[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 Senate continued with the consideration of the bill.
  The PRESIDING OFFICER. Under the previous order, there will now be 4 
hours of debate on the bill, S. 2351, equally divided and controlled 
between the majority and the minority leaders or their designees.
  Who yields time?
  Mr. PACKWOOD addressed the Chair.
  The PRESIDING OFFICER. The Chair recognizes the Senator from Oregon.
  Mr. PACKWOOD. Mr. President, in a moment, I am going to yield to the 
Senator from Minnesota such time as he wants.
  But I am telling you, I have reached the limit of my patience. Last 
night, the majority leader introduced a new bill. It has no number. He 
has not introduced it. He had it printed by the Government Printing 
Office. It is not a star print, which requires unanimous consent. It is 
a new bill. And apparently what he has done--I have it all on the one 
page, and I have not had a chance to look at it yet.
  The following sections have been modified since the initial printing 
of S. 2351, which was his bill only last week. Title I, 101, 102, and 
so forth; title II, title III, IV, V, right on through title IX.
  We have no idea what he has done. We are now soon going to be on this 
bill. This is exactly the problem I have been talking about for the 
last month. Are we going to go day by day with brandnew bills, brandnew 
amendments, with no chance to see them? Do these have to be costed? Do 
they have any cost? Does anybody know? Has anybody seen them? No.
  Is the majority party so determined to pass a bill, any bill, that 
they do not care whether anyone sees it or not? We have already turned 
down Senator Helms' sense-of-the-Senate amendment this morning that we 
should not proceed unless we have Congressional Budget Office 
estimates. We turned that down. That is the budget procedure we have 
voted to follow for years. We should have estimates before we go. We 
defeated that.
  Now we have a bill we have never seen. We have modifications to the 
previous bill that we only saw last week that was 1,400 pages, 14 
pounds.
  It is an absolutely insane, inane, unfair process to ask us to now 
know what is in this bill that has not been introduced, but was printed 
last night at the request of the majority leader.
  Mr. President, I yield to the Senator from Minnesota such time as he 
may deem necessary.
  Mr. KENNEDY. Will the Senator just yield for purposes of 
clarification? What exactly is the point that the Senator was making?
  The PRESIDING OFFICER (Mr. Akaka). Does the Senator from Oregon 
yield?
  Mr. PACKWOOD. No, not on my time.
  Mr. MOYNIHAN. Mr. President, now, comity, comity; and no breaking of 
furniture.
  Mr. PACKWOOD. I just did not want it on our time. That is fine.
  Mr. MOYNIHAN. Sure. I yield to the majority leader such time as he 
requires.
  Mr. MITCHELL addressed the Chair.
  The PRESIDING OFFICER. The majority leader is recognized.
  Mr. MITCHELL. Mr. President, I simply want to make one point, and 
then I will be glad to yield to our colleagues.
  I introduced my bill 1 day after announcing my plan.
  It was based upon the Finance Committee bill. That committee had 
completed its work a month before, and the Labor Committee bill which 
completed its work 2 months before. In June, Senators Dole and Packwood 
announced that they had a plan, and it was introduced as a bill last 
night, 6 weeks later. No one has yet had a chance to read it. It was 
for many weeks a phantom bill.
  We welcome the opportunity to read the bill now finally after a 6-
week delay. But I hope now that we can concentrate on debating the 
issues, not on when which bill was printed for whom. We moved as 
promptly as possible.
  There will be ample opportunity to debate this bill. I have said many 
times no one will be rushed. We will stay here as long as it takes, as 
many days and weeks, months, if necessary, for every Senator to be able 
to consider the bill amply.
  But let us be clear with respect to proceedings on the bill. My bill 
was introduced 1 day after I announced my plan for everyone to see. And 
it took more than 6 weeks to get our colleagues' bill from the time 
they announced the plan. We welcome the debate. We welcome the 
discussion. Perhaps we can get to the issues before this debate is 
through.
  I thank my colleagues.
  Mr. PACKWOOD addressed the Chair.
  The PRESIDING OFFICER. The Senator from Oregon.
  Mr. PACKWOOD. Mr. President, just so the record is complete, in late 
June, Senator Dole and I asked the legislative counsel's office--that 
is, the professional staff that drafts bills--to draft our bill. They 
only have so many people. They indicated they had to draft the finance 
bill first--and I am not complaining about that. Then they again set 
aside our bill to draft the majority leader's bill. We would have loved 
to have had our bill last June, the first week in July, or the second 
week in July. We just did not get it. We could not get it. I am not 
blaming anybody. It is no one's fault.
  But for the majority leader to blame us because the professional 
staff that drafts the bills put his bill ahead of ours seems to me 
borders on a bit of hypocrisy.
  I am glad we are going to have plenty of time. Senator Dole and I are 
not suggesting that we rush our bill. We would be perfectly happy to 
take a recess for a month, and let everybody study our bill.
  I hope that this is the last bill he is going to introduce because we 
spent a lot of time going through last week's bill.
  I do not know. But I might say to my good friend from New York that I 
have heard--I do not know if this is true--that the provision he and I 
especially do not like about percentages of residents and number of 
residents may not be in this bill now. I do not know if it is or not. 
But I would hope it is out.
  I hope the day after tomorrow we do not get another list like this. 
This is effective August 9, another list of titles and changes when we 
have spent hours and hours studying the last bill we have. You cannot 
quite go through this in a night.
  So I would implore the majority leader to discuss with himself what 
it is he wants and make up his mind. I will not ask him--make up his 
mind and give us one last bill that we can work on.
  I yield such time as my good friend from Minnesota wants.
  The PRESIDING OFFICER. The Senator from Minnesota.
  Mr. ROCKEFELLER. Will the Senator from Oregon yield?
  Mr. PACKWOOD. On Senator Moynihan's time. Yes.
  Mr. ROCKEFELLER. Just as a point of clarification, the objection that 
the Senator raised on work force and residency caps has been removed. 
It is not in the bill printed on the podium before the Senator.
  Mr. PACKWOOD. Let me thank my good friend from West Virginia. I am 
delighted it is out of the bill. Does he happen to know what else is 
out of the bill? I do not know what else is out of the bill. Does he 
know what is in the bill? I do not know what is in the bill either. 
That is all I am asking.
  Mr. MOYNIHAN. May I say we will have those specifics for the Senator 
presently.
  Mr. PACKWOOD. I thank my good friend from New York.
  I now yield as much time as the Senator from Minnesota needs.
  The PRESIDING OFFICER. The Senator from Minnesota.
  Mr. DURENBERGER. Mr. President, I thank my colleague from Oregon for 
yielding, and for my other colleagues for this brief debate.
  I must also begin my comments by thanking 4-plus million constituents 
in the State of Minnesota for making this opportunity available to me. 
It has been a tremendous thrill, and it has been a real challenge as 
the last few minutes--perhaps the last few weeks have indicated--to 
serve in the U.S. Senate, particularly to serve them on an issue like 
this. I have enjoyed it a great deal.
  I also want to thank my colleagues on the Finance Committee and on 
the Labor and Human Resources Committee for the most valuable education 
anybody could ever get both on the health policy and into the process 
by which legislation is made.
  As I was listening to the debate which preceded my colleague from 
Oregon yielding to me, I was reminded of an incident that some 
wonderful staff person pulled out of a little history book on how 
Medicare came to be. He has been reading a series of L.B.J. books, and 
people who have written about L.B.J.
  But he has this wonderful little story about Lyndon Johnson who is in 
the middle of negotiating with Medicare with the Ways and Means 
Committee and, in Johnson's book called ``The Vantage Point,'' on page 
216, he talks about this story. The story is about a man in Texas who 
was being tested for a job as a railroad switchman. They asked him the 
following:

       What would you do if a train from the east was going 60 
     miles an hour, and a train from the west was coming 60 miles 
     an hour, and they were both on the same track, they were a 
     mile apart, and they were headed for each other?

  The guy responded:

       I would run and get my brother.

  And they asked him why. He said:

       Because my brother has never seen a train wreck.

  L.B.J. wrote that he at that time turned to Wilbur Cohen, who was his 
health staff, and said:

       I thought I would run and get my brother because if the 
     Ways and Means Committee Medicare bill got reported out, 
     there would be a train wreck.

  I am sort of getting the sense here as I follow the opening on health 
care reform that we may well have a 60-mile-an-hour train from one 
direction and a 60-mile-an-hour train from another direction. But I do 
not think I am going to run and get my brother. I am going to, if my 
colleagues do not mind, make a couple of comments about the process, 
and then particularly about the bill which the majority leader has put 
in front of us.
  I only reluctantly supported this resolution by the Senator from 
North Carolina this morning because I do not think we are rushing to 
health care reform. We have been doing health care reform ever since I 
got here. I do not agree with the notion that we are rushing to do 
health care reform. I remember writing a speech for George Bush in 
January 1992, while he was President of the United States. And we were 
trying to persuade him to take leadership on health care reform. A lot 
of people have been doing health care reform.
  It is a reality that in the last few months we have had a variety of 
plans added to the wide variety of plans which we have been debating 
over the last year, and viewed from a public standpoint, there is a 
certain amount of rushing to a conclusion and a lot of confusion about 
exactly what this is all about.
  But if I may begin my comments by reminding my colleagues and perhaps 
others that I stand at a desk that was occupied by health care 
reformist. There was nobody in this body when I arrived here as 
committed to health care reform as the late John Heinz from 
Pennsylvania. I sat next to John Heinz on the Finance Committee for at 
least 8 or 10 years before his untimely death. And there was a person 
who was totally committed to reforming the health care system, the way 
we pay for it, the way we insure it in this country. I stand now next 
to the Senator from Oregon who, when I got here in 1978, was a leader 
in health care reform. At various times we will hear from the Senator 
from Kansas, our Republican leader, who was doing health care reform 
when I got here. I remember our first act in 1979 on the Finance 
Committee was to beat, by one vote as I recall, the hospital cost 
containment approach to health reform of President Carter. While I do 
not know where my colleague from New York was at on that particular 
vote, I do know where the majority leader, the Democratic leader of the 
House was; he, too, voted against it.

  In those days, we were doing bipartisan health care reform. The 
decision was that a national budget for hospitals and price control of 
hospitals in this country--by at least one vote in the Finance 
Committee and by a narrow vote in the Ways and Means Committee--was not 
the way to reform or change the system.
  Congressman Gephardt was wise then, and Senator Packwood was wise 
then, as was Senator Dole, and anyone else who voted against that 
particular approach to health care reform.
  In the 1980's the Republicans led in reform, using the Government 
program--the little-known Government program--called Medicare as the 
vehicle for health care reform. One of our colleagues said this morning 
on the floor of the Senate--Senator Specter from Pennsylvania--that his 
Aunt Rosie does not want anybody messing with her $91 payment on her 
Medicare plan. She thinks it is the Blue Cross plan she buys at home. 
Another one of my colleagues at breakfast said that a relative of his 
called and said, ``I do not want any Government in my Medicare plan.'' 
I have a poll taken by AARP back in 1984 which tells us that even in 
1984, 4 out of 5 Americans who are on Medicare do not realize that it 
is a Government-run program. I suspect that the number may be greater 
today.
  Anyway, we have been using, through the 1980's, that Government 
program--Medicare--as a way to try to change the approach to health 
care in this country. Mr. President, I remind the occupant of the 
chair, the Senator from Hawaii, because he was not here, that in the 
first 6 years of this period when we had a Republican Senate and 
President, I happened to chair the Health Subcommittee of the Senate 
Finance Committee. Senator Baucus from Montana was the ranking member 
and then George Mitchell, the majority leader, was the ranking member, 
and many people I see on the floor today were part of that committee. 
Every single thing we did, from prospectively pricing hospital payments 
to the so-called DRG payments to prospectively pricing the part B 
payments in 1989, was bipartisan. Everything we did to try to bring 
catastrophic insurance and drug benefits and long-term care to the 
elderly were cooperative efforts--in that case, between Senator 
Mitchell and myself and others on the Finance Committee. Bipartisan. It 
was not a Republican bill; it was a bipartisan approach. The same thing 
is true of the outcomes of the work we did on AHCPR. The same thing is 
true of every effort that we made at changing the system--which 
everyone says is the greatest system in the world. It is not. It 
delivers the best health care in the world. That is why people come 
from all over to use it. But, as a system, it has been found wanting by 
many of us. We have tried to change it using Medicare as a vehicle. 
Every single time we have done it, it has been bipartisan.
  Mr. President, I went back and looked at a book I wrote in the early 
1980's. I wrote two books on health policy, but only one of them ever 
got printed. The other one is buried in about seven chapters that are 
edited and not published. I looked at the one that got printed back in 
1979. I laid out the first health care reform bill that I authored, and 
its principles are the same as the principles that are incorporated 
into bills like Kerrey-Chafee, Breaux-Durenberger, Cooper-Grandy, and 
the current bipartisan Finance Committee bill.
  I was reminded of this because in a conversation with my number two 
son,who is now working at a hospital in Minneapolis, he started telling 
me, ``Dad, you know, in your book you said'' this and that. I said, oh, 
my God, what a compliment that a kid will read and remember something 
his dad said or wrote. But in 1981, I laid out eight principles for 
reform. I am not the only one. I am sort of identifying those of us who 
have been involved in health care reform before Bill Clinton got to be 
a Governor, to say nothing of being a President. Health care reform did 
not start with the election of 1992. It did not start with the election 
in Pennsylvania. It started before I got to the U.S. Senate and has 
been ongoing, and the bottom line is that it has been bipartisan.
  Mr. President, if for no other reason than history, I ask unanimous 
consent that the speech I referred from September 1981 be printed in 
the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                  A Framework for Health System Reform

 (Remarks by Senator Dave Durenberger to the National Health Council, 
                  Washington, DC, September 18, 1981)

       It was over two years ago that I first introduced the 
     Health Incentives Reform Act. Since that time I've learned a 
     lot about health care in this country. I've learned which 
     government programs work and which ones don't. I've learned 
     about fraud and abuse. I've learned about getting the best 
     health care in the world to the people who need it. And I've 
     learned how much it all costs. But through it all, my faith 
     in the principles underlying the Health Incentives Reform Act 
     has not wavered. I started out with a strong belief in the 
     value of choice and the strength of the private sector. 
     Somewhere along the way the ideas were translated as ``pro-
     competitive'' and that's true--but the underlying theme 
     remains consumer choice.
       Choice gives individual consumers the opportunity to select 
     a product or service that best meets their needs. The most 
     successful provider of that goods or service will be the one 
     that best responds to consumer desires--whether those desires 
     include cost, quality, appearance, or other factors. As I'm 
     sure you know, these very basic elements of a competitive 
     market do not exist in health care. The ultimate consumer of 
     health services, the patient, is usually insulated from the 
     cost of care by a private or government insurance plan. 
     Furthermore, when patients do share in the cost of their 
     health care, they find there's nothing to shop around for--in 
     other words, no choices. How many employees have a choice of 
     health plans? How many Medicare beneficiaries do? Not many. 
     And without consumer choice to stimulate providers to be 
     responsive and efficient, we really can't expect doctors and 
     hospitals to change their behavior. More regulation won't 
     cure the ills of our health system. But neither will the 
     status quo. We must introduce the basic elements of choice 
     and competition into health care.
       In the course of thinking about these issues I've come to 
     realize that achieving a better health system entails much 
     more than simply enacting a so-called pro-competitive bill. 
     No single bill can include all the elements needed to make 
     our health system more competitive. The reason we have market 
     failure in health care cannot be attributed to any single 
     piece of legislation in the past. The course to our present 
     state of affairs has been incremental, and likewise our 
     movement toward greater competition will have to be 
     incremental. That doesn't mean that our action will be 
     limited or slow in coming. It only means that we will act 
     broadly and persistently.
       An incremental approach requires that a competitive 
     framework be established which can be used to formulate 
     positions on the entire range of health issues. It's very 
     easy for health policymakers to view issues in isolation and 
     forget the contribution each one makes to the whole. You 
     can't expect a business to produce a good product if each 
     division sets its own agenda. There has to be coordination 
     and an overall corporate strategy. Improving the health 
     system is no different. It needs an overall framework and 
     game-plan.


                  eight guiding principles for change

       I've thought a lot about a framework for health, and I'd 
     like to share with you today the guiding principles I've been 
     developing. Most of these principles apply to other issue 
     areas in addition to health, and are representative of my 
     general philosophy on the role of government in society.
       1. Choices are good. Government policy should expand 
     choices to the individual, not limit them.
       Monopolies in service provision, whether public or private 
     in nature, should be avoided. Citizens benefit from choice, 
     whether it's in the form of competition with Ma Bell for long 
     distance rates or in the alternatives to the U.S. Postal 
     Service for package delivery. Government has done a 
     reasonably good job of extending health care choices to 
     its employees through the Federal Employees Health 
     Benefits Plan. Similar choices should be extended to 
     Medicare beneficiaries and veterans.
       2. The government is generally a better purchaser of 
     services than provider of them.
       Government does not allocate resources as well as private 
     markets and should directly provide services only when a 
     private alternative is unavailable. In cities like New York, 
     private bus lines are able to make a profit on runs the 
     transit commission consistently loses money on, despite 
     charging the same fare. Another example is in the area of 
     municipal garbage collection. Those communities like Newark, 
     Kansas City, and Minneapolis, that contract out for refuse 
     collection, are able to save millions of dollars compared to 
     communities that directly provide the service.
       A further extension of this principle is that, if possible, 
     government payments should go through the beneficiary rather 
     than directly to the provider.
       As an example, consider the G.I. Bill. Veterans were given 
     the choice of going to whichever institution they wanted to 
     receive their education, certainly a preferable alternative 
     to building exclusive Veterans Colleges to handle all veteran 
     education. In the area of subsidized housing, special 
     projects conducted by HUD in Green Bay and South Bend have 
     demonstrated that housing allowances--a form of voucher--give 
     beneficiaries a range of choices that made them happier and 
     the market more responsive. The same approach should be used 
     with Medicare and Medicaid.
       3. Consumer choice is enhanced as information increases. 
     Government policy should facilitate the flow of information.
       Individuals cannot be expected to make sound choices if 
     they are provided with insufficient or inaccurate 
     information. Furthermore, information must be presented in a 
     straightforward and comparable manner. Individuals should not 
     have to compare apples with oranges. Consider the value and 
     popularity of a publication like Consumer Reports. It helps 
     us compare products on the basis of cost and quality. On the 
     other hand, look at the information the government provides 
     federal employees under the FEHBP--there seems to be plenty 
     of information there, but at least for me it's very difficult 
     to make heads or tails out of. Information must be provided 
     in a usable form.
       4. The price of goods or service should be a true measure 
     of its cost. Government policy should not facilitate hidden 
     costs or cross-subsidizations.
       A good example is the subsidy our government provides for 
     tobacco. It's bad enough that the government gets in there 
     and mucks up all the price signals that would otherwise be 
     shaping the market--but then to have the stuff so 
     unhealthy on top of that. It just doesn't make sense. In 
     the health area, Medicare cost allocation formulas often 
     force hospitals to shift legitimate expenses to private 
     paying patients. Such cost-shifting doesn't save the 
     system any money, but it does distort the price signals 
     buyers perceive. Consumers should get what they pay for 
     and pay for what they get.
       5. The government should guarantee access to necessary 
     care. However, standards of access cannot be open-ended and 
     must be realistic.
       Not every town has a Bloomingdale's or a hospital or an 
     orthopedic surgeon, but access to these facilities and 
     services is usually reasonable. In the medical area, 
     geographical access is only one issue; there's also economic 
     access. We provide medical services to those who can't afford 
     them. But consider the difficult issue we face as medical 
     technology offers us expensive new treatments for disease. 
     True, the treatment may be better, but is it worth 10 times 
     the cost? We simply cannot afford a health system which sets 
     standards solely on the basis of available technology with no 
     regard for price. Setting standards for access is a thorny 
     but unavoidable government responsibility.
       6. A responsive market will have fluctuations in capacity. 
     Temporary shifts and increases in capacity are to be expected 
     as the market adjusts.
       Shifting buyer preference causes some producers to increase 
     output while others decrease theirs. Consumer preference for 
     fuel-efficient cars left our American auto manufacturers with 
     too many large cars and too much capacity to produce them. 
     Even though they are rapidly downsizing their models, they 
     still have more capacity than they need for producing large 
     automobiles. But that's not bad; it's just part of the 
     process, and government shouldn't be tempted to meddle with 
     it. In the health area, that means getting away from 
     certificate-of-need.
       7. The government should establish guidelines for quality, 
     but recognize that quality will ultimately be judged by the 
     individual.
       Consumer protection often takes the form of government 
     regulating the producer and setting standards for quality. 
     For years the government has tried to regulate standards for 
     mileage and crash restraints in automobiles. The government 
     has also tried to control the use of artificial sweeteners, 
     even though diabetics might choose to accept the risk of 
     cancer to decrease their sugar intake. A more appropriate 
     role for government is to establish guidelines and, as 
     mentioned earlier, provide adequate information to the 
     individual making the choice.
       8. The government's role in stimulating competition should 
     be to assure fair market conditions, not regulate its 
     particular brand of competition.
       We each have a slightly different definition of 
     competition. What's important is not that we install one 
     particular model, but that we create the conditions that will 
     allow the market to diversify and shape its own future.
       That's it. If I get up to ten, maybe we can call them the 
     Commandments. For now, I guess they're just the Beatitudes.
       As an example of how they might be used, take health 
     planning. The concept is a good one. When it comes to a 
     community's health system, citizens should have some input. 
     But the regulatory authority we've given planning agencies is 
     dangerous and uncalled for. To a planner, excess capacity is 
     the bane of our health system. To a believer in the market 
     and my sixth principle, excess capacity is a part of change 
     and innovation. As I see it, the elimination of all excess 
     hospitals beds in a community would significantly reduce the 
     pressures for change within the hospital industry. 
     Franchising may be okay for McDonalds or Wendy's, but it's 
     not okay for the government. We should neither franchise 
     peanut growing nor health care, and HSAs should not have the 
     certificate-of-need authority they now enjoy.
       I know you are interested in the more talked about pro-
     competitive provisions. I tend to think in terms of public 
     buyers and private buyers. As the major purchaser of health 
     care, government certainly has a responsibility to shape up 
     its own act. Consequently, I have been very interested in 
     proposals which would extend voucher-type options to Medicare 
     and Medicaid beneficiaries. The proposals range from fairly 
     limited ones, like Senator Heinz' bill to capitate HMOs under 
     Medicare, to broader voucher schemes in the mold of Alain 
     Enthoven's ideas.
       I recognize both the technical difficulties and unknowns 
     associated with a shift to capitated payments, but I believe 
     we must pursue it now. From the standpoint of the budget 
     process, capitated government contributions would make 
     Medicare spending predictable and precise. From the 
     standpoint of the beneficiary, there would be choices; 
     choices which would allow the individual to best match his or 
     her health needs with a qualified health plan. It all fits 
     with my guiding principles, especially the first two. I 
     expect the scope and details of a capitation plan for 
     Medicare and Medicaid to be developed by my staff and the 
     administration over the next several months. The Senate 
     Finance Committee should be in a position to hold hearings 
     and mark up a bill by early next year.
       I'd be less than candid if I said I expected smooth sailing 
     for these provisions. There is tremendous inertia in current 
     federal policy. Government is accustomed to what we have, and 
     so is the private sector. As a public buyer, government must 
     change its position by directing its dollars through the 
     beneficiary, offering choices, and returning coverage to the 
     private sector. As private buyers, businesses must assure 
     that fair market conditions exist for their employees. The 
     market place can work if we all work to make it happen.

