[Congressional Record Volume 140, Number 118 (Friday, August 19, 1994)]
[Senate]
[Page S]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: August 19, 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 PRESIDENT pro tempore. The Senator from Texas [Mrs. Hutchison] is 
recognized.
  Mrs. HUTCHISON. Thank you, Mr. President.
  I do want to say to my colleague from Delaware that I do appreciate 
so much that he strengthened the bill in conference on that point, 
because it is a sore point. In addition to South Dakota, I know 
certainly it is a sore point in Texas, too.
  The recognition that we must make sure that people have fair warning 
when people with this background move into a neighborhood and that we 
must protect our innocent people at all cost is very gratifying, and I 
appreciate the efforts on behalf of the victims of sexual assault for 
the efforts of the Senator from Delaware.


                           Amendment No. 2571

  (Purpose: To strike the surcharge under a federally operated system)

  Mrs. HUTCHISON. Mr. President, I send an amendment to the desk on 
behalf of myself and Senator Gregg and ask for its immediate 
consideration.
  The PRESIDENT pro tempore. The clerk will report the amendment.
  The legislative clerk read as follows:

       The Senator from Texas [Mrs. Hutchison], for herself and 
     Mr. Gregg, proposes an amendment numbered 2571.

  The amendment is as follows:

       On page 182, strike lines 11 through 19.

  Mrs. HUTCHISON. Mr. President, my amendment will remedy one of the 
many harmful effects of the pending Mitchell bill.
  It would strike from the bill the takeover tax.
  We have discussed a number of issues during the past week, but a 
regular theme has been the contention by many of us that the Mitchell 
bill constitutes a Government takeover of the American health care 
system to which we can point to a number of examples and the frequent 
denial of this fact by supporters of the bill often without further 
elaboration.
  But, in fact, Mr. President, 55 new bureaucracies would determine 
what benefit package would be required and how they will be 
administered.
  Just to give you a few citations of the 55 new bureaucracies there 
are: The National Health Benefits Board; the Health Insurance 
Purchasing Cooperatives set up by the States or local governments; 
Health Insurance Purchasing Cooperatives set up by the Federal Office 
of Personnel Management; National Guaranty Fund for Multi-state Self-
insured Plans; the Assistant Secretary for Office of Rural Health 
Policy; the Federal Accreditation, Certification and Enforcement [ACE] 
Program; the Health Plan Service Areas; State Risk Adjustment 
Organization; Advisory Committee for Risk Adjustment Program; State 
Guaranty Funds; State Public Access Sites for Medically Underserved 
Areas; Prescription Drug Payment Review Commission, the Long-term Care 
Screening Agencies; the National Council on Graduate Medical Education; 
and the National Council on Graduate Nurse Training.
  Those are just a few of the 55, Mr. President. I will not recite the 
whole list, but this reason alone is frightening enough. The Mitchell 
bill authorizes the Secretary of Health and Human Services to terminate 
a State plan if she finds it does not meet the Mitchell bill test, and 
bring in the Washington troops to take over. The Secretary of HHS could 
then charge every community-rated plan participant in that State 15 
percent of the cost of their health insurance as payment for the 
Federal takeover.
  I do not mean anything against the current Secretary when I say this 
because I have no knowledge of whether she or any of her successors 
would crave such authority. But when I speak of the American people who 
would pay that tax, I do not speak of them hypothetically. I know they 
cannot bear this burden easily.
  A State loses control of its residents' health care if the Secretary 
finds that the State plan ``substantially jeopardizes'' the ability of 
eligible individuals in the State to obtain coverage of the standard 
benefit package.
  In my view, there should not be a State plan to examine, there should 
not be a standard benefit package to compare, and the Federal official 
should certainly not be able to run over a State and tax it so heavily.
  Are States likely to pass the test? Well, I have served in two 
branches of my State government--legislative and executive--and I can 
tell you that burdens, the burdens imposed by Washington, are one of 
the great roadblocks to effective State government.
  This bill imposes more than 177 new responsibilities on every State. 
I know the harm of unfunded Federal mandates. I do not think the 
Framers of our Constitution envisioned States as the meek servants of 
the Federal Government. In fact, I know they did not. I do not think 
they saw people as hapless clients of the State. We began as a nation 
of people who constitute a State which formed a Federal Union and 
delegated to it certain powers. The Mitchell bill stands this tradition 
on its head to create trickle-down democracy and trickle-down health 
care.
  I ask again: Are States likely to pass the test? We could ask our 
friends in the Congressional Budget Office. They report:

       It is doubtful that all States would be ready to assume 
     their new responsibilities in the timeframe envisioned in 
     this proposal.

