 3 
weeks writing our bill. The Finance Committee spent countless days 
working on their bill--20 Democrats and Republicans working together 
for one goal.
  Mr. President, the interest groups have been heard--and believe me 
Mr. President, they have been heard and are still being heard. Mr. 
President, now is the time for us as the Senate to come forward; our 
turn as a Senate to debate tough issues; our turn as a Senate to cast 
tough votes on tough problems. And Mr. President, it is our turn as a 
senate to finish the job that the American people have given us.


                         how we've gotten here

  Mr. President, let there be no mistake as to to why we are gathered 
for this debate. The American people--not the President, not the 
Congress, and not the interest groups--are the voices calling to be 
heard, asking for change and reform in our health care system. The 
families who have lost their homes because of illness have asked to be 
heard. The children denied needed treatment because they were unlucky 
enough to be born into a family without insurance have asked to be 
heard. The small businesses that want to provide insurance but can't 
afford it have asked to be heard. The employees locked in their jobs 
for fear of losing their coverage have asked to be heard. The people 
whose life-threatening conditions have been labelled ``preexisting'' 
have asked to be heard.
  The affluent and the very poor have not brought us here; they have 
health care. Working Americans and their families--they are the voices 
that are crying out for us to address this crisis.
  At this point, this cause is about infinitely more than the political 
fate of a President--and I hope my colleagues recognize that. This 
cannot be about handing a President a major victory or crippling him 
with a major defeat--it must be about making health care affordable and 
accessible for millions and millions of working Americans.
  We cheapen and demean those people's needs and ourselves if we look 
at this debate through a crass political lens. We honor and respect 
their needs if we--Republicans and Democrats--put our differences aside 
and set off together on a common journey.
  There are a powerful few in this country who are expending every 
ounce of their energy to prevent that journey from beginning. They are 
using every scare tactic in the book to frighten the American people 
away from reform.
  I agree that middle-class Americans should be frightened--they should 
be frightened of what would happen without reform. I base this 
contention not on scare tactics or propaganda, but on facts:
  In 1980, health care cost 9 percent of the average family's income. 
Now that figure has risen to 13.1 percent. By 2000, without reform, 
health care will cost the average American family 18.4 percent of its 
income--that is nearly $1 out of every $5 earned.
  The average family in Connecticut spends $8,257 a year for health 
care.
  Without reform, that number will climb to $15,919 by 2000.
  There are now 39 million people with no health insurance.
  One of four Americans--63 million people--will lose their health 
coverage at some point during the next 2 years.
  Even in Connecticut, which has proportionately fewer uninsured than 
most other States, 23,000 people lose their insurance every month.
  We are not talking about poor people here. We are talking about the 
middle class.
  More than 80 percent of all the people without coverage in 
Connecticut are part of working families.
  It is an irony that in the America of today, if you are on welfare, 
you can get health care. If you are in prison, you can get health care. 
If you are a Member of Congress, you can get health care. But if you 
are a middle-class American who gets up and goes to work every day to a 
job without coverage, then you can't get health care. That's what this 
debate is about.


                        twelve million children

  During this debate, I want to pay special attention to the 12 million 
children in this country who have no health insurance. They aren't 
sending us postcards or hiring lobbyists or putting ads on the air. But 
it is their future, more than anyone else's, that we will be 
determining in the next few weeks. I don't know anyone who would want 
to miss the opportunity to see that these children get decent health 
care.


                        excellent starting point

  The bill before us is an excellent starting point for debate. I am 
disappointed that it has not drawn more bipartisan support because I 
think it answers many of the criticisms leveled at the Clinton health 
care plan.
  We heard that the President's bill was too centralized. So this bill 
is much simpler and more flexible. It eliminates mandatory alliances 
and replaces them with voluntary, competing alliances.
  We heard that the President's bill was too expensive. So this bill 
includes fail-safe measures to protect against budget deficits.
  We heard that the cost controls in the President's bill would 
throttle the market. So this bill includes no cost controls.
  We heard that the President's bill was too burdensome on small 
business. So this bill requires an employer contribution only if other 
measures fail. And if the mandate is imposed, it would exempt 
businesses with fewer than 25 employees and would require other 
employers to pay only half of the premium.
  This bill is a moderate, measured approach. It is a compromise. It 
builds on the best of our private health care system. Yet we still hear 
from some that it goes too far.
  To this point, it looks like trying to find a compromise on health 
care reform is like chasing a mirage in a desert. Every time we move 
toward it, it moves further away.


                          ``courage mounteth''

  But there is still time for us to put our narrow interests and 
objections aside and do the right thing for the American people.
  For it is when this body faces the greatest challenges that it does 
the greatest things. Shakespeare wrote in ``King John,'' ``For courage 
mounteth with occasion.''
  If we hadn't had courage, this country never would have had a Civil 
Rights Act or a National Highway System or Social Security or Medicare. 
This is just such an occasion. We must show some courage--both to 
strengthen health care and at the same time restore some faith in 
American democracy.