  Mr. DURENBERGER. Mr. President, one of the things that our chairman 
of the Finance Committee has taught us this year, in literally hours 
and hours and hours of hearings on health care reform, is to define our 
terms. And we are all grateful to him for having done that. I hope that 
in the course of the debate, in the next week or two, however long it 
takes, that those definitions will come in handy. I must say, listening 
to the debate and discussion last night, the opening statements last 
night, starting with the majority leader's statement, I heard a lot of 
examples of Americans denied access to health insurance because of 
medical conditions.
  As someone who has been trying to change the system for a long time, 
and who stood on the floor in 1992 with Lloyd Bentsen when he was 
chairman of the Finance Committee, and passed the national legislation 
that would have eliminated all of those problems, I do not like the 
idea that today's health care reform is premised on a set of real 
problems that could have been resolved in 1992, except the Democratic 
Congress would not permit us to take up that bill on the House side. 
But every one of those stories is a real story. My colleague from West 
Virginia told these stories about the medically uninsurable in 
Minnesota. They are real people who are really suffering. We have been 
trying for years to resolve that through insurance reform. It has been 
held up, for whatever reason, until now when it becomes a part of the 
overall health care reform. But it is only part of the health care 
reform debate.
  One of the Sergeants at Arms was kind enough to come up to me and 
say, ``Senator, I just learned you were not going to be here next 
year.'' In a way, that, too is a compliment, that the word has not 
gotten out, even though I announced it a year ago. I went back to 
Minnesota in September and announced that I was not going to run for a 
fourth term, and Mrs. Clinton came to town the next day and sort of 
wiped me out. That is probably why he did not hear about it. She did a 
wonderful job all day long, as she did in many communities, alerting 
people to the need for health care reform.
  At the end of the day, there was a 1-hour television program, one-
third of it came from Rochester, MN, at the Mayo Clinic where Mrs. 
Clinton was, and Paul Wellstone was up in a small town in northeastern 
Minnesota, and I was sitting in my hometown of St. Cloud, MN, which, to 
you Garrison Keillor fans, is Lake Wobegon. In Rochester, there was a 
5-year-old youngster that had a serious and disabling disability with 
which he had been dealing since birth, a very expensive, medically 
uninsurable person. We talked for 15 minutes about how health care 
could help her and billions of people like her.
  Then we went up to northern Minnesota to the little town of Moose 
Lake, and Senator Wellstone was there with Dr. Ray Christianson, who 
that year had been the Family Practitioner of the Year, and talked for 
15 minutes on how health care reform put a family practitioner in every 
rural community in America.
  We came to Lake Wobegon where I was sitting with the owners of the 
Ace Hardware Store, Cathy and Denny Timm, who were 35 years old--I 
remember that--from Clearwater, outside Saint Cloud, and have the Ace 
Hardware Store.
  They had the television camera there, and Hillary Clinton was on the 
other end of it. It is hard to know what the Timms were going to ask.
  Well, Denny Timm looks right in the camera and says:

       Mrs. Clinton, we so appreciate your coming to Minnesota. 
     This is my question: I am glad we are going to do health care 
     reform. I need to know how much is it going to cost, who is 
     going to pay for it, and how is it going to affect my 16 
     employees, half of whom are part time, and most of them are 
     college students.''
  That was a much more difficult question to answer in 2 or 3 minutes 
by the First Lady of the United States, and it has become a more 
difficult question to answer as time goes on: How much is it going to 
cost? Who is going to pay for it? And how is it going to affect me?
  Mr. President, I am going to deal with that subject in the context of 
the majority leader's bill. I wish I were here dealing with the context 
of the Finance Committee bill because it is the one bipartisan, or 
nonpartisan, bill that passed out of any committee of the the House or 
the Senate. But I do not have that opportunity right now. I would like 
to talk about it in that context. But we will talk about it in the 
context of the Mitchell bill.
  Before I do that, I want to say to the majority leader how much I 
have enjoyed working with him. I already referenced the fact that he 
and I worked on Medicare catastrophic. We worked our way through all 
the difficult efforts to pass it and stood on the floor of the Senate 
here trying to defend it as it was being defeated by a 65 to 35 vote. 
His heart is in the right place. There is no question about it.
  (Mr. KERREY assumed the chair.)
  Mr. DURENBERGER. But it is critical, Mr. President, as we try to find 
a solution to the challenge of what is health care reform, how much is 
it going to cost, who is going to pay for it, and how are we, the 
people of America, going to benefit from it, and what changes are we 
going to have to engage in in order to enjoy these benefits, that I 
talk about the Mitchell bill.
  After July 2, when the Finance Committee bill was reported out, it 
was common knowledge that the Finance Committee bill, which was 
basically a market-based bill, and the Labor Committee bill, which is 
very much like the Clinton bill, were going to be melded. The word also 
went out that the drafters were going to reach out to those of us on 
the market side of the ledger.
  We had one meeting, no ongoing discussions, no negotiations, no 
involvement in the drafting of the bill. When the draft emerged, we 
were told this was a market bill.
  The majority leader says today that he tried to write it on the 
Finance Committee bill. Mr. President, I have read the Finance 
Committee bill. I wrote a lot of the Finance Committee bill. My staff 
did and other staff did. This is not the Finance Committee bill. It is 
not a market bill.
  Today I want to tell you why. I have come to the conclusion that it 
is not health reform. It is 95 percent universal enrollment. It does 
insurance reform, but it does not do market reform.
  Most people have never seen a medical market, at least not that they 
would recognize when they see it, but Americans live in a market 
economy and we operate in markets all the time. We are accustomed to 
choosing from a variety of products that we need on the basis of value, 
quality, price, service, satisfaction. We all know that. We have 
markets for food, for homes, for cars, for furniture, for dancing 
lessons, for restaurants, just to name a few. But we do not for health 
and medical services.
  There are some, and I know some of my colleagues on this floor, who 
will say medical services cannot be bought and sold, you cannot put a 
value on them, you cannot put a price on them, you cannot judge 
consumer satisfaction; they are a social good; the heck with the price; 
the heck with the service.
  Mr. President, we have medical markets now. Most of them do not work 
as well as they could. Some work better than others, and for most of 
our lives, the fact is that we have taken the quality of medicine and 
access to medical services for granted. Everyone who is here today 
knows that. Cost was no object. We pay doctors' fees for their services 
on a piecework basis.
  I imagine, when I was a kid there were probably 100 different 
services doctors could do for you. Today there are apparently 9,000 
different services, if you look just at the Medicare codes, a piecework 
service. And cost was no object. We sent the bills to insurance 
companies, and they paid them for us.
  Doctors and lawyers and insurance companies then got State 
governments into the business of protecting fee for service. They 
passed laws preventing competition and choice. They taxed insurance 
premiums. They mandated long lists of benefits. They imposed other 
requirements. Every time in the licensure proceeding there was a new 
kind of doctor or medical professional, someone passed a law saying 
that new kind has to be in the benefit package.
  The result is we have lots of services available. We have very high 
quality, but you really would not know it. We have the best care, as 
has been said often, but it costs so much. We are approaching a crisis 
in access and affordability, as the majority leader said last night.
  The only thing that has demonstrated that we can actually do reform 
and actually get cost under control in this system is one national 
rule. It is called ERISA, and there is an ERISA rule, written in 1974 
as a way to protect pensions at the national level, which has now been 
expanded to include all employee benefits, including health insurance. 
One little law has made it possible for employers and employed people 
all over America to say the system does not work; it costs too much and 
produces too little. And all over America, from Multnomah County, OR, 
to Mahnomen County, MN, you name it, employers and employees have come 
together in coalitions to self-insure. Self-insure. What does that 
mean? It means that at work our group will take on the risk of 
providing for the medical services of our employees.
  What does it really mean? What it really means is you are not going 
to use health insurance because, if you use health insurance, you have 
to buy a whole bunch of services you do not need. You have to buy a 
whole bunch of providers you do not need, and you have to pay twice as 
much as you ought. Lately, it means you also have to take on taxes at 
the State level, surcharges at the State level, whatever the case may 
be.
  What do you get in return for it? You think you get malpractice 
reform from the States? No. You think you get insurance reform from the 
States? No. Not until the last year or so did they start insurance 
reform.
  You get a lot of costs on a fee-for-service system, and it is only 
because of this one little national law, the ERISA law, that people 
have said we are going to take responsibility for changing this system. 
And in community after community and company after company and CALPERS 
in California and the Minnesota public employees in Minnesota and 
Rochester, NY, and places all over America, people have gotten together 
and said the system is broken. Yes, the care is the best in the world, 
but the cost has no relationship to what we are buying. And so they 
have used this to take charge of their own access to the system. They 
are demanding value for their money.
  And in this whole series of relationships that are being built up--
the latest in my home community is called a health care action group, 
and it is a marvel the way intelligent employers and intelligent 
employees, banding together with people like the Mayo Clinic, the Park-
Nicollett Clinic, all these doctors who in other places we accuse of 
being greedy--but not here. If you tell the doctors that they are going 
to be rewarded for being the best that they can be, they will be the 
best that they can be, not the most expensive they can be.
  Because they understand, like in any other market in the world, that 
the measure of success in being best at what you are is that you get 
all the business, not that you get to charge the highest prices. That 
only works in professional baseball and football; but not in the 
grocery stores, not in any other competitive markets. If you are the 
best that you can be, you get the business.
  That is why in the health care action group, you have all these 
people coming together to negotiate better ways to define what is 
health; what is a good medical service; what is a good outcome; how do 
we better share the risk; how do we get our employees more involved in 
making these decisions; how do we reward people for staying healthy?
  This is ordinary Minnesotans at work. No Government told them what to 
do. No Government or alliance or HIPC, or anything else. Only them. 
They made it up themselves.
  All over America, this sort of thing has been going on in just the 
last few years. Efficient networks of care have expanded enrollment 
today. Up to 51 percent of private sector employees are in some kind of 
new network. I think my colleague from Oregon talked about this last 
night. The goal of market-based health care reform is to capture the 
gains of this trend toward competitive markets, to recreate national 
rules so that all these local markets can work, to give the hospitals 
of this country some sense of direction.
  If we are going to cut them in half, the number of beds, they ought 
to know how it is going to be done. If you are going get rewarded as an 
insurance company for being accountable rather than just being a bill-
paying service, we ought to know what the rule is. And if you buy your 
health insurance in Minnesota but you use it in Florida, you ought to 
know the rule is same in Florida as it is in Minnesota. National rules 
for local markets.
  And no two markets are the same, Mr. President. The Omaha market is 
different. It is a different culture. Medicine is a series of 
relationships. Health care is a series of relationships at the local 
community level. But everyone in those relationships needs to deal by 
the same rules.
  So, taking this little national rule, this so-called ERISA rule, we 
have tried to adopt a set of principles that said if we can just have 
national rules by which these markets can operate, then we do not have 
to tell the markets how to operate.
  If they can do it in Minnesota without the Government telling them 
how to do it, if the Mayo Clinic, which is 1,100-plus doctors--you 
know, now they are in the primary care business and the rural business 
and the specialty business.
  If the Mayo Clinic, from 1986 to 1992, can be averaging a growth of 
only 3.4 percent a year and in the last 2 years less than 1 percent 
growth in cost, they must be doing something right.
  We have talked before in the Finance Committee about liver 
transplants at the Mayo Clinic--which is one of the best in the world, 
according to the U.S. News and World Report--are something less than 
$150,000--for a liver transplant.
  Now that is a lot of money, but nothing compared to Tampa General 
Hospital in Tampa, FL, where my folks live, where it is over $300,000.
  Now, who is better, Mayo or Tampa General? I do not know. Ask King 
Hussein. He goes to Mayo. But ask the average American, they do not 
know, because nobody tells them; because we pretend this is a social 
good and we cannot tell them this sort of stuff. Why not? Why not? No 
good reason.
  Now, I am going to use that chart in just a second for another 
purpose, but the reality is--to get to the heart of what I want to talk 
about--the reality is that all of the Democratic bills that I have 
seen, and that includes the majority leader's bill, start out the same 
way. They all say we are for managed competition. They all say we have 
buyer co-ops, we have insurance reforms, we have rules for accountable 
health plans. They all start out the same way. They preempt some 
States' actions, in many cases, so we can have national rules and 
preempt the States from their anticompetition work.
  But what they give with one hand, they take away with the other. They 
are so anxious just to get to universal coverage without having 
Government pay its fair share of its promises, that they compromise the 
market in order to get there.
  President Clinton paid for universal coverage with something he 
called savings--savings.
  Senator Moynihan--and I know he does not like it when any of us say 
this--called that financing scheme ``fantasy financing.''
  But, Mr. President, practically every committee in the House and the 
Senate has turned down explicit financing. There is no broad-based 
income tax to cover the 15 percent of Americans that are uninsured. 
There is no broad-based income tax or excise tax or anything like that 
to cover the cost of bringing all low-income people into this system.
  There was a large tobacco tax but, thanks to a lot of Democrats, in 
particular from tobacco-growing States, that tax is practically gone.
  So, we cannot raise real taxes. Fortunately, we cannot raise debt 
anymore, because we have a resolution that says we have to stop at $5.3 
trillion.
  We have only two choices.
  Congressman Gephardt says, and the President has said in his original 
bill, we have to mandate somebody else to pay the bill. Let us have an 
employer mandate so all the employers pay 78 percent of these premiums, 
and then we in the Government will not have to raise the money to pay 
for universal coverage. It is called regulatory Federalism, for those 
who are students of the way intergovernmental systems work.
  There are three things the Federal Government can get people to do. 
First is taxes; the second is debt borrowing; and the third is tell 
someone to do it--mandate it.
  Now, the employer mandate does not seem to be going anywhere, and 
there is a very soft employer mandate in this particular bill.
  The universal coverage sponsors need a mandate. Without it, they have 
to resort to hidden financing. They have to shift funds from one place 
to another--cost shifts. They say we need to have universal coverage in 
order to end cost shifts. But what they do is force everybody into 
community-rated pools of payers in order to do cost shifts.
  Let me say that again. What they do is force everybody into 
community-rated pools. The President had these things called mandatory 
alliances. In the labor bill, they had alliances which they said were 
voluntary, but the coverage pools served as the cost-shifting vehicle. 
Now, in the Mitchell version of this, we are going to have 78 percent 
of American workers in large community rated pools, and the other 22 
percent in experience-rated pools, composed of employers of 500 or 
more. The objective is to get everyone into a community-rated pool of 
payers in order to do cost shifts, not to stop them.
  What does raising this requirement of a firm from 100 to 500, for 
example, have to do with anything? You cannot self-insure if you are 
less than 500 employees. You have to go into some kind of community-
rated pool. And I think they begin with adjusted community ratings, 
then they to go community rated, or something like that.
  What does that accomplish? Well, for one thing it stopped all these 
employers from getting together and negotiating that I was talk about 
earlier.
  In the State of Vermont, there is only one company that employs more 
than 1,000 people. So in all of the State of Vermont, you have all 
these negotiators who are trying to change the system probably down to 
one or two or three people.
  There are 50,000 employers between 100 employees or less and 500 
employees or less--50,000 people all over this country who could be 
negotiating to get the quality of health care up and the prices down, 
but they are all wiped out. They are all wiped out. Half of the 
employees in this country are in groups of 100 or less and half in 
groups of 100 or more, which is why we chose 100 as the breaking point. 
In smaller firms, they need to group up to get market power.

  The second reason we chose it, those of us who believe in the market, 
is that we wanted people, a lot employers and a lot of employees, 
working to change this market. But, no, that is not what the Mitchell 
bill does.
  All the firms in the Mitchell proposal are required to sign up for a 
cooperative within these pools. Remember, there are 78 percent that are 
in one of these mandatory pools. If there is no co-op available, 
believe it or not, what do you do? You go to Washington, DC, where the 
Federal Employee Health Benefit Plan will put a co-op together for you; 
a Government buyer from Washington, DC, given a competitive advantage 
over all other co-ops.
  Senator Mitchell takes away the incentive for many employers and many 
groups and associations to negotiate. We have carefully tried to bring 
trade associations, MEWA's, a lot of other employer organizations into 
this process. And now they are gone. What happens? Once all of these 
buyers are into one pool, what happens? Now the cost shifting begins in 
earnest. Last night, I heard our colleague, the chairman of the Labor 
and Human Resources Committee, Senator Kennedy, say the majority of the 
funding in the Mitchell bill comes from savings in the Government 
programs. He is right. This bill increases cost shifting from 
Government to private employers in several ways. Today, two-thirds of 
the current cost shifting is embraced under payment by Federal 
programs, Medicare and Medicaid--something in the neighborhood of $24 
billion to $25 billion a year.
  Not only will this cost shift continue, but the Mitchell bill plans 
to increase it. What are Medicare savings? They are budgeted reductions 
in fees for Medicare expenditures. Medicare currently pays 59 cents on 
$1 of medical charges of part B, and 71 cents on a $1 of hospital 
charges in part A. Who pays the rest? That is a cost shift. There is no 
question about it. The cost shift works easily in the suburbs, where 
you have a lot of third-party payers to shift it on, but it does not 
work so easy in rural areas where two-thirds of the people are in 
Medicare or Medicaid.
  So the difference is consistently shifted onto employers. And the 
rationale in the Mitchell bill for getting 78 percent of the working 
people into these large co-ops is so that you have this much larger 
pool, guaranteed to pick up the costs that are shifted from the 
Government programs. Senator Mitchell said he is changing Medicaid so 
these people can join private plans as well--again, through these 
pools. Senator Moynihan and I had a proposal for how to do this, how to 
phase it in over a period of time. But that is not the proposal in this 
bill. The proposal in this bill is to have all of the low-income people 
come right into the pool with working people or small businesses. The 
problem is that insurers do not know how to estimate the risk of 
previously uninsured individuals, so they will inflate the potential 
risk, thus raising the cost to everyone in the pool. So workers' rates 
go up. This makes risk adjustment, which we barely understand, very 
difficult. And health plans will go back to risk avoidance rather than 
seeking risks to insure.
  Low-income individuals who qualify for subsidies would not have to 
pay for deductibles and copayments. The Government does not pick up the 
cost of the copayments or deductibles--you will. These will be shifted 
onto working people in that pool, as well. Subsidized people do not 
have to follow open enrollment rules, according to the Mitchell bill. 
They can sign up when they are sick without penalty. Think of that. 
When you know you are sick, you can go buy an insurance plan in part of 
this pool. So prices will reflect this personal risk selection, as 
well.
  If that is not bad enough, plans cannot cancel people who fail to pay 
their premiums. Those losses are passed on to people who pay their 
bills. In effect, free riders shift costs onto riders. And we are not 
done yet. Not satisfied with cost shifts onto employers in the 
community-rated pool, the Mitchell bill allows new cost shifts from the 
community-rated pools to larger employers who are buying in experience-
rated markets. Using ``risk adjustment" programs governed by Federal 
and State rules, the funds will be transferred from huge community-
rated pools to large employers. And this is simply a hidden payroll 
tax. Because it is hidden it is unlimited and open-ended.
  The focus of criticism so far on the Mitchell bill has been on the 
triggered mandate on employers. But you do not need a mandate to force 
employers to pay the Government's obligations. You do not need a 
mandate to force employers to pay the Government's obligations. This 
bill, the Mitchell bill, does it for you. This 2001 trigger is not the 
problem with the Mitchell bill. The majority leader said in his opening 
statement today the only way cost shifting can be stopped is to cover 
everybody. The way his bill does it, the cost shift does not stop, it 
is institutionalized --from politicians who make promises and then 
break them and force working people to pay the bills.
  Any kind of coverage extension that is premised on savings in this 
place has to be looked at very closely. And whether it is the drug 
benefit for the elderly, the $90 billion drug entitlement which is paid 
for from savings, or any of the other additional benefits, somebody has 
to answer the question that Denny Timm asked up in the Ace Hardware 
Store: Who is going to pay for it? How much is it going to cost? And 
how much is it going to affect me?
  Shared responsibility, I cannot find it in this bill. People who have 
gold-plated plans continue to have unlimited tax deductions. Some of 
the law firms in this town pay $1,000 a month for plans, with a tax 
subsidy of 39 percent. That is $4,680 a year of your taxes going to buy 
their health plan. They put nothing at risk to maintain that system. 
The self-insured in the Mitchell bill--over 5 years, self-insured 
people will only get a 50 percent deduction for their premiums. Working 
people who pay their own premiums get nothing--nothing--while the 
lawyer gets a $4,680 tax subsidy.
  I appreciate very much the efforts of the majority leader. Let me 
conclude by saying to the majority leader and to my colleagues who are 
on the floor, particularly those who are the leaders of the committees 
who brought us to this day, what I said earlier. First is that I do not 
think we are rushing to judgment on health care reform. We have been at 
this for a long time, and it is about time we take action. So I am on 
your side on that.
  But I also say, we have to start looking at the forest, not at the 
trees. Universal coverage is a tree. We cannot even define it. 
Medically uninsured is a tree. Employer mandate triggers, there is a 
tree. FEHBP, that is a tree. Risk adjustment, that is a tree. Mandated 
benefits, that is a tree.
  We need a vision of what the forest could be. We cannot get to a 
bipartisan--which I think it needs to be--health care reform bill one 
amendment at a time on this bill. We cannot get there one vote at a 
time.
  I just need to conclude by reading from the quotation from Bob 
Reischauer, that was included in the Robert Samuelson article in 
today's Washington Post. For whatever else you may think of 
Reischauer's estimating prowess, I think he has been in health policy 
for as long a time as many of the rest of us. He warned 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 cannot say,'' he says, ``I want a piston from a Ford and a fuel 
pump from a Toyota, and expect the engine to run.''
  Mr. President, the majority leader, I am afraid that is what we are 
trying to do with these melded approaches to health care reform. We 
need a vision for what we could be as a Nation; the role of medical 
invention, of information technology and, yes, the role of Government 
in getting us there.
  I also think that it needs to be--and I have pledged to all of my 
colleagues--it needs to be bipartisan. By that, I do not mean one or 
two or three Republicans. I think there are a substantial number of 
Republicans in this Chamber and there are a substantial number of 
Democrats who do not want to put this off, who want to deal with this 
issue. And we need to be given the opportunity to do that.
  Mr. President, I yield the floor.
  The PRESIDING OFFICER. Who yields time? The Senator from New York is 
recognized.
  Mr. MOYNIHAN. Mr. President, may I first thank the Senator from 
Minnesota for his words. That he has not dropped out of this effort is 
hugely important to us.
  He has been on this issue from the day he arrived in the Senate. I, 
for one, hope he will leave a large achievement behind him. I think it 
is still possible. I think what he has said this afternoon makes it 
even more so. I want to thank him, and tell him of the gratitude I have 
had for his work in the Finance Committee all these years and, in point 
of fact, the only slight change I would make to his erudite factual 
statement is that the bill before us is, in fact, at this moment still 
the Finance Committee bill.
  Mr. DURENBERGER. Will the chairman yield?
  Mr. MOYNIHAN. Of course.
  Mr. DURENBERGER. I leave you with one story. This is gleaned from the 
Tragedy of Lyndon Johnson by Eric Goldman. This is a story, again, that 
involves the passage of Medicare in 1965. As the story goes, one of the 
ways in which this Medicare bill was ensured of success is that Lyndon 
Johnson, being given a variety of ideas that came from Republicans, 
said laughingly to his staff, and I will quote:

       Just tell them to snip off the name Republican and slip 
     those little old changes into the bill.

  I thought of that story in the context of my advice to the majority 
leader and to my colleagues on the Democratic side of the aisle. That 
sort of sums up the essence of bipartisanship in this place, and it is 
a long tradition. It goes back to LBJ. You can, as far as I am 
concerned, snip off any contribution I make to the effort if, in fact, 
you can make sure it is bipartisan and you can make it happen this year 
in a way that--as the Finance Committee chairman said earlier, at least 
60-plus Members of this body to get it passed.
  The PRESIDING OFFICER. Who yields time?
  Mr. MOYNIHAN. Mr. President, I yield the learned and indefatigable 
Senator from West Virginia as much time as he desires, 20 minutes.
  The PRESIDING OFFICER. The Senator from West Virginia is recognized.
  Mr. ROCKEFELLER. Mr. President, I thank my dear friend from the State 
of New York.
  Mr. President, as we prepare to finally work the Senate's will on 
health care, a story comes back to me. Back about 50 years ago, a 
Russian visitor to Washington sat and observed a session of the 
Congress and said: ``Congress is so strange. A man gets up to speak and 
says nothing. Nobody listens and then everybody disagrees.''
  I think everybody in this body can remember debates on this floor 
where we have had the same kind of thought. But I hope and I pray that 
all of us will approach the next days and weeks as we debate and 
resolve a bill to deal with our Nation's health care crisis, that we 
will approach it very differently than what the Russian observer saw.
  When each of us sought election by the people of our States to this 
Senate, we never thought or agreed that it would be easy. I truly doubt 
that any of us tell our constituencies that we serve in the U.S. Senate 
just to talk or to make speeches or to argue amongst ourselves until we 
can go home for the night. We are all here to confront problems, not to 
pretend they do not exist. We are all here to represent the people of 
our States as part of the same union bound together as a nation. And 
now we have reached this moment when we confront a problem called 
health care in America.
  In our wake are years and years of speeches about the crisis of 
rising health care costs and diminishing health care coverage.
  I noted my friend from Minnesota, as he spoke, said many true things. 
And I think that the majority leader, Senator Mitchell, has reached out 
in his bill by making many compromises. I interrupted the Senator from 
Oregon to point out that the cap on residency at academic health 
centers have been eliminated. That was in order to reach out, not only 
to the Finance chairman but also to the Senator from Oregon, and 
others, who felt that way.
  We have reached out in terms of making alliances not mandatory but 
voluntary. We have stretched out the time line. If there is ever to be 
a mandate, it will never happen until the next century and only then 
under certain circumstances, only if the Congress does not follow the 
orders of the commission. We have reached out.
  But I have to say that in the search for the 60 votes that the 
Senator from Minnesota so dearly wants, that this does have to be a 
two-way process. We cannot constantly be reaching out and out and more 
and more and then nothing comes back. It is very hard to reach 
agreement that way.
  So here we are with our years of speeches about this crisis. This 
debate begins after, as you go over the years, I would say virtually 
thousands of hearings in Congress. Certainly tens of thousands of 
hearings and public meetings in our homes and visits that all of us 
have had with people in our States. Hundreds of reports, hundreds of 
studies and commissions, mountains. They fill cabinets in everyone's 
offices and in distant chambers somewhere in this complex, telling us 
some of the grim facts about health care in America.
  We have to be realistic. The Senator from Minnesota spoke about the 
fact that we let the market work. That is one of the compromises 
Senator Mitchell has made in this bill, is to give more time for the 
market to work. But I have to point out to my friends on the other side 
that the Department of Labor has recently indicated that workers who 
are insured, who have insurance through their jobs, that their numbers 
dropped from 66 to 61 percent over the last 10 years and that the trend 
is downward under the voluntary system. That means, Mr. President, that 
5.5 million more working Americans are now uninsured.
  The market system works in different sectors in different ways. Does 
it work perfectly in health care? I am afraid not. At some point, we 
have to draw on everything that we have learned, from the experts, from 
our own constituents and from our own souls, and decide on the actual 
steps that will solve as much of the problem as we possibly can this 
year.
  With the health care plan submitted by the majority leader, we now 
have that opportunity. This is a bill that tries to achieve the major 
goals of health care reform in ways that will work and that we can 
afford and that are fair. The majority leader can only offer the rest 
of us the opportunity to act. He has no powers further than that. Then 
it is up to us. In order to complete this process and pass a good bill, 
enough of us have to commit to the hard work, commit to the honesty, 
looking at ourselves squarely in the mirror that comes along with 
solving problems that are as difficult and complex as health care. We 
have to do the listening and ultimately the decisionmaking that must 
occur if action is to be taken on behalf of the American people.
  That, Mr. President, is what a legislative body is supposed to do. 
That is why we are here. That is why we are hired on. If too many 
Senators treat this debate upcoming as only a chance to score points, 
one against the other, one party against the other, their win is the 
American people's loss.
  If too many Senators also stay stuck on the idea that we should hold 
off one more time until next month or next year or the next election, 
their delay dashes the hopes of millions of Americans--many in my 
State--who are now thinking maybe--just maybe--something will soon 
happen here to help them with their health care nightmare. If too many 
Senators refuse to admit that solving problems takes compromise and 
risk, their evasion means leaving the health care problem exactly where 
it is, and there is that possibility, Mr. President. There is that 
possibility, that from all of this effort, nothing will happen; that we 
will talk about bipartisanship but in the end there will be only one 
Republican and a number of Democrats and everybody else will be ``no'' 
and the votes will not be there. There is that possibility that we have 
to confront.