  Now, that is hardly surprising, when you think about it. State 
governments, which have their own problems, plus a whole series of 
mandates from Washington already, scramble to set up the new health 
care purchasing cooperatives, oversee their work, and make sure that 
everyone's care matches the prescriptions laid down by the Mitchell 
bill and all of the Federal Commissions. And they set up a complaint 
mechanism for each community-rated area. It is easy to see why the 
Congressional Budget Office says their success on the job is doubtful.
  The States' responsibilities in this bill are overwhelming. Let me 
cite some of the more burdensome tasks that I see in this bill that are 
being asked of our States.
  States must determine eligibility for the Mitchell bill's new premium 
subsidy program. This program has three new subsidies: Full subsidies 
for low-income individuals up to 100 percent to 200 percent of poverty; 
full subsidies for children under 19 and pregnant women for 3 months 
after pregnancy, up to 15 percent of poverty, phased out to 300 percent 
of poverty; and subsidies for the unemployed.
  The Congressional Budget Office says that determining eligibility for 
the subsidies will be an enormous task for States, made more 
complicated by the three different subsidy programs for premiums that 
would be in effect.
  States must also offer wraparound coverage; that is, continue to 
offer any Medicaid service that is not offered in a Medicaid 
recipient's standard benefits package.
  Further, States set Medicaid income eligibility thresholds within 
Federal parameters. These thresholds differ from those of the subsidy 
program, so it will make it a little more difficult.
  The subsidy program could be a tremendous undertaking for other 
reasons, such as confirming involuntary terminations as to unemployment 
subsidies and in verifying State residency and income claims.
  States must have subsidy recipients submit revised applications 
whenever changes in family income occur, including employment status of 
family members.
  States must also conduct end-of-year reconciliation by requiring 
subsidy recipients to submit year-end income verification statements 
and determining what subsidies they should have received. States then 
pay deficit or collect excess.
  The Congressional Budget Office comments that ``the end-of-year 
subsidy reconciliation process in which the income of a subsidized 
family would be checked to ensure that the family received the 
appropriate premium subsidy * * * would be a major undertaking.''
  Once eligibility is determined for subsidies, the States must make 
the premium payments to the plans and then collect the Federal 
reimbursement--reimbursement paid at times and in a manner that the 
Secretary has not yet determined. These could be huge cash flow 
problems for our States.
  And, as State treasurer, I know that managing cash flow is one of the 
greatest of all the burdens of our State government. We would add to 
that burden by having all of these payments and excesses every month, 
or maybe every 3 months, or maybe every half year. It will be a 
terrible burden to manage the cash flow.
  States must draw boundaries for community-rated areas, make sure 
there are at least 250,000 people in each area, and conduct open 
enrollment periods.
  Then States must establish complaint review offices for every 
community-rated area, maintain alternative dispute resolution methods 
in addition to that, and establish an early resolution program in each 
complaint review office.
  States must establish fair marketing laws and standards, distribute 
enrollment materials and information on plans and cooperatives, and 
establish consumer information advocacy centers.
  If that is not enough, States must establish data systems, and ensure 
that medical information data elements are transferred to health plans 
and health care providers in accordance with the Federal standards.
  Here are some other new State responsibilities:
  The Mitchell plan imposes a 1.75-percent tax on all health or 
accident premium payments in the country. This would have to be 
administered by the States.
  The Mitchell plan authorizes States to assess a 1-percent tax on in-
State premium payments to pay for the administration of this subsidy 
program. This amounts to saying it is OK for States to do what they 
would have a right to do anyway, to pay for this unfunded mandate, an 
unfunded mandate that the Congressional Budget Office estimates could 
cost States $50 billion over 10 years.
  States have always had the ability to assess premium taxes. They do 
not need sanction from the Federal Government to do so. In fact, this 
section gives no new authority, but it really sort of limits a State's 
flexibility.
  These are only a fraction, Mr. President, of the 177 State 
responsibilities under the Mitchell plan. Many of them are clearly a 
burden on our States administratively, as well as financially.
  Mr. GREGG. Will the Senator from Texas yield for a question?
  Mrs. HUTCHISON. I am happy to yield to the former Governor of New 
Hampshire.
  Mr. GREGG. I think, first, the Senator has brought forward an 
amendment which is very important, because, as she has listed and 
pointed out, this bill is filled with mandates put on the States, and 
if the States do not comply, the enforcement mechanism is incredibly 
onerous.
  I was supplied a chart here that, assuming an annual premium of 
$2,000, the effect of the tax, the premium tax, which you are trying to 
eliminate, on the citizens of the States, would be, if it were 
assessed--in other words, as I understand it, if the Secretary of HHS 
comes in and determines the State violated some mandates they sent to 
the State, would not comply with one of these ridiculous 
recommendations put on the States, the Secretary of HHS has a right to 
go into a State and take over the State's health delivery system and 
assess a 15 percent tax. And you are eliminating that 15-percent 
premium tax, which is a very good amendment.
  But as I am reading this language, the effect of this tax, assuming 
an annual premium of $2,000, it would be a potential of $2.5 billion of 
new taxes on the citizens of Texas; it would be $169 million of new 
taxes on the citizens of New Hampshire.
  Let us take a couple other States here.
  For the State of Illinois, it would be a $1.8 billion potential new 
tax on the citizens of Illinois.
  There is a total potential tax here of $39 billion being assessed 
against the citizens of a State because they were unwilling to follow 
these outrageous directives which the Senator has just listed. Is that 
correct? Is that what would happen as a result of this, if this 
language is not changed?
  Mrs. HUTCHISON. The Senator from New Hampshire is absolutely correct. 
When you put all the taxes together that could be assessed if the 
States cannot meet these mandates, almost $40 billion. That is in 1 
year.
  Mr. GREGG. If the Senator from Texas will yield for an additional 
question, I would simply ask where can language like this have come 
from? What could have been in somebody's mind who would put in place 
language which would put that type of a gun to the head of a State 
government and the citizens of a State because they did not want to 
follow some directive of these new 177 directives? Does the Senator 
have any idea where this came from?
  Mrs. HUTCHISON. I cannot say that I knew what the people who were 
writing this bill were thinking. But I can say I do not think whoever 
decided that this was the way to go had, probably, ever served in State 