                          REVERSE THE CYNICISM

  For it is widely known that the American people have grown 
increasingly cynical about their Government. They know the problems we 
face as a Nation, but they are rapidly losing faith in their 
government's ability to do anything about those problems. The principle 
that our Democratic Government is the vehicle of our Democratic 
aspirations is eroding.
  This health care debate is an opportunity to either restore or 
further damage that principle. The American people have identified a 
national goal: When you strip away labels, poll after poll shows 
substantial majorities in favor of meaningful health care reform and 
universal coverage. And we now have before us a bill to meet that goal.
  The American people are watching and waiting. They want to know if 
their Government is capable of solving a problem they have identified. 
In short, we now have an opportunity to do our jobs as elected 
representatives.


                         IRRELEVANT SIDE ISSUES

  I've heard a great deal of discussion over the last few days about 
the size of this bill, about how many pages are in this bill, even 
about the weight of this bill. That discussion is completely 
irrelevant, completely meaningless, completely beside the point for 
working people all across this Nation who are hurting.
  Those who have lost or are in danger of losing their insurance are 
drowning. They don't want to see us argue about the size of the 
lifeboat we are going to dispatch. They just want that lifeboat. They 
need security and peace of mind, and they are demanding our help.
  We haven't had a debate like this for decades, and if we fail this 
year, we won't have another one for decades more.
  We simply cannot fail. I look forward to working with my colleagues 
to get the job done.
  Mr. MOYNIHAN. Mr. President, that is exactly the spirit in which it 
appears to this Senator that we ought to proceed and are proceeding. I 
thank the Senator from Connecticut for all he said.
  And now we look forward to hearing from the Senator from Iowa, who 
has asked to be joined in the debate this evening, Senator Harkin, 5 
minutes, I say to the Senator.
  Mr. HARKIN. Mr. President, I thank the Senator for yielding.
  As Senator Kennedy said earlier, we have debated this issue for 
decades. We have deliberated, we have cogitated, we have 
procrastinated, and as we have, Mr. President, the middle-class 
Americans are sinking. Costs are skyrocketing. More and more working 
Americans are losing coverage.
  In 1980, the average family cost for coverage was $2,500. Now it is 
$7,000, average per family in America; $7,000 per family. If we do not 
act by the year 2000, it will be up to $14,000 per family in America. 
That is what is happening to the middle class.
  In Iowa, in my own State, the cost for a working family has gone up 
to 245 percent faster than wages in the last 10 years. Businesses in my 
State pay 167 percent more now than they did 10 years ago. And if we do 
nothing, it will go up an additional 394 percent by the year 2000. That 
is what is happening to the middle-class American. That is what is 
happening to businesses.
  Now I hear my colleagues on the other side talk about this great 
health care system we have in America. I want to correct that, Mr. 
President. We do not have a health care system in America. We have a 
``sick care system'' in America. If you get sick, you get care. And you 
get care in the emergency room. What we are trying to do is change that 
system to provide more preventive health care, keeping people healthy 
in the first place, changing a sick care system into a health care 
system.
  Senator Dole said earlier tonight that we are going to roll the dice. 
Never mind that we have debated this bill for years. Never mind the 
fact that Senator Dodd said the Finance Committee and the Labor 
Committee have jointly held nearly 100 hearings since last September. 
Never mind. Senator Dole said we are going to roll the dice.
  Mr. President, that is what is happening every day to millions of 
working Americans throughout this country. They get up in the morning 
and they roll the dice. They wonder whether or not they are going to be 
sick. They wonder whether or not they are going to have health care 
coverage.
  Let me read a couple of examples. Jim and Carol Kaplan of Chelsea, IA 
are a middle-aged farm couple, 55 or 56 years of age. Carol had a 
kidney transplant 10 years ago and requires regular antirejection 
medication. Jim had cancer 5 years ago but he is now healthy. They pay 
nearly $15,000 a year in health care costs. They have a small farm. 
They pay $350 a month for prescription drugs. Their Blue Cross health 
insurance plan costs nearly $11,000 a year. It went up $2,400 just this 
year. They have looked for other plans. They are told they could get a 
cheaper plan. But, of course, they would have to exclude all of their 
preexisting conditions, ``don't you know.''
  Jim got word of this increase right around Christmastime. He said he 
was so depressed he could not talk to anyone. He told me he does not go 
into town very much anymore because they cannot afford anything beyond 
the basics because of health care costs. These are hardworking, good 
Americans paying for that kind of coverage.
  I can read example after example. George and Pat Kadrmas of Traer, 
