[Congressional Record Volume 140, Number 116 (Wednesday, August 17, 1994)]
[Senate]
[Page S]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: August 17, 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, the time is now 
allocated equally between the two managers of the bill, with the 
Senator from Oklahoma to offer an amendment.
  Mr. NICKLES addressed the Chair.
  The PRESIDING OFFICER. The Senator from Oklahoma.


                           Amendment No. 2563

 (Purpose: To provide for general enforcement of employer requirements)

  Mr. NICKLES. I send an amendment to the desk and ask for its 
immediate consideration.
  The PRESIDING OFFICER. The clerk will report the amendment.
  The assistant legislative clerk read as follows:

       The Senator from Oklahoma [Mr. Nickles], for himself, Mr. 
     Moynihan, Mr. Packwood, Mr. Craig, Mr. Coats, Mr. Gregg, Mr. 
     D'Amato, Mr. Grassley, Mr. Daschle, and Mr. Stevens, proposes 
     an amendment numbered 2563:

  The amendment is as follows:

       On page 145, strike lines 1 through 5.

  Mr. MOYNIHAN. Mr. President, might I ask to address the Senator. That 
is to be an amendment for himself and for the Senator from New York.
  The PRESIDING OFFICER. The record will reflect that the amendment is 
offered on behalf of the Senator from Oklahoma and the Senator from New 
York, Senators Nickles and Moynihan.
  Mr. NICKLES. Mr. President, I thank my friend and colleague from New 
York for cosponsoring this amendment and also for his cooperation on 
it.
  I ask unanimous consent that Senators Packwood, Gregg, Coats, 
D'Amato, Grassley, and Daschle be added as cosponsors.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. NICKLES. Mr. President, on August 3, President Clinton had a 
press conference and had an opening statement encouraging enactment of 
health care. And in his opening statement he stated:

       You can keep your own plan, or pick a better one.

  Mr. President, that statement was not correct if you read the 
Mitchell-Clinton bill. That statement has bothered me a lot because I 
think it is awfully important when we talk about health care that we be 
factual. I know a lot of people maybe have said that one side or other 
distorts the facts. I would like to talk about that.
  I had a press conference yesterday where I was critical of this 
statement because I think the statement is flatly incorrect. It is not 
true, because, frankly, under the bill we have before us, there are a 
lot of health care plans and a lot of proposals--actually the majority 
of the proposals--that are in the country today that would be illegal 
under the Clinton-Mitchell proposal. They would not be allowed. I will 
mention several of these.
  One, if you have a plan that is less generous--in other words, if you 
do not offer the standard benefits package, something significantly 
less than the standard benefits package, you cannot keep it. I refer to 
the bill.
  I would like to keep my comments very factual. I would just refer my 
colleagues to page 137 of the bill. It says an employer shall make the 
plan available which provides the standard benefits. It does not say 
less than the standard benefits.
  Keep in mind that under the Mitchell-Clinton plan, you can offer a 
standard benefits package, and an individual can also buy an 
alternative standard benefits package with the high deductible. But it 
is still the Government-defined standard benefits package. You cannot 
come up with a different plan, one that is less expensive than this 
package.
  I make mention of that because I think it is important. I know some 
people said that statement is not correct. It is correct.
  I also said you cannot offer a plan that is more generous. If you 
have a plan that is more generous, it still has to be a governmental 
plan. It has to be a standard benefits plan or it has to be a 
Government-approved supplemental plan.
  So, again, you lose a lot of flexibility. Right now you could offer a 
multitude of different plans. You really cannot do that under the 
Mitchell-Clinton plan.
  Also, the President said you can keep your own plan. That is not the 
case if you have a cafeteria plan because in the bill, if you look at 
page 1224, section 7202, cafeteria plans which offer health benefits 
will be hit with a heavy tax. Four million Americans currently have 
cafeteria plans. They like them. They are happy with them.
  Under the bill that we have before us, you lose your flexible 
spending account. We have a lot of Americans who do not have the exact 
number, but now have flexible spending accounts that include health 
care. On pages 1218 through 1221, section 7201, the Clinton-Mitchell 
bill states that if an employer provides health benefits under a 
flexible spending account, those benefits would be taxable to the 
employer at the highest corporate rate and to the employee at their own 
individual rate.
  If you happen to be self-insured and you have less than 500 
employees, you cannot keep your plan. Your plan is illegal. I feel kind 
of strongly about this because I used to manage a company. We had a 
self-insured plan. I designed the plan.
  I remember asking Mrs. Clinton a long time ago when she had her first 
meeting with a Republican group. I said, ``Can we keep our plan?'' The 
answer was no. She said ``No.'' It is still no under this bill.
  Just to recite the section, on page 137, section 1301 of the Clinton-
Mitchell bill, if your company has less than 500 employees, you cannot 
self-insure. So I mention that.
  I will just add the final one.
  If you have benefits that are different from the Government-mandated 
benefits, you cannot have it. Your plan will not be allowed. That is 
under the provision that I am dealing with. This bill is very clear. It 
says the employer shall have the standard benefits package. Under the 
standard benefits package, you can have an alternative, if you are an 
individual, that costs maybe a little less because it has a higher 
deductible. It still has the same benefits. You have to have the 
Government benefits.
  It also says you can have a supplemental plan to provide additional 
benefits. But, again, that has to be a Government-approved plan. That 
very much limits your ability to offer additional benefits, maybe with 
a different deductible.
  There are limitations, too. If you have a supplemental plan that 
deals with cost sharing, you cannot self-insure for that cost sharing. 
Let me give you an example.
  This is something that should drive unions crazy, it is something 
that should drive anybody crazy that has a plan that offers a little 
extra benefits. If they want to sell self-insurance for those extra 
benefits, they cannot do it. They have to purchase insurance to provide 
for those extra benefits.
  So, again, the President's proposal, the Clinton-Mitchell proposal, 
eliminates a lot of optional plans and optional benefits. It eliminates 
plans that have benefits different than the Government-imposed, 
mandated benefit plans. And it eliminates cafeteria plans and, as I 
mentioned before, the flexible spending accounts.
  The self-insured plans. There are over 400,000 employers that carry 
self-insured plans, covering 16 million people. They lose their plan. 
They are not going to be able to have a self-insured plan. They will 
have to buy a Government-designed benefits package. They have no 
option, no choice. That is their choice. They have to buy what 
Government deems appropriate. Whatever they had, they cannot keep. I 
disagree with that.
  I heard the majority leader, Senator Mitchell. I looked at his 
comments from the floor yesterday. He talked about his plan was 
voluntary and so on. This is not really the case. If the company that I 
manage self-insures, I do not have a choice. If I am going to have 
insurance, I have to have the Government plan. I have to buy the so-
called community-rated plan. I do not have a choice. I do not get to 
continue self-insuring. That is not voluntary.
  I thought, what if I did not participate. What would happen? What is 
Government going to do to me or my company, or when is the Government 
going to tell me I cannot do this?
  There is a little section in the bill which says,

       In the case of a person that violates a requirement of this 
     subtitle, the Secretary of Labor may impose a civil money 
     penalty in the amount not to exceed $10,000 for each 
     violation with respect to each individual.