government as has the Senator from New Hampshire and as I have. They 
have probably not met the cash flow forecasts and had to go out and 
borrow money just to meet cash flow deficits--not real deficits but 
cash flow deficits. Perhaps the people who wrote this bill did not 
realize that if we have a quarterly payment and we have to put that 
money out and we do not get our Federal reimbursement for 60 days--
which is a possibility if we are lucky--that a State would have to go 
out and borrow money to be able to cover these payments.
  It is just something that I do not think any of us who have been in 
State government would want to happen in our States. That is why I am 
pleased the Senator is cosponsoring this amendment, because I know he 
has had to meet those cash flow deficits as well.
  Mr. GREGG. Mr. President, if the Senator will yield for just one more 
question--first, I want to congratulate her for this amendment. My 
question is, how many more of these little nuggets are in this 1,400-
page bill that we are going to find? We found a $10,000-per-person fine 
that was eliminated unanimously after it was discovered. We have had a 
couple of other amendments that have been unanimous, because even the 
majority leader came forward and eliminated some language in here that 
said the people who did not pay the premiums still had to be carried on 
their insurance policy by the insurance carrier. I guess he did not 
know it was in this bill. Even he knocked that one out. How many more? 
But I certainly congratulate the Senator from Texas for finding this 
one and bringing it to our attention. I guess it is going to be our 
business as a Senate to discover the rest.
  Mr. ROCKEFELLER. Will the Senator yield?
  Mrs. HUTCHISON. I appreciate the Senator from New Hampshire pointing 
out that the 1,400-page bill has already been amended several times. 
And it seems that the amendments have been put on because there were 
things in the bill that we probably did not know were there, or if we 
did, we did not know what the impact of that part of the bill would be. 
Therefore, we are amending this bill when we really do not feel that we 
have had a chance to study it adequately to make sure we are not doing 
something to the American people and our health care system that we 
would not absolutely understand and absolutely know.
  I think that is a very good point, and I appreciate the Senator from 
New Hampshire making that point.
  Mr. ROCKEFELLER. Will the Senator from Texas allow the Senator from 
West Virginia to ask a question on this matter to the Senator from New 
Hampshire?
  Mrs. HUTCHISON. I will be happy to yield to the Senator from West 
Virginia to ask a question of the Senator from New Hampshire, if the 
Senator from New Hampshire is willing to take such a question.
  Mr. GREGG. I make a parliamentary inquiry. I believe I have to direct 
any answer through the Senator from Texas; is that correct? I ask the 
Chair's advisement.
  The PRESIDENT pro tempore. Is there objection to the Senator from 
Texas yielding to the Senator from West Virginia for purposes of his 
asking a question of the Senator from New Hampshire and with the 
Senator from Texas retaining the right to the floor?
  The Chair hears no objection.
  Mr. ROCKEFELLER. I thank the distinguished Presiding Officer, the 
Senator from West Virginia.
  I say to the Senator from Texas, the reason I ask this question of 
the Senator from New Hampshire is that the Senator from New Hampshire, 
like myself, has been a Governor. I was a Governor for 8 years. I 
believe the Senator from New Hampshire was a Governor for at least two 
terms, 4 years. The Senator from New Hampshire is very much aware that 
in the operation of States, which the Senator has been discussing, 
there are a lot of demands that Governors have to make. And the word 
``mandate'' is a word that frequently affects a Governor. A Governor 
must do these things.
  The Senator from Texas was discussing the ``mandates'' or 
requirements put upon the States by this bill. I just wonder if the 
Senator from New Hampshire is aware, No. 1, that what is being 
discussed saves $29 billion?
  No. 2, in the Chafee-Dole bill, there are a series of mandates: The 
Federal Department of Health and Human Services takes over if the State 
program fails to meet the requirements of the act; the Secretary shall, 
after notice, terminate such a program. There is power for the 
Secretary, and no role for the State.
  Then in the Nickles-Dole bill, The Federal Department of Health and 
Human Services takes over if the State program fails to meet the 
requirements of the act again. The Secretary was given very, very broad 
discretion in the Packwood-Nixon bill back in 1974. Of course, the 
employer and State mandates that were in that bill are very well known. 
If there are mandates one can persuasively ask: What is coming next? 
How many more will there be? But I think as a former Governor, the 
Senator from New Hampshire and the Senator from West Virginia both 
understand that one does not make large programs work entirely without 
direction and the Republican plans contain similar requirements of the 
States and contain similar mandates.
  Mr. GREGG. I appreciate the Senator's question. I know his 
sensitivity to this, having served as Governor of the great State of 
West Virginia. I have also had the honor to serve as Governor of New 
Hampshire. We do recognize when the Federal Government decides on a 
policy that more often than not it comes in and says to the States, 
``You do it or we are going to put some sort of gun to your head.'' 
Usually it is a fiscal gun.
  But I think the point in this amendment is that in this bill the 
expansion of responsibility on the State is geometric. It goes beyond 
anything I have ever seen before in the number of obligations that are 
put on the State: 177.
  Yesterday--and the Senator from West Virginia was kind enough to 
listen for a while--I spent considerable amounts of time going through 
some of the specifics. They are extraordinary in their responsibility 
and area of activity that the States would have to undertake. Small 
States like New Hampshire and I suspect West Virginia, even though it 
is obviously larger than New Hampshire, would have to incur massive 
amounts of expenses. And it really does not have any of the 
governmental infrastructure or know-how to be able to undertake and 
effectively address those responsibilities.
  Yes, the Dole bill has some of this language in it, too. I hope when 
we get to the Dole bill, if we are so fortunate, the Senator will join 
me in, maybe, offering an amendment to clean up that language.
  But the point of the Dole bill is that it is so much narrower in its 
obligations, what are put upon the States.
  Mr. ROCKEFELLER. The Chafee-Dole bill or Nickles-Dole bill? Which 
bill is the Senator referring to?
  Mr. GREGG. I am referring to the Packwood-Dole bill--the Chafee-Dole 
bill I was never a cosponsor of. Yes, they are in there. I do not think 
it is right to put these obligations on the States in that bill, 
either. But my point is that they really are minuscule, compared to the 
explosion that is in this bill.
  Yesterday I read through 177. I do not want to go through it again 
because it would be tedious and obviously the Senator is up to speed on 
them also because he sat through some of the discussion yesterday. But 
the cost is extraordinary. The Senator mentioned there is $29 billion 
savings to the States. I note the CBO said this bill is going to cost 
the States $50 billion to administer, that is just administer. I would 