IA, small business people paying $2,000 a quarter. Or I can read some 
other people here. Hank Grant, or Harry Ellis, age 56, worked in Des 
Moines for a tire company for 26 years, took disability retirement in 
March of this year because he had heart bypass surgery. He is paying 
$400 a month in medication, $300 a month for oxygen, and his spouse has 
no coverage. Guess what happened? The Pirelli Tire Co.--this is a union 
man--had a contract with their people that if they took early 
retirement because of disability, the company would continue to pick up 
the 80 percent of the health care benefits until such time as they 
could get on Medicare.
  So Harry Ellis, 56 years of age, 26 years working at the company, 
thought he had it made until the Pirelli Tire Co. said, ``No, we are 
taking it all away. We are dropping it all. You pick it up yourself. We 
are abrogating it.'' What is he going to do? He cannot afford that.
  Another example of Americans every day rolling the dice. Every day in 
America working Americans get up in the morning and they say a prayer. 
``Please don't let me get sick today. Please don't let me get injured 
today.'' Every day they roll the dice. What we want to do is not roll 
the dice. We want to pick up the dice. We want to replace the dice with 
a sure bet, universal coverage that cannot be taken away so these 
working Americans do not have to roll the dice.
  Lastly, Mr. President, Senator Dole says that somebody has to pay. We 
are already paying. We are paying at the emergency room doors. People 
may not have health insurance, but they get health care. They get it at 
the worst possible time, when we pay the most. As long as we are going 
to pay it, let us spend smarter. Let us get them early, cover them, get 
preventive health care, and let us spend the money in a little bit 
smarter way. That is what we are trying to do with this legislation.
  Mr. MOYNIHAN. Mr. President, may I say to the Senator from Iowa that 
is indeed exactly what we are trying to do and what we ought to do. I 
thank him for his remarks.
  The senior Senator from California has been patiently attending to 
her notes and her address. I am happy to yield 5 minutes to Senator 
Boxer.
  The PRESIDING OFFICER. The Senator from California is recognized.
  Mrs. BOXER. Thank you, Senator Moynihan, very much. I thank him for 
his leadership.
  I will correct the Record. I am a junior Senator. However, Senator 
Feinstein and I actually were elected on the same day. She was sworn in 
before. I thought I would explain that to the Senator.
  Mr. MOYNIHAN. I stand corrected.
  Mrs. BOXER. Thank you very much. I feel very proud to be representing 
the good people of California in this health care debate. I spent 10 
years over on the House side and have been on a number of health reform 
bills. Now the time has come.
  I really feel it is very interesting that our first vote on this 
health care issue may well be a vote to decide if we are even going to 
take up this health care matter. It appears that there will be a vote 
on whether to delay. And I am going to address my comments in the brief 
time I have to this question of delay.
  I said I was proud to be here to debate health care. I found it 
interesting that my Republican colleague, Phil Gramm, said he would be 
proud to do whatever he could to stop the Mitchell bill from coming 
forward. And I believe that means health care reform will not come 
forward because the way we work in this U.S. Senate is a bill is 
introduced, we work our bill will, we compromise, we discuss it and 
debate it, and it becomes law. So we have to beat back this call for 
delay or filibuster.
  Mr. President, who is going to get hurt if there is a filibuster or a 
delay? Seventy-six percent of those of us who have insurance have a 
lifetime benefits cap. If one of us gets sick, we may reach that cap 
and have no insurance. We will be hurt. Seventy-six percent of us who 
have insurance will be hurt because health care reform will take care 
of that problem.
  Twenty-five percent of Americans are stuck in a job lock. That is a 
new terminology. We are afraid to change jobs because we are afraid we 
will lose our insurance. So 25 percent of us who work will be adversely 
impacted by delay or filibuster. Obviously, the 37 million Americans 
who have no health insurance will continue to have no health insurance. 
So 37 million Americans will be hurt by a delay or a filibuster. And 
the decent, good employers who already give their employees health 
insurance will be adversely affected by a delay or a filibuster because 
when we have universal coverage, insurance will become affordable for 
those employers as well as for the rest of us.
  What about the elderly? They do not have a prescription drug benefit 
or long-term care. They will get it with this health reform bill.
  So I think it is very clear that the voices of filibuster, the voices 
of delay are not the voices of the American people. They may be the 
voices of the special interests. That is true.
  Let me read for you a quote from the sixties when this body was 
looking at the Medicare question--and Senator Kennedy talked about it. 
I am going to quote Senator Carl Curtis, a Republican Senator from 
Nebraska. This is what he said during the debate to create the Medicare 
system, one of the most cherished systems we have in this country.