  So if you are an employer--and my company has about 65 people--well, 
if we did not comply, if we wanted to stay with our self-insured plan, 
our penalty is $650,000. Mr. President, that is more money than we made 
last year. That is more money than we made the last several years, 
probably. Unfortunately, we turned into a good, nonprofit organization, 
not by design.
  An employer that has 100 employees, that is a $1 million penalty. 
That is a big penalty.
  In other words, the heavy hand of Government is coming in and says 
you have to offer this standard benefits plan designed by Government. 
You have no choice whatsoever.
  The reason a lot of people have different plans is because they want 
economy. They think they can do a better job.
  I look at the cost under the Clinton-Mitchell health care bill. The 
cost for a two-parent family, according to CBO, is $5,883, almost 
$6,000. Those are 1994 figures. I will tell you that cost exceeds what 
a lot of us are paying in the private sector. A lot of people in the 
private sector pay a lot less than this. Yet they would have no option 
under this bill. They are going to have to have this Government-imposed 
standard, mandated benefit package as designed by this bill.
  This bill turns enormous power over to the benefits commission to 
design the deductibles, the copayment and so on. But the package 
estimated by CBO is going to cost about $6,000.
  I again do not want to use personal examples. But in our company, we 
provide insurance for about $2,400. I just met with the president of a 
major university in my State. They provide benefits for their 
employees. I think he said they have 1,100 employees. It is a private 
university. He said they were providing health care benefits for the 
teachers, professors, staff, and so on, I think for an average of about 
$2,800. Wait a minute. We are all ready to mandate something like 
$6,000. You are going to have to provide that. He said, ``What if I 
don't?'' I said, ``Well, there is a little section in here called 
`enforcement' where the Secretary of Labor can fine you up to $10,000 
per person if you do not offer the standard benefits package.''
  If you do not do what Government says you should do, then you will be 
subjected to those kinds of fines and penalties. Mr. President, there 
are a couple of other things that people would be shocked to find are 
in this bill. There is a prohibition on offering an alternative 
package. This gets confusing. But under the bill, it says you have the 
standard benefits package, and we will make this available, and 
everybody is going to have to have it. Everybody is going to have the 
same benefit. But for individuals, we are going to allow them to have 
an alternative benefit package, as defined in the section. It has a 
higher deductible, and it presumably will be cheaper. That is 
availability to individuals, but it is not available to companies. If 
you read on page 138, it says no employer may offer an alternative 
standard benefit package established under subtitle (c).
  That is a high deductible plan. So an individual can have a high 
deductible plan and presumably save on some premiums. But a company--if 
anybody is working for a company, they are out of luck. They do not get 
to have the high deductible plan. They have to have the more expensive 
plan. The employer cannot offer a higher deductible plan. If they did, 
they are subject to a $10,000 fine--per employee.
  I mentioned that in my company we self-insured. We happened to have a 
high deductible plan. We self-insure for that portion. Those plans are 
illegal under the section that says you cannot have a self-insured 
plan, because on page 138 they prohibit an employer from even offering 
an alternative benefit. So you lose freedom, and you lose your choice 
and, frankly, you do not get keep your own plan.
  Again, I think it is important that we go back and think of 
statements that are made on the floor. People say these plans are 
voluntary. They are not voluntary, not if there is a $10,000 fine if 
you do not comply and certainly if you do not get to keep your own 
plan, if you have a cafeteria plan or if you have a plan with different 
benefits than those mandated under this proposal.
  Mr. GREGG. Will the Senator yield for a question?
  Mr. NICKLES. Yes.
  Mr. GREGG. Am I to understand what you are saying here is that there 
are approximately 200 million Americans today plus who have an 
insurance plan or participate in an insurance plan; that to the extent 
that their insurance plans do not conform with the standard benefits 
package and they pursue the use of that claim, they would be fined, or 
the businesses they work for would be fined $10,000 for each one of 
those 200 million Americans, adding up to $20 billion in potential 
fines?
  Mr. NICKLES. The potential would be there. I tell my colleague that 
it says the Secretary ``may,'' not shall. But it gives the Secretary 
the discretion if anybody does not provide for the standard benefits 
package or--I will saying standard benefits package, when you consider 
there is a standard, alternative and supplementals. If you do not 
provide what the Government says you can, or if you can provide more or 
less, you would be liable to a $10,000 per-employee fine.
  Mr. GREGG. If the Senator will yield further. To take this to 
specifics, under the standard plan package that originally came from 
the President, and as it was originally introduced here, the 
President's plan, there was only one mammogram allowed for people who 
are under age 50. I think that was the rule. If, for example, your 
company had enrolled in--let us say that was the standard plan that was 
settled on--but it probably would not be because it was such a 
ridiculous proposal--but say that was settled on by some Federal 
bureaucracy that designed what the standard plan would be. If your 
employer decided that one mammogram under age 50 is not appropriate, 
that there really should be two or three, or the opportunity to have 
two or three, you or your employer offering a greater benefit in this 
area would be subject to, potentially, a $10,000 fine per employee 
because they had not met this precise, one-size-fits-all plan proposal?
  Mr. NICKLES. The Senator is correct. The only way that you can 
provide that extra benefit is if you purchased a supplemental benefit 
through a carrier. But I will mention that you cannot provide a 
supplemental that duplicates coverage that is in the standard benefit 
plan. So it is a heavily regulated supplemental benefit option. One can 
buy some additional benefits on top of the standard benefit, but again 
it is a Government-approved benefit package that is very constrictive.
  I will go a little further. Most people do not understand the 
supplemental plan, and I have spent a little time trying to figure it 
out myself. If you want to buy additional benefits, you can, but it has 
to meet the Federal regulation and also the State's, and then likewise, 
if you want to say, wait a minute, in our plan we want to have greater 
cost share, so I will help pay some of the deductible, because most of 
the supplemental is on an 80-20 basis, and I worked it out with my 
employees over the years and we do 90-10; so I want to have a lower 
deductible, and it was agreed to in collective bargaining or something. 
According to the cost-share agreement, you cannot self-insure on the 
supplemental cost share. Crazy. Under this bill, you cannot self-insure 
for the cost-sharing supplemental. I just cannot believe some of the 
provisions that are in this bill. You are prohibited by law. If you did 
self-insure, you would be subject to a $10,000 fine.
  Mr. President, I want to be clear that I am not eliminating all of 
the abuses that are in this bill. I am trying to eliminate and will 
with the concurrence of the Senate--the $10,000 penalty for 
noncompliance. We are going to take away some of the heavy Government 
hammer that is in this bill. When I say in this bill--a lot of people 
were not aware of this provision. I was not aware of it until not too 
long ago. This provision, or part of this provision, was included in 
the Labor Committee bill, but not in the Finance Committee bill. I 
understand in the Finance Committee bill when they originally had a 
mandate to keep on standard benefits, they were going to say that if 
you do not have a standard benefit, you ought to be subjected to a 50 
percent premium penalty. But that was dropped in the Finance Committee. 
It was in the markup, but it was dropped. That is a very punitive 
penalty, but that is a lot more reasonable than a $10,000 penalty. That 
is a penalty of $1,500, or something, for most people; $1,500 is still 
too heavy, in my opinion, but it is a lot more reasonable than $10,000.
  Again if you look at a small employer with 100 employees, maybe they 
are self-insuring and want to continue doing so. Maybe they are self-
insuring and doing it for $3,000 an employee, and the employees are 
happy with it, and the employers are happy with it; it is working well. 
They may say: Oh, no, I am not going to go with this Government-
designed standard benefits plan. We have a good package of benefits. We 
worked it out, and it is successful, and we are keeping costs down. The 
Government is saying you cannot keep that package, and if you do, we 
are going to sock it to you with the $10,000 fine.
  Mr. President, I plan at a later time to offer an amendment that is 
going to allow employers and employees to keep the plans they have that 
they like. That is the so-called grandfather amendment. I am working on 
that, and I want that to pass. One of the reasons we decided to go with 
this amendment first was to educate some people, because a lot of 
people were not aware it was in here. A lot of people did not realize 
that, wait a minute, the Government has so much power that if you did 