  If we do that, leave the problem where it is, sadly, millions of 
Americans will have the terror of getting sick or of getting a pink 
slip, and yet everywhere I look someone is calling for more delay. We 
hear battle cries of filibusters against Senator Mitchell's health care 
reform bill, itself a compromise bill based upon a compromise bill. 
Most astonishing is the talk that it is too late. Too late for whom? 
For us? Mr. President, it is not too late for the people that I 
represent. As West Virginians have told me now for many years, over the 
many years that I have worked on this issue, they simply need the 
politics and the posturing in Washington to stop. That is the only 
way--there is no other way--to actually solve the health care problems 
that are hurting our people, choking our businesses, and robbing our 
future.
  For what are the champions of delay waiting? Is it not obvious enough 
that if Americans could get health care that they need on their own, 
through the current system by simply working hard and playing by the 
rules, they would have it, that they would be insured, that we would 
have universal coverage? The system has been in existence for quite a 
long time.
  Unfortunately, this is a problem where they need Congress to act and 
to not make excuses. The rules that affect their lives, that are 
ruining lives, have to be changed, and only we can do that. That is 
what the bill from the majority leader is about. We have the time we 
need to pass a good bill. We have the time to keep faith with what 
matters most to the American people. We are building from years of work 
by Senator after Senator, many of them on this floor now--Senator 
Moynihan, Senator Durenburger, Senator Domenici, Senator Dole was here, 
many others--Senator Pryor, Senator Simon--many years of work by many 
Senators, 40 alone among the Finance Committee and the Committee on 
Labor and Human Services, Senators who have been steeped in this for 
years, who devoted untold hours to this issue, and we have 8 weeks left 
in this session to produce something that meets the basic test.
  For West Virginia, there is only one outcome that deserves to be 
called too late. That is if Congress fails to pass a good health care 
bill this year. Then it will be too late for thousands of families in 
my home State--11,000 of whom will continue to lose their health 
insurance each month through no fault of their own. If trying to enact 
reform is pushed off once again, it will be too late for thousands and 
thousands of our senior citizens, veterans, children, young people, 
small business owners, and, Mr. President, for the 210,000 people in 
working families in my State who work each day, pay taxes and play by 
the rules but do not have health insurance. In a country called 
America, that should not exist.
  These West Virginians cannot put their health care problems on hold 
or send them on recess, and they sure cannot turn to the Federal 
Employees Health Benefits program like we can. They have their own life 
savings, their homes, their peace of mind, their financial future, and, 
in some cases, their lives on the line. So for West Virginians, too 
late comes only if the Senate does not work through this bill, through 
our disagreements, and through our way to real results for very real 
people.
  Mr. President, I think about Gary Smith and his family in Salem, WV. 
Their situation to me says it all. One of Gary Smith's three sons 
suffers from neuro-fibro mitosis, which is an unusual disease commonly 
called elephant man's disease. The son needs surgery to correct part of 
his face that is growing out of proportion with the rest of his body.
  Gary, the father, works, painting high tension towers for a 
Pennsylvania company, but that very high stress job does not come with 
health benefits. The last time his son had surgery, the surgery cost 
$50,000. They were lucky that time; the hospital absorbed some of the 
costs and saved the family from bankruptcy. But this time they have to 
come up with the money; this time no more relief; the extra surgery 
cannot be put off; and yet the Smiths have too much to qualify for 
Medicaid--he is working--and too little to buy insurance on their own. 
He does not make that much. They have nowhere else to go.
  I have no idea whether Gary Smith is a Democrat or a Republican. I 
have no idea if his political thinking is mainstream, midstream, to the 
left, or upside down, and I could care less. I just know that America 
cannot go on being a country that leaves hard-working people like Gary 
Smith out in the cold. It does not make sense, morally or economically, 
to be a people that is divided between those who can get health care 
and those who cannot, or between the people in businesses who shoulder 
the costs of rising health care and those who cannot or will not.
  That is why Democrats and Republicans, the left, the middle, the 
right, whoever you are, have to do this together or we will fail. The 
majority leader deliberately and carefully crafted a bill that draws on 
the work of Senators from both sides of the aisle, from many 
committees--particularly two--and from other bills, a compromise on a 
compromise on a compromise, to try to get the votes, earnestly to try 
to get the votes.
  The bill passes the most important test. It lays out the steps to 
universal coverage. We will get there, step by step--more slowly than I 
had hoped but with the important beginning of focusing on children. The 
bill responds to the fears about more bureaucracy which is so often 
discussed on this floor. It cuts most of it out. That will be an 
interesting subject for debate.
  There are now protections and benefits for America's small 
businesses. Senator Mitchell's bill includes prescription drugs and 
long-term care, the very proposal in fact that David Pryor and I made 
in the Finance Committee to guarantee home- and community-based care to 
millions of people, not just older but people of all ages, since 40 
percent of the people who need long-term care are, indeed, younger than 
65.
  The bill has essential provisions to address the chronic shortage of 
primary care physicians all over our country, in both rural America and 
in our inner cities. We spend billions and billions of hard-earned 
taxpayers' dollars, Mr. President, to train physicians. Most taxpayers 
do not know that--billions of dollars to train physicians. Tax dollars 
through the Federal Treasury pay for over half the cost of what is 
spent in the totality of training a physician in America today.
  Now, does that not suggest the Federal Government on behalf of 
taxpayers should also have something to say in suggesting that the 
money be used to train the kinds of providers that Americans need and 
where they need them, and in the right numbers? Taxpayers' money, 
public policy should follow behind that.
  That simply is what the work force section in this bill is about, to 
make sure that we have the kinds of doctors to meet the needs of all 
Americans in West Virginia, in New York, in California, and in every 
other State.
  The bill before us aims at keeping faith with America's veterans. 
There happen to be 27 million veterans in America. Comprehensive health 
care reform makes it finally possible to improve the quality and 
availability of medical care for all veterans, not just the 2.67 
million who use the veterans hospitals now, but for all 27 million. It 
has extraordinary possibilities. It is in the bill. The leader's bill 
is our chance to meet that goal.
  So, Mr. President, in conclusion, when all this is taken together, 
there is no arguing with the notion that Americans will have better, 
more affordable, more dependable, more secure health care with the 
Mitchell bill.
  Mr. President, I urge all of my colleagues to think long and hard 
about the consequences of how we spend these next several weeks. It is 
in our power to produce a bill that eases the burdens of families and 
businesses and children in every State and town of this country. It is 
in our reach to work out our differences and put our energies into 
achieving positive results. It is now up to us, each of us, of both 
parties, to prove that we can turn our years of words about health care 
into deeds that extend to Americans the basic health security that can 
never, ever be taken from them.
  I thank the Chair. I thank my distinguished finance chairman.
  I yield the floor.
  Mr. MOYNIHAN. Mr. President, could I just congratulate my learned 
and, as I said, indefatigable friend, the Senator from West Virginia, 
on his statement. He is entirely right. There is no reason whatever to 
go out of this Congress without legislation. He has said, in somewhat 
different tones but with the same level of comity, exactly what the 
Senator from Minnesota said, Senator Durenberger, who opened the debate 
today.
  I think it is going very well. I hope people are listening to this.
  Mr. PACKWOOD addressed the Chair.
  The PRESIDING OFFICER (Mr. Mathews). The Senator from Oregon.
  Mr. PACKWOOD. Mr. President, the Senator from West Virginia is one of 
the decent and kind people in the Senate. I have a quarrel with a 
number of things he said. But I will take only one.
  He said the majority leader very carefully crafted this bill, taking 
bits and pieces from other bills and coming forth with almost nirvana. 
I did not think the last bill was nirvana.
  But if this bill was so carefully crafted taking bits and pieces from 
all of the bills from all of the hearings, why last night do we have 
this? It does not have a number on it yet. This is the majority 
leader's new bill with every section, every subsection practically, 
changed. We do not know what is in it. If the last bill that he 
introduced was so carefully crafted, why do we need this? And if we 
need this, is this the last carefully crafted bill? Or are we going to 
have another carefully crafted bill tomorrow, or next week, or next 
month?
  I think what crafting is attempting to do is to pick up a vote here 
and there, and he will craft it and craft it and craft it until he 
thinks he has the votes. It has nothing to do with the substance of the 
subject. It has a lot to do with the votes for the subject.
  I yield as much time to my good friend from New Mexico as he may 
want.
  Mr. DOMENICI addressed the Chair.
  The PRESIDING OFFICER. The Senator from New Mexico.
  Mr. DOMENICI. Mr. President, might I say to the junior Senator from 
West Virginia, while I have not had the opportunity to work with him as 
much as some Senators on the Finance Committee, we disagree on some 
things. But I, too, want to compliment the Senator from West Virginia 
on the way he conducts himself both on a personal basis and on a 
senatorial basis. I hope I am considered his friend because I take that 
view with his family. I am very pleased to be working on this bill. I 
hope we can come up with something together, bipartisan. I am not sure 
we can. But I want to express that right up front.
  Mr. President, when I first came to the Senate a long time ago, I 
brought to Washington my children, all eight. And my last born were 
twins. They were 5\1/2\ when I was elected. We brought them and we 
bought a big enough house for all of them. So we live pretty far out, 
because, obviously, we do not have a lot of money. The further out you 
go, the more you buy. So we actually bought a house from the Israeli 
Embassy, which had a staff house out there. I did not know that. But it 
turned out to have a nice basketball pole and everything.
  So I worked hard and did not spend much time with the children. But 
one morning I said, I am just going to go in late. I am going to be 
with them. It is teachers' holiday, so they were home. By then they 
were about 7. They were sitting in two chairs, as you might suspect, in 
front of the television set. Things have not changed much. And they 
were attentive as can be.
  I put on my trusted robe. I sat behind them, and I was going to kind 
of be part of them, I thought, for a little while. So I put in a few 
words this way, a few words that way to see if they would focus on me 
instead of that television. Finally, one of them looked over her 
shoulder and said, ``Daddy, you is no king. You're just a Senator.''
  Well, you know, this problem is big enough for a king. It is big 
enough for somebody who just sits down and says we are going to fix it. 
We do not have that luxury. So the second best luxury, as I see it, is 
to be a Senator, to be in this body at this historic time and to do 
just one very simple thing; that is, to try to get health care reform 
without doing a lot of harm to other things. And that is what worries 
me.
  I am going to talk about the bill today that I thought was the 
premise for Senator Mitchell's and President Clinton's proposals to 
reform health care. And many in this Senate know--and I take a great 
deal of pride in this--I did not come here today unprepared. I mean, 
there will be some things I will tell the people of this country and 
the Senate that nobody knows yet about this bill. I thought the good 
thing about being here right now and the way we are structuring it was 
maybe we would educate the American public and maybe we would educate 
ourselves, and maybe we would do the right thing. You cannot do the 
right thing in this kind of reform without knowing what you are talking 
about.
  I just want to suggest that nobody is to blame. It is just sort of an 
admission on my part that I feel a bit let down today because I am 
going to spend about 35 or 40 minutes talking about what I think is 
very important about the deficit of the future, the debt on our 
children in the future, the fiscal policy of our Nation, new taxes and 
what they are going to do to our future, and how this great health care 
system might be adversely affected by what we are trying to do in the 
name of doing things better.
  So I feel a bit let down after that work because I have just got this 
piece of paper that lists sections effective August 9 of yet a new 
bill. Frankly, I am not sure I am explaining to the American people the 
health care reform bill that is pending before the Senate for their 
consideration because I now find that this very well could be a whole 
new bill. First of all, it has grown. I did not catch that until just a 
couple of minutes ago. But this is 38 pages longer than the first 
bill--whatever that means. However big it was, it is 38 pages longer. I 
now find that in this bill, believe it or not--this new one, which I 
assume is out there to see whether 51 Senators can join it--there are a 
total of 139 sections that have been modified, amended, or deleted. 
That means that every single one of the 11 titles in the previous bill 
have been changed.

  I assume that these changes are not one-word changes or grammatical 
changes. I assume there are some big substance changes. So I apologize 
right up front to those in our country and those who listen in the 
Senate; I apologize if my analysis is wrong. I do not believe I made a 
mistake. I choose to quote outsiders as much as I can in this 
statement. But we may be totally off the mark, because we may be 
talking about one proposal, and the majority leader may have a 
completely different proposal. I believe that is the case and, frankly, 
I want to make this last point only one more time: There is nothing 
more important to our future than that we do health care reform right. 
If we do it wrong, the repercussions, the legacy is an enormous thing 
for us to bear and for others to be burdened with.
  I believe that the first Mitchell-Clinton bill that preceded this 
modification--I have looked at it enough and analyzed it, that I cannot 
believe it was seriously intended to become law. Had the U.S. House--
after 51 Senators got signed up to that bill--agreed to accept that 
bill, I tell you, I cannot believe that it would really become law. Let 
me say, if that were the case, it is such a piecemeal project that I 
believe we would be back in 6 months with major surgery--to borrow 
something from the medical profession. I believe when the people of 
this country found out what was in it, and what they were going to have 
to do, for those who think this would be a good election ploy--if in 2 
months they can find out things wrong with it, it will be a terrible 
thing for those who vote for it, because by the time people analyze 
what it does to the future of the American economy, to health care, to 
new costs, new taxes, to lack of ability to choose, and what it might 
do in the future to our health delivery system and professionalism, let 
me tell you, there would be a big price to pay.
  I want to put this problem somewhat in perspective. Let me state at 
the outset that I believe we should enact health care reform. I think 
there are things in the system we ought to correct, and some of those 
are very serious. I give the President of the United States, Senator 
Mitchell, Senator Dole, and a myriad of others, credit for putting this 
issue at the top of our agenda. But as we move toward reforming our 
health care system, we in this Congress, like doctors who deliver 
health care, should take the Hippocratic oath to do no harm. We should 
take that oath to do no harm. We must remain conscious of the strengths 
of the health care system and careful that in our rush to reform it, we 
recognize these simple truths:
  First, our health care system is huge and it is complex, consisting 
of almost $1 trillion in expenditures, private and public. It is one-
seventh of the American economy now, and if not controlled, by shortly 
after the turn of the century it will be one-fifth of the entire gross 
domestic product. That is astonishing. I do not even know how to put 
that into common words for people to understand.
  Since the gross domestic product is the sum total of everything of 
value that we do in a year, I think I might put it this way: This 
health care system will be so big that one of every five Americans will 
be taking care of you. So we might say, is that not wonderful? I say 
you can walk down the street and you can almost be assured that if five 
people have passed you, one of them is taking care of you.
  I do not believe we will make it with that kind of system. I do not 
believe we can have a standard of living that is befitting of our 
people if one-fifth of everything of value we do, from producing cars 
to making desks, to buying food, to the myriad of things we live with--
paying for electricity--if one-fifth of it is to stay healthy. That is 
what scares me, because my first point is that if you look at the 
leader's plan--the so-called Mitchell-Clinton plan--you do not reduce 
the costs of health care, you increase them. So that if you did 
nothing, we would be at 20 percent of the gross domestic product--and 
my good friend from Oregon said yesterday slightly less than that--
after we do all this cost containment and all this other rigmarole that 
is in the bill.
  Mr. PACKWOOD. If it all works right.
  Mr. DOMENICI. And ``if it all works right,'' says my good friend from 
Oregon.
  The second point: Most Americans--85 percent--have health insurance 
that gives them access to the finest quality health care system in the 
world. That does not happen to be the case in my State. There are more 
uninsureds. But taking the Nation, 85 percent have health insurance, 
and most people think it is pretty good.
  So the first point to be made is that we are talking about 15 percent 
of Americans that are uninsured, and a system that is trying to take 
care of those 15 percent in a rather willy-nilly way. But built into 
the system we are paying a lot of money already to take care of them, 
but not in an ordinary, primary care way, rather through emergency care 
and the like.
  As I see it, I do not believe that we should pass anything that we 
are not as certain as we can be that it does no harm to the system that 
is delivering first-class health care services to tens of millions of 
Americans. As we move to improve the physical health of Americans, I 
believe it is imperative that we protect our Nation's fiscal health, 
our budgets, our obligations and our taxes, all of which are our fiscal 
health, and in our rush to reform, that we do not underestimate the 
costs and bankrupt this Nation.
  The best way for us to ensure that we are moving in the right 
direction is to build our reform on principles that have wide 
bipartisan support already. Unfortunately, there is a lot of rhetoric--
and much of it is partisan--surrounding this debate. I believe it does 
not add very much to the actual performance of our ultimate job. But it 
makes achieving bipartisanship, and an agreement based on that, much 
more difficult.
  I would almost conclude for the people of this country that if a 
totally partisan bill is produced, what the majority leader will have 
to piece together to get the segments of the party and philosophies on 
his side of the aisle, will end up being a plan that does great harm.
  I do not see it otherwise. I do not think there should be a rush to 
pass a bill that is partisan, because I think anybody who understands 
what that means would conclude that it will not be balanced.
  Health care is too important because it affects every American in one 
way or another. Therefore, I believe sooner or later, hopefully sooner, 
we will put some of this rancor aside and focus on reforming health 
care without driving American families and American business or our 
Government into huge debt and, in some instances, into the inability to 
pay those debts.
  This great country of ours has a huge private sector. Frequently we 
speak of that private sector, and many do not understand what it really 
means. But, first, the private sector in this country is principally 
made up of businesses large and small. They survive, if they are 
competitive, for the most part. If they are not, they do not make 
money. They cannot pay people. They do not pay good wages.
  So let us recognize that we are taking up in this legislation at a 
time of tremendous reform and change in this health care system that is 
already occurring, and most of that change is in the private sector 
where they are driving health care costs down.
  Let me repeat. Led by large employers, our health care system is 
already making enormous strides in controlling costs by enhancing 
quality. That is happening. We can see market forces at work in my home 
city of Albuquerque, where competition is strong. Hospital costs in 
that city are 40 percent lower than 200 miles away, in the city of 
Lubbock, TX, for such things as heart procedures and that kind of very 
sophisticated hospitalization and surgery.
  Recently, the Wall Street Journal carried a report that a large 
coalition of employers in northern California used a competitive 
bidding process to successfully negotiate reductions in health 
insurance premiums of between 5 percent and 18 percent from 18 
different suppliers of health services called HMO's.
  This is beginning to happen all over America, especially in areas 
where large employers have aggressively begun managing their costs. The 
days of paying anything, not challenging it--just send the bill--are 
gone. They do not need the Federal Government to tell them how to make 
those kinds of changes. They are occurring dynamically and dramatically 
in the marketplace.
  In my view, health care reform should encourage the favorable trends 
now taking place in the private sector, not turn over control to the 
Government.
  Now, despite the strengths of this system, there are some facts to be 
faced. For too many Americans, the health care system is not working. 
If you work for small business, as so many New Mexicans do, you face 
some very serious problems because small business faces some very 
serious problems in terms of insurance premiums for health care. 
Insurers are likely to charge you much higher premiums for 
administrative costs than they charge larger businesses. You have less 
market power to negotiate good rates with insurers, and workers may be 
charged higher premiums. When a coworker has a medical problem like 
diabetes, insurers can deny you renewal of insurance if you had any 
major medical expenses, and insurers can exclude preexisting conditions 
if you switch jobs, creating job lock, one of the words that health 
care has brought into focus.
  Moreover, if you are poor or of low income, but not on Medicaid, the 
high cost of health insurance makes it nearly impossible to get 
coverage, which is the primary reason there are so many uninsured 
Americans today. Americans with incomes below 200 percent of poverty, 
roughly $15,000 for an individual, are three times more likely to be 
uninsured than Americans with incomes above that level.
  And, finally, we cannot assume that costs are under control even 
though I have stated what is going on in the marketplace, and there is 
a great anecdotal evidence regarding even those emerging signs of 
better cost controls, principally by big businesses and big purchasers. 
It is clear that some regions of our country are still experiencing 
very high cost increases. So any health care reform must attempt to 
address those problems.
  I want to depart--since people here frequently think of me as one who 
deals with the budget and they ask me questions about the budget, want 
to talk a little bit about health care reform and the Federal budget. 
Why would I do that? Because essentially, whether we like it or not, we 
are going to be voting on legislation that has a big effect on our 
children and grandchildren in terms of the budget of the United States, 
whether we are still in an enormous deficit position, whether we are 
still unable to pay our bills as a nation. And thus, in a very real 
sense, the effect on the Federal budget of this plan and any major plan 
is of extreme importance, and we ought to try our best up front to 
understand it.
  That is not so easy, because we are sending new things to those who 
make the estimates all the time. Evidence of that is today, when every 
section in this bill has been changed, and yet we had some estimated 
costs in here the day before yesterday and yesterday.
  So we must be careful not to saddle our young people and to burden 
future generations with today's health care costs. After all, the 
administration in its 1995 budget document revealed that future 
generations of taxpayers are already projected to face taxes amounting 
to 82 percent of their income without health care reform. That is in 
the President's budget document.
  To quote Harvard law professor Laurence Tribe, and this quote was 
made in a public hearing regarding a balanced budget. Listen to it as 
it resonates with reference to the issues at hand, and I quote:

       Given the centrality in our revolutionary origins of the 
     precept that there should be no taxation without 
     representation, it seems especially fitting in principle that 
     we seek somehow to tie our hands so that we cannot spend our 
     children's legacy.

  That is a pretty good statement by a constitutional scholar who 
understands the significance of indenturing future generations. He 
calls that taxation without representation.
  There is no more compelling case for controlling health care costs 
than their current and projected impact on the Federal budget. Indeed, 
one of the most critical issues facing the country is continued growth 
of open-ended, mandatory spending in the Federal budget. That is, you 
create the situation where a citizen is entitled, as a matter of law, 
to benefits, and if you do not pay them, they can enforce it in a court 
of law. That is the definition of an entitlement. And this is led today 
by Medicare and Medicaid and the resulting growth in budget deficits.
  It is amazing--I cannot pass judgment on the majority leader's bill 
or this serious modification--but it is amazing, since the major cost 
of future deficits is the open-endedness of Medicare, that that program 
was not found in the President's health care reform package; rather 
amazing, the very program causing the deficit problem and the cost 
containment problem for future generations, that program was left out 
of the reform, presumably to run much as it is today.
  These costs of Government health entitlements which are not subject 
to competitive pressure have escalated at a remarkable pace since they 
were enacted in 1965 and will continue to do so in the future.
  Between 1970 and 1993, Medicare spending has grown on average more 
than 14 percent a year, and Medicaid has grown more than 15 percent a 
year. It is no coincidence that the explosion of these programs 
coincides with the beginning of our long struggle to control the 
Federal debt. If, in the end, we do not control these programs, it will 
not matter that we have health security because our jobs, our 
prosperity, and our future will be in jeopardy.
  I want to speak a moment about what I perceive to be a significant 
broken promise. I thought that the President agreed with me and many 
others in the production of his budget and the projections for the 
future. In fact, the President has said on many previous occasions that 
we will never get the budget under control if we do not control 
Medicare and Medicaid. You may remember, as I do, that the President 
sold his tax and budget plan to the American people on national 
television in July of 1993. During that TV news conference, the 
President said:

       We need to bring the deficit down to zero. To do that, we 
     have to pass health care reform.