       We are not doing something for the people today or this 
     week if we pass this bill. We are doing something to the 
     people. We are not doing something for the people.

  He said that about Medicare.

       We are doing something to the people, and I am not going to 
     have a part in this. I am not going to let the children of 
     this country point their finger at me and say I led a parade 
     either in Committee or on the floor to vote for two 
     socialized insurance programs, part A and part B of Medicare.

  I raise this and bring this quote to your attention because I think 
we are going to hear those same voices. Those are the voices of delay. 
Those are the voices of filibuster. Those are the voices of the special 
interests. Those are the voices we must stand up and fight. This is 
going to be a very difficult debate. But I say to you that if we ever 
had any courage or guts, this is the time to show it.
  I, frankly, think that if there is a filibuster, it will be a 
cowardly filibuster. I thought about it a long time before I used those 
words. But I think it will be a cowardly filibuster or delay because I 
think there are some in this institution who do not want to cast the 
tough votes and hard votes. Well, they cast those votes in both 
committees, Senator Moynihan's committee and Senator Kennedy's 
committee. It is our turn and it is our time. I hope the people will 
call our offices tomorrow. The number is 202-224-3121. I hope they will 
call tomorrow when they wake up and they are perky, and I hope they 
will tell us to fight against delay and filibuster.
  I yield the floor.
  Mr. MOYNIHAN. Mr. President, the Senator from California raised the 
question that the first vote we will have will be tomorrow on the 
question of whether we put this off until next year. In the terminology 
of ``sure bets,'' which the Senator from Iowa made, I will say to her I 
will give you a sure bet that that amendment will go down hard, and we 
will have had an affirmative beginning of this debate.
  Mrs. BOXER. I look forward to that.
  Mr. MOYNIHAN. To conclude this evening, I can just say that this 
present cycle that brings us to this floor today began 2 years ago when 
one of the most distinguished men of his generation ran for the U.S. 
Senate, and raised the simple proposition that if an alleged criminal 
has a right to a lawyer, why do you not have a right to a doctor? In 
that elemental epiphany, we started the journey that brings us here.
  I am very happy and honored to yield the remainder of our time to the 
most distinguished Senator from Pennsylvania.
  Mr. WOFFORD. I thank the chairman for all he is doing and has done, 
and for his good sense of history. Mr. President, I thank the Chair for 
all he has done in this field; he has worked so hard.
  Mr. President, ``We cannot escape history.'' Abraham Lincoln said 
that. We cannot escape history. We of this Congress and this 
administration will be remembered in spite of ourselves. But whether we 
will together rise to the occasion or fall divided, that question 
remains for us to answer. I would like to believe that in the days and 
nights ahead we will be guided, as Lincoln said, ``by the better angels 
of our nature,'' and that those watching us will witness self 
government, not civil war. Mr. President, this debate is not about 
politics, it is about people.
  John Heinz, whose seat I filled, was deeply concerned about what our 
Nation's health care system was doing to people and their lives. 
``America's health delivery system is fundamentally flawed,'' he said. 
``It is absolutely perverse that in a Nation of such great affluence as 
ours, we operate under a system that is based on ability to pay rather 
than on medical need.''
  When I got this job 3 years ago, I vowed to do everything in my power 
to make something good come out of the tragedy of the loss of John 
Heinz. When the people of Pennsylvania sent me back here, they did make 
something good happen--they sent a message to Congress that the 
conventional wisdom about the politics of health care was wrong. The 
people told Washington that health reform was not too hot to handle; it 
was too hot not to handle.
  And today, legislation to provide all Americans with affordable, 
private health insurance is on the floor of the U.S. Senate for the 
first time in the life of our Nation.
  That, in itself, is an achievement that the people of Pennsylvania 
should be proud of. But to solve the problem, to protect middle-class 
families from losing the coverage they thought was secure, and from 
paying more premiums and deductibles and copays than they can afford, 
we still have far to go.
  Pennsylvanians want us to go the distance. They are tired of 
Washington's finger-pointing and gridlock. They do not want Congress to 
squander this chance. And they certainly do not want their health 
security held hostage to anyone's political agenda. The people want 
action from this Congress.
  What action do they want? They want, I believe, the same kind of 
guaranteed coverage and choice of affordable, private health plans that 
Members of Congress have arranged for themselves.
  Members of Congress do not have Government-run health care; they have 
a range of private health insurance options. They have a consumer 
choice system--more choice, in fact, than most Americans get from their 
employers today.
  Our bill will make the Federal employee's plan that Congress has 
available to the American people and make it a model for reform; 
private health insurance that cannot be taken away; affordable 
premiums, paid by a shared contribution from employer and employee; a 
choice of doctor and health plan. That is what the Mitchell bill is, 
and that is what I am fighting for.
  I am going to fight against any so-called reform bill that does 
nothing to help older citizens and their families, allowing insurance 
companies to continue to charge a lot more if you are old or have a 
preexisting condition, failing to include prescription drugs or long-
term care, failing to keep promises given to retirees in terms of 
health care benefits from becoming broken promises. And I am going to 
fight against any bill that would make things worse for all of the 
middle-class families who have insurance today, by giving a green light 
to companies to continue cutting back, by covering fewer workers with 
less coverage and less choice. That is what I am against.
  There are some who are going down a different well-worn path. Their 
sound bites and slogans have a familiar ring because their predecessors 
made the same tired old arguments against Social Security and Medicare, 
against child labor laws and civil rights, against the 40-hour week and 
the minimum wage, against family and medical leave.
  But the scare tactics did not work, and the horror stories did not 
come true. Freedom did not disappear. Capitalism did not collapse; it 
got stronger, just as our economy will get stronger when we bring 
health care inflation under control.
  People in this country support the idea of employers contributing 
something to their employees' health insurance, because that is how 
most working people get their health insurance today. The only place 
where that is not understood is in Washington, where special interest 
lobbyists seem to have more power over the process than the people do.
  How dare Members of Congress, who have their health insurance paid 
for by their employer--the U.S. taxpayers--say it is impossible to 
provide the same kind of security to the people who sent them here. Why 
should middle-class Americans, who work hard, pay their taxes, and send 
their kids to school, not have that kind of security, too? It is a 
matter of simple justice.