not comply, you could be subject to a $10,000 per-employee penalty. 
That is a very heavy penalty.
  I am delighted that it looks as if--since Senator Moynihan 
cosponsored this amendment, and others--it will be deleted from the 
package. My concern is that we have a lot of amendments, a lot of 
provisions in this bill, and the people do not know about them. When 
they find out about them, I am thinking that a lot of people will be 
quite upset.
  Mr. KENNEDY. Will the Senator yield?
  Mr. NICKLES. I think I have the floor.
  Mr. KENNEDY. I was wondering if the Senator would yield on my time 
for a question.
  Mr. NICKLES. I will be happy to.
  Mr. KENNEDY. Just following the issue of the amendment and also the 
presentation the Senator has made, I know about the standard benefits 
package. I know that S. 1743, the Nickles bill, outlines the standard 
benefit package. You have a standard benefit package in your own bill. 
The only way that you receive any tax credit for any of the employers 
is to receive a tax credit to purchase insurance, but only if they get 
the standard benefit package.
  I am just trying to understand why you are arguing--I appreciate the 
fact of the elimination of the $10,000 penalty, which I am going to 
support, because I believe there are other provisions in the 
legislation that will provide sufficient remedy. I think what is 
actually going to happen is that they will be offering the standard 
benefit package. But you appear to be arguing against the standard 
benefit package here on the floor of the Senate, and the bill that you 
introduced requires it and indicates that the only way you are going to 
get favorable tax treatment is if you use it.
  Mr. NICKLES. The Senator asked me a question.
  Mr. KENNEDY. I just asked how the Senator can possibly rationalize 
that position with his presentation here.
  Mr. NICKLES. I appreciate the Senator's question.
  Mr. President, I will be happy to answer my colleague, and I also 
want to finish and conclude my statement.
  Mr. KENNEDY. On whose time, if we can just agree?
  Mr. NICKLES. This will be on my time.
  The PRESIDING OFFICER. The Senator from Oklahoma.
  Mr. NICKLES. The Senator alluded to the plan I cosponsored on 
consumer choice of health plans. We say give everyone a tax credit who 
qualify for the tax credit. You have to offer something. We do not give 
tax credits for people doing nothing. So you had to have some kind of 
health expense, basically defined by IRS, to qualify for a tax credit, 
just like you qualify for a tax deduction right now. You have to have a 
certain health care benefit operation to get the tax deduction. You 
also have to do certain things to get the tax credit.
  The Senator's question is not relevant. What my bill did not do is 
say everyone in America had to replace their insurance with Government-
defined insurance.
  Mr. President, this is a big issue because the whole title of my bill 
was consumer choice. The whole purpose of my bill is to give consumers 
lots of choices with different options, different benefits. Under the 
bill I sponsored with 25 of my colleagues, we have a multitude of 
options.
  Mr. KENNEDY. Mr. President, will the Senator yield?
  Mr. NICKLES. I will not yield. I want to finish.
  Mr. KENNEDY. Will the Senator yield just on this point?
  Mr. NICKLES. I will not yield.
  My bill made a multitude of options. We called it consumer choice for 
a purpose because we wanted everyone in America to have the maximum 
number of choices.
  Unfortunately, some alluded to the Clinton-Mitchell package and say 
it has choices. Let me tell you the choices you have under the Clinton-
Mitchell package. You have Government plan A, Government plan B, and 
Government plan C, and they are all the same, one fee-for-service, one 
HMO, and one preferred provider. But they are all the same. They all 
have exactly the same benefit. You could not offer a different benefit 
if you wanted to because the Government defines that benefit package. 
The benefit advisory group defines the package, and you could not offer 
something different.
  There are thousands of companies, hundreds of thousands, millions of 
Americans who have health care a lot less expensive than what is 
mandated under the Clinton-Mitchell bill.
  I am trying to preserve peoples' rights to be able to buy less 
expensive insurance or more expensive insurance.
  They cannot do it under this package. And under the package we have 
before them, if they do not do it, they are subject to a $10,000-per-
person penalty. Big Government is here. Big Government is saying no. 
``This is voluntary. If you do not participate, here is a $10,000 
fine.''
  I just happen to disagree with that. That fine happens to be more 
than double the cost of insurance for most people.
  So the heavy hand of Government is here. I know it passed the Labor 
Committee, and maybe that is not surprising. But it should not become 
law.
  (The PRESIDENT pro tempore assumed the chair.)
  Mr. NICKLES. Mr. President, the reason I offered this amendment is it 
is saying two things. I want to educate people because, as I stated 
before, people do not know what is in the Clinton-Mitchell package. 
They do not know what kind of freedoms they are going to lose. They do 
not realize that under this bill, if they have a cafeteria plan those 
plans are tax heavily. They do not realize if they have a flexible 
spending account those plans are taxed heavily. They do not realize if 
they have a self-insured plan that covers 16 million people, those 
plans are illegal. I said cafeteria plan. The cafeteria plan covers 4 
million people. The self-insured plan covers 16 million people. And 
those plans under the Clinton-Mitchell package--there are lots of 
people in West Virginia and Oklahoma who are happy with the plans and 
like the plans.
  Mr. President, they are a whole lot less expensive.
  Mr. KENNEDY. Mr. President, will the Senator yield?
  Mr. NICKLES. No, I will not yield. I want to continue.
  They are a whole lot less expensive. They do not cost $5,800. As a 
matter of fact, $5,800 is a lot of money in West Virginia and a lot of 
money in Oklahoma.
  I am interested. The company we have or I have been involved with 
provides insurance for $2,400. If we follow this prescription for 
disaster, those plans are going to cost $6,000. Maybe we will be 
subsidized, or maybe some of our employees will be subsidized. I do not 
want to be subsidized. We are doing a decent job providing health care 
for our family and our company. Why in the world should the Federal 
Government get involved?
  I make a comment that a lot of people do not realize this. This is a 
massive mandate. I have heard people say the Clinton-Mitchell bill does 
not have a mandate. It does. It mandates you have a very expensive 
package. If you cannot afford that package, guess what some employers 
are going to do? Employers in West Virginia and Oklahoma are going to 
say, ``I cannot afford it. I am going to drop it. It is not mandatory 
now, so I am going to drop it. Employees, you are on your own.''
  Some of those employees will qualify for subsidies. I heard the 
majority leader say we are going to eliminate the Medicare plan and 
replace it with the private plan. What he is also not telling you is 
under his bill 57 million new people will be eligible for subsidies; 57 
million people will be eligible for subsidies in a few years that are 
not eligible today, more than double the number of Medicaid people who 
receive subsidies, but they will be receiving Federal subsidies. You 
are having a massive Federal subsidy program because people cannot 
afford this.
  So employers will be dropping the plan. Employees will be getting 
subsidies to buy health care. And then guess what, Mr. President? And 
this is very interesting. Then an employer can come back and say, ``I 
want a subsidy so I can start this over.'' And they can start again, 
and the employer can get 5 years of subsidy with the Federal Government 
paying about half of their health care costs.
  This is almost an encouragement plan for people to drop their health 
care, put people out on subsidies to get their health care on their 
own, and then the Federal Government will come in and subsidize that 
employer for them to pick it back up.
  I think that is a disaster. We should not be making those mistakes.
  What does this amendment do? It does not eliminate the standard 
benefit package. I wish we would, and we will probably try to do that 
later. I am going to try to allow all the missing plans to stay in 
existence. If the people and employees are mutually satisfied, they 
ought to be able to keep the plan. We should not have the heavy hand of 
the Federal Government saying your plan is good enough and we are going 
to replace it with a Government-knows-best plan; we are going to 
replace it with a plan that costs $6,000 per family.
  We should not do that. This is a serious mistake and serious 
infringement on freedom. And that is exactly what happened in this 
bill. Then they have the heavy hand of the Federal Government coming in 
and saying, ``There is a $10,000 penalty if you do not comply. So we 
are going to make you comply whether you want to or not.''
  Then I read in the Record where Senator Mitchell stated this is 
voluntary. How is it voluntary? ``It provides for a voluntary system in 
which Americans would purchase private insurance.'' That statement was 
made yesterday. How could it be voluntary if you had a $10,000 penalty 
if you did not comply?
  I just cannot believe that we would go down this route. So I am 
delighted that we will delete this one section. We are deleting section 
1309. That is one paragraph on page 145 of a bill that is 1,443 pages 
long.
  Mr. President, I think this is vitally important. I thought it was 
vitally important for a long time. This section that we are deleting, 
this section 1309, page 145, I will read again:

       In the case of a person that violates a requirement of this 
     subtitle, the Secretary of Labor may impose a civil money 
     penalty, in an amount not to exceed $10,000, for each 
     violation with respect to each individual.

  So if you have 100 employees, that is equal to a $1 million penalty 
that the Secretary of Labor could impose.
  Mr. President, we need to strike this section. I am delighted that 
the Senator from New York and the Senator from Oregon are cosponsoring 
this amendment. I look forward to improving the bill, at least by 
taking this very serious mistake out of the bill.
  Mr. President, I yield the floor.
  The PRESIDENT pro tempore. The Senator from New York [Mr. Moynihan].
  Mr. MOYNIHAN. Mr. President, I thank the Senator from Oklahoma for 
taking this initiative.
  I point out that we join him in it in a bipartisan manner. We 
considered the matter at some length most of this morning.
  Mr. President, we came to this judgment, which was that in the 
legislation that Senator Mitchell has put forward it is clearly in the 
interest of employers to provide the standard benefits package. It 
makes them a more attractive employer and more attractive to employees 
they would hope to have, but most important, elementary and 
indispensable, providing the standard benefit package is the condition 
of receiving the subsidies that the bill provides for low-wage 
employees. With that package you get the subsidies. Without it you do 
not. We have incentives. This is an incentive-driven bill. We think 
that it is in the best interest of firms and their employees to have 
health care.
  The Senator from Massachusetts speaks with great emphasis on the 
importance of preventive care, and, indeed, if there is anything 
salient in our medical situation today, it is the degree to which 
behavioral patterns lead to illness as against the random disasters of 
typhoid fever or cholera of the past.
  Professors of medicine teach behavior, inculcate behavior that makes 
for health. And already we begin to see some of this effect being shown 
up in the slackening of the health care cost increases. But, most 
importantly and essentially, the subsidies are the incentive to which 
we are absolutely convinced employers will respond.
  I regret to hear my friend from Oklahoma has established a nonprofit 
activity. That was not the plan, and it need not be the case once this 
legislation is enacted. I look forward to a thriving, healthy, and 
profitable work force in Oklahoma.
  And so, Mr. President, there is no great need to expand on this 
position. The Secretary of Labor does not need this particular 
sanction, and when a sanction is not needed it is best excised.
  We are not in the business of running around and policing the health 
care plans of the Nation's employers. We set the standards, we provide 
incentives, and we expect to see a response. And we will know that 
response and we will keep track of the coverage, but not in a mode that 
is threatening or indeed punitive. We are not trying to hurt anybody 
here. We are trying to help our country and help its employers and its 
workers.
  So I think this is a nice bipartisan note on which to conclude 
today's behavior.
  I see we will alternate, but would the Senator from Oklahoma mind if 
my friend----
  Mr. PACKWOOD. I believe I am controlling the time.
  Mr. MOYNIHAN. Would the Senator from Oregon mind if the Senator from 
South Dakota speaks now?
  Mr. PACKWOOD. I am happy to have him speak now.
  The PRESIDENT pro tempore. Who yields time?
  Mr. NICKLES. Will the Senator from South Dakota yield?
  Mr. DASCHLE. Yes.
  The PRESIDENT pro tempore. The Senator from Oklahoma is recognized.
  Mr. NICKLES. Mr. President, I ask unanimous consent that Senators 
Durenberger, Shelby, Mack, Gorton, Roth, and Lott be added as 
cosponsors of this amendment.
  The PRESIDENT pro tempore. There being no objection, it is so 
ordered.
  Who yields time?
  Mr. MOYNIHAN. Mr. President, I yield to the Senator from South Dakota 
such time as he may require.
  The PRESIDENT pro tempore. The Senator from South Dakota [Mr. 
Daschle] is recognized for such time as he may require under the 
control of Mr. Moynihan.
  Mr. DASCHLE. Mr. President, I will be brief. I thank the 
distinguished chairman of the Finance Committee, the manager of bill, 
for yielding me some time.
  Let me make several points as quickly as I can.
  First of all, let us make sure what this amendment does and what it 
does not do. What this amendment does is to strike the reference to 
$10,000.
  I have indicated that I intend to support the amendment because, as 
the chairman stated so well, there are other ways with which to ensure 
that we can achieve the compliance we want. There are carrots and there 
are sticks. Let us try the carrot approach. Let us do as much as we can 
to ensure that throughout this bill, whatever it is we do, we encourage 
using the incentives that are in the bill. We are certainly willing to 
try that approach in the manner of this bipartisanship cooperation, and 
I think that ought to be stated up front.
  But the Senator from Oklahoma makes a second point in defense of his 
amendment that I frankly do not support. I think that most members on 
this side of the aisle, in fact, I would guess many Senators on both 
sides of the aisle, would have difficulty supporting. Namely, the 
deletion of some need for standardized benefits.
  It is very clear in the bill offered earlier by my friend, the 
Senator from Oklahoma, that on three pages--pages 33, 34, and 35--there 
are direct references to standardized benefits and a recognition of the 
need for compliance with those standardized benefits.
  Senator Chafee, with all of his cosponsors, had a bill that 
specifically delineated a number of standardized benefits. The Finance 
Committee, the Labor Committee, all of the bills, for the most part, 
even Senator Dole's, have references to standardized benefits. At least 
for the past several months, every one of us has been working under an 
understanding that standardized benefits are a good thing.
  In fact, I will go back and find what the record states with regard 
to the Medigap proposal we passed several years ago. As the author of 
that amendment, I clearly recall there was a widespread recognition 
that Medigap policies--that is, policies in addition to what we get 
through Medicare--were standardized. I recall there was virtual 
unanimity that standardization of Medigap policies was a good thing. 
There was strong bipartisan support, I think unanimous support, in the 
Finance Committee. But I will go back and check the record on that.
  Now, why is standardization of benefits important? It is important 
because if we do not have it, this bill might as well be called the 
Fine Print Protection Act. That would be exactly what we would be 
doing. We would allow the insurance companies to do what in many cases 
they are doing right now. Not all of them, but many of them are putting 
in the fine print contingencies that can scare people to death. That 
fine print keeps people from getting the benefits they oftentimes 
thought they had.
  I do not know about most of the Members of this Chamber, but I know I 
am not as familiar with my plan as I wish I were. I frankly cannot tell 
you this afternoon whether I have a lifetime limit in my plan or not. 
But they are in a lot of plans. People are caught by complete surprise 
once they bump up to that limit, because they did not know the fine 
print, buried somewhere in the plan itself, had a limit on what the 
insurance company would pay.
  Exclusion of important services, including durable medical equipment, 
rehabilitation services, mental health treatment, and preexisting 
conditions clauses are all there. Exclusions of preexisting condition 
clauses are in many plans. That is something else we are trying to 
eliminate. There is widespread recognition of the importance of 
eliminating preexisting condition exclusions.
  Service limits, such as a limit on days in the hospital or no more 
than a certain number of physician visits per year--these are also in a 
lot of plans.
  Hidden gaps in coverage are also there. For example, no coverage for 
congenital conditions and no coverage for illness in the first 10 days 
of life are major exclusions. In fact, a high percentage of the plans 
covering pregnancy have a provision that limits coverage in the first 
days of life after a baby is born.
  Exclusions of certain providers can also occur, like coverage for 
psychiatrists or other mental health practitioners.
  Mr. President, the point is that one of the reasons we are here in 
the first place is that people are just caught unaware too often. So 
many times, when we need the benefits the most, they are not there. We 
are surprised. We find out only too late that the plan we were counting 
on, the plan we paid thousands and thousands of dollars for, is not 
there when we need it the most.
  And so, let it be understood that what is in the fine print is really 
what we are talking about here. There is no discussion, no debate about 
eliminating the $10,000 fine. I suspect that a majority of Members on 
both sides of the aisle will probably agree that, as the chairman said, 
there are other ways to ensure we get as much compliance as we can.
  But I can give--and I will do this for the Record--a number of 
examples. Allen Fuller lives right here in Washington, DC. He allowed 
his name to be used in discussing his own situation. His family lost 
their insurance when his wife started her own business. Eventually they 
bought private insurance for the family. Two weeks later Allen thought 
he had pulled his back out. When he went to the doctor, tests showed he 
had cancer of the lungs and spine.

