[Congressional Record Volume 140, Number 110 (Wednesday, August 10, 1994)]
[Senate]
[Page S]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: August 10, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
                          HEALTH SECURITY ACT

  The PRESIDING OFFICER. Under the previous order, the Senate will now 
resume consideration of S. 2351, calendar No. 539, which the clerk will 
report.
  The legislative clerk read as follows:

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

  The Senate resumed consideration of the bill.
  Mr. DOLE addressed the Chair.
  The PRESIDING OFFICER. The Senator from Kansas.
  Mr. DOLE. Mr. President, I wonder if I might claim my leader time 
before we start on the health care. Has leader time been reserved?
  The PRESIDING OFFICER. The Senator is correct.
  Mr. DOLE. Mr. President, I yield 5 minutes of my leader time to the 
Senator from New York, [Mr. D'Amato]. I will take about 2 or 3 minutes. 
I do not want to delay my colleagues.
  The PRESIDING OFFICER. The Senator from Kansas is recognized.
  Mr. DOLE. Mr. President, I would like to call the attention of my 
colleagues to four articles in today's Washington Post.
  First, I recommend the story on page 1 entitled, ``CBO Is Lukewarm on 
Senate Health Plan.'' This story summarizes some of the problems the 
nonpartisan Congressional Budget Office has with Senator Mitchell's 
proposal. Let me share a few quotes from that story.

       The CBO also found the [Mitchell plan] would be difficult 
     if not impossible for individual States to implement, and 
     that a proposed tax on health care plans whose benefits costs 
     exceed certain levels could increase the cost of insurance 
     for many people and cause some to drop coverage.
       Furthermore, the bill's proposal that there be an employer 
     mandate only in States that do not reach 95 percent coverage 
     by 2000 would cause businesses to move across State borders 
     to avoid the payment.
       The Agency also found an aspect of the Mitchell bill--
     establishing three additional medical subsidy programs--would 
     be difficult to accomplish in a sensible and administrable 
     fashion.

  It is obvious from this story, Mr. President, that the CBO 
preliminary analysis of the Mitchell bill should be read by every 
Member of this Chamber before we being the amendment process.
  The second article worth reading is on the front page and it is 
entitled ``A Second Opinion as Debate Begins.'' And this article 
reports that Mrs. Clinton believes the Mitchell bill is an ``untested 
approach,'' and she expresses her skepticism that ``it would work as 
advertised.'' Mrs. Clinton also expressed her preference for the 
legislation sponsored by Congressman Gephardt.
  Mrs. Clinton's influence on this issue is well known. And no doubt 
about it, she has been a very eloquent voice in this debate. But if she 
believes the Gephardt bill is better, it should lead us to wonder what 
will happen in a House-Senate conference committee. Will the White 
House be exerting its influence to set aside whatever bill the Senate 
passes, and to adopt the Gephardt approach? If that is to be the case, 
why do we not just bring the radical Gephardt bill up for a vote right 
now.
  Also on the front page is a headline that reads ``Businesses Desert 
Key Health Bills.''
  And the article reports that:

       A wide range of small and very large businesses have come 
     to the same conclusion that the bad news [in the Mitchell and 
     Gephardt bills] far outweighs the good.

  The article also contains a very compelling quote from James Klein, 
the executive director of the Association of Private Pension and 
Welfare Plans.
  Mr. Klein points out correctly that the folks who are saying that the 
Mitchell bill is not as bad as the Clinton or Gephardt bill are asking 
the wrong question. And he says the right question about the Mitchell 
bill is ``Is it better or worse than the current system with all its 
flaws?''
  And Mr. Klein concludes:

       Business, both large and small, is increasingly of the view 
     that it is worse than the current system and shouldn't be 
     allowed to go through.

  That is also the conclusion shared by the highly respected economist 
Robert J. Samuelson, in the fourth article in today's Post that I 
recommend to my colleagues.
  Let me just share a few quotes from Mr. Samuelson's op-ed which can 
be found on page A-19.

       Among other things, the Democratic health care plans 
     contain a large--and unjustified--multi-billion dollar tax on 
     younger workers. You wonder whether most Members of Congress 
     know this or even care. The whole health care debate is now 
     completely out of control. The desperate effort to craft 
     something that can be advertised as ``universal coverage'' 
     means that Congress literally no longer knows what it's 
     doing. Anything resembling the Democrats' bills, if enacted, 
     would produce massive unintended side effects.
       Chaos is now the most important and largely unreported 
     reality about the health care debate. Dozens of provisions in 
     [the Democrats' bills] would have huge unappreciated 
     consequences. John Sheils of Lewin-VHI, a health consulting 
     firm, says premiums for small businesses in the Mitchell bill 
     could be 25% higher than for big companies. The CBO agrees 
     a gap exists but puts it lower. Who's right? Do most 
     Members of Congress understand the gap? Probably not.

  And Mr. Samuelson--who, to be fair, also criticizes Republicans in 
his article--concludes by writing:

       In May, Robert Reischauer, head of the CBO, warned that 
     trying to find a compromise by combining provisions from 
     different bills might make the health system worse. He 
     compared it to building an auto engine with incompatible 
     parts. ``You can't say I want a piston from Ford, a fuel pump 
     from Toyota--and expect the engine to run.