say in the case of the State of New Hampshire, I asked our Health and 
Human Services people for an evaluation of the assessment that this was 
a money savings event for New Hampshire. They came out and said to me, 
talking about the Mitchell bill now, it is not a money-saving bill. 
Because of some unique measures they had not anticipated, since they 
did it from a national viewpoint and assessed each State on a national 
scale, but because of New Hampshire's situation it would be a money 
loser under the Mitchell bill. So my view is it is wrong for the 
Federal Government to assess all these additional obligations on the 
States and then come in and say if the State does not do them, we are 
going to assess the citizens of the State a 15-percent premium tax--
each citizen of the State can get hit with that 15 percent premium tax. 
Even if you accept the fact that the Federal Government should have 
some enforcement mechanism, why aim the gun at the poor citizens of the 
State? Why not at least just take out the Governor?
  Why not say the Governor shall comply, and if the Governor does not 
comply, then the Governor shall be responsible in some way? What the 
Senator from Texas has offered is an elimination of this 15-percent tax 
which flows to each individual in the State. Let us not hang each 
individual in the State, let us not hang them all because we feel that 
the Governor needs to be hanged because the Governor stood up for the 
States rights or something and decided they did not want to follow the 
177 mandates. I think the amendment of the Senator from Texas makes 
sense.
  Mr. ROCKEFELLER. I say to the Senator from New Hampshire, I 
understand what he is saying, and I appreciate the fact that he 
recognizes that a variety of bills, both Democratic and Republican, put 
requirements upon the States. They may differ as to the amount. You 
cannot make big programs work without some kind of structure.
  Mr. GREGG. I acknowledge that as a fact of life that there are going 
to be obligations throughout the State. The problem is this bill puts 
such new massive obligation on the States that they exceed anything I 
have seen before.
  More importantly, the thrust of the arguments of the Senator from 
Texas is, if the States do not comply, the penalty should not run to 
every citizen in the State with this premium tax surcharge. It should 
be rather a debate between the State government and the Federal 
Government, not a debate which puts a gun at the head of every citizen 
in the State and says, ``Because your State Governors decide to maybe 
make a stand on the issue of not wanting to get involved in labor 
reorganizations and hospitals reorganizations, you are going to be 
assessed with a tax.''
  Mr. ROCKEFELLER. I thank the Senator from Texas and the Senator from 
New Hampshire.
  Mr. GREGG. I thank the Senator from West Virginia for his courtesy, 
and the Senator from Texas for her indulgence.
  The PRESIDENT pro tempore. The Senator from Texas has the floor.
  Mrs. HUTCHISON. Mr. President, I am always glad to hear the former 
Governors, and I as a former State treasurer, talk about all the State 
mandates we give them and the inability to always pay for those. I will 
just submit that this is exacerbated by the fact that the timetable is 
also an onerous burden. All of this is required to be up and running by 
January 1, 1997, or the Federal Government steps in and charges 15 
percent to do it. That is only 1\1/2\ years after the Federal 
regulations are going to go into effect on July 1, 1995. The 
Congressional Budget Office calls compliance doubtful. I think the 
Congressional Budget Office is being kinder and gentler.
  This is trickle-down theory, no question about it. This is a top-down 
Federal approach to standards, rules, and regulations. The Federal 
Government promulgates Federal directives and the States administer the 
rules and regulations for the citizens to comply and pay for. This bill 
is doomed because it is going to have a failure rate by the States, and 
we are going to end up with a Federal-run health care system. The 
States cannot possibly meet these deadlines, and especially with only 
the minuscule amount of money that is given to them by us to try to get 
this up and going. It is massive. It is 177 new mandates that they must 
comply with in a year and a half.
  To all of my colleagues who keep trying to tell us that this bill is 
not a Government-run health care system, I just urge you to read this 
section. The 15-percent tax exposes the extent of State bureaucracy 
that would be established under the Mitchell bill. This tax illustrates 
the considerable Federal encroachment on the Mitchell plan. The 15-
percent tax in this bill indicates what the Mitchell group thinks it 
would cost to run this system, and it would be a huge tax. As my 
friend, the Senator from New Hampshire, says, it will be $40 billion if 
every State has to pay this kind of tax.
  Let us look at an average family. This provision will severely impact 
the hardworking middle class. Not only will the average family of four 
have to buy the standard benefits package, pay a 1.75-percent tax on 
their premium, possibly pay a 25-percent tax on their premium, but now 
if this provision is in place, these middle-class Americans may be 
subject to yet another 15-percent tax.
  So where does that leave an average family of four? The Heritage 
Foundation estimates that under the Mitchell bill, by the year 2002, 
after earning between $30,400 and $76,000, the premiums for an average 
family of four is estimated to cost over $8,600. And if you add the 15-
percent tax to their burden, it would be an additional $1,300, bringing 
the total cost of their premium to almost $10,000.
  If this family does not go beyond the standard benefits package, the 
CBO says the premium would be $5,883, plus the $102 for the 1.75-
percent tax, plus $882 for the 15-percent tax, for a total of almost 
$7,000.
  Everyone outside this Chamber knows that we are conducting a 
dangerous business. They feel we are playing with fire. They want us to 
slow down. Two-thirds of the American people want us to go home and 
start over next year. My office receives up to 2,500 calls per day, and 
they are 10 to 1 against--10 to 1. Some Members of this body may take 
our constituents for fools, but I do not. I think the American people 
are ahead of Congress on this issue, and this is not a new phenomenon.
  We are not anywhere close to a good bill now, and the more time that 
we spend with our constituents, the more we realize that the bill 
before us does not reflect their needs or their expectations.
  Mr. President, this is not federalism. This is paternalism. King 
George III said, We are going to govern you in the United States and we 
are going to charge you 15 percent for the privilege. We revere our 
forebears who threw off the yoke of an intrusive Government 
unresponsive to their local needs. Do we carry on this Government in 
their name only to gather up that liberty, hard won and precious, to 
have deadlines, Federal standards and commissions overtake this 
country. If we do so, I think we betray the independence that we fought 
for and I think we renounce the heritage that our forefathers and 
foremothers gave us. The States are not Federal creatures to be 
overruled. They are not to be bossed around, and they are not to be 
cast aside at will.
  President Reagan said, ``All of us need to be reminded that the 
Federal Government did not create the States, the States created the 
Federal Government.''
  My amendment will save our citizens from a 15-percent tax forced by 