  Allen started chemotherapy immediately and found that his insurance 
policy only covered accidents in the first month but did not cover 
illnesses. The insurance company said his cancer was a preexisting 
condition and refused to cover his bills. Allen Fuller was left out, in 
spite of the fact that he had paid thousands and thousands of dollars 
for a policy he thought was going to be there when he needed it the 
most.
  Barbara Elsas-Patrick, another person here in Washington, DC, has 
health insurance through her professional association. She is a 
teacher. She paid $500 a month coverage for herself and her daughter. 
The policy had waivers for preexisting conditions. She was not aware of 
that. It was buried in the fine print. Barbara is reluctant to go to 
the doctor now because every time she has another condition, according 
to this particular policy, it is not covered the next time she goes to 
the doctor.
  This is really what we are trying to avoid here. The point is very 
clear. Do we want to protect the fine print in plans in the future? If 
we do not, then let us recognize, as Senator Nickles recognized, as 
Senator Chafee recognized, as Senator Mitchell has recognized, that 
there ought to be some recognition of a need for standard benefits and 
elimination of the fine print in this bill.
  I yield the floor.
  Mr. LOTT. Mr. President, under this bill, any business that tries to 
provide health insurance for its employees, but not the high-priced, 
Government-mandated insurance plan, could be fined $10,000 per 
employee.
  Now, we have heard many speeches in support of the Clinton-Mitchell 
bill, saying how the bill would help all Americans, and help 
businesses.
  If you read the bill though, the situation is quite different. The 
Clinton-Mitchell bill makes the Secretary of Labor a bounty hunter, 
searching for firms who are doing the right thing, but not the 
Government-mandated thing.
  We are not talking here about mean old businesses that do not care 
about their employees. We're talking about small, sometimes struggling 
firms, which under the Clinton-Mitchell bill could be destroyed by 
fines or have a to lay off workers.
  That is why I rise today in support of the Nickles amendment. This 
amendment says the Government should not penalize businesses for doing 
the right thing. The amendment nullifies this $10,000 per employee 
bounty.
  Again, the Secretary of Labor under Clinton-Mitchell will be able to 
destroy businesses at will without the Nickles amendment. Let us say 
you have a small business. You are struggling to make payroll, and pay 
for, say, a catastrophic insurance for your employees, so they would 
not be left holding the bag of unlimited health care costs.
  Under Clinton-Mitchell, the Government comes along and says, hey, 
that is not enough insurance you are giving your employees. They need 
drug counseling services. They need abortion services. They need 
psychiatric coverage. The Government's telling you that your business 
has to buy a Cadillac insurance plan, when you only can afford a Pinto 
health plan.
  If you cannot afford it, and even if your employees do not want all 
of these benefits, the government under Clinton-Mitchell will make it 
very expensive for you.
  In fact, the Secretary of Labor could assess your business at $10,000 
per employee fine, if you do not go out and buy the Government's 
standard benefits package. Now think about this: if you do not buy the 
expensive, Government-mandated plan, then you are fined heavily, and 
your corner store, or computer startup, or farm, goes belly-up. If you 
do buy the plan, you probably would have to lay off workers. Again, if 
your employees like the insurance plan you provide them, then that is 
too bad. You have to go out of business, or you have to lay some of 
these happy employees off.
  Under the Clinton-Mitchell bill, you would have to make a choice 
between the Government, and your employees, probably middle-income 
employees who need work.
  The Nickles amendment says you will not have to make that choice.
  But the Nickles amendment is about choice. If employees for a small 
company like their insurance plan, but it is not the plan the 
Government has mandated, they should be able to keep that plan.
  Most Americans are happy with their health insurance--85 percent to 
be exact. Everyone agrees that whatever reform we try to achieve in 
this Chamber, choice in health plans should be maintained. This is what 
the American people want.
  Several times in his Presidency, President Clinton has promised the 
American people that the insurance they have, that they are happy with, 
will not be taken away.
  We see in Clinton-Mitchell, though, that choice is taken away.
  The President has been telling Americans that the Government would 
not take away the insurance plans Americans are pleased with.
  The Clinton-Mitchell bill does not maintain consumer or business 
choice--at least not the type of choice Americans are used to. The 
Clinton-Mitchell bill says yes, you can have choice--if you have the 
money. If you are able to pay $10,000 per employee, if you are able to 
cough up a 25-percent surcharge, if you are able to swallow the cost of 
a nondeductible health plan--yeah, you can have choice. Some choice.
  Americans in general, and middle-income Americans and businesses who 
employ middle-income people specifically, can not ante up the money the 
Clinton-Mitchell bill would squeeze out of people. Under the Clinton-
Mitchell bill, the Government will take away choice, and will force 
Americans to pay for a government plan--or pay through the nose.
  That is why I rise today to support the amendment by my friend from 
Oklahoma, Senator Nickles. His amendment does what the President says 
he wants done--maintenance of consumer choice. The amendment takes the 
Secretary of Labor out of the bounty hunter business.
  This is an amendment for all Americans, especially middle-income 
Americans. The Clinton-Mitchell bill, with its 17 new taxes, 55 new 
bureaucracies, and its almost $1.4 trillion cost is not middle-income 
friendly. The Clinton-Mitchell bill penalizes those who work hard and 
play by the rules.
  The Nickles now Moynihan amendment is a little bit of sanity and 
fairness. This amendment does not nullify those few good aspects of the 
Clinton-Mitchell bill: aspects like allowing Americans with preexisting 
conditions to get and keep insurance, and allowing portability of 
insurance.
  The Nickles amendment does nullify this anti-middle-income and anti-
business part of the Clinton-Mitchell bill. The way to better access to 
our health system is not to destroy families or businesses. The Nickles 
amendment, with that maxim in mind, seeks to maintain choice.
  Several Senators addressed the Chair.
  Mr. NICKLES. Will the Senator from Oregon yield me 4 minutes?
  Mr. PACKWOOD. I have a number of other speakers who want to speak and 
I would like to speak.
  Mr. NICKLES. Four minutes?
  Mr. PACKWOOD. All right.
  Mr. NICKLES. I thank my friend and colleague from Oregon.
  Mr. PACKWOOD. Could I ask the indulgence of my good friend from New 
York? Would he mind if I spoke after the Senator?
  The PRESIDENT pro tempore. The Senator from Oklahoma is recognized 
for 4 minutes.
  Mr. NICKLES. Mr. President, I wanted to respond because both Senator 
Kennedy and Senator Daschle alluded to the plan I was the principal 
sponsor of, the consumer choice plan, and said that we have a standard 
benefit.
  What we had in our bill was strictly voluntary, that said if you want 
to qualify for tax credits you had to have at least catastrophic, which 
is basically hospitalization, which makes sense. We were telling 
everybody we want individuals to have their opportunity to choose 
whatever they want so they would have a tax credit. But to qualify for 
the tax credit they had to have at least hospitalization. But they 
choose the benefits. They could have anything above that they want. 
They could choose from any of a multitude. There was an unlimited 
number of choices under our proposal for individuals to choose. That 
was the whole idea, consumers could choose and the tax credit would go 
directly to them. It would not be just tied to their employer.
  This is in stark contrast to the Clinton-Mitchell proposal that says 
it is illegal for somebody to buy a benefit that is outside the 
standard benefit package; you cannot offer less, you cannot offer more. 
You can offer a supplemental but only if it is Government approved. You 
have to have every benefit that they determine, and some of the 
benefits are not very popular; to some of the benefits there are a lot 
of objections. To some of the benefits some have moral objections. They 
are going to mandate everybody buy those. We did not do those. We said 
individuals should be able to choose the benefits, have maximum number 
of choices on the benefits in stark contrast to the Clinton-Mitchell 
proposal.
  I yield the floor.
  Several Senators addressed the Chair.
  The PRESIDENT pro tempore. The Senator from Oregon.
  Mr. PACKWOOD. Mr. President, I yield myself such time as I may need.
  I was going to use this chart until the Democrats agreed to this 
amendment. ``Warning to employers: Providing health insurance to 
employees may be hazardous to your financial health.'' The reason I was 
going to use that is I do not think this provision, as it was 
originally in the bill, Senator Mitchell's bill, was put in by 
accident. And now that it has been accidentally discovered, it is being 
taken out in a great spirit of comity. As a matter of fact, I think the 
finding that--it takes almost a Houdini, as we go through this bill.
  But I think perhaps the more analogous story is one that relates to 
Winston Churchill.
  He was at a dinner party one night and an admiral was there, an 
admiral of significance in the British fleet. The admiral, admiring the 
flatware, pocketed a rather expensive gold spoon, which bothered the 
hostess no end because she had seen it but she was not quite sure how 
to approach the admiral and suggest that he give back the spoon. So she 
went to Winston Churchill, explained her situation, and asked what she 
should do.
  He thought for a moment. He went over to the table and he took 
another gold spoon off the table, a larger one. With the handle 
sticking out of his pocket he walked over to the admiral and said, 
``Oh, Admiral, I think we have both been discovered. We will have to 
give the spoons back.''
  What has happened here is, we have caught the Democrats with the gold 
spoon in their pocket. Now they have to give it back. We have heard 
them say, ``Oh, well, there are other ways to enforce this. We do not 
need this.'' Why was it ever in the bill to begin with if they do not 
need it?
  Did they know it was there? You bet they knew it was there because 
when this bill, Mitchell 1--when Mitchell 1 was drafted there was not 
only this $10,000 penalty but, in addition to the $10,000 penalty, a 35 
percent tax. And it was levied upon your health insurance premiums. If 
you have six employees, you are a little laundromat paying $2,500 
apiece for health insurance, $15,000, 35 percent tax, roughly a third, 
roughly $5,000 you were going to pay in addition $10,000 times six 
employees. That is $65,000 for a little laundromat owner. Now you can 
say you do not have to offer the standard benefit package, but $65,000 
is a whale of an incentive not to offer anything else.
  What happens when we get to Mitchell 2? The 35 percent has been 
dropped out, so they knew it was there. The $10,000 was not dropped 
out. Now the poor little laundromat owner is only going to have to pay 