  Well, that's precisely what's happened. The contraption is no longer 
even a car made from incompatible parts. It's now part car, part 
tractor, and part rollerblades. It's a clunker. Most Americans seem to 
understand this. Will Congress?
  Mr. President, Will Rogers once said that ``All I know is what I read 
in the paper.''
  And no doubt about it, after reading the Washington Post this 
morning, one thing I know is that it would be foolhardy for Americans 
to trade in the best health care system in the world for a plan that 
raises as many questions and as many concerns as the plans by Senator 
Mitchell and Congressman Gephardt.
  I ask unanimous consent that the two Washington Post articles be 
printed in the Record.
  There being no objection, the articles were ordered to be printed in 
the Record, as follows:

 Health Care: Start Over Next Year--They Don't Know What They're Doing 
                                Up There

                        (By Robert J. Samuelson)

       Among other things, the Democratic health care plans 
     contain a large--and unjustified--multi-billion-dollar tax on 
     younger workers. You wonder whether most members of Congress 
     know this or even care. The whole health care debate is now 
     completely out of control. The desperate effort to craft 
     something that can be advertised as ``universal coverage'' 
     means that Congress literally no longer knows what it's 
     doing. Anything resembling the Democrats' bills, if enacted, 
     would produce massive unintended side effects.
       Apparently, most Americans grasp this. In a Newsweek poll 
     last week, respondents were asked whether Congress ought to 
     ``pass reform this year'' or ``start over next year.'' By a 
     two-to-one margin (65-31 percent), they said ``start over.'' 
     They sense that the versions of health reform crafted by 
     House and Senate leaders are hodgepodges of conflicting 
     provisions whose only purpose is to win passage. But what is 
     clear to ordinary Americans is denied in Washington. In the 
     capital, the fiction is that legislators know what they're 
     doing and are debating rational alternatives.
       ``I think you're going to see a very good, erudite back-
     and-forth,'' says House majority leader Richard Gephardt, 
     sponsor of the House bill. Well, it won't be ``erudite'' if 
     members of Congress don't understand the consequences of 
     their actions.
       Gephardt's plan, for instance, would create a new Medicare 
     Part C program for the unemployed, workers in small companies 
     and many existing Medicaid recipients. The Congressional 
     Budget Office estimates that the program might enroll 90 
     million people. But the project could easily err by millions 
     in either direction. More important, Medicare Part C 
     emphasizes ``fee for service'' medicine (patients selecting 
     individual doctors), while the rest of the bill emphasizes 
     ``managed competition'' (reliance on health maintenance 
     organizations and similar plans).
       In a single stroke, the bill would separate the under-65 
     population into two groups, mainly based or income and size 
     of employer. Each group would be crudely steered toward a 
     different type of medicine. In practice, this division may 
     not be politically acceptable or economically workable. Many 
     Americans may find one type of medicine more appealing than 
     the other and resent being excluded. Or the artificial 
     segmenting of the medical market may raise costs for both 
     ``managed competition'' and ``fee for Service.'' Gephardt 
     doesn't know; no one does.
       Now, consider the tax on young workers. It arises from 
     ``community rating.'' As people age, their health costs and 
     insurance premiums rise. But ``community rating'' requires 
     that everyone pay the same rate. This provision is included 
     in the House bill and, in a modified version, in the Senate 
     bill. The effect would be to raise insurance for younger 
     workers (say those below 45); the amounts are hard to 
     estimate, but a good guess is at least $300 to $500 a worker. 
     If employers have to pay higher insurance, they will pay 
     lower salaries. The invisible tax on young workers might 
     total $15 billion to $25 billion annually.
       Is this fair? No. If enacted, it would compound the 
     existing bias against the young. Already, one-third of the 
     federal budget goes to the elderly; the young are taxed to 
     support the old. How much farther is this to go? Or is it a 
     cynical reaction to voting patterns (the young vote less than 
     the middle-aged or old)?
       Questions like these swirl around both Gephardt's plan and 
     Senate majority leader George Mitchell's. It is hard even to 
     describe Mitchell's plan. He says it's voluntary and lacks a 
     ``mandate.'' Wrong. It's true that it doesn't mandate 
     companies to buy insurance for workers. But it does mandate a 
     standard benefit package for firms--the vast majority--that 
     offer insurance. Because the mandated benefits are above 
     average, this would probably raise health spending. Companies 
     below the new standard would increase benefits; those above 
     would have trouble lowering them.
       Next, Mitchell hopes to achieve 95 percent insurance 
     coverage by offering subsidies for low-income workers to buy 
     it. But there's a ``fail-safe'' mechanism to limit subsidies 
     if the budget costs exceed projected costs. However, if 95 
     percent coverage doesn't occur by 2000, Congress could 
     require employers to pay 50 percent of their workers' 
     insurance. But this would apply only to firms with more than 
     25 workers. Got it? Neither Mitchell nor anyone else knows 
     whether this would reach 95 percent coverage.
       These plans are confusing because the health debate evaded 
     the basic tension between expanding health services 
     (``universal coverage'' etc.) and controlling health 
     spending. It's hard to do both at the same time. The plans' 
     complexities--as with the original Clinton plan's--aim to 
     disguise this conflict. Republicans haven't been especially 
     constructive in this debate because they haven't faced up to 
     it either. But they are now correct that a bad bill would be 
     worse than none.
       Chaos is now the most important (and largely unreported) 
     reality about the health care debate. Dozens of provisions in 
     these bills would have huge unappreciated consequences. John 
     Sheils of Lewin-VHI, a health consulting firm, says premiums 
     for small businesses in the Mitchell bill could be 25 percent 
     higher than for big companies. The CBO agrees a gap exists 
     but puts it lower. Who's right? Do most Members of Congress 
     understand the gap? Probably not. Still, the pretense in 
     Washington is that Congress is making conscious choices.
       The pretense is sustained because in Washington politics is 
     sport, especially at the climax of a legislative battle. All 
     attention fixes on who wins and loses--and the deals that 
     enliven the game. Rhetorical blasts are taken for reality; 
     political reporters know little of how legislation would work 
     and care less. This often leads to bad laws, and in health 
     care, the potential for blunders is huge because Congress is 
     tinkering with one-seventh of the economy and most aspects of 
     medicine.
       In May, Robert Reischauer, head of the CBO, warned that 
     trying to find a compromise by combining provisions from 
     different bills might make the health system worse. He 
     compared it to building an auto engine with incompatible 
     parts: ``You can't say I want a piston from Ford, a fuel pump 
     from Toyota * * * and expect the engine to run.'' Well, 
     that's precisely what's happened. The contraption is no 
     longer even a car made with incompatible parts. It's now part 
     car, part tractor and part rollerblades. It's a clunker. Most 
     Americans seem to understand this. Will Congress?
                                  ____


