[Congressional Record Volume 140, Number 113 (Saturday, August 13, 1994)]
[House]
[Page H]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: August 13, 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.
  Mr. HATCH. Mr. President, I enjoyed listening to all of the Senators 
who spoke on health care today. As the President knows, I have taken a 
great interest in this matter through the 18 years that I have been in 
the U.S. Senate. I look forward to somehow or other crafting a health 
care bill that all of us can, or at least the vast majority of us, can 
join in.
  The last thing on Earth I want to see is a health care bill that 
passes that only has 50 or 51 people in support of it. So all of us 
have to keep open minds, look for what we can and do what we can to try 
to bring about health care that will be beneficial for all Americans.
  I was interested in the comments of the distinguished Senator from 
Arkansas and in the comments of the distinguished Senator from Florida 
that there were 17 new taxes in this bill. Actually, the Senator from 
Florida misspoke. There are not just 17, there are 18 new taxes in the 
Mitchell bill.
  I am concerned about that. I have a rough time seeing how people in 
America are going to want to have to put up with 18 more new taxes.
  I ask unanimous consent that a listing of these 18 taxes be printed 
in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

             The 18 New Taxes in the Clinton-Mitchell Bill

             (Prepared by the office of Senator Judd Gregg)

       1. Standard health plans will be subjected to a risk 
     adjustment assessment by a State organization using a 
     methodology developed by the Secretary of HHS. This tax will 
     be levied on large, experience-rated employers as well as 
     community-rated plans. (Sec. 1504.)
       2. States may impose a premium assessment on the insurance 
     plans offered in the State of up to one percent of the total 
     premiums collected, to cover administrative costs incurred by 
     the State. (Sec. 6007.)
       3. A series of tobacco taxes will be phased in, including a 
     45-cent per pack tax. (Secs. 7101-7103.)
       4. A 1.75 percent tax will be paid by the self-insured, 
     issuers of insurance plans, and individuals providing health 
     insurance administrative services on the amounts received as 
     premium and administration payments. (Sec. 7111.)
       5. A premium cap is set in the form of a 25 percent excise 
     tax that will be levied on the excess premiums of high-cost/
     high-growth health plans. (Sec. 7112.)
       6. A ``recapture'' tax will raise Medicare Part B premiums 
     for individuals whose income is above the threshold of 
     $80,000, or $100,000 for a couple. An even higher tax is 
     charged for those income exceeds the threshold be $15,000 
     single/$30,000 joint. (Sec. 7121.)
       7. A 10,000% excise will be charged on some type of 
     ammunition. (Sec. 7131.)
       8. There is a 2.9 percent tax increase on certain S 
     corporation shareholders and partners. (Sec. 7132.)
       9. A 2.9 percent Medicare Hospital Insurance Trust Fund tax 
     will be imposed on all State and local employees. (Sec. 
     7133.)
       10. Any benefits richer than those included in the standard 
     benefits package that an employer provides will be included 
     in an employee's income and will be taxed as ``non-
     permitted'' benefits. (Sec. 7201.)
       11. Any benefits provided through a ``cafeteria plan'' or 
     flexible benefit account will be included as part of an 
     employee's income earnings and will be taxed. (Sec. 7202.)
       12. The deductibility of payments for health insurance 
     costs will be limited. (Sec. 7204).
       13. A 35 percent tax will be assessed against the aggregate 
     employer contribution for any insurance plan that do not 
     conform to the standard benefit package, that vary in the 
     amount of employer-provided contribution, or that 
     discriminate under health status requirements. (Sec. 7211.)
       14. The rules for tax-exempt status as a health care 
     organization are restricted. (Sec. 7301, 7303-7304.)
       15. A 25 percent excise tax is imposed upon beneficiaries 
     of private inurement by tax-exempt health care organizations. 
     Additional taxes will be levied against the management of 
     such organizations, as well as beneficiaries under specific 
     circumstances. (Sec. 7302).
       16. Special tax rules that were applied to Blue Cross/Blue 
     Shield are repealed. (Sec. 7305.)
       17. Tax penalties are increased on incorrect information 
     returns that are filed on non-employees. (Sec. 7502.)
       18. Post-retirement deductions on medical and life 
     insurance are limited. (Sec. 7521.)