  In fact, his promise of spending cuts in the context of health care 
reform was one of the arguments he used to get Congress to approve the 
tax increase, which I believe the distinguished chairman of the Finance 
Committee said was the largest tax increase in the world in history; 
anyhow, somewhere close to being the highest ever for Americans.
  Now, might I explain to you what was found in the President's budget 
and vision statement with reference to health care?
  Found on pages 116 to 120 of A Vision of Change for America, the 
President's tax and budget plan, issued in February of 1993, the 
President promised massive deficit reduction from his yet-to-be 
unveiled health care plan. In fact, Mr. President, he promised a $300 
billion deficit reduction between 1995 and 2000.
  On this chart, the President's promise is reflected in the red or 
orange area. Here we were. Here is where we were going to go on the 
green line if we left everything alone. This entire orange or red area 
was going to be applied to the deficit of the United States and get the 
deficit under control.
  The President was right in one sense. We cannot balance the budget 
with Federal health care costs growing as they are. Despite the 
slowdown in private health spending, let me repeat, CBO, the 
Congressional Budget Office, continues to project that Medicare and 
Medicaid will grow at around 11 percent a year even if inflation is 3 
or 2 percent. In 1980, those programs cost $48 billion. In 2004, they 
will cost $650 billion.
  Now, here is what has happened to the promise and the reality.
  This orange is what everybody is telling the American people is the 
savings that are going to accrue in the two major health care programs 
of the United States when and if we get the costs under control. So the 
President projected we are going to get health care costs under 
control, and here is the new line.
  Here is what was projected.
  And the yellow is what we are adding in new costs.
  And, believe it or not, none of this goes to the deficit, for all of 
it is spent on the new programs. And, I might add, with the exception 
of one bill, every single bill on health care reform assumes $300 
billion worth of savings. We do not know whether it will work, but we 
assume it. Because if we are going to get health care costs down, 
everyone assumes that every penny of it will be spent.
  And I said, let us put $100 billion of it on the deficit by mandate 
and spend only what is leftover. But that was done because I understand 
it this way and understand that you will never get the deficit under 
control after you have adopted a health care program that uses all 
these savings unless you decide to tax the American people hugely, cut 
defense a huge amount--I do not think you will do that--or dramatically 
change the pension programs of this country.
  So this debate and this program has a huge, huge footprint on what 
else has to happen in this country with reference to our fiscal policy 
for generations yet to come.
  So, in other words, even after the $260 billion tax increase, the 
deficit is not under control. Despite some efforts to make it appear 
that it has gone away, it will begin to skyrocket again. And, I must 
say, it will be over $350 billion again shortly after the turn of the 
century.
  So, looking back to the chart, we can see that the health care reform 
plan would actually push this deficit line to the top line from this 
line. A total difference between the promise and reality is close to 
$400 billion. And that is $400 billion less in deficit reduction; or, 
to put it the other way, $400 billion more in deficit spending.
  Now I think it is vital that we understand this. I am not sure that 
anybody wants to do anything about it, but I believe we ought to 
minimize it at the very least.
  While that promise clearly was broken and cannot be met, so that 
nobody will misunderstand, we did offer budget proposals that reduced 
the deficit by cutting things. And the cuts were not in Medicare or 
Medicare exclusively, but many others, so we would have had a much 
different approach to where the deficits would end up.
  Now, I want to take a look in terms of Senator Mitchell's proposal of 
yesterday--clearly, I do not know about today--and tell you what it 
does. It creates 6, I say to Senator Durenberger, 6 new open-ended 
Government spending programs and creates or expands 15 others.
  Let me repeat. We are all worried about entitlements and mandatory 
spending; that is, creating a program where a citizen is entitled to 
resources of the Government under order of the court. We have 6 major 
new ones, open-ended, and 15 other ones are changed, as well. None of 
the changes is downward, from what I can tell.
  These new entitlements will cost--and this has pretty much been 
agreed upon by the Congressional Budget Office and our experts. Let me 
give you this one. The new entitlements will cost $501 billion between 
1995 and 2000, and $1.4 trillion between 1995 and 2004. These new 
entitlements will bring millions of Americans on to the Federal 
Government's subsidy program.
  And let me give you the best estimates I can there. An estimated 100 
million Americans will be eligible for Senator Mitchell's premium 
subsidies alone, not counting the long-term care, which is a new 
program with new beneficiaries, and other entitlements in this bill. I 
am not counting them. I am only counting the recipients of subsidies in 
whole or in part for insurance premiums.
  And what is most alarming to me is the growth rate of these new 
entitlement programs. According to the Congressional Budget Office, the 
new premium subsidy program will grow over 10 percent a year, even 
after it is phased in. So if we thought we had things under control and 
were getting them there with new health care reform, admittedly, right 
up front, the Congressional Budget Office warns us that these subsidy 
programs will grow at a rate of 10 percent a year even after they are 
phased in.
  The Medicare drug benefit, a brand new one, grows at 10.5 percent a 
year even after phased in. The long-term care program grows 44 percent 
a year according to the Congressional Budget Office once it is in full 
effect.
  So I do not think there can be any mistake about it. The Mitchell-
Clinton bill, under the guise of health care reform, will create 
several new open-ended, runaway entitlement programs.
  Now, why do we have to do that when we are having difficulty 
understanding the reform programs and their effect? Why would we have 
new programs costing huge numbers of billions of dollars?
  I guess I might say--and I hope this is not the case--that maybe it 
is because some of those programs bring some votes and bring some 
support out in the country that might not otherwise be there.
  It should not be surprising, then, that the proposal of yesterday 
does nothing to slow the rate of growth of overall health care costs in 
this country. Everybody is wondering--we have said that. I think 
Senator Durenberger said that. But, after all, we are just Senators. In 
fact, according to the Congressional Budget Office, the Mitchell 
proposal will actually increase national health expenditures by between 
$240 and $285 billion over the next decade. Instead of controlling it, 
it goes up.
  I have heard a lot--at least I did 2 weeks ago, it seems like it is 
not so loud and often now--that we ought to pass this reform package 
because it is good for the middle class. Right? Let me talk about the 
new taxes in this bill. If the middle class feels put upon by previous 
taxes they better hold on to their wallets. This new proposal has 
massive new taxes. Between 1995 and 2000, $110 billion; between 1995 
and 2004, nearly $300 billion. Let us add them together, in the next 10 
years it is $410 billion in new taxes. I find it very hard to believe 
that these new taxes will help middle-class Americans as the President 
has indicated.
  First let me tell you about some of these taxes. There is a 1.75-
percent tax on all health insurance for $74 billion, between 1995 and 
2004; a 25-percent excise tax on health insurance premiums that grow 
faster than a premium cap--whenever those premiums do that, that 25-
percent excise is on. And yesterday Senator Packwood explained in some 
detail how the starting point for that 25-percent tax--how that would 
go. It is very complex and I believe very unfair. But that is $75 
billion between 1995 and 2004.
  Another 1 percent tax on health insurance premiums is levied by the 
States to fund administrative expenses, another $50 billion. That tax 
revenue goes to the States. These are big tax increases, billions and 
billions of dollars in new revenue.
  According to the Congressional Budget Office, these taxes do little 
or nothing to contain health care costs and may actually pose, ``an 
impediment to coverage.'' That is taken from the Congressional Budget 
Office.
  To quote from that report, on this 25 percent new excise tax on high-
cost premiums--and let me before I quote say it does not matter to me 
what is written in any bill that says that is going to only be a tax on 
the insurance companies and the providers. In the end, the cost of the 
delivery system will assimilate that and the insurance premiums will be 
higher on everybody. There is no way to get around it. You cannot write 
supply, demand, costs and expenditures, and some profit out of the 
private sector and claim you want them to do this, you want them to 
cover everybody. It will be there.
  Now let me quote:

       The tax on premiums of high-cost health plans in Senator 
     Mitchell's proposal would be difficult to implement. In 
     addition, its contribution to containing health care costs 
     would be limited and it might be considered inequitable and 
     an impediment to extending coverage.

  Not Pete Domenici, not David Durenberger--the Congressional Budget 
Office. Frankly, I believe they are being generous. I cannot imagine 
that they would write it in the toughest language, being a neutral body 
and with the director being subject to confirmation by the Senate and 
the House.
  I continue quoting the Congressional Budget Office:

       Unlike taxes as contained in the Managed Competition Act 
     and bill reported by the Committee on Finance, which would 
     not affect the lowest-cost plans, virtually all plans would 
     be subject to the assessment called for in Senator Mitchell's 
     proposal.

  That is a vindication of my notion that all premiums would go up.
  For middle-class Americans these taxes add up. I am not sure what it 
is. We are trying to find out. But I will say that for most middle-
class Americans, their taxes will go up to at least an additional $500 
a year in very short order. I think it is more but I feel comfortable 
in saying that.
  Perhaps that is why the respected president of the Kaiser Family 
Foundation, Drew Altman--very reputable and very professional--gave 
this assessment of this health care reform just last week.

       The group that is most likely to be helped least, at least 
     as the discussion stands now, is the working middle class. 
     Which is a little surprising [he says] since it was the rise 
     of the middle-class concern that put these issues on the 
     front burner in the first place.

  I repeat, this is not my evaluation. It is Drew Altman. I have 
inquired. Everybody I can ask says this is a man of high repute, and he 
indicates that at least as the discussion stands now, the group that 
will be hurt the most is working middle class.
  Again, everybody is asking, if these are entitlement programs, can we 
not make sure they do not go through the roof? Can we not make sure 
they are contained? Can we not put a cap on them?
  I want to offer my own observation first. If you put benefit programs 
in place where the citizens of America are entitled to something, and 
that something is health care, you are probably going to pay for it 
whatever the cost is, because it is very hard to take things like that 
away, change them, modify them, make them less of a package than you 
originally promised and gave. Nonetheless, we have tried. In fact, I 
believe this Senator, with some very able staff, came up with a first 
attempt to do that. It now has a nickname. It is called ``a failsafe 
provision.'' Right?
  Mr. MOYNIHAN. Yes. Right.
  Mr. DOMENICI. ``Failsafe'' meaning we are only going to spend as much 
as we want to spend and we have a failsafe way to do that.
  I am telling my colleagues, that failsafe was first found in the 
Chafee bill. We helped draft that. But I am very concerned that if we 
have a significant underestimate in the cost of these new 
entitlements--and I repeat what I said a while ago, we have had that in 
every entitlement that deals with health care; so big, in fact, that it 
was estimated Medicare hospital insurance was going to cost us only $9 
billion in 1990. I assume the Senator is aware of that. Instead its 
cost was $67 billion.
  That is why I believe any legislation that we ultimately pass, in 
order to protect our children and children yet unborn from huge 
deficits, has to have a failsafe mechanism to control costs. 
Unfortunately, the proposal of yesterday--perhaps it has changed today. 
I note that section on failsafe is changed. I cannot tell what it does. 
But, unfortunately, the Mitchell-Clinton proposal on failsafe is so 
watered down in terms of its rigidness, in terms of real control, it is 
worthless--worthless. It is based on inexact, estimated baselines, not 
on real dollar limits. It has a $10 billion cushion. It leaves 
incredible discretion to the Office of Management and Budget. And it 
exempts increases attributed to economic and technical changes from the 
rigors of discipline.
  Mr. DURENBERGER. Will my colleague yield for a question?
  Mr. DOMENICI. Of course.
  Mr. DURENBERGER. I know my colleague from Rhode Island is getting 
sensitive to the amount of time that is being allotted Republicans. But 
let us assume you have all of these promises made to extend all of this 
coverage. But the cost of the coverage exceeds what you estimate. This 
is your point.
  Mr. DOMENICI. Yes.
  Mr. DURENBERGER. At that point you have to either borrow the money, 
increase the deficit----
  Mr. DOMENICI. Yes.
  Mr. DURENBERGER. Or just using the Medicare Program as an example, 
you can, at the budget level here, reduce the amount that is going to 
be paid for doctor services or hospital services, thus you do not 
increase the deficit; right?
  Mr. DOMENICI. The amount that the insured has to pay can be 
increased. That is another way.
  Mr. DURENBERGER. It seems to me that if, in fact, the demands on the 
entire system exceed the fail-safe amount, what we normally do here is 
reduce the Medicare payments in the coming year for doctor services or 
hospital services. That is how we get to the place where a party is 
paying 71 cents on a dollar of charges for hospitals and 59 cents on a 
dollar of doctor fees. Is that not the process?
  Mr. DOMENICI. Absolutely.
  Mr. DURENBERGER. So the problem then presented to the working class 
in America is the degree to which they end up, when they go to the 
doctor's office or when they go to the hospital, how much of that 
difference between 59 cents and $1 do they end up paying?
  Mr. DOMENICI. Right.
  Mr. DURENBERGER. It seems to me--my colleague can correct me if I am 
wrong--no matter which way you cut it, these overpromises are either 
going to be paid out of debt or they become an additional tax on 
working people's premium.
  Mr. DOMENICI. That is right.
  Mr. DURENBERGER. So one of the problems we talked about earlier in 
the day with the Clinton-Mitchell proposal to get all working people 
into these large pools, and so forth, is to facilitate the additional 
tax from the cost shift from the promises that are made but not paid 
for onto the working people's premiums.
  So, in addition to the specific tax--a tobacco tax, or premium tax or 
State surcharge--there is this hidden tax of the cost shift which 
occurs in the doctor's office, which is difficult to measure. I thank 
my colleague.
  Mr. DOMENICI. You are absolutely right. The point is that to try to 
say to those who are worried about the next generation and how much we 
will have gone into debt, do not worry, even though we do not have any 
idea what our promises are going to cost--we have this measure out 
there that says it is only going cost $300 billion and if it is more 
than that, something will be done about it. I believe you have to know 
much better up front the cost of what you are promising. So fail-safe 
is a tool that is not going to be used because, if you need it, you 
probably will not implement it. That is the point I am trying to make.
  Might I ask the Chair, how much time do the Republicans have left?
  The PRESIDING OFFICER (Mr. Feingold). Twenty and a half minutes.
  Mr. KENNEDY. How much time on our side?
  The PRESIDING OFFICER. Ninety-four minutes.
  Mr. DOMENICI. Mr. President, I have some other remarks, but I note my 
friend Senator Chafee is waiting.


           OTHER CONCERNS WITH THE CLINTON-MITCHELL APPROACH

  But my concerns with the Clinton-Mitchell approach to health reform 
are not confined to just economic and budgetary questions.


                       GOVERNMENT-RUN HEALTH CARE

  The Clinton-Mitchell plans--and all of its variation in Congress, 
such as the Kennedy and Gephardt plans--are characterized by massive 
new Government controls, regulation, and bureaucracy.
  The American people simply do not trust the Government to run the 
health care system. They know a Government system will be less 
responsive to them and will slowly undermine the quality of our health 
care delivery system; a system unsurpassed in the world.
  Let me cite just a few examples of the massive Government role in the 
Clinton-Mitchell plan:


                   MANDATED STANDARD BENEFIT PACKAGES

  Under Clinton-Mitchell, every American who wants to get health 
insurance will be required to buy a Government-set benefit package.
  They will not be ale to buy anything less.
  You can be sure that if the Government is setting benefits, no 
treatment will be uncovered, no provider left out, and it will only get 
worse with time.
  There is some value in standardized benefits in certain contexts, 
particularly for determining subsidies for low-income families.
  But I am against the Clinton-Mitchell bill's limitations on choice 
and ``one size fits all'' approach.


                             PRICE CONTROLS

  The Clinton-Mitchell bill also requires Government-set price 
controls, based on data that does not currently exist.
  Under the proposal, the Secretary of the Treasury would set reference 
premium amounts for every geographic area in the country.
  These reference premiums would be established based on 1994 national 
health expenditure data that the Secretary would somehow try to 
distribute by region.
  According to CBO:

       These determinations would be extremely complex and 
     difficult to make, requiring adjustments for demographic 
     characteristics (age, sex, socioeconomic status), health 
     status, current levels of health care expenditures, 
     uninsurance and underinsurance, the presence of academic 
     health centers, and other factors. Little reliable 
     information of this sort is available, and the Secretary 
     would have to collect a mass of new information. With the 
     reference premiums affecting not only tax liability but also 
     premium levels, the process could prove to be quite 
     controversial.

  But, nonetheless, the Secretary would set these reference premiums, 
and then allow them to grow by inflation plus: 3 percent in 1997, 2.5 
percent in 1998, and 2 percent thereafter.
  Health insurance premiums growing faster than this rate would face 
the 25-percent excise tax.
  Clearly, this proposal is a back door attempt to adopt the Clinton 
premium caps.
  It is an especially bad idea because it does not distinguish between 
efficient and inefficient plans.
  All health plans would be held to the same growth rates, regardless 
of whether they have been low cost and efficient to start off with.
  Moreover, the Clinton-Mitchell proposal exempts large employers plans 
from the tax until after 1999.
  Clearly, the tax is designed to protect, to the extent possible, the 
very expensive, high-cost, union-negotiated health plan.
  Similar attempts at price controls have never worked in this country, 
and never will.
  Shortcuts will be implemented and instead of reducing costs, they 
will lead to more inefficiency.


                OTHER EXAMPLES OF GOVERNMENT INVOLVEMENT

  The Government is going to determine the number of specialists and 
primary care physicians that can be trained in each medical residency 
program in the country.
  The Government is going to run a new, voluntary long-term care 
insurance program.
  The Government is going to determine which doctors, hospitals, and 
other health care providers are essential and therefore protected under 
managed care.
  The Government is going to provide new opportunities for lawyers to 
bring suits against insurance companies for disputes over insurance 
claims.
  The Government is going to provide new entitlement spending for 
health research, occupational safety and health, school-related service 
programs, dental schools, and countless other Government programs.
  The Government is going to establish a risk adjustment program to 
measure the relative health status of enrollees in every health plan in 
the country, and then require States to transfer billions of dollars 
among plans based on that methodology, which today does not exist.
  Do you detect a pattern of excessive Government interference here?


                        job destroying mandates

  And now let us turn to the job destroying employer mandates in the 
Clinton-Mitchell bill.
  I am opposed to including any kind of employer mandate in the reform 
proposal.
  It does not matter if it is delayed until after the next election, or 
triggered, or cut in half.
  Because, clearly, this President and the Democratic Congress want an 
employer mandate--and the majority leader's proposal is just a foot in 
the door. It is the camel's nose under the tent. And if this bill 
passes and goes to conference, as sure as I am standing here, it will 
come back with an even more devastating, job-destroying employer 
mandate.
  Let me quote from a senior administration health official from the 
August 4 Washington Post explaining their support for the Mitchell 
proposal:

       . . . we hope the bill we get out of conference will have 
     mechanisms [mandates] that will get us to universal coverage 
     by a more direct route.

  I am particularly worried that Senator Mitchell's proposal would 
single out States like New Mexico--where nearly 97 percent of all 
businesses are small business; and 86 percent are businesses with fewer 
than 20 employees.
  As I read it, the mandate will be triggered only in those States that 
fall below 95-percent coverage.
  Well, obviously, States with lots of small businesses, low income 
families, and high uninsured rates today are the most likely States to 
fall below the target.
  And so the Clinton-Mitchell bill would penalize small businesses in 
low income States with a mandate, which will only make matters worse.
  Such a mandate would destroy hundreds of thousands of jobs and 
severely curtail economic growth.
  And, according to CBO, this state by state kind of mandate will not 
work, would drive business out of small States like New Mexico, and is 
not workable.
  To quote CBO:

       [a state by state mandate] would produce inefficient 
     reallocations of business activity. Some firms that did not 
     wish to provide insurance would migrate to states that were 
     not included in the mandate.
       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 in others; the system would have to include either the 
     states or none. Accordingly, CBO's cost estimates of the 
     mandated system assume that a nationwide mandate would be in 
     effect.


                              other issues

  There are other problems with the Clinton-Mitchell bill as well: 
massive shifting of resources from the young to the old through strict 
community rating; weak medical liability reforms; State single payer 
options; and HMO-killing regulation and litigation.
  At the appropriate time, I will have much more to say about each of 
these controversial issues.


                   the seeds of a bipartisan solution

  I believe we should only pass a health care reform bill that has 
strong bipartisan support.
  I believe we can see the beginnings of that kind of an agreement in 
some of the major proposals put forward in the Senate, such as: the 
mainstream group's proposal, which is largely incorporated into the 
Finance Committee bill; the bill I introduced in May, the Health Care 
Reform Act of 1994; and the Dole-Packwood proposal, which has been 
endorsed by 40 Republicans.

  All of these proposals differ in their details--some of which are 
significant--but they share some very critical core features:


                expanding coverage in a voluntary system

  Most Americans want health coverage to ensure good care when they 
need it and to avoid the financial risk of going uninsured.
  The primary obstacle for the uninsured is cost.
  Nearly two-thirds of the uninsured have incomes below 200 percent of 
poverty.
  These proposals would expand subsidies for poor and low income 
Americans to make private health insurance affordable.
  And they reject the notion that we should begin reform by imposing 
new Government mandates on businesses or individuals.


              controlling costs in a reformed marketplace

  Only market incentives can improve the productivity of the health 
care delivery system. And that is the most effective and efficient 
route to holding down costs while maintaining or improving quality.
  To make the market work better, consumers must be permitted to 
compare the price and quality of competing health insurance plans.
  Our proposals would give consumers the standardized information 
needed to evaluate the cost and quality of their health insurance and 
their providers.
  Moreover, we should encourage consumers to be cost-conscious by 
putting a limit on how much employers an employees can deduct from 
taxes for health premiums.


                    small business insurance reforms

  These proposals all recognize the need to establish fair insurance 
rules for small businesses and individuals.
  They would: ban pre-existing condition clauses; establish some 
modified form of community rating for small businesses, with age 
adjustments; and give small businesses the ability to pool their 
purchasing power and get lower premiums.


                       reforming federal programs

  Moreover, these proposals would change the Medicaid program to allow 
those beneficiaries to enroll in private health insurance plans like 
other Americans.
  The proposals would protect Medicare but expand the opportunities and 
incentives for beneficiaries to enroll in competing health insurance 
plans.
  Today, some 50 percent of private group health insurance is in 
managed care, but only 5 percent of Medicare beneficiaries are in 
managed care.


                         access in rural areas

  Our proposals would dramatically expand funding for access to care in 
rural areas.
  In particular, they would increase funding for community health 
centers and the National Health Service Corps.


                         fiscal responsibility

  Finally, these proposals all recognize that we cannot afford another 
new runaway entitlement program.
  To ensure fiscal responsibility, they incorporate a ``pay as you 
save'' or fail safe process.
  That means we can only expand coverage as we achieve savings in 
current programs.
  I believe a bill with these elements could pass with overwhelming 
support if we can get beyond the partisanship and focus on what we can 
do to help the lives of millions of Americans.


                        severe mental illnesses

  During this debate, Senators will disagree on many issues, and the 
debate will be vigorous.
  However, there are a few issues which I believe cross party lines and 
transcend politics.
  Three years ago, I introduced a bill that stated when the Senate 
passes health care reform, it must provide equitable health insurance 
coverage for persons with severe mental illness.

  That bill had 21 cosponsors evenly divided between Democrats and 
Republicans.
  In September 1993, the National Alliance for the Mentally Ill [NAMI] 
held a rally across the street from the Capitol where they presented me 
with nearly 500,000 signatures supporting my bill.
  Among those persons signing the petition were President Clinton, 
Vice-President Gore, and Mrs. Tipper Gore.
  In the time since I introduced that bill, I have spoken on the Senate 
floor and at numerous assemblies with both Democrats and Republicans.
  Nearly every time, one of my colleagues would take me aside and agree 
that we must help the severely mentally ill.
  People with severe mental illnesses have been subjected to 
discrimination because of ignorance and fear resulting in public and 
private health insurance plans setting arbitrary limits on the amount 
of coverage a person can receive for these illnesses.
  As a result, individuals and families often can't gain access to care 
because of this very limited coverage.
  It is now estimated that one out of every three homeless persons 
suffers from severe mental illness.
  Severe mental illnesses such as schizophrenia, major depression, 
bipolar disorder, obsessive compulsive disorder and panic disorder, are 
crippling and disabling illnesses that can strike any person from any 
background.
  We have made a lot of progress as health care reform has moved 
through the Congress, but I must say to my colleagues that the bill 
introduced by the majority leader does not go far enough.
  Unfortunately, the Mitchell proposal leaves the door wide open for 
the continued discrimination of the severely mentally ill.
  In fact, this bill explicitly authorizes cutbacks in benefits for the 
mentally ill to finance other types of coverage if the National Board 
finds the benefit package is too costly.
  So, the standard benefit package could provide coverage for 
eyeglasses, but may not provide coverage to someone suffering from 
major depression to keep them from committing suicide.
  Frankly, I believe we need to rethink that kind of prioritization in 
the benefit package.
  I can assure my colleagues that before this debate is over we will 
have the opportunity of a lifetime to provide equitable coverage for 
the severely mentally ill and end at least one form of discrimination.
  I want to close by simply stating that the bill before us--again I 
repeat, before we got the new bill--that this bill has severe problems 
and, frankly, I do not think it can be fixed. This Clinton-Mitchell 
bill, as I see it, is a roll of the dice and the stakes--the bet, that 
is--is enormously high: one-seventh of the American economy. But it is 
also high for every person in this country that we are trying to help: 
those who currently have little or no health care, those who have good 
health care. They are all at risk.
  And if we are going to take these risks, let us do it together in a 
much more coherent and bipartisan approach that has broad support of 
all Americans. I yield the floor.
  Mr. MOYNIHAN. Mr. President, I yield 4 minutes to the Senator from 
Massachusetts, followed by 10 minutes to the Senator from Nebraska.
  Mr. KENNEDY. Mr. President, I have in front of me the Gramm-Latta 
amendment that was offered in the House of Representatives in behalf of 
the Republican administration on June 26, 1981. It is an inch and a 
half thick. It was offered at 11:15 in the morning and debated until 
7:45--8\1/2\ hours. I did not hear a lot of criticism from a lot of our 
Republican friends at that time that it was going to be so difficult 
for people to understand. I hope they can put that argument aside.
  I heard our colleagues talk about their positions with regard to the 
health care measures. One of the oldest techniques in this body is to 
describe your opponent's position. In many instances, you do not 
accurately describe your opponent's position.
  That is what has been done this afternoon. I listened with great 
interest to this whole debate and discussion from my colleagues, and I 
could not understand the Mitchell bill as described by my good friends 
or what, in many instances, their complaints were really about, 
including my friend from Minnesota, talking about national standards 
and State rules. If he has amendments--that is a concept in the 
Mitchell bill--if he has amendments on that, if he has proposals, I 
hope they will be forthcoming.
  When I saw my good friend from New Mexico get on his feet and talk 
about this legislation, I thought he would talk about one of the most 
important provisions, and that deals with a cause that he has been 
identified with in the U.S. Senate, and that is on mental health.
  One of the critical issues was whether we were going to have parity 
in treating mental health with the physical ailments of the people of 
this country. That has been debated in hearing after hearing. He was 
good enough to testify on that issue before our committee, and we have 
included it. It was included in the earlier bills, and it has been 
included in the Mitchell bill.
  So for all those Americans who have been listening to that debate, 
they ought to understand that we are committed in the Mitchell bill, in 
this legislation on page 114, to the kind of mental health benefits 
that the mental health needs of this country ought to have.
  Mr. President, I was hopeful to hear this afternoon that some 
proposals by our Republican friends were going to be forthcoming. In 
our committee, we have had a series of different amendments and 
suggestions, which we worked out without having to have votes on these 
measures.
  We eliminated a lot of the mandatory requirements on the alliances in 
the legislation; we were able to come together, Republican and 
Democrats alike; we made adjustments in terms of the malpractice 
provisions; we simplified the benefits package; we made some changes in 
cost control--all suggestions that were made by Republicans and 
Democrats, not waiting until the amendment process and the part of the 
debate and discussion earlier in the day.
  Bipartisanship requires coming at least halfway. And here we have the 
majority leader, who has been trying to move that whole process 
forward. I hope that at least in the remaining time--although there is 
not a great deal more time on that side--this afternoon, we will at 
least have some areas, some suggestions, some recommendations prior to 
the time that we are going to come to the point of voting on these 
matters where we can hear about where they are going to agree. Let us 
hear where they want to try to make some progress.
  Maybe we have to delay the point for some days and finally come to 
grips and have the votes on some measures. But let us at least hope 
that the next time we speak and Members address that that we can at 
least find some suggestions and recommendations on where we can begin 
to build the bipartisan legislation which many people have talked about 
but which so far has at least escaped.
  I want to thank my colleagues for indulging me at this time. I see 
the Senator from Arkansas as well as the Senator from Nebraska on the 
floor.
  Mr. DOMENICI. Mr. President, I wonder, since Senator Kennedy alluded 
to mental illness, if I might take 3 minutes on our side to respond.
  Let me do that. I ask unanimous consent that the 3 minutes I use not 
be counted to either side.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. DOMENICI. Mr. President, I really hope the distinguished Senator 
from Massachusetts was not implying that the Senator from New Mexico, 
because I proposed something in the Mitchell bill, is not going to be 
shoulder to shoulder with him on whatever bill passes to get parity for 
the severely mentally ill. But I might tell my good friend, his bill 
that he reported moved more toward covering the mentally ill than this 
bill.
  In fact, this bill, Mr. President, to be honest with you, does not 
take care of the parity that is required. And I know the question is 
how are we going to pay for it.
  But let me tell Senators, I think we ought to treat severe mental 
illness in this country exactly like other major ailments. We should 
not have to fund it separately. If we do not have enough money for 
other things, we cut everything back, but we do not have to continually 
treat the severely mentally ill as if they do not have parity.
  This bill does not do that, so I am not worried about it.
  Mr. KENNEDY. Mr. President, just on our side, 30 seconds.
  I welcome the opportunity, with the Senator from New Mexico, and I am 
sure Senator Wellstone, who has been a leader here, to offer an 
amendment on this legislation as one of the first amendments that we 
can consider about how we can strengthen this proposal, and work with 
the CBO and find ways that we can do it. This is just the kind of 
bipartisan effort that we should have.
  I acknowledge the leadership of the Senator from New Mexico. And 
Senator Wellstone has been a leader. This would, I think, make an 
enormous difference and indicate that in this area of public policy we 
do have bipartisan support.
  Mr. MOYNIHAN addressed the Chair.
  The PRESIDING OFFICER. The Senator from New York.
  Mr. MOYNIHAN. Mr. President, if I may yield myself 1 minute simply to 
once again remind you that the bill before us is the bipartisan bill 
reported from the Committee on Finance, and in that, if the Senator 
from New Mexico could hear me, and the Senator from Minnesota will 
attest, mental health has full parity with all other medical needs. It 
is a matter of principle, and bipartisan, and was never contested.
  Ten minutes to the Senator from Nebraska.
  Mr. KERREY. I thank the Chair and I thank the Senator from New York.
  Mr. President, I rise to discuss the matter before us, the health 
care reform bill introduced by Majority Leader Mitchell.
  Something needs to be done to change the laws that govern the 
financing and delivery of health care in America. The status quo is 
unacceptable.
  For those of us with personal wealth who are well insured life looks 
pretty good. However, for the majority, whose insured status and 
financial capacity to pay is in doubt, life looks very uncertain.
  Too many hard-working young Nebraskan families do not have insurance 
and cannot afford to go to the doctor until the medical situation has 
become an emergency. Routine health care is not affordable for many 
whose take home pay must cover rent, food, clothing, and other 
necessities.
  Just one example of the cost of a familiar health care service should 
help focus our minds on the need to lay aside partisan differences and 
pass a bill which helps make health care more affordable.
  The health care service is the delivery of a baby. It costs $12,000 
to have a baby in Washington, DC, it costs $5,000 to $6,000 for the 
same services in Nebraska.
  Bringing a baby into this world at either of these prices--which 
twenty years ago was considered to be within the household budget and 
thus was treated as an out of pocket expenditure--can be a financial 
catastrophe. Today, it is a procedure that is most often paid by an 
insurance company, the government, or by a now financially strapped 
family. Twenty years ago I paid cash to the doctor and hospital when my 
children were born. I did not have to be insured. Today, uninsured 
Americans who approach the birth of their first child do so with more 
economic anxiety and insecurity than their parents did a generation 
earlier.
  Americans who have themselves or friends that have entered the world 
of high cost health care understand: The thin ice of medical indigence 
could break at any moment. In America the physical trauma of getting 
sick is an event which can also be accompanied by great financial 
trauma.
  Therefore, we know that an urgency exists to change our laws. We also 
know that an urgency acted upon without careful consideration given to 
the question where we are going could result in our making the problem 
worse.
  In particular we must take care not to allow the urgent need to 
subsidize those who cannot pay health care bills to dominate the need 
to contain costs. Every significant Federal intervention to expand 
coverage in this century--tax deductibility, Hill-Burton, Medicare, 
Medicaid--has increased the demand for expensive health care. This 
demand has increased the availability of expensive health care. Not 
surprisingly this has made health care more unaffordable and--we are 
back where we began--increased the demand for subsidies.
  As I have said on earlier occasions, without a fundamental change in 
the way we become eligible for care--namely merely by being an American 
under color of law--we risk an accelerating this cycle of subsidies 
driving demand driving subsidies. This fundamental change, however, as 
been rejected by many as politically impractical.
  Therefore, Americans smell politics all over this debate. They do not 
have too look too far to discover that political insecurity has become 
a greater concern than the insecurity Americans feel about health care. 
Mr. President, it should be this insecurity which motivates the need 
for change. It is this insecurity which gives such resonance to the 
call to provide health care that is always there.
  However, Mr. President, Americans feel insecure about more than just 
health care. They feel insecure because they are becoming both afraid 
for and of their children. They feel insecure because of the pace of 
technological change. While technology has made us more productive and 
created new jobs, wealth and opportunity, it can make us feel we are 
skating at the wrong end of the pond. Downsizing is the bogie man of 
the 1990's. The stress of wondering if tomorrow is the day when they 
are given the news their job has been eliminated by the latest edition 
of the company's computer software program is very real.
  American workers are also on alert to cheap world wide labor and 
conscious free investment capital whose flow knows only the dictates of 
estimated rates of return. The recent revival of U.S. productivity 
demonstrates that America's work place team is willing to face 
international competition with the same courageous performance that has 
lifted our standard of living to the highest in the world. Still, in 
spite of this success, in the back of their minds, as they fight 
traffic to and from work, blue and white collar workers alike wonder: 
Is this the day my job goes to Mexico or Indonesia or China.