  Mr. President, the eyes of the country are upon us. Like the great 
debates of our history--over war and peace, over civil rights, and over 
social justice--this debate will say a lot about who we are as a 
Nation. And it will answer a fundamental question: Who runs America?
  Already, the special interests have spent more money on lobbyists and 
lawyers, on TV and radio ads, campaigns of fear and smear, designed to 
mislead and misinform, than on any other issues in our Nation's 
history, more money than the Bush and Clinton campaigns together spent 
in the entire 1992 election. Who runs America?
  At our Nation's founding, Alexander Hamilton took a foreign visitor 
on a tour of this Capitol and he boasted, ``Here, sir, the people 
govern.''
  Mr. President, if we are true to our mission and our mandate, we will 
live up to Hamilton's boast.
  But if we do not, then decent, hardworking citizens will point to 
this place where statesmen once strode and say, ``There, friend, the 
special interests rule.''
  America deserves better than that, Mr. President. And I have faith 
that we will prove to be better than that, because this battle that 
Harry Truman began for guaranteed, private health insurance for all 
Americans is not about the next election; it is about the next 
generation.
  Thank you, Mr. President.
  The PRESIDING OFFICER. The Senator from New York.
  Mr. MOYNIHAN. Mr. President, as a matter of humility, I rise to thank 
the Senator from Pennsylvania for the extraordinary eloquence in which 
he concluded this first opening debate.
  This is an historic moment. For the first time ever a proposal for 
universal health coverage is on the floor of the U.S. Senate, on the 
floor of either body of the Congress.
  If we could have the faith, the vision and the tenacity that the 
Senator from Pennsylvania has shown from the time in the 1960 election 
and civil rights seemed an impossible dream, he brought a candidate for 
President to see that it was a necessary imperative, and it came about 
not least because of the Senator from Pennsylvania.
  I thank him, and I thank the Presiding Officer.
  Mr. President, I believe all time will have expired now.
  If I may suggest just for a moment, if you will be patient with me 
for one moment, I have some matters to conclude.
  Is the Senator from Oregon ready to go?
  Mr. PACKWOOD. Let me check just a moment.
  Mr. MOYNIHAN. Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. MOYNIHAN. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                            MORNING BUSINESS

  Mr. MOYNIHAN. Mr. President, I ask unanimous consent that there now 
be a period for morning business with Senators permitted to speak 
therein for up to 3 minutes.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. DOLE. Mr. President, before rushing to embrace the so-called 
crime bill, I urge all of my colleagues to review a speech by Professor 
John DiIulio of Princeton University, who appeared yesterday at a 
conference sponsored by the Project for a Republican Future.
  Professor DiIulio happens to be a registered Democrat, but it's his 
view that Congress should reject the crime bill because it's not smart 
and tough, as President Clinton likes to say, but ``dim-witted and 
weak.'' Professor DiIulio argues that the crime bill ``costs far too 
much, is much too complicated, contains way too many untested and 
unwise provisions, and will do nothing to reduce the country's crime 
problem.''
  In fact, the professor suggests that the crime bill may actually add 
to the crime problem as a result of something called the ``safety 
valve'' provision. He explains, and I quote:

       The Senate version of the crime bill that was drafted . . . 
     at the Federal level, at least, . . . by permitting certain 
     categories of convicted drug defendants to be invited back to 
     court, to be given a virtual retrial under a retroactive law.

  Professor DiIulio estimates that as many as 16,000 Federal prisoners 
could avail themselves of this safety-valve provision.
  So, Mr. President, this may be the first crime bill in American 
history that could actually lead to the early release of thousands of 
convicted criminals--a ``Get-Out-of-Jail-Free'' card brought to you by 
the U.S. Congress.
  In his speech, Professor DiIulio rejects the fallacy that our State 
and Federal prisons are somehow teeming with hundreds of thousands of 
nonviolent, first-time offenders. In fact, only 6 percent of all State 
prisoners are nonviolent offenders with no prior sentence to probation 
or incarceration. And of the 35,000 persons admitted to Federal prison 
in 1991, only 2 percent--700 inmates--were convicted of simple drug 
possession.
  Finally, Professor DiIulio highlights the danger of overselling the 
so-called 100,000 new cops-on-the-street provision. After looking at 
the fine print, he estimates that the crime bill provides full funding 
for only 20,000 new police positions, an increase that will be spread 
out across the country. So, Mr. President: Of course, it is worthwhile 
to hire more police. More police generally means more security. But, at 
the same time, let is not deceive ourselves into believing that 100,000 
new cops will be hitting the streets anytime soon--crime bill or no 
crime bill.
  Professor DiIulio's speech is a welcome dose of reality. I urge 
everyone to take a few moments to review it before casting a vote on 
the crime bill.
  Mr. President, I ask unanimous consent that Professor DiIulio's 
speech be reprinted in the Record immediately after my remarks.
  There being no objection, the speech was ordered to be printed in the 
Record, as follows:

                       Remarks by John J. Diiulio

       Thank you, Bill. I'm glad to be here, not only as a card-
     carrying Democrat but also as someone who has somewhat 
     reluctantly and begrudgingly come to the conclusion that this 
     crime bill ought to be scrapped.
       Let me begin by saying I think there are some very good 
     things in this crime bill, just as there were many good 
     things in each of the major pieces of federal anti-crime 
     legislation that were passed over the last 10 years. I'm 
     talking here about the Comprehensive Crime Control Act of '84 
     which established the sentencing guidelines, the anti-drug 
     abuse acts of '86 and '88, the Crime Control Act of '90 and 
     the Brady bill of '93. And as I mentioned, the Brady bill may 
     indicate, not among those who would oppose this crime bill 
     because it fosters further federal restrictions on guns, in 
     particular on certain types of assault weapons, I think that 
     its provisions are wise.
       By the same token, I wouldn't number myself among those who 
     oppose this bill because it contains billions and billions of 
     dollars for social programs. There is a fair amount of silly 
     business in this bill on that side. Midnight basketball may 
     be silly business. But prison-based drug treatment is not. 
     And so there's a mixed bag there.
       Finally, I wouldn't count myself among those who oppose the 
     bill because of the flaws, the limitations in its more 
     sensible or well-intended provisions. It's easy to 
     deconstruct, if you will, the community policy provisions of 
     this bill. The bill calls for 100,000 new cops. But when you 
     read the relevant titles of the bill, what you discover is 
     that that really means about 20,000 fully funded positions.
       And when you further look at how this bill is to be 
     administered, you come to recognize that it's to be 
     administered by the Office of Justice Programs, which is the 
     alphabet soup of agencies left over from the days of the old 
     Federal Law Enforcement Assistance Administration, which is 
     to figure out some way of divvying up this money between 85 
     percent for more manpower, 15 percent for everything else 
     having to do with policing, so much to jurisdictions under 
     150,000, so much to jurisdictions over 150,000, and so on.
       And if you're stouthearted enough to look at this bill in 
     light of the relevant academic literature, you know that it 
     takes about 10 police officers to put the equivalent of one 
     police officer on the streets around the clock. This is 
     factoring in everything from sick leave and disabilities to 
     vacations and three shifts a day and desk work and so on. So 
     that 20,000 funded positions becomes 2,000 around-the-clock 
     cops. And 2,000 around-the-clock cops gets distributed over 
     at least 200 jurisdictions for an average actual street 
     enforcement strength increase of about 10 cops per city.
       Moreover, you learn, when you look at the relevant titles, 
     that these positions are not really even fully funded. The 
     money is really seed money that will run out rather quickly. 
     And I suppose that those big-city mayors, Democrat and 
     Republican, who are supporting the bill simply believe that 
     in the out years the federal government will belly up to this 
     bar again and put up more funds.
       Nevertheless, I think the community policing provisions of 
     the bill, many of the prison provisions of the bill, 
     represent tiny, perhaps faltering but tiny steps in the right 
     direction. Why, then, should the GOP or responsible 
     legislators of both parties or concerned citizens generally 
     oppose this bill? My answer is that, in the last analysis, 
     this bill, warts, beauty marks and all, simply costs far too 
     much, is much too complicated, contains way too many untested 
     and unwise provisions. It will do nothing, in my view, to 
     reduce the country's crime problem. In fact, as I'll suggest 
     in a moment, it may actually add to it. The bill is not, as 
     the president, I think, likes to say with sincerity, smart 
     and tough. I think rather it is, taken all in all, rather 
     dim-witted and weak.
       There are at least four specific realities about crime in 
     this country that this bill does little or nothing to 
     address, or addresses perversely; Revolving-door justice, the 
     youth crime bomb, the black crime gap, and the real root 
     causes of crime. Now, I am going to try to do the 
     impossible--my Princeton students would not believe it--and 
     stay within my 15 minutes. So I will say as much as I can on 
     each of these scores before turning it over to my colleagues 
     on the panel.
       First, let me talk about revolving-door justice. Every 
     major public opinion survey shows that the public has lost 
     confidence in the ability of the justice system to arrest and 
     detain and convict and punish violent and repeat criminals. 
     From a number of recent studies published by Brookings and 
     other institutions, it's clear that the facts and the figures 
     support the public's frustrations and fears on crime.
       Let me offer just a little bit of the evidence, and I 
     stress a little bit of the evidence, on revolving-door 
     justice. Sixty-five percent of felony defendants are released 
     prior to trial. That includes 63 percent of all violent 
     felony defendants. Now, what happens to them when they're out 
     on the streets? Well, nearly a quarter of them simply never 
     show up in court, for starters. About 11 percent of murder 
     arrestees and about 12 percent of all violent crime arrestees 
     are on pretrial release for an earlier case at the time of 
     the offense. Over 20 percent have 10 or more prior arrests. 
     Over 35 percent have one or more prior convictions.
       Case management, which is a bureaucratic euphemism for plea 
     bargaining, means that over 90 percent of all criminal cases 
     today do not go to court because the offender pleads guilty 
     to a lesser charge. That's true as well for violent offenses. 