the Federal Government, and it is a good amendment. I urge my 
colleagues to support it.
  Thank you, Mr. President. I yield the floor.
  The PRESIDENT pro tempore. The question is on the adoption of the 
amendment.
  Mr. ROCKEFELLER addressed the Chair.
  The PRESIDENT pro tempore. The Senator from West Virginia is 
recognized.
  Mr. ROCKEFELLER. Mr. President, will the Senator from Texas yield for 
an additional question?
  Mrs. HUTCHISON. I will yield, Mr. President.
  Mr. ROCKEFELLER. There was a point during the Senator's presentation 
that she was talking about paperwork, the kind that burdens all of us. 
And she referred to the standard benefit package. I wonder if the 
Senator has thought about the impact of having 1,500 different 
insurance companies with 1,500 different insurance forms. This junior 
Senator from West Virginia has been to see his own insurance records. 
Has the Senator from Texas been to see hers?
  Mrs. HUTCHISON. Have I been to see?
  Mr. ROCKEFELLER. Your actual health insurance records.
  Mrs. HUTCHISON. No, I have not had that experience, I am proud to 
say.
  Mr. ROCKEFELLER. It is a grim experience. I advise the Senator to do 
that because it shows the absolute proliferation of paperwork in our 
current medical system. You have forms from HCFA, from different 
insurance companies, forms from all over the country. I was literally 
unable to put my arms around them. You could not possibly have lifted 
my insurance records.
  Under the bill before us there will be a single form and all 
insurance companies would use it. It might be one page or it might be 
two pages. As a matter of fact, we already have a draft of it.
  Having a single form would save $9 billion over the cost of 1,500 
forms not to mention the inconvenience of the paperwork. I wonder if 
the Senator was aware of that?
  Mrs. HUTCHISON. I am aware of that. Let me say that I agree totally 
with the Senator from West Virginia that we should have standardized 
forms, and that is in the Dole bill, or it should be if it is not.
  Let me say that I think we can make great improvements, just as the 
one that the Senator has mentioned, without throwing out the whole 
system and without the massive Federal bureaucracy that is put in place 
by the Clinton plan or the Mitchell plan or some of the other plans 
that we have seen on this floor.
  One of those is the one that the Senator has just mentioned. A 
standardized form would make such a difference. It would bring the cost 
of health care down, so that the money being spent for that can go into 
better health care, for productive uses.
  But we do not have to throw out the system in order to have that kind 
of very good improvement to the health care system that we have now. 
That is why I am supporting a plan that would make improvements in our 
system. I think we need to do that, and we need to be committed to it. 
We do not need to walk away from it at all. But we do not have to have 
the massive Federal bureaucracy get involved to standardize forms.
  Mr. ROCKEFELLER. Mr. President, you do not need a Federal bureaucracy 
to create a single form. It is something that we would have the private 
insurance industry do. After all, all of our plan is to guarantee 
private health insurance. It has nothing to do with the Federal 
Government at all.
  But if I might just ask one further question of the distinguished 
Senator from Texas. Maybe the Senator could help me understand why in 
the Dole plan, with respect to the Federal employee health benefits 
provisions, says ``insurers may charge a 15 percent surcharge for 
enrollment.''
  This means that the American people will have to pay more than their 
Member of Congress for exactly the same plan.
  Now, that is on page 117 of Senator Dole's plan. And on page 85 of 
his plan, he allows insurance companies to add up to 15 percent in 
administrative charges to community-rated premiums.
  I am wondering how it is that the Senator finds this acceptable, in 
the Dole plan while she criticizes the Mitchell plan for having 
excessive administrative costs?
  Mrs. HUTCHISON. I appreciate the question from the Senator from West 
Virginia. We do not have the ``all plan,'' the Dole plan, on the floor. 
If we did, I think there would be some changes that we would all want 
to make in the Dole plan. I will just say, though, that starting with 
the Dole plan would give us a base that we could easily take from and 
enhance the bill and make it better. I certainly think that we have 
more choices in the Dole plan. Having access to the Federal system is 
something I am totally committed to by our small businesses. I think 
that is a very good opportunity that we should give to people.
  When we have the Dole plan on the floor, I hope that we can do that 
because I think if we could start from a base of the Dole plan, where 
it is not 1,400 pages with 55 new Federal bureaucracies and 177 new 
State mandates, we will have no State mandates in the Dole plan. We 
will have some subsidy boards that will determine the subsidies, but 
nothing like 177 new mandates. We will not be creating a big Federal 
bureaucracy.
  Let us put the Dole plan on the floor and let us talk about some of 
the nips and tucks that we would be able to take in that plan to make 
it better.
  But for Heaven's sake, let us not start from the top and trickle down 
through 1,400 pages and try to make a good bill out of a bill that just 
is not workable.
  Mr. ROCKEFELLER. To the Senator from Texas, if she would be patient 
once again, I am trying to be fair to each of us and to each other's 
plans as we select areas of criticism.
  We are about to agree to the Hutchison amendment. That says that we 
reflect the Senator's concern, respond to her concern, acknowledge her 
concern.
  The Medicaid cuts called for by the Dole plan will shift $35 billion 
from the Federal deficit to State budgets over 5 years, and I think in 
the case of Texas, that comes to about $2 billion. That is awkward for 
the Senator from Texas. I point that out.
  I hope that she will join with me in understanding that as we trade 
words back and forth, we know the American people want and expect a 
health care reform bill that is signed by the President; that we are in 
fact deeply committed to that; we were sent here for that, and we 
intend to do it. I thank the Senator from Texas for her extraordinary 
patience.
  Mrs. HUTCHISON. I just say in response to the Senator from West 
Virginia that I would be delighted if we could put the Dole bill before 
the Chamber and let us work from that as a base, because if it is, 
indeed, the Senator's desire to have a health care reform bill that we 
can pass, that we can be proud of, and know that it is going to be good 
for this country, we can start from the Dole bill and we can refine it, 
and we can come out with a very good plan.
  I do not think, however, that we can start from the Mitchell bill, 
which is such a drastic change, which has the takeover mechanisms that 
we have already found need to be amended in so many ways to put it into 
shape, and it is not acceptable to the American people. I think that is 
clear from the massive calls we are getting in our offices. And I would 
just say that if the Senator really wants a plan, let us put the Dole 
plan on the floor and talk about what is in it, because Senator Dole 
has already said that he would be happy to discuss these cuts because 
they are much less--much less--than the Mitchell bill, and we are not 
even talking about a massive number of new bureaucracies because there 
are no mandates, and there are no taxes in the Dole plan.