  Insecurity in the midst of an economic recovery is the reason 
Americans still do not feel like their country or their political 
leaders are heading in the right direction. They feel misled and let 
down as we fail time and again to inspire and help them believe in the 
uncharted course of our future.
  Wealthy, economically secure Americans can only guess at the terrible 
change which has accompanied the technological and economic advances of 
the past 30 years. They can only guess why the cry for health care that 
is always there hits home even for Americans who are currently 
protected with affordable insurance.
  Some of them are still smarting from last year's deficit reduction 
legislation. That legislation and that attitude continue to influence 
the debate on health care. Where this influence subjects us to the need 
to make certain that health care reform contains costs and contributes 
to deficit reduction, it is a force for good. Where this influence is 
an angry, petulant one note interference, it obstructs the path of 
progress.
  Made angry by last year's increase in their rates of taxation some 
wealthy Americans cannot see or do not care that tens of millions of 
low income working Americans were given more security by an increase in 
the earned income tax credit. Some of them cannot see or do not care 
about families who refinanced their homes making it easier to keep 
their budgets in balance. They cannot see or do not care about self-
employed Americans who are finding that health care is more affordable 
now that they are able to deduct 25 percent of the cost of their 
insurance.
  They cannot see or do not care that the economic recovery--which was 
in place when this legislation was enacted--has strengthened Americans' 
job security. The demand for skills is on the rise and with it the 
confidence of consumers who are buying cars, building houses, and 
adding to the security of those who build both.
  In part, wealthy Americans whose taxes were raised have a right to 
complain. They were made to be the fall guy rather than being told they 
were participating in something which needed to be done. Instead of 
thanks they felt the abuse captured in the phrase we are only taxing 
those who profited from the excesses of the 1980's.
  The taxes we raised in 1993 on upper income Americans and the 
spending restraint we enacted reduced the amount of borrowing required 
by the Federal Government to pay its bills. Those who paid those taxes 
and those whose programs have been curbed should be allowed to feel 
they have done something good. There can be no doubt we have borrowed 
hundreds of billions of dollars less than we would have otherwise. And 
there can be no doubt this effort has on balance been good for the 
American economy.
  The best test of this truth cannot be found in liberal or 
conservative think tanks predisposed to be for or against tax 
increases. Reliable truth also cannot be found in the campaign material 
of those who voted for or against the act.
  Instead, the best guide to find the truth is to witness the response 
of the stock and bond markets. These markets--which may have as many 
individual liars as a collection of politicians--does not lie in its 
aggregate decisions. It looks at this kind of legislation with the cold 
eye of the investor. There is no mercy given on account of ideological 
orientation.
  The market hit the bid. They bought the spending caps. They believe 
they will work. It even liked the tax increases although that the 
attitude of the individual traders was less benevolent. Measured by the 
positive movement of interest rats, inflation, job growth, business 
starts, business confidence, and investment spending on equipment, the 
economy not only survived the blow of higher taxes, it has thrived.
  The market, however, wants us to do more to reduce Federal borrowing 
needs. It does not want us to pass a health care bill which expands 
entitlements taking deficits higher. The Federal Reserve is already 
poised to raise interest rates on account of economic good news and 
fears of inflation. Action taken by us which pushes deficits higher in 
the name of health care security could reduce security by taking the 
steam out of economic growth and expansion.
  America's collective capacity to subsidize those who cannot pay their 
health care bills is dependent on the strength of our economy. Our 
national capacity to buy is directly proportional to our national 
income. We should not make commitments to spend money unless we have 
the money to spend.
  America needs to travel down a road of further deficit reduction. Our 
goal should be to arrive at a point where we are making annual payments 
to reduce our debt instead of annual additions. If we continue--and if 
we reduce the savings and investment barriers in our income Tax Code--
America's income will rise along with our capacity to pay health care 
bills.
  The Mitchell bill contains language which provides a fail safe 
mechanism to make certain that does not happen. This portion of the law 
is designed to prevent the Federal Government from providing subsidies 
unless savings are obtained. In addition the law would require the 
Federal Government to disclose the amount of taxes that would be needed 
to pay for Federal health spending.
  Unfortunately, this bill--in addition to bringing tens of millions of 
low income Americans into a subsidized system--would also give new 
benefits to those Americans who are already beneficiaries of Federal 
subsidies. This expansion causes me to doubt the promise of deficit 
neutrality.
  This is my first category of concern: The Mitchell bill does not have 
sufficient safe guards against a further expansion of nonmeans tested 
Federal entitlement programs. Without expansion of eligibility or 
benefits, the year to year increase in Federal spending just for health 
care is almost equal to the entire amount spent on Medicare and 
Medicaid the year Senator Mitchell began his distinguished career in 
this body. These two programs cost $50 billion that year; this year 
they will cost $280 billion.
  My firm conclusion is this: Do not promise anything you will not pay 
for up front. Given a chance we would all prefer to have someone else 
pay our bills. This is particularly true with expensive health care. 
These bills carry a hefty weight.
  My second category of concern is the increased centralization of 
decisionmaking required by this law. This new law would shift more 
power over health care to Congress and Federal agencies than is 
desirable. If we candidly assess our abilities, most of us would admit 
we make decisions today which are little more than educated guesses.
  Let me provide a recent example offered to make this point: We should 
be making fewer health care decisions in Washington, DC, not more. Last 
week, I received a letter written to me by Dr. Paul Collicott, chairman 
of the Nebraska Medical Association ADHOC Committee on Medicare. The 
purpose of the letter was to ask me to offer a technical amendment 
authorizing the Secretary of the Department of Health and Human 
Services to do something Dr. Collicott believes would be good for 
Nebraska Medicare patients and the providers who care for them.
  I am inclined to agree with Dr. Collicott. He is a man with well 
known integrity and credentials that give his suggestions an air of 
correctness. How could it be wrong to help? Particularly when it sounds 
so fair and so likely to bring a little benefit to Nebraska's Medicare 
beneficiaries.
  The problem is that I am not making an informed decision. The 
decision is based more on an assessment of what makes good political 
sense than on what makes good medical sense. From the point of view of 
a policymaker concerned about cost and quality listen to the letter and 
answer honestly if you feel qualified to make this decision:

       This issue has to do with the impact of budget neutrality 
     calculations on relative values under the Medicare Fee 
     Schedule (MFS) due to coding changes for physician services 
     and the arbitrary reduction of Relative Work Units (RWU's) 
     that have been assigned to these codes by the Health Care 
     Financing Administration (HCFA).
       Presently, the RWU's are assigned to a certain CPT code by 
     a peer review process through the AMA's Relative Value Update 
     Committee (RUC). These values then are forwarded on to HCFA, 
     and either accepted at face value or reassigned a different 
     value. In the past, in order to achieve budget neutrality, 
     all RWU's have been arbitrarily reduced 2-3% in order to 
     achieve budget neutrality. These RWU's have been reduced 
     either within a family of codes or at the individual code 
     level. This practice has led to distortions and underlying 
     relative base work estimates developed through the AMA/RUC 
     process a refinement process.

  Current law gives the Federal Government--and we as representatives 
of the people--the power and the obligation to answer this question. 
Allow me to summarize it. In order to achieve budget neutrality, should 
we stop assigning RWU's to CPT's through the AMA's RUC particularly if 
HCFA is going to arbitrarily reduce the RWU's within a family of codes 
or at the individual level? No cheating now. Do not ask your staff to 
explain all the terms. You make the decision.

  Just a little ridiculous, do you think? Well, the Mitchell bill would 
have us making even more of these kinds of decisions. Last week, I 
pointed out five examples where power and control were both being 
shifted to us and the bureaucracies which I would like to summarize 
again:


                      federal oversight of states

  The Federal Government would set requirements which States must 
follow in the new system. States would submit an application to the 
Federal Government specifying how they will meet the requirements. If 
the State does not submit an application, or if the Federal Government 
does not approve the application, the Federal Government can step in 
and take over health care reform in the State, and charge a 15-percent 
tax on all insurance. After a State's application is approved, it is 
subject to the Uncle Sam's variation of the random drug test: It can 
audit a State's program at any time.


                     federal oversight of medicine

  The Federal Government would decide how many doctors will be trained 
each year and how many go into primary care and how many will be 
permitted to train in each specialty and where they will train. The 
National Health Board will set standards for what is medically 
necessary and appropriate treatment instead of doctors. Furthermore, 
the National Health Benefits Board and the National Health Care Cost 
and Coverage Commission are exempted from the Federal Advisory 
Committee Act. Translation: They do not have to allow the public into 
their meetings.


                 federal regulation of health spending

  The Federal Government would set the baseline for total health 
spending excluding Medicare and SSI based on 1994 spending for the 
standard benefit package. That number is trended forward in 1995 and 
1996 based on CBO estimates for health care growth in their 1993 
report. The Government then sets what the rate of growth will be 
beginning in 1997 and forward. Any plan that exceeds that will be taxed 
at 25 percent of the difference beginning in 1997. Big business and big 
unions are exempt from the tax until 1999.


                 federal regulation of health insurance

  These regulations have the net effect of eliminating the existence of 
hospital indemnity policies, cancer policies, and other types of 
supplemental policies.


                  federal regulation of small business

  No business with less than 500 employees would be permitted to self-
insure. All businesses of less than 500 would be required to join 
purchasing alliances.
  This week, I would like to point out five additional parts of this 
proposed new law which would shift power inappropriately to the 
Congress or to Federal agencies.


                    federal regulation of employers

  The Federal government is authorized to audit, regulate, and 
investigate employers who contribute to their workers insurance. In 
addition, employers will be prohibited from offering an alternative-
standard benefits package. The Federal Government also will develop 
certification criteria for all workplace wellness programs.


           federal role in administering private health plans

  Where self-insured, employer-sponsored health plans are found 
insolvent, the Federal Government will assume temporary responsibility 
for operating the plan.


    federal regulation and administration of purchasing cooperatives

  The Federal Government will establish procedures for operating all 
purchasing cooperatives. In addition, the Office of Personnel 
Management [OPM] must ``make every effort to enter into an agreement 
with a purchasing cooperative in each community rating area in the 
United States * * *'' to ensure that standard health plans offered by 
the Federal Employee Health Benefits Program [FEHPB] are available to 
all community rated individuals. If no purchasing cooperative exists in 
an area or if OPM is unsuccessful in contracting with an existing 
cooperative, OPM must establish and administer a purchasing cooperative 
in that area.


                      federal role in collections

  The Federal Government shall provide States with such technical and 
other assistance as may promote the collection of amounts owed by 
families. In addition, the Federal Government is responsible for 
assuring that employers make payments of any employer premiums. The 
Federal Government may also provide for collection activities to 
collect amounts owed to States by purchasing cooperatives.


                  federal over-regulation of benefits

  The amount of detail in this bill significantly increases the power 
of the Board so that it becomes a regulatory agency with few limits on 
its authority to interfere in plan decisions on coverage, similar to 
the Medicare model. The National Health Care Board is given broad 
powers to promulgate guidelines, establish and update periodically 
tables for all categories, and to specify and define specific items and 
services as clinical preventive services. In addition, the Board will 
develop standards for appropriate management of mental illness 
services, establish criteria for determinations of medical 
appropriateness, and regulations and guidelines for determining whether 
an item or service is medically necessary and appropriate.
  Mr. President, these are my top 10 objections. Of importance is the 
omission from my list of the triggered 50-50 business mandate. While 
that may appear on a later list, its regulatory impact is much less 
than meets the political eye.
  Mr. President, perhaps all of these can be changed in the Mitchell 
bill. Certainly the majority leader has clearly and fairly indicated a 
willingness to make changes. My problem is that the more I read the 
bill the more of these things I find. And the more I find, the more 
work I think needs to be done to construct a bill that will make health 
care more affordable to all Nebraskans.
  Mr. President, I am willing to work to accomplish this goal.
  Mr. President, the question really before us is whether or not we 
have the capacity to bridge the differences between Republicans and 
Democrats and pass a bill that is urgently needed by the people--
urgently needed.
  The distinguished Senator from Massachusetts is probably the best 
legislator, authorizer, in this body. The distinguished Senator from 
New York as well has a considerable amount of experience in writing 
legislation, enacting legislation, and working on behalf of the people 
not just of the State of New York but the people of this entire 
country.
  I see the distinguished Senator from Oregon down here, who has been a 
part of extremely controversial legislation in the past and has managed 
to get over the partisan differences and bridge the gap between the 
left and the right, the up and the down, the back and the forward, and 
all that sort of thing, and get a piece of legislation. We passed tax 
reform in the past. There were great differences.
  Mr. President, today lives are at stake. There truly are people in 
America who are watching now, hoping this debate gets interesting and 
hoping the debate, as a consequence of getting interesting, leads to a 
finished product, the enactment of legislation.
  The question before us is, can we bridge the differences? I say with 
great respect to every single Member of the Labor Committee, I wish the 
vehicle today was going to continue to be the Finance Committee bill, 
because it is a bipartisan bill. There we have Republicans and 
Democrats that may not have liked the getting together that occurred, 
may not have liked just exactly the way it was done, but because it is 
bipartisan, it is much less likely that you are going to get the kind 
of, I think, frankly, dishonest representations back and forth that 
lead nowhere, that make for good press releases and make for very 
interesting sound bites on the television stations, but do not in fact 
inform us so that we can make a reasonable decision.
  It is true we are dealing with one-seventh of the U.S. economy. It is 
true we are dealing with something that is life and death for the 
American people, so we need to give it our full and serious 
consideration. We are prepared to do that. Many of us--indeed, I would 
say most of us--have spent a great deal of time studying this issue, a 
great deal of time at home in looking at the problems that are there. 
It is, as the President said, bankrupting this country. There will be a 
$38 billion increase from last year to this year just in Federal 
spending for health care--$38 billion, Mr. President.
  Now, this year alone, we will spend $320 billion directly and $70 
billion with an income tax deduction and an offset against FICA --
nearly $400 billion in Federal tax dollars being allocated.
  Now, I argue we do not disclose it, and we need to balance it. We are 
honest in the way we do it, but it is a tremendous amount of money. The 
President of the United States, when he started this thing, said it is 
bankrupting America, and it is. It is bankrupting businesses, and 
increasingly it is bankrupting families.
  Why? Well, in part, we are demanding expensive health care. Not very 
many of us walk in and say, ``Could you give me the cheapest thing you 
have?'' Most of us walk in and say not only do we want expensive health 
care but, like Richard Dreyfuss in ``The Tin Man,'' we say we want the 
Cadillac for nothing. And so over the past 50 years, we have come to 
Congress, and we have said we want expanded coverage. We want to have 
our purchase be income tax deductible. We want Medicare, Medicaid. We 
want Hill-Burton.
  Every single time, indeed, we have helped people pay the bills, we 
have increased the coverage. We have done lots of good things. But in 
addition to that, we have gone from the point, in 1950, where 80 
percent of the bills were paid with cash, to today, where 80 percent is 
either socialized through the Government or it is socialized through 
insurance--80 percent of us have our health care bills paid by someone 
else. As a consequence, most of us do not even know what the price is, 
and most of us in this body need to be reminded that for tens of 
millions of Americans, even having a baby can be a financial 
catastrophe.
  Mr. President, it costs $12,000 to have a baby in this city--imagine 
that, $12,000. That is 2 days, a normal vaginal delivery. Now, the 
insurance companies only pay for 1 day. Two days, normal delivery, 
$12,000.
  Mr. President, my babies were born 19 and 17 years ago. I paid cash. 
I did not have to be insured 20 years ago. Why? Because having a baby 
was not a financial catastrophe if you were not insured. We have driven 
increased demand into the system in order to provide coverage for 
individuals. In order to reach out and help individuals pay the bills, 
we have driven increased demand into the system. The price goes up. The 
requirement for increased subsidies occurs as a consequence, if you 
follow what I am saying. Every single time we come and drive demand 
into the system with Government action, it increases the price and 
then, not surprisingly, more Americans finding themselves needing 
subsidies, come to us and ask for the subsidies.
  Mr. President, it is crucial for us to be honest with the American 
people in this debate. We are bankrupting America. We have to decide 
what Americans as individuals have to be responsible for in making a 
payment and in what areas are we going to pass the collective hat.
  Every single one of us knows, and very few of us will mention, that 
we are subsidizing people in America today who have the capacity to 
pay. They just do not want to pay the bills.
  Now, we subsidize lots of people with part B Medicare. We are 
subsidizing lots of people, as the distinguished Senator from Minnesota 
said earlier, who are getting high-cost health insurance plans through 
their employer. We have lots of subsidies in place for people today who 
do not deserve it.
  Mr. President, we cannot pay all the bills. We cannot promise 
American people we are going to pay every single one of their health 
bills because the definition of health continues to expand.
  There is no researcher in America that has instructions to find a 
cure or treatment for some terrible disease that is being told ``Find a 
cure that is cheap; find a cure or treatment that is not going to cost 
very much money.'' And rarely do they find a cure or treatment that is 
not expensive, that is not again outside the reach of the American 
people's capacity to pay.
  Mr. President, at some point we have to be honest and say that this 
stuff gets expensive. We have to be honest as well and say that there 
is substantial agreement in this body and feel an urgency to help those 
who genuinely need it. There are tens of millions of Americans out 
there who do not have the capacity to pay the bills, who are forced to 
ingratiate themselves to remain on welfare before they are told that 
they are eligible.
  All of us know there is a problem in America. We can see the gaps and 
differentials that separate Republicans and Democrats. My sincere hope 
and prayer is that the momentum that seems to have stopped, seems to 
have caused lots of us to say, well, I am not sure we are going to get 
a bill; I hope that we are able, in a quiet moment, to acquire the 
humility necessary to see that the American people are counting on us 
to set aside our differences and enact legislation this year. It is 
urgently needed.
  We ought to do the best we can to get a bill to the President of the 
United States so he can sign it on behalf of millions of Americans who 
are hoping and praying that we are able to get the job done.
  As I have said before, I have offered some additional suggestions for 
changing, in particular, the Mitchell bill. I do it with great respect 
for the majority leader. I trust his capacity to be deficit neutral.
  We began this whole thing by saying we want to reduce the deficit 
with health care reform. That is the reason our deficits are going up. 
That was the great line that began this whole debate. We have to make 
sure that on final passage we are able to go home and say that we did 
what we said we were going to do, that we passed health care reform 
that reduced and not increased the deficit in spite of our desire to 
say, yes, it expands benefits, expands and gives people all sorts of 
new things. It has to reduce the deficit.
  I pointed out, as well, the things where I think we shifted the power 
of the Government in this legislation to the Federal bureaucracies and 
Members of Congress.
  I reiterate a request made to me by a doctor in Lincoln, NE, who 
frankly is asking me a question that I pretend I know what I am talking 
about when I answer. But the truth of the matter is I do not have the 
capacity to answer the question. I am shooting at a target that is 
behind a wall, and a spotter comes out every now and then to tell me to 
adjust left and right. I really, as a Member of Congress, do not have 
the ability to make detailed decisions that very often are not economic 
decisions. They are moral decisions. They are ethical decisions, 
decisions about life and death.
  Mr. President, all of us know that typically what goes on out there 
in the medical community is we have a desire to keep people alive, keep 
someone alive, to stay alive. These are very difficult moral decisions. 
I must tell you I do not feel comfortable as one individual in Congress 
making those decisions. I certainly do not trust signing it off to some 
bureaucracy in Washington, DC, which will, in my judgment, do very 
little other than perhaps to make it difficult to get a plane into 
Washington National Airport.
  Mr. President, I hope that our strategy here is to recognize that 
Americans need it. Our economic security depends upon it, and our 
capacity to go to bed at night and say that Americans are going to be 
able to afford health care depends upon our taking action.
  I will continue to work with the mainstream coalition. I will 
continue to focus and to work with the mainstream group, a group of 
Republicans and Democrats, who want a piece of legislation enacted. We 
are tormented by the problems that we see in the country, and the 
status quo is unacceptable.
  I will pay a great deal of respect and attention to the Senator from 
New York, the chairman of the Finance Committee, and the senior Senator 
from Massachusetts who is probably this body's best legislator, 
probably the best able to see the gaps and the differences that 
separate one from another.
  I pay a great deal attention as well to the Senator from Rhode Island 
who is waiting patiently to speak next, and last, and certainly not 
least, the majority leader.
  Mr. President, we have to take action. There is agreement here in 
this body. I hope in the process of debating that we do not do as the 
Senator from Massachusetts cautioned us against doing, and that is 
simply coming down with a laundry list of complaints, simply coming 
down and saying, here is what is wrong, here is what is bad, here is 
what it is, but come down, and say, here is what we want changed. And, 
if it is changed, we will vote on it. That is what we need to be doing; 
not coming down here and offering a reason to vote no. Lord knows, 
there are a thousand reasons to vote no. But there are tens of millions 
of Americans out there that are good reasons for us to vote yes.
  I yield the floor.
  The PRESIDING OFFICER. Who yields time?
  Mr. PACKWOOD. I yield such time as the Senator from Rhode Island may 
consume.
  Mr. CHAFEE. Mr. President, first, I want to thank our ranking member, 
Senator Packwood, and the distinguished chairman of the Finance 
Committee. Also, I would like to congratulate my good friend from 
Nebraska who gave such a fine statement. What he said are the feelings 
that I have. I think they reflect the feelings of everyone in the 
mainstream coalition. We want a bill. We want a bill this year. We 
believe we can get a bill.
  Yes, there are problems we find in the legislation before us, but I 
think we can arrive at a strong bipartisan measure that will get 
enthusiastic support in this Chamber.
  So for my part, I want to say I am delighted we are moving into this 
health reform legislation this week. It is very complicated. I think it 
is time for us to do the best we can to struggle for constructive 
changes that are going to help our citizens lead healthier lives.
  A great deal of emphasis is placed on the limited amount of time we 
have. Yes, we were to go out on recess at the end of this week. Can we 
stay another week and another week? Sure. I recognize the need to move 
quickly, but I do think we have to proceed with some care because the 
legislation we enact will have widespread and not necessarily 
predictable consequences. No American is going to remain untouched. It 
is going to affect how we are born, how we live, how we die. This is 
far-reaching.
  I just saw in the paper a note of a little child born in Pawtucket, 
Diana Rebello, born on Sunday night, August 7, at Women and Infants' 
Hospital in Providence. Think of her life and what it means. Then I 
think of Theresa Nigrelli of Westerly. She is 100 years old and still 
stringing pearls every day at Nigrelli Jewelers. She does not need 
glasses. So we think of her, too.
  The financial aspects of this are mind-boggling. They have been 
touched on before. But I would like to repeat that one-seventh of our 
economy in the United States of America is devoted to health care, one-
fifth of the Federal budget. Of the five biggest items in the Federal 
budget, Social Security, defense, interest on the debt, Medicare and 
Medicaid, it is the last two that are going right off the chart, 
Medicare and Medicaid. Defense is banging along, going down; Social 
Security, fairly stable; interest on the debt going up, not such a 
substantial amount. But it is the last two that are causing us our 
principal problems.
  The 1,410-page bill before us was only released a couple of days ago. 
As I understand--I am not sure it is accurate--changes are still being 
made to it. So it is up to us during this debate to air thoroughly for 
the American people what is in this proposed legislation and to ensure 
that our actions do not make the situation any worse. Clearly, we do 
not want to go backwards.
  I would like to quote to my colleagues a warning from Reischauer of 
the Congressional Budget Office in February before the Finance 
Committee. This is what he said:

       Estimates of the interactive effects of so many complex 
     changes to an industry that encompasses one-seventh of the 
     economy are highly uncertain.