  Mr. HATCH. Mr. President, today marks what would have been the first 
day of recess, but I am glad to be here. I am glad to be here, because 
health care reform should rank at the top of our legislative agenda. It 
must be a priority.
  The only problem I have with being in session today is that I was not 
able to return to Utah and listen to the people there, whose valuable 
input is so essential to the success of our legislative process.
  And never was such input more crucial.
  One thing I can tell you about the people of Utah is that they are a 
smart bunch. They are not being fooled by the rhetoric of the Clinton-
Mitchell-Gephardt health plans, plans which will ultimately provide the 
Government with total control over the greatest health care system 
there has ever been.
  Utahns understand the fact that when they say ``Free health care for 
all,'' it really means ``Poor quality health care for all.'' And that 
is poor quality health care for all, paid for by large burdensome taxes 
on the hardest working Americans, the middle class.
  Utahns also know the term ``employer mandate'' is only a fancy smoke 
screen for a very large payroll tax and that payroll taxes by any name 
mean fewer jobs.
  Utahns define the phrase ``shared responsibility'' to mean the middle 
class pays more for their health care while receiving less. This is how 
the administration and my colleagues from the other side of the aisle 
would like to reward those who pay their fair share.
  The people of Utah are not falling for the attractively packaged bomb 
of burdens known as the Clinton-Mitchell Health Security Act, and 
neither is the rest of America.
  They did not fall for version one.
  They did not fall for version two.
  And they will not fall for version three which we just received 
today.
  As you can see, these versions are not little versions. This is big 
stuff. And it is going to affect every American citizen for decades to 
come if we do not do it right.
  Utahns see the Mitchell bill for what it is: a surefire way to 
dismantle our health care infrastructure and place the costs of 
renovation on the American people.
  I was interested in the comments of the distinguished Senator from 
Arkansas saying there are not that many new bureaucracies being 
created. When we have had plans this big, no matter what they have been 
in the history of the U.S. Senate, tell me when it has not involved a 
tremendous expansion of bureaucracy. If anybody believes that it does 
not, then I have a number of things I would like to sell to you, 
because you sure are a sucker.
  That is all I can say about it.
  What is so bad about the Health Security Act? A lot.
  Today, however, I want to concentrate my remarks on two of its most 
devastating provisions.
  The first problem is that the bill promises things it cannot possibly 
deliver. Let us look at its impact on the elderly.
  Architects of the Health Security Act promise senior citizens the 
peace of mind that improved access to long-term care and home-and-
community-based services belong. No one can dispute the need for that.
  But at what price?
  When advocates of the Mitchell plan tout its improved benefits for 
senior citizens, they neglect to read the fine print.
  The Mitchell bill is funded through incredible cuts in the Medicare 
Program, cuts which I predict will jeopardize the whole future of 
Medicare in this country.
  Congressional Budget Office calculations indicate that Medicare cuts 
in the Mitchell bill between now and 2004 total $198.8 billion. How on 
Earth can Medicare absorb cuts like that and still be viable, and keep 
up the high quality of work and medical care and treatment that the 
elderly have come to expect in this country? There is no way they can.
  How can doctors absorb $10 billion in payment reductions and still 
agree to participate in Medicare? We are already having substantial 
problems in Utah with physicians who do not want to participate in 
Medicare because of its low payment rates. This bill will drive 
physicians out of the Medicare Program.
  And it is not just Utah; it is everywhere in the country.
  How can hospitals and nursing homes absorb $97.2 billion in cuts and 
still remain open?
  How can clinical labs and patients who use their services absorb 
$21.2 billion in cuts? How can hospitals and nursing homes absorb $97.2 
billion in cuts and still remain open? How can clinical labs and 
patients who use their services absorb $21.2 billion in cuts? How can 
the home health program--one that I helped to bring into existence, 
worked hard to get it into existence, and which means so much to people 
whose lives are coming to an end-- and for families who have to watch 
over them but have to work and need somebody to care for them. How can 
home health care programs see costs cut $63.9 billion and still remain 
viable? The answer is simple. They cannot. I have a problem with 
provisions in any bill which cut too deeply into Medicare. How the 
Mitchell bill jeopardizes Medicare is one of the hidden stories in this 
debate, and we ought to get it in the open right now.