$60,000, instead of $65,000; the $5,000 incentive removed, he can go 
ahead and offer what he wants--and pay the $60,000. Did they know it 
was there? You bet. They knew it was there.
  Why was it there? It was there so the argument can be made, you do 
not have to offer the standard benefit plan. You can offer anything you 
want. You can have any plan you want under this bill. There is no 
employer mandate until the year 2005 or 2002 or whatever it is, and up 
until that time the employer can offer anything he wants. But if he 
wants to offer anything other than the standard benefit package it is 
going to cost him $10,000 an employee.
  Let me give another example. The little laundromat owner with six 
employees is paying $2,500 a year for health insurance for his six 
employees. The standard benefit package, husband and wife with a couple 
of kids, is $5,500-$6,000. So now comes along this bill and the little 
laundromat employer cannot afford $5,000 or $6,000 for the standard 
benefit package. And if he offers any insurance and does not offer the 
standard benefit package, he gets fined $10,000 per employee.
  What does the little laundromat owner do? I will tell you what he 
does. He drops his health insurance. He cannot afford $6,000 per 
employee and he certainly cannot afford $10,000 per employee penalty, 
so he drops it. Now they have no coverage.
  This $10,000 was designed deliberately to be, not an incentive--
coercion, Mr. President; $10,000 an employee is not an incentive, it is 
coercion. And because the Democrats have been caught with the gold 
spoon in their pocket, they are now allegedly giving it up and saying 
we never needed it anyway.
  As we go through this bill, Houdini like, looking for other gold 
spoons, my hunch is they will agree with many other amendments we bring 
up because they knew they could not defend this. They knew they could 
not defeat it. So they co-opt it.
  I am delighted to have them on board. I would be interested, if they 
have an explanation, as to why the $10,000 was ever in there to begin 
with. They knew it was there. Why they took out the 35 percent penalty, 
having gone through this bill themselves, but never took out the 
$10,000.
  There is only one answer. We are going to force you to voluntarily 
provide the $6,000 standard benefit package or nothing. For too many 
employees the answer will be nothing. I thank the Chair.
  Several Senators addressed the Chair.
  The PRESIDENT pro tempore. The Senator from New York.
  Mr. MOYNIHAN. I yield to the Senator from Massachusetts such time as 
he may require.
  The PRESIDENT pro tempore. The Senator from Massachusetts, [Mr. 
Kennedy], is recognized for such time as he may require.
  Mr. KENNEDY. Mr. President, we have been involved in this debate and 
discussion on the bill for some 2 weeks, now. And we had a good debate 
and discussion on the children's amendment over a period of several 
days. Then the Senate went on record to advance the protections for 
children.
  I think that was an important improvement over the Mitchell bill. And 
I think we understood that after we had the consideration of an 
amendment on this side, we were going to go to the other side in order 
to consider an amendment. So many of us who have a desire to get into 
the substance of these measures--and there are strong policy 
differences on many of these measures--we were hopeful that we would be 
able to reach some kind of accommodation.
  I think all of us are still hopeful we will, even with those 
individuals who have expressed reservation about the Mitchell proposal. 
I think most of us were somewhat hopeful that we would have a proposal 
or an amendment here that really was going to be at least somewhat 
defining in terms of the direction of this debate.
  When I first saw the amendment of the Senator from Oklahoma earlier 
in the day, I was somewhat interested in the fact that he was going to 
make an amendment to strike the $10,000 penalty that employers might be 
required to pay if they did not provide the standard benefit package. 
We reviewed that measure and reviewed the other provisions of the 
legislation. Those of us who are for universality of health care are 
not into just trying to find areas where we are going to penalize 
employers. We are interested in universality and cost containment and 
trying to develop some consumer protections.
  As far as that $10,000 requirement, I felt that if you are going to 
have--and we can come back to this in a moment--a standard benefit 
package and you are going to have to have some kind of remedy. I did 
not think, quite frankly, that $10,000 was an unreasonable penalty. I 
was persuaded in the spirit of bipartisanship that we ought to try and 
find some common ground. So I indicated, at least as far as this 
Senator is concerned--and, of course, all of the Members have views and 
their views are entitled to an equal amount of credit--that this was 
something that I could support.
  I was listening earlier to the debate on what we are really talking 
about here--on whether we are going to have a standard benefit package 
or whether we are not going to have a standard benefit package; whether 
the Mitchell bill is going to require it, or not require it, and then 
the reasons for it. Then there were charts pulled out to talk about 
what the costs were for the standard benefit package.
  It is interesting that what those figures basically reflect is the 
actuarial value of the benefit package that Members of the House and 
Senate have in this institution. Obviously, we know the values change 
in different parts of the country, so we know using those charts might 
alarm people in different parts of the country. They were intended to 
illustrate what the costs were in an actuarial way for programs that we 
have in the Congress of the United States, that we have as Senators, 
and to emphasize that we are trying to make those same kinds of 
benefits available to the American people.
  Ten million Americans have them, including Members of the House and 
of the Senate of the United States and the President of the United 
States. In the Mitchell bill, we give the same opportunity to working 
families and other families across this country so they will have these 
benefits, too. I pay $101 a month for a program as a Member of the U.S. 
Senate. I bet most Americans who are watching this program with very 
comprehensive protections--I doubt there are many other programs that 
are any better, and I think most Americans would say, ``I'd like to 
have what you have, Senator,'' or what any other Member here has.
  That is in the Mitchell bill. Just store that away as we are talking 
about all of these other factors and that program is evaluated because 
it costs differently for Federal employees in different parts of the 
country to reflect local costs. We have what is considered to be at 
least a standard package. It can vary a bit in terms of the copayments 
and deductibles, but the essential elements are there.
  Now we have a debate on the question of the role; why are we 
requiring a standard package and raising the serious question of 
whether any bill at all ought to have a standard package.
  I was somewhat interested in the remarks of my friend from Oregon who 
was the principal sponsor of President Nixon's program, which had a 
standard package. As one of the principal cosponsors of that program, I 
do not remember him saying at that time, as it was being debated and 
discussed, ``Oh, no, we don't want a standard package.'' That was an 
essential part of the Nixon program. But time moves on, and we have to 
consider that.
  Then I was interested to hear my friend from Oklahoma, Senator 
Nickles, say, ``We don't want a standard benefit package. How are we 
going to deal with the problems that many of the businesses are going 
to have to deal with?''
  So we looked through the Nickles legislation, cosponsored by 25 
Republicans, and we found out that it outlines a standard benefit 
package on page 33. I referenced this in some earlier comments. The 
Nickles legislation talks about providing for all necessary acute 
medical care described in subsection B; it talks about physician 
services; it talks about patient cost sharing, deductibles and 
copayments. He has a standard benefit package effectively described in 
words. And his legislation said that you had better conform with his 
standard benefit package or else you will not get the favorable tax 
treatment. The message better go out to all Americans that unless you 
have the Nickles proposal and his standard benefit package, your taxes 
are going to go up. The message better warn every American that the 
only way to keep their taxes down is to adhere to the Nickles standard 
benefit package.
  It is so interesting how some people use these hot-button items like 
taxes, the Mitchell program on taxes. I think most of us believe that, 
with $68 billion a year in health care costs that are directly related 
to smoking, there ought to be some increase in taxes relating to 
cigarettes.
  Well, here it is, right here in the Nickles proposal. Unless you 
provide the Nickles standard benefit package outlined in the Nickles 
bill with 25 Republican cosponsors, you do not get the tax 
consideration. And yet, they say, isn't it terrible under Mitchell when 
they say you have to provide the standard package, make sure you make 
it available to consumers, because if you do not conform with the law, 
there will be a penalty. And now under the Nickles proposal, if you do 
not do exactly what Senator Nickles wants you to do, you are not 
eligible for the favorable tax considerations and it will continue to 
go up.
  Now we look over to what happens in the Chafee proposal.
  Mr. NICKLES. Will the Senator yield?
  Mr. KENNEDY. When I finish. I will be a few minutes and then I will 
be glad to yield.
  On S. 70, on the Chafee proposal, each plan must offer one or more of 
the following: Standard benefits package or a catastrophic package. 
That is on page 89, and that is section 1301.
  I am going to be interested in how Senator Chafee is going to do it, 
because if you do not conform with the Chafee proposal, you pay $100 a 
day in penalties. Is that not interesting, $100 a day in penalties 
under the Chafee proposal? That could certainly add up.
  Many of us have been willing, as a matter of conformity, to say, 
``All right, we will eliminate the $10,000.'' But yet under the Chafee 
proposal, it provides under the standard package a catastrophic 
package. It has covered items: Medical surgical services, medical 
equipment, prescription drugs, preventive services, rehabilitation 
services, substance abuse services, hospitals services, emergency 
transportation, and it goes on and on.
  If you do not conform with his proposal, you are penalized.
  And under Breaux-Durenberger, you must offer the uniform set of 
effective benefits, and that is effectively a standard benefit package. 
I am not surprised, Mr. President.
  One of the thoughtful members of our community on health policy, 
Alain Enthoven, has followed these issues closely, and there may be 
those of us who differ with some aspects of it, but we have enormous 
respect for Mr. Enthoven. He served in the Defense Department in the 
early 1960's. I can remember his very considerable public service in 
the Defense Department.
  He has taken on this issue and written extensively about how to reach 
universal health care. I have had the opportunity to listen to him and 
to read his comments.
  He has been very much involved, I think, in helping to shape the 
thinking of many Members. Here is Alain Enthoven:

       There are powerful reasons for as much standardization as 
     possible.

  This is the free marketeer.

       The first is to facilitate value for money comparisons and 
     to focus comparisons on price and quality. The second is to 
     combat market segmentation, the division of the market into 
     groups of subscribers who make choices based on what each 
     plan covers, such as mental health, efficient care rather 
     than price.
       The third is to reassure people that it is financially safe 
     to switch plans for a lower price, with the knowledge that 
     lower-price plans do not realize savings by creating hidden 
     gaps in coverage.

  Hidden gaps in coverage. Hidden gaps in coverage. That is the point 
that the Senator from South Dakota has made. That is the point which 
other Members have made, the hidden gaps in coverage.
  What are those hidden gaps? Those are the gaps which exclude from the 
prenatal services any complications for children for the first 10 days 
after birth. Mr. President, 93 percent of infants' health needs come 
when? Interesting. The first 10 days after birth. Those are the kinds 
of life limits, those are the other kinds of exclusions, the hidden 
lines, the fine print, all of the things that we have talked about 
which our Republican friends have talked about, which we have talked 
about over here, all of which I thought about as we listened to those 
eloquent statements for the past few days--talking about eliminating 
preexisting conditions, eliminating the kinds of unfairness in the 
various standards under insurance reform, that all of us were 
attempting to try to address, that Alain Enthoven, who is one of the 
key thinkers in terms of the whole market force approach on health 
care, has identified as one of the very great dangers.
  Mr. DASCHLE. Will the Senator yield for just a minute?
  Mr. KENNEDY. I will be glad to yield and then I was asked to yield 
over here. I will yield here, just make a very brief final concluding 
comment, and then either yield the floor or respond.
  Mr. DASCHLE. I would only ask the Senator from Massachusetts whether 
Mr. Enthoven also mentioned that part of the cost shifting occurs 
through lifetime limits? The Senator mentioned the lifetime limit 
problem. What happens when people bump up against lifetime limits? They 
have catastrophic illnesses with costs that their insurance plans do 
not cover. Who pays for this? Is it the taxpayer? Is it the insurance 
company? Is it the individual? Is it the small business? Is it another 
family? Somebody is going to pay for those costs.
  So ending cost shifting is an added benefit in having coverage 
delineated in all health insurance policies, is it not? Unless you 
eliminate these fine print provisions, unless you eliminate things like 
lifetime limits, do you not continue to prolong the cost shifting that 
goes on in the system today?
  Mr. KENNEDY. The Senator is absolutely correct. When you begin to 
have these exceptions, and these loopholes written into it, and then 
you run into these other kinds of costs associated with these illnesses 
and sicknesses, someone ends up paying for it. And it will be those 
that have played the game by the rules and received the standard 
benefit package.
  I see others waiting, and the time is moving along, so let me just be 
brief in a final comment or two.
  The logic that we have heard from our friends on the other side of 
the aisle is basically the same logic that was heard in the Senate 
years and years ago when the Senate was considering the child labor 
laws. Why should we here in the Senate take action to protect children? 
Why should we? It is an argument today you find difficult for even the 
best of Members to try and be able to make. No one would absolutely buy 
it.
  You read the history. Do we know something here on the floor of the 
Senate that people do not know back in local communities? The same 
argument. The same argument was made in the debate on the lemon laws. 
Why should we be establishing some standards? If the purchaser of an 
automobile drives it out of the lot and it falls apart, why should we 
care anymore? Why should we make sure that the representations that are 
made to that consumer be accurate in terms of the sale of a particular 
commodity? Is that so unusual? The same arguments are being made over 
here. They say, look, I bet we could get people to work below the 
minimum wage. Why do we say that we want $4.25 an hour to be a minimum 
wage? The reason that we do is we say we are a caring society and we 
believe that men and women who want to work 40 hours a week, 52 weeks 
in the year ought to be able to have sufficient revenue to live in some 
dignity and some peace with a roof over their house and food on their 
table and be able to afford a mortgage.
  We do not say, why do we establish that floor? Republicans and 
Democrats alike have moved the minimum wage up. We are not saying we 
can find people that will work for a buck an hour and if they want to 
go for a buck an hour why not let them work for a buck an hour. Why 
should we in the Congress interfere with that? And if they want to 
exploit children, why not let them do it? Why should we in the Congress 
do it? And if someone wants to sell a lousy car, why not let them do 
it? Why should we in the Senate provide protection?
  It is the exact same argument, Mr. President. What we are 
establishing is the standard benefit package. And it is interesting, 
when we were discussing and debating this issue in our Labor and Human 
Resources Committee, the principal difference between Republican and 
Democrat was not essentially what was going to be in it but whether we 
were going to outline it in detail or describe what was going to be in 
it and give greater flexibility to the national health boards so that 
there could be adjustments and squeezing of those elements in case of 
the economic exigencies that might occur.
  But we did not have any debate, any real discussion about the nature 
of the preventive services or hospitalization. There may be some 
difference in terms of some of the aspects of mental health. But we did 
have agreement conceptually about what should be in that standard 
package.
  To hear in the Chamber of the Senate this afternoon, when we are just 
entering this program, that those who have been either principal 
sponsors or cosponsors of legislation, piece after piece of legislation 
going back historically even to the 1970's, who have supported a 
standard benefit package, come out and say, well, we really do not need 
it, we are not going to provide those protections, Mr. President, we 
know the reasons for that in terms of providing the protection so that 
the consumers can have real choice, so that they are able to compare, 
so that they will be able to compare quality, so that they will be able 
to do the evaluation on the basis of medical report cards, so they can 
talk to other consumers and find out whether they are getting good 
quality, so that there is no fine print in there, so that they will 
know what the real costs are, so they will know the various elements of 
that program. It can be a standard package. You can have different 
deductibles. You can have different co-pays. You can have different 
features, but you and I know the competition will not be on the basis 
of the standard opinion. It will on the delivery of services, the 
efficiency of the services and the quality of the services. And that is 
what the consumer ought to have the ability to buy.
  I will be glad to yield briefly, and then I see two or three of my 
colleagues on the floor, to try to respond.
  Mr. PACKWOOD. Mr. President, is the Senator done?
  The PRESIDING OFFICER. The Senator from Oregon.
  Mr. PACKWOOD. Mr. President, how much time would the Senator from New 
Hampshire like?
  Mr. GREGG. Ten minutes.
  Mr. PACKWOOD. I yield 10 minutes to the Senator from New Hampshire.
  The PRESIDING OFFICER. The Senator from New Hampshire is recognized 
for 10 minutes.
  Mr. GREGG. I thank you very much, Mr. President.
  We have just heard a speech by the senior Senator from Massachusetts 
which has been one which really has not been material to the issue at 
hand, which is not too surprising because when you consider what has 
happened here it is that a point within the bill has been discovered, 
of which there are, I suspect, hundreds like this, that has a 
devastating impact on the American people and on the way they relate to 
their Government, a $10,000 fine that could be assessed against up to 
200 million Americans if they refuse to follow the dictates of a small 
cadre of bureaucrats directed by people here in Washington. People 
would be outraged, and they are outraged when they learn of this.
  So when it is discovered and brought to light, it is immediately 
abandoned because the folks who put this language in here recognize 
that it is not defensible in the public eye. That is, of course, what 
the debate over the last few days has been about, trying to analyze 
what is in this massive document, which will have a dramatic impact on 
the day-to-day lives of Americans, about which we have not been 
told. Regrettably, there is a lot of it in here.