  We could start from a base that says we want to improve our system, 
we want portability, and we want to do away with preexisting 
conditions. We want malpractice reform, which is the only real reform 
that can bring the cost down. We want the standardized forms that you 
have mentioned earlier. We want pools that allow individuals to have 
access to affordable care. Let us start from that kind of base and see 
if we cannot put together a plan before the end of this year that the 
American people will accept, and where we will be sure we know what the 
impact will be.
  So I thank the Senator from West Virginia and I hope that we can work 
together on something that is positive and productive.
  Mr. President, I suggest the absence of a quorum.
  The PRESIDENT pro tempore. The clerk will call the roll.
  The bill clerk proceeded to call the roll.
  Mr. KEMPTHORNE. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDENT pro tempore. Without objection, it is so ordered.
  Mr. KEMPTHORNE. Mr. President, I would like to speak to the amendment 
before us that was introduced by the Senator from Texas. I would like 
to give an example of what would happen in the State of Idaho in the 
event that the program in the State were taken over by the Federal 
Government. In Idaho, that would affect approximately 540,000 insurance 
policy holders.
  The question that I posed to myself and to the Senate is: Is 15 
percent assessment truly reasonable? I have put it in terms that deal 
with Idaho, to use that as an example. Currently, Idaho charges a 3 
percent fee on insurance premiums in the State--that yields 
approximately $40 million--of which only $3.9 million is used actually 
administering the program in the State.
  Let me restate that. We assess a 3 percent fee in the State of Idaho, 
of which only 10 percent of the amount of money that is collected is 
actually used to administer the program. This means that three-tenths 
of 1 percent of the insurance premiums in the State of Idaho are 
sufficient to cover the expenses of the Idaho Department of Insurance.
  Under this bill, it apparently would take 50 times the amount of 
funds now used to administer the State program in order to administer 
the Federal program. I think, Mr. President, this demonstrates the 
level of bureaucracy that is in the Clinton-Mitchell plan. I also think 
that this demonstrates that this bill provides what Americans do not 
want, and that is more taxes and more Government.
  Mr. President, I wish to commend the Senator from the State of Texas 
who has pointed this out to us--again, using the example of one State 
out of the union, where we use three-tenths of 1 percent to administer 
it in the State. Apparently, at the Federal level, it would take 50 
times the amount of money for that sort of administration.
  I ask unanimous consent that I be added as a cosponsor to this 
amendment.
  The PRESIDENT pro tempore. Without objection, it is so ordered.
  Mr. KEMPTHORNE. I yield the floor.
  Mr. WARNER addressed the Chair.
  The PRESIDENT pro tempore. The Senator from Virginia is recognized.
  Mr. WARNER. I thank my friend and colleague from Idaho.
  Mr. President, I addressed the Senate earlier today very briefly in a 
colloquy, and I would like to continue my remarks at this time and have 
that appear at this point in the Record.
  Mr. President, my theme of this set of remarks is to preserve and 
protect. We have in our great United States the finest health care 
services in the world. Our physicians and our nurses, and all manner of 
health professionals, our hospitals, our medical schools, laboratories, 
research facilities, all are unsurpassed.
  There is one thing that no amount of debate can distort the fact----
  [Disturbance in the visitors' galleries.]
  The PRESIDENT pro tempore. The galleries will please be in order.
  The Senator is recognized.
  Mr. WARNER. I thank the Chair. There is one fact that is 
indisputable. Americans do not leave our shores to seek health care 
elsewhere. People come from all over the world to our United States to 
receive the benefits of this system. Does it need some repair? Yes, it 
does. We recognize that costs are growing, and we also recognize there 
is a significant number of our population that somehow do not have 
access. I could go on.
  There are other areas in which we want to provide some help, and we 
will. But our primary goals from the outset of this reform effort have 
been to provide better health protections for the American people, for 
those with little or no protection, the underinsured and the uninsured. 
Our intent is to provide them with the means of acquiring health 
insurance coverage. For the vast majority of the American people with 
insurance coverage--some 86 percent--our efforts have been focused on 
protecting them from the ravages of skyrocketing health care costs.
  I, too, like every Member, have heard from our constituents about the 
problems. I have taken some of the calls in my office. I want to take 
them, because you learn every day as we debate and receive these calls. 
I remember well the plight of a Fairfax County man, the father of a 
child with spina bifida, whose employer, the owner of a lumber mill, 
had been presented with a terrible choice. The insurance company 
presented that choice. The insurance company said: Yes, we will renew 
the policy for this company--let us say it had 100 employees--however, 
we have knowledge of this one family that has this child with the spina 
bifida problem. Then the insurance company said to the company: If you 
keep that family in the plan, the same plan that provides for upwards 
of 100 other employees, the company's premiums could go up as high as 
110 percent. But if you drop the family with the sick child, your 
premiums will only go up 12 percent.
  We do not want our companies and our families faced with those 
choices. More recently, I recall the case of a very fine young 
professional woman who came to Virginia from California to be closer to 
her family. She had a minor health condition while she was in 
California working, but she had always been able to treat it with a 
reasonable medication. After just the first few months on the job, this 
problem recurred, but this time in a very serious and painful manner. 
The plan with her new employer said that in that first 6 months if 
there is a recurrence of a previous condition, the plan does not cover. 
This woman was faced with the choice of enduring the pain and the 
suffering to try and get to that 6-month benchmark. She could not make 
it. The personal pain and discomfort and risk to her health was too 
great. But, thankfully, through a combination of concerned, willing, 
and generous physicians and providers, the woman was able to have her 
operation, but not before going through a great deal of mental anguish 
and physical torment.