  Indeed, at the same time we are cutting Medicare, we are offering our 
citizens a new entitlement: prescription drug coverage. This, too, is a 
heartless hoax which victimizes the elderly. The drug benefit promised 
by the Mitchell plan would cost almost $100 billion in its first 6 
years of operation, from fiscal years 1999 to year 2004.
  What are we getting for our money? Not what you think. Fifty-five 
percent of the elderly now have prescription drug coverage. The 
deductible for retirees is typically $100 or less. Contrast that with 
the Mitchell bill. Estimates indicate that it would cover only a 
fraction of Medicare beneficiaries, 35 to 42 percent, with a deductible 
of about $650 and a new cost of $100 billion. What a deal.
  Mr. President, nothing is as certain as death and taxes. This bill 
proves that point: cuts that surely mean the death of a Medicare 
program, and taxes the public would not believe. The Clinton-Mitchell 
health care bill contains at least 18 outright tax increases. Most of 
these are hidden taxes on the middle class that will sneak up on 
taxpayers like thieves in the night.
  CBO numbers show that in the next decade the bill would raise taxes 
by a net amount of over a quarter of a trillion dollars. This means 
that every family of five in Utah will pay more than $5,100 in 
additional taxes because of this bill.
  One of the examples of the hidden tax is the 1.75-percent levy on all 
insurance premiums. This tax will raise $75 billion over the next 
decade and will be paid, directly or indirectly, by almost everyone. 
Individuals who buy their own insurance, or who share the cost of 
health insurance premiums with their employer, will pay the tax 
directly.
  In the case of employer-provided insurance, the tax on premiums will 
be passed on to employees in the form of lower wages, reductions in 
benefits or lost jobs.
  It is ironic that a bill designed to keep the costs of health care 
down should immediately raise those costs by assessing a tax on health 
care insurance premiums.
  Another stealth tax in the Clinton-Mitchell bill is the complicated 
25 percent tax on health insurance plans whose premiums grow faster 
than a targeted growth rate. This tax, estimated to raise over $70 
billion, would apply to virtually all health plans, according to the 
CBO.
  Although this tax is a barely disguised method of price control, it 
is obvious already that it will never work. If it were an effective way 
of holding down premium costs, it would not raise much, if any, 
revenue.
  I was shocked to learn that analysts have forecast that the Mitchell 
bill will cost Utah businesses $547.6 million a year starting in the 
year 2002, the year that the employer mandate would be triggered. That 
says it all.
  Mr. President, I am not here to oppose health care reform. As I said, 
I believe we ought to work together to try and come up with a workable 
solution. I am here to oppose a version of health care reform that will 
doom the greatest health care system in the world and, at the same 
time, suck America's economy right down the drain.
  I believe health care reform is possible.
  I believe health care reform is desirable.
  I believe health care reform is necessary.
  But not reform like this.
  The architects of the Clinton bill, however it is packaged, should 
get back to the drawing board and maybe sit down with some of us and 
work this out, for surely this house of cards is going to tumble.
  I am very concerned about it, because I have seen through the years 
how difficult it is to get small, but effective, health care bills 
through, from home health care to drug price competition, patent term 
restoration, to the orphan drug bill, to S. 784, the dietary supplement 
bill. It takes an inordinate amount of work to get these bills through, 
and they are part and parcel of the health care program. I can name 
dozens and dozens of others that I have helped pass or worked on to get 
through.
  I am the only Senator on all three committees involved in the health 
care debate. The Finance Committee which my dear friend from Arkansas 
and my dear friend from West Virginia and dear friend from South Dakota 
are all on, and the Labor and Human Resources Committee which has 
worked long and hard and, I felt, came up with a horrendous bill which 
is now part of the Mitchell bill; and, of course, the Judiciary 
Committee, all three of which have a lot to do with health care.
  The Judiciary Committee is really concerned about medical liability 
issues, about antifraud issues, about ERISA issues. The Finance 
Committee is worried about almost everything involving taxes, money, 
and things involving Medicare, Medicaid, Social Security, ERISA, and so 
forth. The Labor and Human Resources Committee has almost all the 
public health issues.
  Frankly, I am very concerned about what we are doing. But I really 
believe that this bill would be an absolute albatross around the necks 
of everybody in America, if we pass it in its current form. Nobody 
believes we are going to do that. And I want to pay tribute to 
everybody who is working hard and trying to come up with something that 
might really work well.
  I will not talk any longer today on this, but I wanted to make some 
of these points, because I am very concerned that we are leading 
America down a path that is going to be almost impossible to get out of 
once we start down it. If we do it the wrong way, we are all going to 
be sorry about it. Of course, we will probably be dead and gone while 
our children are saddled with this albatross the rest of their lives.

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