  The Senator from Oregon used the nice story, the very fine story, 
about the golden spoons being discovered now. I would look at it more 
as something my children are involved in recently that I have noticed. 
They bring these pictures home. I think they are called Magic Eye 
pictures. You hold them up, and they are a maze of different designs. 
As you move that design closer to you or back from you, you suddenly 
see the pictures within the design. I understand this is a best selling 
book, called Magic Eye.
  That is what this it. That is what it takes to use this document. You 
have to use a Magic Eye approach. As you move it closer to you under 
section 1,300, what you see is a great, big, huge truck coming at you 
which is going to run you over if you happen to be an employer in this 
country who wants to maintain a plan that is not consistent with the 
plan that you were told to comply with by some bureaucrat here in 
Washington.
  Let me point out some other things that this fine applied to that has 
not been mentioned. We have been talking about the standard benefits 
package. This is just one of the items that this hit before it was 
discovered.
  Think of some the other things this fine did. There is a section 
1331, and a $10,000 fine will apply, if you as a commuter go to another 
job in another community-rated area and do not take the community-rated 
plan in that area. So what does that mean in real terms? It means that 
you are going to get stuck with $10,000?
  What it means is, if Mary Smith and John Smith lived in Nashua, NH, 
and John Smith worked in Boston and Mary Smith worked outside of 
Boston, in Nashua, which would be reasonable--and I suspect it would be 
reasonable in many parts of this country--they would be in two 
different community-rated areas. If John Smith wanted to be on Mary 
Smith's policy in Nashua, because it was a cheaper policy or because 
they were more comfortable with that provider group in Nashua, he would 
be subject to a $10,000 fine. He does not have that option. He has to 
take the plan in Boston.
  That is one point where the $10,000 fine kicks in. It does not happen 
to be mentioned. It just sort of appears.
  Another point where the $10,000 fine appears to kick in, under 
section 1308, under this section, there is some language put in for the 
purposes of litigation relative to losing benefits. The way this works, 
the section establishes two different standards of proof and requires 
that courts without the requirement of any additional showing to 
promptly order the retiree's benefits to be reinstated. The practical 
effect of this is that the Secretary of Labor could fine a judge, who 
did not comply with this section, $10,000.
  There is another point that this $10,000 fine affects if you are 
running a cooperative, and there are a whole series of obligations 
which you need to undertake, and you do not undertake. There are 
sections 1322, 1323, and 1324. They involve things like membership 
agreements, agreements with plans, allowable fees. Under this section, 
the cooperative could be subject to a $10,000 fine for every member 
that it had in it--remember, a cooperative could have hundreds of 
thousands of people in it--if it did not meet one of these technical 
requirements on an issue of membership agreements.
  The list really goes on and on in this area. For example, one of the 
ironies is the way this $10,000 fine was designed. It is a compliance 
obligation which is enforced by the Secretary of Labor against 
regulations created by the Health and Human Services Secretary. The 
practical effect of that is that the Secretary of Labor could 
theoretically fine the Health and Human Services Secretary for not 
going forward in a manner that the Secretary of Labor thought was 
reasonable. I do not think that would happen. But that is the way this 
is drafted.
  The point I am making here is that within the language of this bill 
there are many complex, unintended consequences generated by this 
language. There is one little paragraph that is in here that the pond 
into which this stone has been dropped of a $10,000 fine causes ripples 
to occur throughout the society generally, and they are unanticipated. 
Yet, they are in this bill.
  So when we go through this bill section by section, and ask let us 
take a harder look at this section, let us take a harder look at that 
section. I think it is a reasonable request. It is not reasonable for 
other people to say, ``Well, you are just delaying the process.'' In 
fact, we are not delaying the process. What we are trying to do is 
point out to the American people some of the very serious flaws in this 
piece of legislation.
  I think it is nice that when we point these out on occasion and raise 
them as an amendment, the drafters on the other side recognize 
immediately that the golden spoon has been found in their pocket, that 
the picture has come into focus on the Magic Eye, and that people have 
figured out what they are up to.
  What they are up to in this $10,000 fine is essentially to create an 
act of intimidation and coercion against employers in this country, the 
purpose of which is to make it unalterably clear that if you do not 
comply with the bureaucratically demanded health care structure, you 
would basically be put out of business or be threatened with such a 
fine of such an extended nature that your business and the viability of 
your business would be seriously threatened.
  So that is the issue, the issue of the fact that you have a situation 
where Government has reached the point where in order to assert this 
plan, it feels it must intimidate, it feels it must coerce by 
threatening this level of fine. It is a philosophy that runs through 
this entire bill, Mr. President, a philosophy of we know best here in 
Washington. If you do not agree with us, that is because you are not 
just smart enough to understand it, or compassionate enough to sense 
it. And therefore, please American people, stand back, and let us 
design your lives for you, and specifically let us design this health 
care plan. If you do not stand back, we are going to run over you with 
that truck that just appeared as a result of analyzing the bill that 
looks like a Magic Eye.
  I yield the floor.
  Mr. PACKWOOD addressed the Chair.
  The PRESIDING OFFICER (Mr. Conrad). The Senator from Oregon.
  Mr. PACKWOOD. Mr. President, I know the Senator from New York wants 
to yield to the Senator from Delaware. I wonder if 2 minutes might be 
given to Senator Nickles to respond.
  The PRESIDING OFFICER. The Senator from Oklahoma.
  Mr. NICKLES. Mr. President, I ask unanimous consent that Senators 
Burns, Exon, Murkowski, and Smith be added as cosponsors.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. NICKLES. Mr. President, the Senator from Massachusetts has 
alluded to the bill that I am the principal cosponsor of as the 
consumer choice bill, and said it has a standard benefits package. That 
is not correct. What we did in this bill, just to clarify, is we 
replaced the tax exemption that people now have for their health care 
plans with tax credits. But we said if people want to get tax credits 
for health care, they have to have at least a catastrophic health 
insurance plan that covered primarily hospital and physician patients. 
We did not define everything else but they had to have this.
  The individuals could have a maximum choice. It would be the 
individuals that would choose. That is kind of a new concept. They 
would not have to take what the employer offered. They could choose 
anything they wanted. But, they have to have it to have the tax credit. 
They to have to have the health care. We had a nice tax credit, a 25-
percent tax credit, so the Federal Government would help everybody.
  Frankly, the Federal Government uses the Tax Code right now to 
subsidize your health care by saying you do not have to pay taxes on it 
if you are an employer that subsidizes. A lot of people do not have a 
job. So they do not get any benefit from the tax credit. That is not 
fair.
  We said the tax benefits really should not be dependent on whether or 
not somebody has a job with a generous employer. They should be 
universal to everyone, just like we give tax benefits to people who buy 
a home. We do not define the size of the home, but we allow them to 
deduct the interest expense. But it has to be on the home.
  Likewise, we said only a tax credit. We are willing to help everybody 
buy health care. We will give everybody a tax credit. But they have to 
buy health care with it, and in health care we said hospital and 
physician services.
  They had an unlimited number of options. That is unlike the proposal 
that we have before us, the Mitchell proposal. That is unlike the 
proposal we had before us that says it is illegal for you to offer 
different benefits.
  The Government mandates a very expensive package. You have to have 
this. If you do not have the benefit in your package, you are out of 
luck, or you are subjected to fines and penalties and excessive taxes.
  That is not what we had. We said we will give everybody a tax credit, 
and we will not define your package. You can choose your package. That 
is consumer choice.
  I think that is significant reform.
  I thank my colleague.
  Mr. MOYNIHAN. Mr. President, I yield 30 minutes to the distinguished 
chairman from Delaware, who wishes to address the Senate on another 
matter, but one of equal urgency.
  The PRESIDING OFFICER (Mr. Daschle). The Senator from Delaware is 
recognized.

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