     Only 44 percent of murder cases go to trial, 23 percent of 
     rape cases, 15 percent of aggravated assault cases.
       Now, we hear a lot about the explosion in the prison 
     population, and it's true that the nation's prison 
     population, federal and state, has increased dramatically 
     over the last 15 years. But it's also true that the probation 
     and parole population has increased even faster. Today you 
     have about four and a half million persons under correctional 
     supervision in this country--four and a half million. Three 
     and a half million of them, roughly, are not incarcerated. 
     Rather, they're under the supervision of probation and parole 
     officers who are handling hundreds of cases and really can't 
     provide effective supervision.
       What happens in these cases? Well, a disproportionate 
     number of the three and a half million in probationers and 
     parolees out there circulate in and out of poor minority 
     urban neighborhoods, repeatedly victimizing their truly 
     disadvantaged neighbors. We have data on recidivism that 
     could--probably books and volumes that could fill this room. 
     But just to cite a few of the statistics, within three years 
     of sentencing we know that nearly half of all probationers 
     are placed behind bars for a new crime or abscond.
       We know that for parole, the tale is very much the same. If 
     you look on a state-by-state basis, you find, for example, 
     that in Florida between 1987 and 1991 you had over 100,000 
     prisoners released early. At points in time when they would 
     have been incarcerated were they not released early, these 
     offenders committed over 26,000 new crimes, including some 
     nearly 5,000 new crimes of violence, including 346 murders.
       Now, what else do we know about probationers and parolees? 
     Well, we know that with respect to violent crimes, violent 
     crime arrests, 16 percent of violent crime arrestees are on 
     probation and 7 percent are on parole. Now, if you take those 
     two numbers and you add it to a number I gave earlier--that 
     is, 12 percent of violent crime arrestees on pretrial 
     release--you're left with a rather amazing number, that 35 
     percent of all violent crime arrestees have some criminal 
     justice status at the time of the offense; that is, over a 
     third of all violent crime arrestees are ostensibly in 
     criminal custody at the time of the offense. Now, if that is 
     not revolving-door justice, I don't know what is.
       The Senate version of the crime bill that was drafted and 
     put out back in November--November 19th, 1993, to be exact, 
     by a vote of 95 to 4--would, I think, have done something, 
     though I'm not sure exactly how much, to stop revolving-door 
     justice. But now, almost nine months later, we have before us 
     a crime bill that would actually, in my view, grease the 
     revolving door, at the federal level, at least, via such 
     provisions as the so-called safety valve provision, which is 
     essentially a provision that would permit certain categories 
     of convicted drug defendants to be invited back to court, to 
     be given a virtual retrial under a retroactive law.
       About 5,000 prisoners would be immediately eligible for 
     this provision and they could get sentence reductions of as 
     much as half or more in some cases of their sentences. Also, 
     the language of the safety valve is quite elastic. I would 
     not be surprised, if this bill passes with this provision, to 
     see the safety valve provision applied to all of the 16,000 
     or so so-called low-level drug offenders in the federal 
     prison system.
       Now, interestingly, the safety valve idea has been 
     supported by a number of Republicans as well as Democrats, 
     including a number of conservative Republicans. And I think I 
     know where they're coming from. I don't think anyone would 
     believe that the federal sentencing structure is perfect. 
     There are lots of sentences, especially, I would say, for 
     drug offenders that are overly harsh. And I myself have taken 
     an interest in some such cases, up to and including joining 
     the clemency petition of one federal inmate who's serving 
     time for a nonviolent first-time drug offense.
       But what I would like to point out is that the utterly 
     false argument behind the safety valve provision, and other 
     provisions in this bill like it, is that many, if not most, 
     prisoners are petty first-time offenders with few previous 
     arrests, no previous convictions and no history of violence. 
     The facts, which have been painstakingly put together by the 
     U.S. Bureau of Justice Statistics and by other research 
     organizations and widely published, speak in exactly the 
     opposite voice.
       Let me just give you a few of the facts. In 1991, fully 94 
     percent of state prison inmates had been convicted of a 
     violent crime or had a previous sentence to probation or 
     incarceration. In other words, only 6 percent of state 
     prisoners were nonviolent offenders with no prior sentence to 
     probation or incarceration. Nearly half were serving time for 
     a violent crime and a third had been convicted in the past of 
     one or more violent crimes.
       If you look at the state data, you get the same picture. In 
     New Jersey, where I spend a lot of my time, you had in 1992 a 
     prison population in which about half of all prisoners were 
     serving time for a violent crime. Eighty percent had criminal 
     histories involving violence. The average prisoner had nine 
     prior arrests, six prior convictions and so on.
       Now, it is true that the federal prison system, compared to 
     the state systems, or most state systems, has relatively 
     fewer violent criminals and more property and drug offenders. 
     But of the 35,000 persons newly admitted to federal prison in 
     1991, only 2 percent, or about 700, were convicted of mere 
     drug possession. And even in the federal prison system, about 
     half of all prisoners had two or more prior felony 
     convictions and over half of all prisoners in federal 