  Underline that ``highly uncertain.'' The estimates are ``highly 
uncertain.''

       Assumptions, used by the Congressional Budget Office and 
     other analysts, about people's behavioral responses to new 
     incentives are frequently based on research evidence from 
     small changes in the existing marketplace.

  They are very small samplings.

       In the case of the Administration's proposal--

  This applies to any proposal--

       however, the entire marketplace and the configurations of 
     the actors within it would be changing, and there is no 
     precedent for estimating the effects on health spending or 
     the economy.

  That is the end of the quote. That is what the Director says.
  The same caveat applies to each of the estimates that are given in 
the various bills that have come before us. We all know from study and 
vast experience and in listening to witnesses much that is right and 
much that is wrong with our health care system. And we acknowledge that 
in many respects it is exemplary in technology and innovation, the 
skill of our professionals, and the range of choices. We also know 
there are several things that demand reform. It seems to me very 
important to keep in mind what we are trying to do? What is the end 
game here? I think our objectives are three.
  First, we must give Americans health security. We want to ensure to 
hardworking people like Christopher North of North Smithfield, RI, that 
he does not live in fear of losing his coverage. He, his wife, and two 
sons were covered by his wife's policy through her employer. She lost 
her job. They applied for a new policy. They were turned down. Why? 
Because their son had a preexisting condition. Minor though it might 
have been, it was enough for the insurance company to turn him down and 
thus turn down their family's insurance.
  Insurance companies do not like to insure poor risks. They are very 
skillful at finding healthy people. And that is why many small 
businesses with employees who are older or have preexisting conditions 
are finding their health insurance--they can get it, but they cannot 
afford it. It is unaffordable. If one employee develops a debilitating 
condition, all or most of his employees are going to be dropped, 
frequently. This is a tricky problem in our States where 86 percent of 
the firms employ less than 20 people.
  What about ``job lock"? In other words, staying in a job, and you 
want to leave, but you cannot because, if you go to the new place, you 
will not be able to get insurance.
  Donald Bolster, Bristol, RI, 13 years with Blue Cross--his wife 
suffers now in Parkinson's. No other insurance plan will take them on 
because of a preexisting condition. They cannot shop for insurance 
coverage. They cannot get an alternative plan. They do not have 
portability. They cannot move to another job. That is what is known as 
job lock.

  The second objective: We must extend health insurance to those--as 
many as we can--who are not now covered. We want to make sure that the 
first group can keep their insurance. The second group, we want to 
extend it to them. We know the statistics: 15 percent of Americans, 37 
million Americans at any one time, are without health insurance. In my 
State, it is 92,000 of our citizens, and 15,000 of them are, 
regrettably, children. They cannot get or do not have health insurance.
  Who are these uninsured? Many people have the impression that the 
uninsured are the poor or elderly. That is not so. The very poor have 
Medicaid, and the elderly have Medicare. Ironically, in our system, 
single-parent families are better off in terms of health insurance than 
two-parent families. Single-parent families are frequently on Medicaid. 
Two-parent families are not. One may be working and the wife is at 
home, or she may be working in a firm where they do not provide 
insurance. Therefore, they earn too much to qualify for Medicaid.
  The vast majority of people without health insurance live in families 
in which the head of household is employed for at least some portion of 
the year. These are not people who are the unemployed, never getting a 
job; they are employed at least some portion of the year. In my State, 
76 percent of the uninsured are in families in which the head of 
household works full time. Eighty-five percent have incomes above the 
poverty level. We all know that it is very costly for society when 
individuals like these do not have health insurance. They are the ones 
that go into the emergency rooms of hospitals for treatments or for 
procedures, and the hospital emergency room is not the right place. It 
is far too expensive for these individuals. Or else they do not go 
anywhere, and then the child, or the individual, or parent, comes down 
with a devastating illness that, in the end, costs our society far 
more.
  The third objective is to do something about controlling costs. 
``Cost containment'' is the buzzword used. The cost of health care in 
our society is getting tremendously expensive for the individual, for 
companies, for States--particularly through Medicaid--and for our 
Federal Government. In the United States as a whole, we spend 14 
percent of our gross domestic product on health care--more than any 
other industrial nation. The Federal Government spends 19 percent of 
its budget--nearly 20 percent, one-fifth of all our expenditures, on 
health care. That is projected to go up to 25 percent by the end of the 
century.
  Local and State governments, particularly through the costs of 
Medicaid for State governments, spend about 15 percent. The country 
just cannot sustain these costs. When you talk about what it is doing 
to businesses, the statistic is well known that there is a greater cost 
for health care than for the automobiles built by Chrysler, Ford, and 
General Motors. It costs more for health care than for the steel in the 
automobile. We spend twice as much for health care in the United States 
per automobile worker per car than is spent in Japan.
  We have a wonderful opportunity to do something about all of this. 
This does not come along very often. It came along in the 1930's in the 
New Deal, in the 1940's under President Truman, and it came along in 
the 1970's under President Nixon. Yet, in each of those instances, the 
extremists, those demanding perfection and those who said do not do 
anything, got together and thwarted the chances of the group that 
wanted to do something. Obviously, it was not a majority.
  So our challenge in 1994 is to make some history. I think we have the 
wisdom to put partisanship aside and to enact broad health care reform. 
I was honored 4 years ago when Senator Dole asked me to be chairman of 
the Republican task force, and we worked on this and came up with 
legislation in 1991, and then a better bill in 1993, the Health Equity 
and Access Reform Today Act of 1993. We had 20 Republicans on that and, 
subsequently, we had two Democratic Senators join us, making it one of 
the only two bipartisan health care reforms.
  In November of last year we formed a bipartisan group called the 
mainstream coalition to see if we could not work together. We are drawn 
by the common belief that reform is too important to be destroyed by 
party politics. We wanted to formulate a proposal that would put us on 
a responsible path toward universal and affordable coverage with 
effective cost controls.
  We had some principles to guide us. The first was caution. Nobody 
knows how this thing is going to work out. Will we get better health 
care? How much will it cost? We have to implement the reforms slowly 
and build on the ongoing assessment of how it is affecting individuals 
and businesses and the Government.
  Second, do not add to the deficit. We believe financing should have a 
realistic conservative time line for phasing in health insurance and 
for granting vouchers to the low-income individuals, which is part of 
our plan. And thus we came up with a so-called failsafe mechanism, 
which is a big word for slow it down, when you phase in the coverage, 
the costs, or accelerate it, depending on the success of the reforms. 
We want to ensure that the reforms do not add to the already dire 
Federal deficit.
  Third, there should be a minimal level of Government intervention. 
Let us not replicate Medicare, which has been fine for the 
beneficiaries, but a disaster in terms of cost containment. That is the 
ultimate of the micromangement program. It is cumbersome and top heavy 
with regulation and produces a 12 percent annual growth in cost, which 
is more than double what the private sector is going up in. And only in 
Government-run programs do you have the bizarre situation during a 
House-Senate conference, where Congressmen Pete Stark and Senator John 
Chafee are huddled at 2 a.m. in a corner of the Capitol deciding who is 
going to be reimbursed for reading an EKG, or whether nurse 
practitioners should be reimbursed directly or not. I do not know 
whether I can speak for Congressman Stark, but I can say I am 
incompetent to make those decisions. I suspect that he might be, too, 
but I have to be careful.
  These service delivery issues should not be decided by politicians at 
2 o'clock in the morning, but by health care professionals working in 
competitive, efficient markets.
  Mr. President, this Government intervention is kind of interesting. I 
got a letter from Jim Wilson, owner of Wilson's clothing store in 
Wickford, Rhode Island. He indicates he is not too sure of what the 
Government is doing. He asks two simple questions: First, what is the 
Government's track record in projecting the costs of entitlements? How 
good is the Government in predicting what something is going to cost 
when it is entitlement? And how well have these programs been managed 
and controlled?
  I think, reluctantly, the answer has to be ``horrendous'' to the 
first one and ``poorly'' to the other.
  In the reforms we develop, I believe there should be the least 
possible Government intervention and the greatest possible reliance on 
market forces.
  Fourth, the solution we must enact must have the broadest possible 
bipartisan support. That does not mean Democrats or Republicans caving 
in to the other side, it means all of us giving up a little bit to meet 
in the Senate. When we are enacting reform, we will be asking the 
public to accept a great deal on faith. How can we earn our trust if we 
pass a bill by one vote? The public will be suspicious, and rightfully 
so. We can see what happened with catastrophic a few years ago. We can 
debate in earnest taking up the bill by the majority leader. He has 
worked hard to fuse the two bills in the Finance Committee and Labor 
and Human Resources Committee, which was a herculean effort. I think we 
are indebted to Senator Mitchell for his effort.
  There are a number of provisions in this that cause me great concern.
  The Senator from Massachusetts says: ``Well, list them, but just do 
not attack the measure. Tell us specifically what you are talking 
about.''
  I personally feel that these points that I will make should be 
corrected. Maybe I am misunderstanding. Maybe I do not read the 
legislation right. Maybe it has changed in a subsequent rewrite. I do 
not know.
  But the President and Senator Mitchell, and others, have indicated 
they are willing to give voluntary market solutions a try before 
imposing Government controls. In this bill and in many areas, in my 
judgment, that voluntary market solution effort has not been given the 
chance it deserves.
  Some of us have been chided in the Senate for not recognizing how far 
Senator Mitchell has moved. I take such criticism seriously and have 
spent some time looking through this proposal. What I found is 
surprising. It is absolutely true the approach does not have the 
immediate mandate on the employers which was in the original bills that 
were discussed, such as the President's bill.
  But the leader, it seems to me, has in that instance attempted to 
accommodate those in his own party as well as Republicans. But let us 
look at some of the other issues that have been less debated and less 
publicly discussed since the Clinton bill was first presented, vestiges 
of which we still find in the Mitchell bill.
  First, mandatory alliances. A single alliance set by the Federal 
Government through which all employers and all individuals must 
purchase insurance appears no longer to be part of this proposal. It is 
out. It appears to be. However, in its stead is a requirement that all 
employers with fewer than 500 employees must join a purchasing 
cooperative and pay any required fees, all employers, with 500 or less 
employees. In my State that is practically everybody. Yes, we have a 
few employers with over 500, but they are relatively few.
  The proposal of Senator Mitchell appears to accept the idea that 
there would be competing cooperatives, and would allow employees to 
purchase coverage outside any cooperative. This sounds good.
  Let us look a little further. There also is a requirement that the 
Federal Government, through the Office of Personnel Management, choose 
what one might call a favored cooperative. That is the responsibility 
of the Office of Personnel Management. All employers of 500 or fewer 
are required to join that cooperative, although they can join others 
likewise, but you have to join that one and pay your dues. PPM is 
mandated to establish a cooperative if there is none in the area. 
Follow this, the end result would easily be what we sought to avoid, 
single alliances in an area set up by OPM, thus run by the Federal 
Government with all businesses under 500 required to belong.
  This is one of the things that we objected to and many objected to 
right in the beginning.
  Second, price controls. Under the original proposal, Clinton proposed 
a premium cap above which insurance plans could not charge. That was in 
the original plan. Many of us objected and argued that competitive 
forces should be used instead to bring the price of insurance down.
  The proposal before us by the majority leader contains a provision 
that purports to be a market-based, cost-containment mechanism, but on 
closer examination, it looks like the premium cap enforced by a tax. 
The Government sets what it believes is a reasonable premium in each 
area. The Government sets this. And it is indexed to increase at a 
fixed amount. And if it exceeds that, then the Government imposes a tax 
on the difference between what the plan charges and this other amount. 
This is clearly not letting the market forces work.
  Third, the proposal creates new regulations for all health care 
insurance plans sold in the United States, not just those that are 
involved in the so-called uniform benefit package. In other words, it 
says that a whole new set of Federal regulations will apply to a whole 
series of plans that exist out there. It might be the cancer policy, 
for example. That would not be involved either. That would not be 
involved in the uniform benefit package.
  Clearly, we can see why these new regulations apply to the uniform 
benefit package. There cannot be any denial for preexisting conditions, 
and all the things that we previously discussed in insurance market 
reform, but this proposal extends all of those rules to the policies 
that currently exist that someone might want to buy even though those 
policies receive no Federal subsidies.
  We do not understand why you get the Government involved in this 
whole set of new regulations for an area that is working perfectly well 
now.
  Next, the fail-safe mechanism that has been touched on already by 
prior speakers is something that we believe deeply in to make sure that 
what you are doing does not cost more than the expenditures that would 
have taken place in the plan before us. We do not believe that it 
accomplishes that objective.
  Malpractice reform. One objective of health care reform has been to 
reduce the costs through medical liability reform. The bill before us 
proposes only modest Federal reforms. The proposal requires alternative 
dispute resolution but still allows the parties to go to court. There 
are no caps on noneconomic damages, no changes in the statute of 
limitations. Most important of all, the bill appears to preempt tougher 
State malpractice laws currently on the books in favor of the weaker 
Federal rules.
  For example, in California, they have enacted substantial medical 
tort reform, medical liability reform, after hard-fought statewide 
debate. Those California rules would all be preempted now by these 
Federal rules by the Federal Government. In other words, there will be 
total Federal preemption.
  Next is medical education that has been discussed. It was discussed 
last night by Senator Packwood and in some detail. I would like to echo 
my concerns that he voiced. I cannot understand--obviously, there 
should be inducements for those to go into primary care but for someone 
to sit here and say x percentage of practitioners be in primary care 
and y percentage in the specialties, if one wants to study to be a 
ophthalmologist, three cheers. It may well turn out that the market 
forces will work out that he does not have a job, but that is his 
business. Maybe he is going to be the greatest ophthalmologist. But to 
restrict who can and cannot take up the various specialties does not 
seem to me to be a constructive way to proceed.
  Again, we would hope that the market forces would work that way, and 
as we go more and more into managed care, the market forces in that 
particular area are going to be stronger and stronger.
  Next, ERISA. ERISA are the rules that pertain to companies that 
operate in many States and those that have self-insurance. Many 
provisions in this proposal before us will have the effect of gutting 
the ERISA preemptions that currently exist and that have worked 
successfully for the health plans of multi-State companies and self-
insured companies.
  The effect of these changes will be to substantially increase the 
cost of these plans to employers and to employees. An example is a 
requirement that these companies be subject to State laws involving so-
called risk adjustments, in other words, to paying from one set of 
plans into another set of plans, so-called community-rated plans. That 
is an open-ended ability of States to impose a new tax on the premiums 
of these companies. They do not know what it is going to cost.
  Association plans. There currently exists the capacity for 
businesses, such as a group of automobile dealers or the local chamber 
of commerce which may put together a whole series of small businesses 
in groups. They are formed to purchase insurance. Now, many of us would 
like to see these plans grandfathered with slightly modified rules so 
they can continue to exist.
  To enact a health care reform bill this year, is it really necessary, 
as is done in this proposal, to completely revamp even those parts of 
our existing health system that are currently working? I do not think 
so.
  Next is the costly new litigation proposal that exists in this plan. 
It establishes broad new rules that will open State and Federal courts 
to a huge influx of claim disputes. In fact, under this proposal 
attorney's fees are subsidized for certain individuals bringing suit 
against the claims decisions made by a health plan. There is no 
question that the plans will simply pay off nonvalid claims, get rid of 
them solely to avoid the litigation costs.
  This is hardly cost containment. It is a bonanza for cost, and it is 
a bonanza for lawyers. General Electric has told us that it is their 
estimate this will add $1 million a year to their health care costs.
  Perhaps some of these ideas have merit. But I do not think any of 
them are essential to the enactment of health care reform.
  Another point. After the employer mandate triggers into effect, this 
legislation prohibits insurance plans from ending an individual's 
health insurance coverage even if the individual or the group does not 
pay their premiums.
  In other words, you cannot drop them for failing to pay their 
premiums. That is an unusual provision. So I guess the proposal, the 
rationale behind it, is they want everybody insured. So you can be 
insured even though you do not pay your premium. I think it would be a 
great incentive for people not to pay their premium.
  But then there is set up a shortfall add-on assessment on all 
insurance payers. That amount is to be used to pay for those deadbeats 
who do not pay for their insurance. In other words, every insurer or 
rate payer will pay an additional amount for those who do not pay their 
premiums.
  Finally, next to last, is community rating. That was discussed last 
evening by Senator Packwood. Pure community rating, as you know, 
eliminates any difference between the amount paid by older Americans 
and those paid by younger Americans. This comes in the year, I think it 
is, 2002. It will inevitably lead to price increases for younger 
workers who are not the most wealthy of groups and will force them to 
drop their coverage.
  And then, finally, for some reason, a new occupational safety and 
health program is established under this legislation. I do not quite 
know why we have to get into that in the name of health care reform.
  These are some of the reasons I have concern over the proposal set 
forth by the majority leader. The Mitchell bill, but for the employer 
mandate, appears to reflect few of the principles that those of us in 
the mainstream have, those of us who err on the side of less Government 
intervention, more marketplace competition, and effective-cost 
containment.
  What does that mean? Does that mean that we Democrats and Republicans 
cannot unite on a bipartisan plan that will enjoy broad support? I do 
not think so. By that I mean, I do not think the negative.
  I will start that over again. Does it mean that we cannot unite? I 
believe we can unite. Does it make sense for us to try for a bipartisan 
measure that keeps in mind the two objectives we all say we are for?
  I think if you ask people out here what are they for, they will all 
say two things: We want to increase the number of Americans who have 
health insurance, with our goal of eventually covering everyone. 
Everybody would agree with that, I think. Very few would not. Second, 
our objective is to get costs lower for individuals, for companies, for 
State governments, and for the Federal Government. Cost containment.
  Nearly all of us pay tribute to the effectiveness of the marketplace. 
We all seem to subscribe to the notion of competition. There would be 
very few people who would get up on the floor of this Senate and say, 
``I don't believe in competition. I don't believe in the effectiveness 
of the marketplace.''
  We subscribe to the notion of competition, those of us in the 
mainstream. We are, for the most part, extremely skeptical of 
Government intervention.
  So why can we not unite behind a bill that incorporates those 
beliefs? We do not have to achieve everything this year that we would 
like to. There will be other opportunities to deal with this subject, 
to ascertain whether we should do more or less.
  I and all the other members of the mainstream group want to see good 
health care reform enacted this year. We will do all we can to be 
helpful. We believe it is extremely important to have a bill with broad 
support.
  What am I talking about? Seventy-five or eighty votes in favor--that 
is not an impossibility--rather than a measure that sneaks through with 
51 or 52 votes.
  Time is getting short, but there still remains time to produce a 
product that will be of great benefit to millions of Americans. What an 
opportunity. What a wonderful opportunity. So let us not let it slip 
through our grasp.
  I thank the distinguished chairman of the committee.
  Mr. MOYNIHAN. Mr. President, I thank the Senator from Rhode Island 
for a remarkable statement and a hugely positive and encouraging one, 
to this Senator.
  We can do this. We can do it. And if it is done, he will be one of 
the principal reasons it was done.
  I thank the Senator.
  Mr. CHAFEE. I thank the Senator very much.
  Mr. MOYNIHAN. Mr. President, I ask unanimous consent that the time 
yielded to Senator Chafee not be deducted from the Democratic time, and 
that the time for the Democratic side be adjusted to equal that used by 
the Republican side.
  The PRESIDING OFFICER. Is there objection?
  Mr. PACKWOOD. I have no objection.
  I would just like to know how much time, therefore, that leaves the 
Democrat side. We have used ours all up.
  The PRESIDING OFFICER. The Democrats will be restored to 77 minutes.
  Without objection, it is so ordered.
  Mr. MOYNIHAN. Mr. President, the able and learned Senator from 
Arkansas has been patiently waiting his opportunity, and I yield him 15 
minutes.
  Mr. PRYOR. Mr. President, I thank the distinguished chairman of the 
Finance Committee.
  I would just like to say that I am very, very proud that this debate 
is finally here, that we are joining our forces here on the floor of 
the Senate, that we are doing our duty. Hopefully, this is going to be 
a constructive endeavor, ending up in meaningful health care reform 
legislation that can be sent to our President.
  Mr. President, in late July, the very distinguished majority leader 
was faced with the daunting task of integrating the two major health 
initiatives that were offered by the Senate Labor and Senate Finance 
Committees. Senator Mitchell was challenged to develop a bill that 
would effectively serve as the starting point of debate for one of the 
greatest legislative undertakings in recent history--reform of our 
health care system. I applaud the majority leader for meeting this 
challenge and bringing to the table a bill of considerable merit. I am 
certain all of my colleagues would agree that he has shown impressive 
leadership by acting both expediently and in a very, very bipartisan 
manner.
  The majority leader's bill is the culmination of almost 2 years of 
intense congressional examination, and today we are presented with a 
real opportunity to use our hard work to effect positive changes in our 
health care system. Some of my colleagues are claiming that no bill is 
better than a bad bill. Yet, to imply that the majority leader's 
proposal is a ``bad bill'' misrepresents the work we have done the past 
several months. As a team, we have built upon the groundwork laid by 
President Clinton with his Health Security Act. And at least up until 
now, we have overcome many of the barriers presented by partisan 
politics.
  I recognize that we still have plenty of work to do. But I firmly 
believe that instead of throwing up our arms in frustration, we have an 
obligation to the American public to meet the challenge put before us 
today.
  Mr. President, I have stated before that the cost of doing nothing 
far outweighs the cost of reform--both in financial and human terms. My 
statement today is an effort to urge this Congress to take action and 
to seize this very unique opportunity to offer Americans the health 
care they deserve. With that said, I would like to comment on a few 
aspects of the majority leader's bill, which I find of particular 
importance.
  As chairman of the Special Committee on Aging, I am very pleased that 
the majority leader included in his plan programs aimed to alleviate 
the two biggest concerns of older Americans--long-term care and 
prescription drugs. Understanding that the financing of any health care 
plan must include significant savings in the Medicare Program, we 
simply must provide senior citizens with something in return. The 
inclusion of a new long-term care program as well as prescription drug 
coverage is a major start, I truly believe, toward guaranteeing the 
health security of our Nation's most vulnerable populaton--the elderly.
  Our Nation's elderly and disabled will rest easier knowing that the 
majority leader's plan includes a new home- and community-based care 
program. This new program is a major step in the effort to reform our 
long-term care system. By providing services for persons of all ages, 
this thrust will help give American families peace of mind regarding 
long-term care.
  This new concept will also help end the institutional bias of our 
long-term care system. Currently, for many elderly and disabled 
Americans, the only public help available is offered in a nursing home 
setting. The lack of options will change, should Senator Mitchell's 
plan go forward. The wedge of available services will widen, and more 
people with disabilities will be able to remain living at home with 
their families.
  Another important benefit is that families will no longer have to 
impoverish themselves in order to get help paying the high cost of 
long-term care. Instead of forcing the elderly and the disabled to 
spend down to a low eligibility level, this opportunity is going to be 
made available to all Americans with disabilities. Many recipients will 
be required to pay some of the cost of their services. However, these 
copayments will be equitably set on a sliding scale, according to 
income. In this way, the welfare-based Medicaid methodology will be 
replaced by a fairer system of personal responsibility that removes 
incentives to squander income or to hide assets.
  Our long-term care addition is going to offer a broad array of 
services, providing all disabled Americans with the option to remain in 
their homes and communities. Homemaker/chore assistance, respite 
services, adult day care, rehabilitation and home health care services 
will be among the services made available.
  In our home State of Arkansas, nearly 40,000 people will benefit from 
this new concept. Let me tell you about a few of these people. There is 
a 90-year-old woman living in a small frame house--and I have been 
there--in rural Arkansas. She needs assistance in completing activities 
of daily living. She copes with seizures, heart problems, arthritis, 
and has a hip replacement. Her only family caregiver is a 68-year-old 
daughter. If it were not for the services provided by a personal care 
assistant, this 90-year-old woman would be living in a nursing home 
today and her stay there would be financed by the taxpayers.
  This woman, however, is fortunate, relatively speaking, because she 
does have access to personal care assistance. Countless others living 
in our State and our country as a whole lack access to these types of 
services.
  For example, another woman living in rural Arkansas suffers from 
numerous physical and emotional health problems. Despite these 
disabling conditions, she was turned down for community-based services 
because she somehow failed to meet the medical criteria. Now, as she 
continues to deteriorate on a daily basis, she has become increasingly 
concerned about her ability to continue living in her own home. She 
could apply again for help but is justifiably disillusioned by the 
health care system. Most likely, she will end up in a nursing home, and 
the taxpayers, again, will foot the bill.
  There are many, many other stories that I could tell to illustrate 
the need for the new home- and community-based program. One of those 
people came before the Senate Special Committee on Aging back in April. 
Tom Chapman is 53 and is suffering from Alzheimer's. Hazel, his wife, 
has done everything that she can do, including leave the work force to 
become a full-time caregiver to keep her husband at home.
  Their daughter, 13-year-old Angela, has all but given up her 
childhood as a result of her father's disease. Mrs. Chapman told our 
committee how her husband was diagnosed with Alzheimer's 3 years ago, 
how the disease has progressed to the point where he can no longer 
dress or go to the bathroom by himself. He shadows her all day long 
because he is afraid to be alone. When he eats, he often does not know 
the food is supposed to go into his mouth.
  One of Mr. Chapman's major problems is that because of his age, 53, 
he is shut out of many of the community-based programs that are 
available to those who are over 60. The Mitchell bill would change 
that. It would set up a new home- and community-based care program open 
to disabled people of all ages. Because they have no options, and Tom's 
care needs have become so overwhelming, Hazel, his wife, has decided to 
look for a nursing home for Tom. The costs of nursing home care are so 
prohibitive that the Chapmans have recently had to give up their home 
because they can no longer afford it.
  These are case studies that only barely scratch the surface of the 
problem at hand. It is imperative we take action this year, take action 
now to help the millions of people in this country who are struggling 
to gain access to long-term care.
  Mr. President, I also point out the majority leader's proposal, 
thankfully, includes prescription drug coverage for older Americans. 
Prescription drugs provide us with some of the most cost-effective 
medical care at our disposal. Yet under the present system, too many 
people have been forced to make the desperate choice between buying 
food and utilities or buying the medications they need to stay healthy. 
Over the past decade, skyrocketing prescription drug prices have made 
medications unaffordable to many Americans, especially our Nation's 
elderly. In spite of the many studies which show the harmful effects of 
this relentless inflation on our Nation's poor and elderly, the 
country's drug manufacturers today say that Congress should not take 
any action to contain drug prices. They say we should, instead, rely 
upon market forces to hold down the prices of medications.
  Because pharmaceutical companies retain a high degree of control over 
the prices of drugs they manufacture, the market fails to produce 
adequate cost containment for the American consumer. Competition in 
drug pricing is almost nonexistent because today the companies are 
buying the generic drug manufacturers that serve as their competition. 
The drug companies are also now buying the businesses which distribute 
these drugs throughout the American marketplace.
  Through the course of my years in office, I have received thousands 
of letters, as I know the entirety of this Senate has, from older 
Americans, pleading for help in paying the cost of prescription drugs. 
Unfortunately, the elderly spend over two and a half times as much as 
the younger generation on medications, and they pay for a higher 
percentage of their drugs directly out of pocket. In fact, for over 75 
percent of the elderly, prescription drug bills represent their highest 
out-of-pocket medical costs.
  The Mitchell bill addresses this dilemma. It provides seniors with 
greater parity by including a Medicare drug benefit as part of the 
provisions. As I have already stated, with significant proposed cuts in 
the Medicare Program, we must now offer seniors some degree of help in 
return. This drug benefit, although many will say it is moderate, will 
have the added effect of reaping considerable Medicare savings due to 
reduced hospitalizations, generic substitutions, and improved health 
conditions.
  The Center for Policy Studies recently found that these savings could 
total as much as $37.2 billion saved over 5 years. The seniors who 
stand to benefit from this program are not the wealthy elderly. They, 
instead, represent seniors who fall within 100 to 200 percent of the 
poverty range.
  In my home State of Arkansas, the Medicare drug benefit will result 
in more comprehensive prescription drug coverage for over 250,000 
people age 65 and older. These seniors will be a part of the older, 
poorer minority elderly population who are going to benefit greatly 
from the so-called Mitchell proposal that is now before the Senate.
  Because of these two forward thinking concepts--long-term care and 
prescription drug coverage--we received this morning for Senator 
Mitchell's proposal the endorsement of the American Association of 
Retired Persons.
  I would like at the proper time to place this endorsement of the 
Mitchell plan into the Record. But I would like, Mr. President, before 
I do that, to quote from this endorsement. It is in about the fifth 
paragraph.
  The PRESIDING OFFICER. The Senator has utilized the 15 minutes 
yielded to him.
  Mr. PRYOR. It has expired?
  The PRESIDING OFFICER. It has expired.
  Mr. PRYOR. Mr. President, may I seek 3 or 4 additional minutes?
  Mr. MOYNIHAN. Can we make it 3 minutes?
  Mr. PRYOR. Yes.
  The PRESIDING OFFICER. The Senator is recognized for an additional 3 
minutes.
  Mr. PRYOR. Mr. President, it states:

       The Mitchell and Gephardt bills are about protecting 
     American families. They offer an historic opportunity to 
     provide each of us with affordable, high-quality health and 
     long-term care. If either bill is defeated, health care 
     reform will be dead for years to come.

  In closing, let me state that this morning in the Washington Post, I 
read a very, very disturbing news article about a group of business 
people who are now meeting at the very exclusive City Club in downtown 
Washington. They have decided to oppose all health care reform bills, 
especially, it appears, the ones offered by the Democratic Senators.
  The most disturbing statement was given and attributed to Mr. John 
Motley. I know Mr. Motley. He is a friend. He runs the NFIB, the 
National Federation of Independent Businesses. By the way, this is not 
a small organization. They have an enormous PAC fund, they have an 
enormous number of employees. This is something that Mr. Motley stated 
yesterday: ``We are all very good at putting together votes against 
something,'' said Mr. Motley.
  Mr. President, if Mr. Motley said that, this is the most cynical 
statement that I have seen yet in this long debate about health care. 
Here are a group of business people and their spokesman is saying, 
quoting again: ``We are all very good at putting together votes against 
something.''
  I do not know exactly what our country is coming to. But unless we 
can really get to the bottom of some of these issues and tackle the 
many special interests that for years have profited from this health 
care crisis in America, I hate to say that we are going to be admitting 
that we do not have the fortitude nor the ability to carry forward with 
our commitment to provide health care for all Americans.
  Mr. President, I ask unanimous consent to print in the Record the 
statement by the AARP president.
  There being no objection, the statement was ordered to be printed in 
the Record, as follows:

              Statement by AARP President Eugene Lehrmann

       AARP recommend to our members that they support the health 
     care reform bills introduced in the Congress by House 
     Majority Leader Richard Gephardt and Senate Majority Leader 
     George Mitchell. Although neither bill is perfect, after 
     careful review, we conclude that they provide the foundation 
     for comprehensive health care for all Americans.
       AARP has been a constant voice calling for comprehensive 
     reform of the nation's health care system. Throughout this 
     long and often confusing debate over how to accomplish health 
     care reform, AARP has not endorsed any proposal, but has held 
     steadfastly to our basic reform goals that would provide: 
     universal coverage; long-term care coverage; prescription 
     drug benefits; provisions to protect and strengthen Medicare; 
     controls that reign in skyrocketing health care costs; and a 
     fully-funded health care system that is affordable to every 
     American.
       In the almost three decades since Medicare was enacted, two 
     other Presidents--Nixon and Carter--proposed major reforms, 
     but Congress did not act. The time for proposals without 
     action has passed. We are now dealing with specific 
     legislation that demands difficult choices but offers the 
     hope of real reform.
       Trade-offs will be required of each of us, regardless of 
     age or income. For AARP members, cuts in Medicare must be 
     balanced by new home and community-based long-term care and 
     prescription drug benefits. AARP will continue to fight to 
     protect Medicare and to make sure that older Americans are 
     always able to get the doctor and hospital care they need.
       Ultimately, the choice must be between health care reform 
     and the current health care system. We all know the problems 
     with the current system. The Mitchell and Gephardt bills are 
     about protecting American families. They offer an historic 
     opportunity to provide each of us with affordable, high-
     quality health and long-term care. If either bill is 
     defeated, health care reform will be dead for years to come.
       This is why we are asking our members to support the 
     Mitchell and Gephardt bills. AARP pledges to our members that 
     we will continue to fight for our goals until they are fully 
     achieved. By supporting these bills, we can all make health 
     care reform a reality, not only for ourselves, but for our 
     children, our grandchildren, and the generations to follow.

  Mr. PRYOR. Mr. President, I yield the floor, and I thank the 
distinguished chairman for providing me the opportunity to speak.
  Mr. MOYNIHAN. And we thank the tenacious Senator from Arkansas for 
particularly drawing attention to the pharmaceutical benefit, which is 
of great importance.
  Now I have the pleasure to turn to a natural authority on this 
subject, the junior Senator from Hawaii where we have had universal 
health care for many years and with great and felicitous results. I 
yield 10 minutes to Senator Akaka.
  The PRESIDING OFFICER. The Senator from Hawaii.
  Mr. AKAKA. Mr. President, I thank the chairman for giving me this 
time.
  I have joined today's debate on health care because I represent 
Hawaii and Hawaii leads the Nation in ensuring that basic health care 
is available to all. Our system delivers high-quality care without high 
costs, despite Hawaii's high cost of living.
  When the majority leader and the Republican leader opened the debate 
on health care on Tuesday, they described in very eloquent terms the 
problems with our health care system and their differences over how to 
correct these problems.
  The one thing both leaders agreed was that affordability and access 
were the core problems with health care today. In both their speeches, 
the leaders used the identical words--affordability and access--to 
describe what is wrong with the current system.
  Mr. President, for 20 years, since 1974, Hawaii has had a prepaid 
health care system whose keystone is shared responsibility, or 
employer-employee mandates. I want you and my colleagues to know, and 
the Nation to know, that it works for Hawaii and it will work for our 
Nation.
  In Hawaii, we have solved the problems of affordability and access. 
Hawaii has achieved the American health care dream, near universal 
health care for its citizens and at a cost that is 25 to 30 percent 
below the national average. We achieved this because of shared 
responsibility--employers and their employees joining together to share 
the costs of health care coverage.
  In Hawaii in 1974, we had opposition. We had opposition from the 
American Medical Association. We had opposition from the business 
community. We had opposition from small business associations. We had 
opposition from the Chamber of Commerce. And despite this opposition, 
because of the strong, solid Democratic majorities and a strong 
Democratic legislature and because the bill was a Democratic priority, 
it was passed in 1974, and we have had it now for 20 years.
  So for 20 years, Hawaii has maintained a model health care system. 
The cornerstone of health care in Hawaii is shared responsibilities. 
For 20 years, Hawaii's employers have shared the cost of health 
insurance with their employees. As a result, Hawaii has one of the 
healthiest populations in the Nation.
  I quote from the Journal of the American Medical Association:

       Considering that health outcomes ought to be the key 
     objective of a health care system, Hawaii fares very well, if 
     not the best of all States, in terms of longevity, low infant 
     mortality, and very low premature morbidity and mortality 
     rates for cardiovascular and pulmonary disease and cancer. 
     Two recent national analyses of the comparative health status 
     of all 50 States, one by Northwest Insurance Company, 
     Milwaukee, WI, and another by the Public Health Association, 
     Washington, DC, have rated Hawaii first among all States. We 
     believe a considerable amount of this success is attributable 
     to direct and indirect effects of Hawaii's employer mandate 
     over the past two decades.
       * * * the State's continued emphasis on ensuring access to 
     primary care for nearly all its citizens has been a major 
     factor in better health outcomes and improved health status 
     for Hawaii's people.

  Death from chronic health problems, such as cancer, heart disease and 
lung disease, are also among the lowest. Our cancer rate is one-quarter 
less than the national average, our heart disease rate is one-third 
less than the national average, and the incidence of lung disease is 
half the national average.
  Opponents of health care reform and shared responsibility----
  Mr. KENNEDY. Will the Senator answer a question on that?
  Mr. AKAKA. Yes.
  Mr. KENNEDY. Does the Senator draw a conclusion that because there is 
early intervention--as I understand it, Hawaii has twice the visits to 
the doctors as we do in other States and it has half the 
hospitalizations. A good deal of the analysis in Hawaii, as I 
understand, is for preventive aspects which you included in your 
program which are very similar to the programs in the Mitchell 
program; and that that has resulted in a reduction in both the 
utilization of hospitals and more extensive types of treatment. Is that 
part of the experience?

  Mr. AKAKA. The Senator from Massachusetts is absolutely correct.
  Mr. KENNEDY. I thank the Senator.
  Mr. AKAKA. Hawaii has enjoyed this over many, many years.
  The opponents of health care contend that requiring employers to 
provide health insurance will lead to widespread business failures, yet 
our experience is just the opposite. The dire predictions about 
economic decline, lost jobs, and small business failures have not 
materialized. Requiring businesses and employees to share the cost of 
health insurance has not undermined Hawaii's small business climate.
  Critics respond by saying, ``Hawaii is different. Your State is not 
representative,'' or that, for one reason or another, Hawaii is not a 
good test case on the effect of shared responsibility on small 
businesses.
  In fact, Hawaii is a very good test case because Hawaii is a small 
business State. Small business is the engine that drives our economy. 
Ninety-eight percent of the businesses in Hawaii have fewer than 100 
workers. Firms with 50 or fewer employees constitute 95 percent of our 
businesses. Hawaii is a haven for small businesses, not the Fortune 500 
companies.
  Since Hawaii implemented shared responsibility, we have enjoyed 
steady and nearly uninterrupted small business growth. With the 
exception of 1 year out of the past 20, small business employment has 
increased each year.
  The Hawaii experience defies the predictions that shared 
responsibility will lead to higher insurance premiums or an increase in 
small business failures. Beginning in 1977, Mr. President, when an 
index for business failures was first created, Hawaii's small business 
failure rate has been half the national average. Hawaii has also been 
heralded as the number one ``entrepreneurial hot spot'' for start-up 
companies.
  Critics also insist that employees will respond to health reform by 
eliminating low-wage employees. Yet, they contend that small businesses 
will be forced to cut jobs or shift to using part-time employees 
because they cannot afford the cost of contributing to health 
insurance.
  Neither of these problems have surfaced in Hawaii.
  These critics also fail to take into account the positive effect of 
lower insurance costs on business. What they do not appreciate is that 
as they get closer to universal coverage, insurance becomes less 
expensive, not more expensive. In most cases, businesses that currently 
provide insurance will see their premiums drop under the Health 
Security Act.
  Because of Hawaii's near-universal coverage, health insurance 
premiums for small businesses are competitive with the low rates that 
large employers are able to negotiate. Despite our high cost of living, 
insurance rates for Hawaii's small businesses are 11 percent lower than 
the rest of the country. In 1993, a Kaiser Family Foundation study 
found that small business premiums averaged $251 less in Hawaii than 
the national average. Shared responsibility and universal coverage 
means that small businesses obtain rates that are usually reserved for 
large corporations.
  Shared responsibility is the best way to reduce health care costs and 
make insurance affordable.
  Requiring employees to share the responsibility for providing health 
care coverage has not hurt Hawaii's economy. Hawaii has impressive 
economic evidence to show that our small business sector has not 
suffered harm from 20 years of shared responsibility. Some might even 
say Hawaii's economy is strong because it has a work force that enjoys 
quality health care.
  Our employers understand that a healthy and motivated work force is 
the key to business success. Our businesses receive an economic payoff 
that is well worth the cost of providing coverage for employees. And 
because of this and because it has worked in Hawaii for 20 years, I 
know it will work in our country when we pass this bill. I urge my 
colleagues to keep Hawaii's experience in mind as we act on health care 
reform.
  I thank the chairman for giving me this time.
  Mr. MOYNIHAN. Mr. President, we are coming to the close of 2 days of 
general debate on the health care proposals, and I for one have not 
heard a more forceful and relevant and revelatory statement than the 
Senator from Hawaii--the point that as you approach universal coverage 
there is not the cost shifting that brings premium rates up for small 
business, the fact that you have seen small businesses in 20 years in 
just 1 year decline in numbers through many recessions, a powerful 
statement for which I one for and the Senate in general are deeply 
grateful.
  Mr. KENNEDY. Could I inquire of the Senator?
  The PRESIDING OFFICER. The Senator from Massachusetts.
  Mr. KENNEDY. Is it true that Hawaii now has the most favorable 
business climate for small business in the country?
  Mr. AKAKA. That is the prediction and also that is the feeling there 
now; Hawaii businesses have grown over the years.
  Mr. KENNEDY. Just finally, does the Senator not agree with me--we 
have heard a great deal from those who oppose the Mitchell program--
that in many respects the program that was actually adopted in Hawaii 
and has been in effect 20 years in terms of universal coverage, the 
preventive aspects of health care, many of those features have been 
tried and tested in Hawaii and have been effective? As I understand, 
Hawaii also has the burden of looking after the health needs of many of 
the American possessions in the Pacific basin as well; many of those 
people come in from the Marianas and from the other islands, and they 
also utilize the Hawaiian facilities, and still with all of those kinds 
of burdens they are able to have the kind of excellent system with all 
of the health benefits and economic benefits that the Senator has 
identified.
  Mr. AKAKA. The Senator from Massachusetts is correct. We do service 
the Pacific region. They do use our facilities and our program, and it 
has worked very well for the Pacific.
  Mr. KENNEDY. I thank the Senator.
  Mr. MOYNIHAN. We thank the Senator for a remarkable statement. But is 
the Senator sure it is not somewhat connected with the climate?
  Mr. President, the Senator from Montana is here, and I am happy to 
yield 10 minutes to him.
  The PRESIDING OFFICER. The Senator from Montana.
  Mr. BAUCUS. I thank the chairman. I wonder if he could yield more 
than 10 minutes because my statement will take more than 10 minutes.
  Mr. MOYNIHAN. Fifteen.
  Mr. BAUCUS. I appreciate that.
  Mr. President, first, I commend the chairman of the Senate Finance 
Committee and also the chairman of the Committee of Education and 
Labor. Many, many Members of this body have explained to their 
colleagues and to the public at large how much we all owe our gratitude 
to these very fine men, and I want to join in that praise and those 
compliments. Without their efforts, it is clear we would not now be 
here attempting to work out a solution to the health care crisis that 
our country faces.
  Mr. President, I wish to take a few minutes here to discuss the 
health reform proposal now before us. I begin by saying that this is a 
monumental effort. It is a historic effort. It is an effort that has 
been well framed in this debate, particularly by the measure offered by 
Senator George Mitchell, our majority leader.
  I commend him for his work and the extraordinary, almost herculean, 
efforts he has undertaken to get us here.
  Montanans have discussed health care in many ways and discussed it in 
depth. I, for example, held town meetings and conferences and have had 
more talks with Montana businesses, union members, health 
professionals, and ordinary citizens than I have had on practically any 
other issue. Virtually all agree that we have to act now.
  Too many middle-class Montanans are in danger, for example, of losing 
their coverage. Too many Montana businesses are facing the choice of 
whether to offer health benefits at all. That is because costs for them 
are rising too fast.
  Listen to Gary Beley, a self-employed, self-ensured rancher from Big 
Timber, MT.

       My wife and I are 59 years of age, and ranch for a living. 
     We have a * * * $1,500 deductible policy on which we have 
     filed one accident claim in over a 10-year period. They rate 
     us in good health. From 1991 to 1993, our premium has gone up 
     from $3,970 to $7,352 per year. This is an 85 percent 
     increase in over a two year period. The increases over the 
     last two years have been about 20 percent per every 6 months.

  Mr. President, people like the Beleys are hard-working. They are 
middle-class Americans. They need some relief. And it is time for us to 
step in and do what we can to provide it.
  I believe the proposal before us now will help. It will not solve all 
of the problems we face in health care, but it is a big step forward. 
Today, as we begin the debate, I want to discuss its major features. I 
begin with some of the reforms that will be most critical for America, 
rural America, particularly my State of Montana.
  The first proposal before us has strong insurance reforms. These will 
make it easier for consumers and small businesses to buy insurance. 
Many have a hard time today. The proposal will limit the ability of 
insurance companies to deny health insurance to middle-class Americans 
with preexisting conditions--very important--and it limits the ability 
of insurance companies to cut benefits, arbitrarily drop coverage, or 
charge sick people dramatically higher rates, a lot of which is going 
on today.
  Second, the measure before us offers assistance to businesses that 
want to offer health insurance but are unable to afford it.
  Third, it will increase the number of primary care doctors, an area 
in which Montana in particular has serious shortages.
  Fourth, it will improve the quality of rural health care because it 
includes a rural health condition that I proposed earlier this year. 
Its main features are: First, it makes Montana medical assistance 
facility demonstration projects permanent. This project is known as 
MAF's, and now operates in the towns of Jordan, Circle, Terry, and 
Ekalaka. And according to Walter Busch, the administrator at Roosevelt 
Medical Center in Culbertson, MT, a small town with a population of 
about 796 people by the North Dakota border--this is what he says:

       The Medical Assistance Facility has improved access to 
     quality health care services in a cost-effective manner. It 
     has restored health care services to four remote rural 
     communities and prevented loss of services in two others. The 
     program has cost relatively little to implement, and has been 
     well received by both residents and rural communities. It is 
     a very flexible program, and yet one that has provided 
     consistently high quality care.

  The rural provisions also offer grants for what is called 
``telemedicine'', letting rural doctors and nurses use modern 
technology to confer with specialists in other areas. This is very high 
technology and is very important to remote rural areas. It creates a 
program of branching to create networking among providers, allowing 
them to share information on equipment and techniques and to cooperate 
much more effectively than they can today.
  It also offers tax credits to doctors and nurses who practice in 
underserved rural areas. That includes two-thirds of Montanans.
  Finally, it creates a new, permanent position of Assistant Secretary 
for Rural Health at HHS. This will help make sure Federal officials do 
not forget about places like Culbertson, MT.
  On the whole, the proposal before us is a very good effort. However, 
it contains two troubling provisions. These discriminate against 
Montana and other rural States, place a burden on middle-class 
taxpayers, and endanger any support for the proposal as a whole. What 
are these two provisions?
  The first creates a fund for teaching hospitals. These are large 
profit-making institutions, and about half of this fund will go to 
hospitals on the east coast. The fund is financed with a 1.5 percent 
premium, or a tax on health plans, all health plans, designed to raise 
about $65 billion over the next 10 years for these hospitals.
  These hospitals also receive about $80 billion in transfers from the 
Medicare trust fund. The mere existence of this fund is a problem for 
me. There is no hard evidence that teaching hospitals require this kind 
of a new fund. I am not convinced that creating it is good policy. And 
my preference would be to eliminate it and return to the subject when 
and if a critical need is proven in the next several years.
  However, the fund has a lot of support, and I do not insist upon 
striking it. But I do insist that it be fair. If we create a fund, it 
must support all hospitals with critical needs wherever they are 
because I will offer an amendment to set aside 30 percent of the fund 
for rural hospitals. That will deal with a real, grave, and worsening 
crisis, because 10 percent of rural hospitals closed in the last 
decade. They are gone. They provide no care. Rural areas where 3 in 10 
Americans live have fewer than half as many physicians for providing 
patient care as urban areas. Where cities on the average have 225 
doctors per 100,000 residents, rural areas have only 97 doctors per 
100,000 residents.
  Two of every three Montana counties are underserved, and rural areas 
have higher levels of chronic or serious illness--that is documented--
and have higher percentages of senior citizens than any part of the 
country as a whole.
  My amendment will give hospitals in these regions some critically 
needed aid. It will make sure that the fund is shared evenly among 
hospitals that need support. And it will preserve 70 percent of the 
money to deal with any problems that teaching hospitals might 
encounter.
  The second problem is the proposed tax on high-cost insurance plans. 
This is an idea which sounds good. After all, we do need to control 
costs. We want people to choose the most sensible plan for themselves. 
So why not give them a push toward less ambitious, lower cost plans by 
taxing the higher cost plans? But when you look closer at this 
proposal, you find it is much more complicated. You find in fact that 
the tax will hit again rural heartland States harder than other parts 
of the country.
  Many of the health plans this text covers are not luxuries. They are 
not gold-plated plans. They are the only option for people in high-risk 
jobs like logging, millworking, mining, and agriculture. Farming is now 
the most dangerous occupation in the United States with annual death 
rates at 52 per 100,000 workers, almost five times the national 
average. These people are responsible, they are hardworking middle-
class citizens, and these jobs are the backbone of Montana's economy. 
This tax, then, has a large and unfair impact on middle-class Montana 
workers and industries.
  This version, I must say, is less onerous than the version which led 
me to vote against the Finance Committee package that Senator Mitchell 
has attempted to improve upon. But in its current version, it is still 
unfair to Montana, and it is hard to see how I can support any bill 
containing it. We should not raise the cost of premiums for honest, 
hardworking, middle-class families. Health reform should do just the 
opposite. It should make premiums cost less; not more, but less.
  This proposal also would require large businesses to share the cost 
of health insurance for their employees. But it is a requirement 
unlikely ever to take effect. It provides that only if market forces 
fail to push us to 95 percent coverage by the year 2000, and if 
Congress does not bring us to that level by 2002, then all businesses 
with more than 25 full-time employees will be required to pay 50 
percent of the cost of health insurance for their employees.