                 CBO Is Lukewarm on Senate Health Plan

                    (By Dana Priest and Helen Dewar)

       The Congressional Budget Office yesterday gave a decidedly 
     mixed review to the Senate leadership's health care reform 
     bill.
       The agency, in a preliminary analysis, said the bill would 
     achieve its goal of covering 95 percent of the population in 
     1997, almost immediately after enactment, but would increase 
     the deficit by $9 billion by 2000. The CBO said it would also 
     be necessary to require employers to cover the 14 million 
     people who would remain uninsured after 2000. The requirement 
     is called the employer mandate.
       Because of the way the Congress's budget rules are 
     structured, the deficit would not prevent Congress from 
     adopting the bill. The agency, which Congress created to give 
     it independent economic analysis and forecasting, predicted 
     the bill's adverse impact on the deficit would eventually 
     disappear.
       The CBO also found the plan by Sen. George J. Mitchell (D-
     Maine) would be difficult if not impossible for individual 
     states to implement and that a proposed tax on health care 
     plans whose benefits costs exceed certain levels could 
     increase the cost of insurance for many people and cause some 
     to drop coverage.
       Furthermore, the bill's proposal that there be an employer 
     mandate only in states that do not reach 95 percent coverage 
     by 2000 would cause businesses to move across state borders 
     to avoid the payment.
       ``Because of the disruptions, complications, and inequities 
     that would result, CBO does not believe that it would be 
     feasible to implement the mandated system in some states but 
     not others; the system would have to include either all 
     states or none.''
       The agency, which is charged with estimating the cost of 
     legislation on the federal budget, also found an aspect of 
     the Mitchell bill--establishing three additional medical 
     subsidy programs--would be difficult to accomplish in a 
     ``sensible and administrable fashion.''
       The subsidies would cost the federal government $115 
     billion over four years in addition to what it would spend on 
     Medicaid, the current federal-state Medicaid medical program 
     for the poor.
       Since Mitchell unveiled his plan last week, the legislation 
     has been rewritten ``hundreds of times,'' sources said, 
     because the original plan would have created a ``a huge 
     deficit.'' The bill now includes few subsidies for small, 
     low-wage firms. It also would not limit, as the Clinton bill 
     did, out-of-pocket costs for individuals. The changes could 
     pose serious political problems for Mitchell because the 
     business subsidies had been a sweetener to attract lawmakers 
     worried about burdening firms with new costs.
       The bill includes a novel approach to cost containment--a 
     25 percent tax on health plans whose annual price increases 
     exceed a government-set limit. The tax is projected to raise 
     about $6 billion in 2000.
       Mitchell adopted the provision as a way to raise money and 
     to force health plans to lower their costs. To avoid 
     criticism by labor unions, which oppose it, he inserted a 
     rule prohibiting health plans from passing the tax on to 
     consumers. But the CBO said such a restriction would be 
     difficult to enforce, the tax would be passed on and, if 
     insurance were voluntary, the increase would force some 
     people to drop coverage.

  Mr. D'AMATO addressed the Chair.
  The PRESIDING OFFICER. The Senator from New York.
  Mr. D'AMATO. Mr. President, I thank the leader for yielding me this 
time.

                          ____________________