  These are the stories we have before us here. These are the stories 
that we take into consideration as we confront this problem.
  In recent years I have joined with other Senators in cosponsoring the 
marketplace reforms on which we all agree, which would probably pass 
this body this moment by unanimous consent given the chance.
  The Senator from Pennsylvania [Mr. Specter] has already alluded to 
his marketplace legislation, a version of which passed the Senate 2 
years ago with the support of the then-chairman of the Finance 
Committee, now the distinguished Secretary of the Treasury, Secretary 
Bentsen.
  Eliminating preexisting condition exclusions, guaranteeing health 
insurance renewal and portability, providing full deductibility of 
health expenses for the self-employed, these are steps we could have 
taken long ago if, as I recall, we had had more cooperation, frankly, 
from the other body.
  For the last 2 years, I have been associated with the Republican 
health care task force established by my dear friend and colleague of 
many years, Senator Chafee. He has done a courageous effort, week after 
week, month after month, year after year. He has conducted meetings to 
which all of us have been invited, and I have attended many from from 
time to time.
  I would further commend my distinguished Republican leader, Senator 
Dole. I spoke of him this morning. He has come up with a plan embracing 
those achievable goals to which I alluded. His plan really has not, in 
my judgment, received the full consideration as yet to which it is 
entitled.
  Forty Republican Senators joined Senator Dole in S. 2374. The 
legislation by Senator Dole combines insurance and tax reforms with a 
serious package of tort reforms, medical IRA's and low-income subsidies 
to help make insurance more accessible and affordable. The Republican 
leader and his staff have contributed immeasurably to the health reform 
process.
  My long-time staff member, Remmel Dickinson, has participated with 
this task force every step of the way.
  The Commonwealth of Virginia has not been idle in the campaign to 
expand and improve affordable health care coverage. The Virginia 
General Assembly is one of 21 State legislatures which has approved 
important tort reform with caps on both damage awards and the statute 
of limitations.
  Furthermore, in last year's session of the Virginia General Assembly, 
the Commonwealth approved a number of proposals designed to improve 
access to primary care in medically underserved areas and bring needed 
insurance reforms to the small business community, including 
guaranteeing issue to small employers with 2 to 25 employees of a 
modified community rating system to limit rate variations to 20 percent 
above or below the State average, guaranteed renewal, and a maximum 1-
year limit on preexisting-condition waiting periods.
  I am sure that it is equally important to all my colleagues that we 
not undermine, unintentionly through Federal legislation, or otherwise 
the very real progress which is being made in health care reform in 
many States, Virginia and many others.
  Indeed, I acknowledge the important work done here by Senator Gregg. 
As a member of the working group on health reform, I volunteered to 
represent the interest of the military community. Very little has been 
said about that.
  Mr. President, I know there are other Senators waiting to speak, and 
I will address subsequently in detail the current status of the 
military as it relates to health plans now offered by the Department of 
Defense, the CHAMPUS Program, and a new one called TRICARE. This will 
take considerable time, and I look forward to addressing the Senate at 
another day on this important subject.
  I yield the floor.
  The PRESIDING OFFICER (Ms. Moseley-Braun). The Senator from South 
Dakota [Mr. Daschle].
  Mr. DASCHLE. Madam President, I wanted to have a minute or two to 
talk on the Hutchison amendment. I, like many others on both sides of 
the aisle, support her amendment. But I think it is important we try to 
put it in its proper perspective.
  The distinguished Senator from Texas offered the amendment, pointing 
out that the Mitchell bill contains a 15 percent premium surcharge, 
under certain conditions.
  First, let me describe what those conditions are and then attempt to 
put the issue in its proper perspective.
  The Senator from Texas is correct in stating that there are some 
consumer implications here, and we need to be aware of those. She 
indicated that there was about a $40 billion cost overall, and I am not 
sure that is correct. We will have an opportunity to look at that 
figure more carefully in a little while.
  But the reason that provision was incorporated in the legislation is 
very simple. If a State failed to ensure that all of its citizens had 
access to, a standard plan with standard benefits, if the State 
administrative infrastructure broke down and the Federal Government 
needed to come in to ensure that there was adequate consumer protection 
in that State, it was estimated that there may be some additional 
administrative costs to the Federal Government.
  We had one of two ways of dealing with that.
  First of all, the taxpayers of all States could absorb the extra 
expense. On the other hand, one could allow an additional premium 
surcharge. Senator Hutchison's amendment would delete the premium 
charge, and we are prepared to accept that provision, recognizing that 
other taxpayers may have to pay the additional Federal costs.
  But I think it is also fair to compare this provision to similar 
provisions in other bills. The most appropriate comparison would 
probably be to the Dole bill. The Dole bill addresses situations like 
this as well. On page 85, the Dole bill deals with administrative 
charges. Let me read, Madam President, into the Record what the Dole 
bill says with regard to additional premium charges.