     penitentiaries had a history of violence.
       So one has to understand as well that even these numbers, 
     as depressing as they are, understate the actual amount and 
     severity of crime committed by prisoners when free. For one 
     thing, they don't take into account the effects of plea 
     bargaining. People who may present themselves as first-time 
     nonviolent drug offenders may, in fact, be plea-bargained or 
     violent and repeat offenders.
       Second, these numbers don't account for the wholly 
     undetected, unpunished, unprosecuted crimes committed by 
     prisoners when free. There have been a number of large 
     scientific studies, prisoner self-report studies, that have 
     tried to get a handle on this question. And the two most 
     recent such studies indicate that in the year prior to 
     incarceration, the typical prisoner commits a dozen serious 
     crimes a year, violent and property crimes, excluding all 
     drug crimes.
       And finally, which brings me quickly, I hope, to my next 
     point, these numbers do not reflect the number of crimes 
     committed by prisoners when they were juveniles. We know that 
     nationally juveniles account for about one-fifth of all 
     weapons offenses. They've committed record numbers of murders 
     in the last several years, several thousand murders a year. 
     Today's high-rate juvenile offenders are tomorrow's adult 
     prisoners, but today's adult criminal records don't 
     comprehend yesteryear's slew of juvenile crimes.
       America is facing a ticking youth crime bomb. We have 
     burgeoning numbers of young people who, from all the 
     statistical profiles, are at risk of becoming violent and 
     repeat criminals. The rate of growth in serious youth crime 
     among white teenagers now exceeds the rate of growth in 
     serious youth crimes among black and Hispanic teenagers. Now, 
     given this reality, you might think that this bill would 
     address the problem of juvenile crime in a serious way. But I 
     would submit to you that it does not, not even symbolically.
       Let me just quickly mention the third overarching reality 
     which I think this bill ignores, and that is what I would 
     call the black crime gap. Most Americans, most people in this 
     room, are safer today than they were three or four years ago. 
     Crime rates nationally in most categories of crime have 
     dipped down, but not so for black, Hispanic, poor minority 
     inner-city Americans.
       In 1992, which is the last year for which we have complete 
     data, the violent crime victimization rate for blacks was the 
     highest ever recorded. You have lots of opinion surveys and 
     polls which show that black Americans find crime as truly the 
     number one issue in their neighborhoods, a majority of black 
     school children afraid to go to and from school, a majority 
     of black school children afraid, believe that they will be 
     shot at some point in their lives.
       Now, given this reality, you might think there'd be 
     something in this massive crime bill that would address this 
     problem. Instead, Congress spent a lot of time debating, 
     wasting time with the so-called Racial Justice Act. And 
     without getting into that, at least not getting into it now, 
     we just need to remember that the vast majority of crimes in 
     this country are intraracial. Over 80 percent of all violent 
     crime is intraracial. Over 95 percent of all homicides are 
     intraracial. And we have a series of studies that at a 
     minimum throw into serious doubt the issue of whether, in 
     fact, there are racial disparities in sentencing even in 
     capital cases.
       Well, this bill, of course, contains no racial justice 
     provision. But the logic of that provision, I think, informs 
     other provisions of the bill. It informs, I think, a 
     diagnosis in the bill of the root causes of crime, which talk 
     about things like unemployment and so on. Never mind that we 
     have now studies which suggest that that factor is not 
     important. Never mind the basic fact that most prisoners in 
     the year or two prior to incarceration held a job that paid 
     minimum wage or better. This is the diagnosis of root causes 
     in this bill.
       Well, where to go from here? To be brief, in closing, I 
     would say that--I would hope that this bill would be 
     scrapped, that Congress would come back in a new legislative 
     season and take another crack at it; in other words, go back 
     to the drawing board, but I would hope not one great big 
     drawing board with $30-plus billion worth of talk, but rather 
     a series of little drawing boards--a prison bill, a cops' 
     bill, if you must, a midnight basketball bill, a prison drug 
     treatment bill. And let's debate the merits and let's have 
     our legislators debate the merits and vote on the merits on 
     each provision separately.
       My fonder hope, one that only an academic could bear to 
     speak in a forum such as this, is that Congress would declare 
     a moratorium on federal crime legislation. There is a 
     provision in this bill for a crime commission, a bipartisan 
     commission to study crime. I think it would be much better to 
     have a bipartisan commission that would look at the evolution 
     of the federal government's role in crime control, 
     particularly since 1968, and ask the tough question of what, 
     in fact, has been wrought by the federal government's 
     involvement in making, administering and funding foreign 
     policy, and ask the tough question whether this bill or any 
     conceivable federal crime bill could actually do much to 
     protect the public and its purse better than they're 
     protected by existing policies.
       I'll stop there, Bill.


                   time limitation on votes tomorrow

  Mr. MOYNIHAN. Mr. President, on behalf of the majority leader, I ask 
unanimous consent that the succeeding votes following the first vote in 
the sequence of votes scheduled to occur tomorrow morning be 10 minutes 
in duration.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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