  Most Montanans now, as a matter of course, get their health insurance 
through their employers. But some large businesses nationwide do not 
help provide insurance. They contribute to cost shifting, and thus to 
waste in our health care system. That makes everyone's premiums higher. 
In essence, they impose a private tax on middle-class Americans. And 
people like the Beleys in Big Timber, MT, are paying it.
  These businesses should cover their employees. They have no excuse.
  Small businesses, however, should not be subject to a mandate. They 
operate on small financial margins, and mandating health coverage would 
cost jobs, that is clear. Thus, the proposal exempts all businesses 
with 25 or fewer full-time employees from any mandate, ever. That is 
more than 80 percent of Montana firms. I believe it is fair to small 
business and does give the market a chance to work.
  The Congressional Budget Office believes the proposal will cover 95 
percent of Americans. Even if CBO is wrong, Congress has 2 years to 
address the issue. Only if this fails will large businesses be required 
to help provide insurance. It is a responsible approach, and I will 
vote to keep it.
  I think we will not do enough to control costs. In many ways, this is 
the fundamental issue. Rising health costs put Federal and State 
budgets under tremendous pressure. Within the next 5 years, higher 
health costs will reverse the progress we have made in the deficit 
reduction bills of 1990 and 1993. They hold down wage increases for 
Montana and American workers, lowering the standard of living. And they 
make American business less competitive relative to foreign firms.
  Sooner or later, we will have to deal with this problem. Budget 
pressures will give us no choice. I hoped we would do it this year, but 
it seems to be a political reality that we have no consensus to do it. 
Neither this proposal nor any Republican alternative will control costs 
effectively. But whether we pass a Democratic reform, a bipartisan 
proposal, a Republican bill, or nothing at all, we will have to do it 
soon.
  This proposal's creation of a Commission on Health Care Costs is at 
least a step in the right direction. This Commission will report on 
health costs, gather information on the reasons health care costs are 
rising, and suggest possible ways to address the problem. That means 
pressure will come on Congress to take on health costs, and that we 
will have the most current information available to us on how to deal 
with it.
  The fact that we will not control costs this year is regrettable. I 
think the American people want us to focus more on costs, and we are 
not doing so. But the Commission on Health Care Costs is an 
acceptable--barely--second best. And the failure to do more is no 
reason to oppose the reforms we have before us--support for small 
business, insurance reforms to guarantee coverage, and improved rural 
health care.
  In conclusion, I again commend the majority leader, in particular, 
for his work. As he said, this proposal will change before it passes. 
But its introduction helps us along the way toward our goal of national 
health care reform. With this bill, Gary Beley and his wife will no 
longer have to insure on their own. They will be able to join a group 
and get lower rates. That may not be everything the Beleys need, but it 
is a start.
  Finally, I want to take a minute to commend my legislative assistant, 
Maureen Testoni, for her tremendous work on health care over the past 2 
years. She has worked long hours and provided me with consistently 
good, sound advice, cogent advice. I want to thank Maureen for her work 
and congratulate her on her wedding later this month.
  Thank you, Mr. President. I look forward to the debate.
  Mr. MOYNIHAN. Mr. President, I thank the Senator from Montana for his 
very cogent remarks.
  I yield 15 minutes to the chairman of the Committee on Agriculture, 
the able, learned Senator from Vermont, Senator Leahy.
  Mr. LEAHY. Mr. President, I thank my good friend and neighbor across 
the beautiful Lake Champlain. I know that he, like I, wish we could be 
almost in parallel areas--he in his lovely farm in upstate New York, 
and me on my lovely farm in upstate central Vermont, where we could 
then protect both shores of Lake Champlain. But, Mr. President, we are 
here to do something that I hope will protect all of us, all Americans, 
and that is to bring health care to all Americans.
  I was reading the sports page the other day, and I came across a 
quote from Shaquille O'Neal, the famous basketball star who plays for 
the Orlando Magic. ``The Shaq'' hurt his back, but he said he was not 
worried. He said, ``I am not too concerned--I have good health 
insurance.''
  That quote hit me because it summed up what we are all debating 
about--whether we give America's families the same kind of peace of 
mind about their health care. We should not have to be a famous 
basketball star and somebody who makes millions of dollars a year to 
have good health insurance.
  In Vermont, my home State--and this is a State of only 560,000 
people--5,000 people in Vermont lose their health insurance each month. 
There are 56,000 Vermonters without health coverage; 49,000 of them are 
in working families. Almost 6,000 of those Vermonters are children.
  Mr. President, I know many, many of these Vermonters. Many of them 
are my neighbors, my friends. Some of these Vermonters without health 
insurance went to school with me. Some grew up on the same street I did 
in Montpelier, VT. Some are people I have known all their lives. They 
are hardworking, good, honest, decent people. The fact of the matter is 
that they have worked as hard as anybody in this Chamber and do not 
begin to have the kind of health coverage we have.
  Too many Vermont families do not share ``The Shaq's'' sense of 
security because they know that if they have an illness or if they lose 
a job, it might mean the very end of their health insurance. They are 
asking everybody in this Chamber to do something to end their fears.
  Let me give a personal example. A Vermonter, a mother of three 
children, one of whom is developmentally disabled and another of whom 
has a chronic disease, said it this way:

       I am asking the congressional delegation from Vermont to 
     make sure that this work is done in a timely fashion. Our 
     children cannot wait while party lines are haggled over. This 
     issue is so important to many of us. Please remember that 
     there are real families out here, struggling to provide meals 
     and a roof over their heads and their families'. They should 
     not have to worry about who is going to pay the doctor bill, 
     too.

  That is why we need health care reform, to give this mother, and so 
many parents like her across this country, some peace of mind.
  There are those who do not agree. They say, ``We want health care for 
Americans, and we understand that Americans who lose their jobs may 
lose their health care. We want to do something, but not quite yet, and 
really not in this form. We have to do something a little different, so 
let us make changes. Of course, we want everybody to have health care--
believe us when we say that--but maybe not quite yet because we are not 
quite ready.''
  The people who say they are all in favor of health care but not yet 
and not quite in this form or that form and maybe we should wait a year 
to study it, the people who say this are invariably people who do have 
health care. They can wait until next year or the year after or the 
year after that because they have health care, and they know they and 
their spouses and brothers and sisters and parents and children are all 
covered.
  But what do you say to those people who are hard working Americans 
who do not? What do you say to people who have a child with a chronic 
illness and could not get insurance for that child no matter what? What 
do you say to the people who have a preexisting condition and they know 
no matter how hard they work or how good they are they are not going to 
get health insurance?
  Those people who do not have health insurance are also very real. 
They are just as real as those who have health insurance who say we can 
wait. They are trying to raise families, like this Vermont mother of 
three. They want us to remember them while we are having this debate.
  I think of the debate on programs of Social Security and Medicare. 
During the debate on Social Security, we were told about how little 
good it would do for older Americans. We heard about the end of the 
American tradition. We heard about socialization of America. We heard 
when people were talking back in the thirties whether we would have 
Social Security, we were told by many who opposed it that would do more 
harm than good, that it would hurt older Americans, that it would turn 
us into some kind of socialistic nation.
  During the debate on Medicare, one Senator said:

       It would achieve little for those who need it, while 
     subjecting the very fabric of American life to the strain of 
     severe and unnecessary sacrifices.

  We are going to hear these arguments again. We will hear all of the 
reasons why we cannot cover people, why we cannot have guaranteed 
coverage through the workplace.
  The special interests have hired the best lawyers in Washington to 
make sure they lose no ground in this bill. Some groups have gone so 
far as actually placing calls for people who they then supply with a 
script so they can say ``We oppose this'' or ``We oppose that.'' That 
is shameless.
  Let real Americans talk. Let us let the real people with a personal 
stake in this come forward, not someone who is a hired gun for or 
against any plan.
  I congratulate Senator Mitchell for getting us to this historic 
moment. He introduced a bill that will let us do what is right for the 
people of this country. His bill is a moderate and reasonable approach. 
It can move this country toward universal coverage.
  The majority leader listened to the concerns people have with the 
President's plan and put together a bill that is less bureaucratic, 
emphasizes primary and preventive care, provides extra protection for 
businesses, and pays for itself.
  Some say it does not go far enough. Others say it goes too far. We 
have seen the debate. I watched many of the debates the distinguished 
Senator from New York had in his Finance Committee. I wish to commend 
him. I think there was probably not a single issue that he did not 
bring out and explore in the best possible way. The distinguished 
senior Senator from Massachusetts [Mr. Kennedy] did the same in his 
committee.
  We have heard these debates. I think it is safe to say in listening 
to them we know there is never going to be a perfect solution. We are 
not in a perfect world. And if we wait for the perfect, if we let the 
perfect be the enemy of the good, we would never get off the ground, 
and millions of Americans would be without health insurance.
  Is the bill before us the one I would have drafted? Is it the one the 
Senator from New York would have drafted or the one the Senator from 
Massachusetts would have drafted if they could write it all by 
themselves? I doubt if it is. But there are 100 Senators who have to 
vote on it here and 435 Representatives in the other body who have to 
vote on health care. And every one of us could look at whatever piece 
of legislation is before us and say it is not precisely what I would 
have wanted but it is a start.
  The debate goes forward. I want to look at each part as we vote on 
it, but I would like to see us get to the bill, debate each part, and 
then decide up or down. I will look at how it will affect Vermont and 
how it will affect the country.
  I want to make sure my own State's efforts to make our own health 
care system more efficient and more accessible are not diminished in 
any way.
  There are a lot of things I like about Senator Mitchell's plan. It 
has full funding of WIC. That is a goal my colleague, Senator Jeffords, 
and I shared and fought for for many, many years. It is something that 
we can say to poor pregnant women in this country that they can get the 
same kind of nutrition as someone who has more money. Their children 
can have at least a chance at birth. Having gone through the pregnancy, 
the gestation with decent nutrition, they should then have decent 
nutrition when they start their young life.
  It has strong privacy protections. We want to know that people will 
not have their medical histories the subject of curiosity or harmful 
disclosure for commercial advantages, that someone cannot go into 
computers and find out everything about a person's life and sell it.
  It has State flexibility, allowing States to implement national 
reforms on a fast track.
  Coming from one of the most rural States in the Nation, I am glad to 
see it has strong rural provisions so that when you talk about health 
care reform that is not an empty promise to those who live in small 
cities and towns.
  Many Senators last night mentioned the 59th anniversary of Social 
Security is coming this Sunday. I want to quote one Representative 
whose words from that debate are just as wise today. Here is what he 
said:

       I have looked forward to the initiation of such a program 
     for many years. I must not let temporary disappointment over 
     one feature of the program blind me to the great benefits of 
     the program as a whole.

  I urge Senators to remember these words and remember the hard-working 
people we are fighting for.
  Let us debate the Mitchell plan. Let us improve it where we can. Let 
us, when we disagree with something, vote it up or down. Let us debate 
every amendment Senators have to offer. And let us vote.
  Let us not give the American people the spectacle of a Senate 
unwilling to come to grips with this, unwilling to vote on each issue.
  We have worked hard on this. The distinguished Senator from New York, 
the distinguished Senator from Massachusetts, the distinguished 
majority leader and many, many of our Republican colleagues have worked 
very, very hard on this.
  Now let us bring it to fruition. I think on the thousands of hours by 
hundreds of professional staff members who worked on this. I am proud 
to be joined on the floor of the Senate by the senior staff member of 
my office who worked on this, Theresa Alberghini. She started off as a 
member of Mrs. Clinton's Health Care Task Force early on last year. She 
has worked with the President, with the First Lady, with Members of 
this body and their staffs, and with the Governor of our own State, 
trying to bring to me at least the best information possible but also 
to bring her own other talents. There are hundreds of other men and 
women associated with the Senate who have been doing the same.
  Let us not let all that work go in vain. Let us face up to this, and 
let us hope in the coming days and weeks we can reach a conclusion for 
the American people.
  Mr. President, I thank the distinguished chairman and my good friend 
from New York for yielding me this time.
  The PRESIDING OFFICER. The Senator from New York.
  Mr. MOYNIHAN. Mr. President, may I especially thank the chairman for 
the wisdom and for the experience behind his counsel, that no bill is 
going to satisfy all of us about all of the things, but this is the 
moment for a bill.
  Again, I thank the Senator.
  Mr. President, may I ask how much time is remaining?
  The PRESIDING OFFICER. The Senator from New York controls 14 minutes 
and 16 seconds.
  Mr. MOYNIHAN. Mr. President, in an act of abandon but enthusiasm, I 
yield it all to my friend from Ohio, and may I say that with this the 
distinguished Republican manager and I will have used all of our time, 
and so this will be the last address of the day in this debate.
  Senator Metzenbaum.
  The PRESIDING OFFICER. The Senator from Ohio.
  Mr. METZENBAUM. Mr. President, I thank my colleague from New York and 
rise to take the position of the abandoned Senator, having been given 
this position by reason of an act of abandonment by my friend and 
colleague.
  I rise to express my strong support for comprehensive national health 
care reform.
  Let us not kid ourselves. This is a defining moment.
  At many points in this century, the Congress has been on the verge of 
enacting a universal health care system and each time we have shied 
away from it.
  Once again, we have a chance to rise to the challenge.
  I implore my colleagues, please do not let this moment slip away 
again.
  To the naysayers who say no bill, filibuster, or next year, I say, 
you are letting the American people down; you are playing politics with 
the health needs of the American people.
  We must put the long-term needs of the American people first.

  I believe that each one of us elected to this Chamber knows that this 
country should have a universal health care system.
  Every American should have the right to go to a doctor or a hospital 
when they are sick. That is the heart of what we need to do: Assure 
every American access to affordable high quality health care.
  We are elected Senators in order to lead. We are elected to do what 
is right for the country.
  There will always be a certain amount of politics being played 
between Democrats and Republicans. The Republicans have made a 
political calculation that they can become the majority party if the 
American people believe that the Democrats failed to enact health care 
reform.
  And, regrettably, too many Democrats also are fearful of reform. They 
want Republican cover to hide behind with some of their constituents.
  But bipartisanship solely for its own sake would only mean a lowest 
common denominator reform bill.
  Democrats need not fear health care reform. As long as we do what is 
right for the American people, we will be heroes, not failures.
  Health care reform can be relatively simple. If we only have the 
courage of our convictions, we can do it.
  The American people are fed up with politicians because of our 
willingness to put politics before policy.
  So, as we begin this debate, I implore my colleagues, let us cast 
each vote in the name of a better health care system, let us live up to 
the aspirations of the American people, let us put the need for 
comprehensive health care reform first.
  Every one of us is going to get sick at some point in our lives. And 
everyone must be able to go to a doctor or the hospital when he or she 
is sick. Every one of us; young and old; rich and poor; husbands and 
wives; children and grandchildren.
  Let me tell you some of the cases that we are talking about. These 
are individual cases from Ohio.
  Patrick Joyce, 3 years old, has cystic fibrosis. He needs access to 
specialized care to live a normal life. But without the money to get 
the medical care, he cannot live a normal life.
  And then there is Shawn Durham, a 1-year-old child, rare heart 
defect, who has already had three heart surgeries--three heart 
surgeries on a 1-year-old child. The parents are in college. They have 
no insurance, and no insurance company will cover them. Can we in good 
conscience turn our backs on such cases?
  John Corcoran, whose wife has Alzheimer's; his daughter has seizures. 
Neither can get insurance. And poor John is a farmer who would lose his 
business if either were to be hospitalized.
  Then there is Donna McNamee, born with a bone disease, considered a 
preexisting condition. She cannot get insurance. She has to stay as a 
dependent of her parents in order to get Government help.
  Fred Griffith, his wife has diabetes. That was considered a 
preexisting condition. He lost his job. He searched for a job which 
would insure his wife's preexisting condition. The only job he found 
was in Indiana. So he must travel and be away from his wife for 
extended periods of time to keep insurance.
  Health care is not just a broad term. Health care relates to real 
people. Health care means people who today do not have insurance--37 
million of them, maybe 39 million by this time, out there in the 
countryside. It is not a particularly important figure to you, unless 
one of your loved ones is one of those 39 million.
  Donna Osmond is 59 years old. In 1989, she was stricken with breast 
cancer. She was insured through her husband's company. Her husband now 
wants to retire. He is 62. But if the husband retires before he turns 
65, he loses coverage for his wife. And he cannot find insurance 
coverage elsewhere because of Donna's preexisting condition.
  Eugene Schumacher, 70 years old. His mother is in a nursing home. In 
the last 6 months, he spent over $10,000 for room and board and $1,200 
for medication. He is afraid he will run out of money because of the 
medical expenses. David Kuehl is a hemophiliac, his medication costs up 
to $100,000/year. He is no longer employed, but has extended health 
insurance coverage for 2 years through COBRA. When the 2 years is over, 
it is unlikely he will find insurance coverage elsewhere.

  Under a national health care plan, we can cover everyone. That is 
what they do in other countries. That is what we ought to do in the 
United States of America. This is the richest, most powerful country in 
the world.
  There is absolutely no reason why we cannot provide adequate health 
care to all of our citizens.
  No one can claim that we are not already paying enough for health 
care in this country. We are spending $1 trillion dollars a year--I did 
not say million, I did not say billion, I said trillion--14 percent of 
our GDP each year on health care and still we have 39 million Americans 
without health insurance.
  This is an absurdity. We must start by creating a national framework 
for the financing and delivery of health care. We must have the courage 
to step in at the Federal level.
  The Mitchell bill takes an important first step. I am frank to say 
the Mitchell bill does not go as far as I would like, but it represents 
a sound attempt by the majority leader to craft a middle-ground health 
care reform package.
  Under the Mitchell bill, workers and their families would continue to 
get their insurance through the workplace. Nonworkers and those workers 
whose employers do not provide benefits, would be covered through 
publicly sponsored programs.

  Everyone would receive a standard set of health care benefits with an 
emphasis on preventive care to reduce long-term costs.
  Employers may voluntarily contribute to their workers' health 
coverage, but if a voluntary system does not work, in the year 2000, a 
national commission, with Congress' acquiescence, would impose a 
mandatory employer contribution.
  The Government will provide subsidies to low-income individuals and 
businesses.
  This bill, as I said, is not all that I would like it to be, but 
represents a good start. I would like to see it strengthened in a 
number of areas, and will fight to change it.
  I believe employers should be required to contribute to their 
workers' health insurance now, not in the year 2002.
  I believe we need better subsidies for low-income and working 
families.
  I also believe we need to do more to control health care costs.
  Currently, there are a lot of people making money--important money--
off our health care system.
  The hardest challenge we face is standing up to the special 
interests--the AMA, the AHA, the insurance companies, the 
pharmaceutical companies. But we must make our decisions based on what 
is the right policy, not on what the lobbyists want.
  The special interests will adapt to whatever system we deem right. 
But we in the U.S. Senate must bite the bullet.
  Quite frankly, we have too many doctors and hospitals who are ripping 
off the system. And we have too many doctors and hospitals spending too 
much time figuring out how to make money and not enough time providing 
health care.
  We need to turn things around. We need to control the spiraling rate 
of increase in health care spending.

  We need to recognize that we have many doctors who provide to the 
economy and to the health care of this country, not ripping off the 
system to protect their interests.
  We need to get control of provider fraud and abuse, which is 
estimated to exceed $100 billion a year.
  We need to reduce the administrative wastes of the insurance 
industry, which is ripping us off for almost 25 percent of every health 
care dollar, about $200 billion a year.
  Frankly, I think we ought to eliminate the insurance industry 
entirely from the health care business.
  But even if there is not support to eliminate unnecessary insurance, 
we must require insurance companies to bring their costs under control. 
Some companies are spending as much as 40 percent of insurance premiums 
on administrative costs.
  Mr. KENNEDY. Will the Senator yield for a question?
  Mr. METZENBAUM. I will, indeed.
  Mr. KENNEDY. Does not the Senator agree with me that the kinds of 
inclusions in the Mitchell bill to deal with fraud and abuse could mean 
the savings of billions of dollars that are escaping at the present 
time?
  Mr. METZENBAUM. I certainly agree with the Senator from 
Massachusetts. There is not much doubt about that. There are abuses. 
There are excesses. And the Mitchell bill deals, in my opinion, very 
effectively with trying to eliminate those.
  Mr. KENNEDY. Without that bill, we do not have in place today those 
kinds of provisions that have been included in the measure. I must say, 
as I think the Members of this body know, to a great extent they were 
the result of the activities and the suggestions or recommendations by 
the Senator from Ohio.
  Finally, I would just like to know whether the Senator feels the 
kinds of protections for consumers in this legislation are important as 
well?
  Mr. METZENBAUM. I think the Mitchell bill moves very far in the 
effort to protect the interests and concerns of the consumer. The 
Senator from Massachusetts and I have worked many hours--many years--
trying to protect consumers, whether it had to do with consumer fraud 
generally or whether it had to do with consumer abuses in the health 
care field. I think the Mitchell bill will do much to protect the 
average American consumer. That is the reason I think it is so 
important we move forward.
  Mr. KENNEDY. I was interested in working with the Senator because we 
included in there sort of a report card on different health care 
systems, hospitals, and also on doctors, so the consumers would be able 
to find out whether there was consumer satisfaction, whether there were 
delays, whether there was service, whether there is good service, so 
consumers would be able to have additional kinds of information which 
does not now exist, generally speaking.
  Some States, for example Pennsylvania, have moved on it. But does the 
Senator not agree with me that those features which have been included 
in the Mitchell program would be of great help and assistance? They may 
even be strengthened. I know the Senator would like to strengthen them.
  Mr. METZENBAUM. The features in the bill move a long way in providing 
that protection. The Senator is correct. I hope we can do more. I hope 
to be able to achieve some of those changes on the floor of the Senate. 
But let us face it, half a loaf of bread--in this case maybe three-
quarters of a loaf of bread--is better than no bread at all. And I 
think this bill goes a long way in providing consumer protection.
  Mr. KENNEDY. I just wanted to commend the Senator because I have been 
here for the last part of the debate yesterday and this afternoon, and 
this is really one of the first comments made about the advantages of 
this bill in terms of dealing with the problem of fraud and abuse and, 
second, in identifying one of the additional features of the Mitchell 
bill, besides moving us towards universal coverage and helping get a 
handle on cost containment and the preventive programs and the 
downpayment for our seniors. But there are important kinds of consumer 
protections and information, as well as dealing with fraud and abuse. 
These seem to me to be factors the American public would welcome.
  Mr. METZENBAUM. I have no doubt about that. I think passing the 
Mitchell bill would do much to help the American people as far as 
consumer fraud and consumer abuses in the health care field.
  Mr. KENNEDY. I thank the Senator.
  Mr. METZENBAUM. I thank the Senator for his questions. Frankly, I 
would like to see a collaborative program in which all the major 
parties participate.
  The PRESIDING OFFICER (Mr. Conrad). The time of the Senator has 
expired.
  Mr. METZENBAUM. Let me inquire if anyone else is seeking the floor. 
If not, I ask for an additional 5 minutes.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. METZENBAUM. I prefer to see a collaborative system in which all 
the major parties--consumers, doctors, hospitals and Government--sit 
down and negotiate what we will spend and how we will spend it. That is 
what every other country does. It is not a perfect or painless system, 
but it works. Everyone sits down together and decides what they are 
willing to spend on health care.
  Some people say we can control costs through competition. I have my 
doubts about that. Individuals are not in a position to shop around for 
the cheapest surgeon or forego surgery if they think the price is too 
high. Individuals should not be shopping around for the cheapest 
doctor. And doctors should not be competing against each other on 
price--but rather on the quality of the care they provide.
  Employers and managed care companies claim they can assure quality 
care at a lower cost, but neither data nor logic is on their side. 
Almost all of the studies show managed care companies are not saving 
much more money than traditional insurance companies. And to the extent 
that managed care companies are saving money, they are doing it by 
pressuring doctors and hospitals to discount their fees and not by 
improving the quality of health care they provide.
  All that managed care does is substitute a level of managed care 
bureaucracy for insurance company bureaucracy. One need look no further 
than the financial pages to see what is going on in the health care 
market. Managed care companies are merging like wildfire in order to 
take over and control the health care market. Just this year 
Metropolitan Life and Travelers agreed to merge to create the second 
largest HMO, controlling one out of every four doctors in this country.
  Columbia Health Care merged with Medical Care of America, a deal 
worth over $1 billion.
  New York Life purchased Ethix Co. to create a 2 million enrollee HMO.
  The list goes on and on and on. Insurance companies are at the 
forefront of this movement now, owning 45 percent of all the HMO's in 
this country. Two-thirds of all HMO's are for-profit entities. These 
companies are not in this business solely to deliver health care. They 
are in the business to make money--a respectable effort on their part. 
But when that money comes out of those dollars needed to provide 
adequate health care for the people of this country, or comes out of 
the pockets of doctors and hospitals who are squeezed up against the 
wall, then there is something wrong.
  HMO profits increased 20 percent in 1993: Cigna, Aetna, Humana, U.S. 
Health Care, and Prudential had combined annual profits of almost $500 
million last year. And who is paying for these profits? The American 
taxpayer, that is who, the average American.
  Let us not kid ourselves. Managed care is big business and big money, 
and that is not good for the American people. Putting all this power, 
all of this economic strength in the hands of these HMO's, which are 
buying each other up at an unbelievable pace, means they think no 
matter what system we here in Congress bring about, they are going to 
be able to squeeze more and more dollars out for themselves, for their 
executives, and for their shareholders.
  I am willing to give the managed care industry a chance to prove that 
it can hold down costs. But I have very little--very little--confidence 
they will. I think Senators will be speaking on this floor 10 years 
from now and they will see the HMO's have really been a detriment to 
bringing about a better national health care system. I think we could 
do it better on our own, without turning it over to the HMO's. But I 
believe we have to start now, one way or the other, with or without the 
HMO's, to take control of this monster that has been created and that 
is depriving average Americans of the health care that is so much 
needed.
  In conclusion, let me say I believe we have an incredible opportunity 
before us. We have the opportunity to make a real difference in 
people's lives and improve our country for future generations. We can 
do it, but only if we put politics aside and put the American people 
first. I would say, anyone in this Senate who delays this matter from 
moving forward on the appropriate pace is providing a disservice to his 
constituents and is not the kind of American of which I or any other 
American could be proud.
  I yield the floor.
  Mr. KENNEDY. Will the Senator just yield? How much time does the 
Senator have?
  The PRESIDING OFFICER. The Senator has 15 seconds.
  Mr. KENNEDY. I will engage my colleague at another time. I see the 
Senator from Hawaii here and I know the Senator is about to begin.
  The PRESIDING OFFICER. All time on the bill has expired at this time.
  The Senator from Oregon.
  Mr. PACKWOOD. I ask unanimous consent for 30 seconds to respond to 
the Senator from Ohio.
  Mr. KENNEDY. If I get 30 seconds as well.
  Mr. PACKWOOD. Mr. President, my colleague speaks about managed care 
as being almost corrupt. I will cite him just one statistic. In the 
Portland metropolitan area, 53 percent of the Medicare beneficiaries 
are now in managed care programs and they joined it voluntarily. You 
cannot compel a Medicare beneficiary to join. These people are not 
joining something they think is corrupt, evil and profit-minded that is 
going to do in their health care. They are joining because they think 
they get better service and quality than they do from the regular 
Medicare Program.
  I thank the Chair.
  The PRESIDING OFFICER. The Senator from Massachusetts.
  Mr. KENNEDY. Mr. President, just to address a similar issue. Would 
the Senator not agree with me that in some areas it has been 
successful; in other areas there has been a squeezing of the services 
to the patients and the patients have not been able to take advantage 
and be adequately protected?
  One of the features of the Mitchell bill is it does provide for 
remedies for individuals if they are going to be squeezed out by the 
budget crunches in the development of the HMO's. If it is not 
necessary, it does not need to be utilized. But where it is necessary, 
there are additional kinds of protections which otherwise do not exist 
under current law.
  Mr. METZENBAUM. Without the Mitchell bill there would be no 
protection. As a matter of fact, in response to my friend from Oregon, 
the fact is right at the present time many doctors are being squeezed 
by being told to bring in 12,000 at $2 a head. And the doctors then 
have to provide a different kind of medicine than they are providing 
now.
  I think it is important that we not kid ourselves. The HMO's, in some 
instances, have provided useful services, but, in the long run, I think 
we need some of the protection provided in the Mitchell bill. Without 
it, I think the patients will suffer.
  The PRESIDING OFFICER. All time has expired.

                          ____________________