       In accordance with the reform standards, a community rated 
     health plan may add a separately-stated administrative charge 
     not to exceed 15 percent of the plan's premium which is based 
     on identifiable differences in marketing and other legitimate 
     administrative costs which vary by size of the enrolling 
     group and method of enrollment, including the enrollment 
     directly through a health plan, an employer, or a broker (as 
     defined in such standards).

  Madam President, we just estimated that there may be 100 million 
people enrolling in community-rated plans. We estimated that a 15 
percent charge, assuming about a $6,000 overall annual premium, would 
be about $900 per person per year. At $900 times 100,000 people, one 
has $90 billion in additional charges allowed under the Dole bill. That 
is one premium charge allowed in that plan.
  Let me deal with the second one. On page 117 of the bill it says, in 
addition, to the 15 percent charge allowed for community-rated plans 
referring to the FEHBP:

       A carrier offering a health benefits plan under this 
     chapter may charge a fee to participating small businesses 
     for the administrative expenses related to the enrollment of 
     such businesses in such plan, not to exceed the lesser of 15 
     percent of the the premiums charged each such business, or 
     the amount charged each such business of the same size.

  So, Madam President, under the Dole bill, if you are enrolled in an 
FEHBP plan and you work for small business--since they are the only 
ones allowed to enroll in FEHBP--you pay a 15 percent surcharge. This 
charge covers additional administrative costs. Who does the extra 
charge go to? The insurance companies. It provides protection for every 
insurance company; every company selling these plans can charge 15 
percent more than the standard premium.
  I would be a little more sympathetic to the concerns expressed by 
many on the other side of the aisle about this increased cost if I 
could see there was some evidence that they were also concerned about 
premium surcharges in the Dole plan. But we have a lot of cosponsors of 
the Dole bill who are prepared to allow a 15 percent surcharge on any 
non-Federal employees enrolled in an FEHBP plan.
  I think it is important that we put this whole issue in perspective. 
This amendment is going to pass and we will eliminate the 15 percent 
assessment in the Mitchell plan. We will try to deal with the 
administrative costs, however they may be incurred, in the future,
  Obviously, as we have indicated in the past, if there are differences 
on issues like this, we want to try to be accommodating and achieve 
compromise that is mutually acceptable.
  But let us make sure we understand one thing. There are 15-percent 
premium surcharges in the Dole bill that do not finance overall 
administrative costs of the system, but go directly to insurance 
companies. I think that point needs to be made. I hope that our Members 
are appreciative of that fact as we consider this vote.
  With that, I yield the floor.
  Mr. GRAMM addressed the Chair.
  The PRESIDING OFFICER. The Senator from Texas.
  Mr. GRAMM. Madam President, I came over to talk about health care and 
crime. I did not intend to get into a debate, but I cannot let that 
last statement pass. Let me go back and try to put all of this into 
English so we can understand exactly what is being said, and let me 
begin with the pending amendment.
  First of all, the distinguished junior Senator from Texas [Mrs. 
Hutchison] has offered an amendment to strike a provision in the 
Mitchell bill that allows the Secretary of Health and Human Services to 
determine if a State is running its health care system the way the 
Federal Government has told it to run it, and if not, to impose a tax, 
a 15-percent excise tax, on the premiums paid by every person in that 
State for the health insurance that they are buying. It is a tax that 
the Secretary of Health and Human Services can impose based on her 
determination as to whether she believes the States are doing things 
the way that Washington tells them to.
  We are offering an amendment to strike that provision because we do 
not believe that Washington should be able to impose a tax on people 
buying health insurance in the State.
  Now despite the fact that this provision is at the very heart of the 
Mitchell bill, our colleagues on the other side of the aisle have 
decided that they no longer support this Government edict on people and 
that they are not willing to defend a bill which they have cosponsored. 
And I delight in that, because it shows that old Biblical admonition 
is, in fact, true: ``Ye shall know the truth and the truth will make 
you free.''
   What is happening is America is starting to understand the Mitchell-
Clinton plan; they are rejecting it in overwhelming numbers; and even 
its proponents do not defend it anymore. That is democracy in action, 
and I am not in any way criticizing anybody for that.
  Now what is being said here, however, is that this Mitchell tax is 
somehow related to the Dole plan. I have to take exception to that. 
What the Dole plan has is not the same tax, but a provision which says 
that if you are going to buy your health insurance through the Federal 
system where Government employees buy their health insurance, that 
Federal insurance system can ask you to pay a fee for administrative 
costs. And, whereas the fee is not capped in any way in the Mitchell 
bill, there is a cap imposed in the Dole bill that says that if you 
choose to buy health care through the Government system the fee that 
can be charged cannot exceed 15 percent; and that the fee can be used 
only to defray administrative costs to see that Government employees 
are not subsidizing people from the private sector who are using their 
system.
  To somehow suggest that, under the Dole bill, which says if people 
opt to buy health insurance through the Government system, they ought 
to have to pay administrative costs so Federal employees do not have to 
subsidize them, to suggest that this capped fee is in any way related 
to, comparable to, or relevant to the ability of the Secretary of 
Health and Human Services to impose a 15-percent tax on insurance 
buyers in a State if the State does not do it the Washington way, is, I 
think, missing the mark by a substantial margin.

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