[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.
  Mr. SARBANES addressed the Chair.
  The PRESIDING OFFICER. The Senator from Maryland is recognized.
  Mr. SARBANES. Mr. President, it is late on a Friday afternoon. I 
listened to the comments of the distinguished Republican leader, and I 
regret the sharp cutting edge to them at this point in the debate. As 
we wind down this week's debate, one would hope, as we depart for the 
weekend, we would look forward to next week and coming here in a 
positive and constructive way to address the health care issue.
  In fact, I am reminded of the comments the majority leader made at 
the very beginning of this debate when he first laid down the Mitchell 
proposal. And I want to quote him. He said:

       Madam President, this should not be a political debate. It 
     should be a debate about the best way to deal with the real 
     life problems of real life Americans when they fall ill, when 
     their children fall ill, and when their parents age and need 
     care. There is nothing political about that.

  And then later he said:

       The future quality of life of millions of Americans depends 
     on how firmly we put aside partisanship now and concentrate 
     instead on crafting the best possible reform legislation that 
     we can.

  Now, we have seen a lot of time spent, to put it in the vernacular, 
dumping on the majority leader and his bill. It has been interesting to 
watch. The other side made some criticism, and the majority leader 
said, ``Well, those sound like good criticisms. I am going to 
incorporate them and adjust my bill.'' Then we get the supposed cries 
of outrage that, ``The bill has been adjusted. This is not the same 
bill you put in a few days ago. You have made some adjustments to it.''
  Of course, the adjustments were made in response to the suggestions 
and the observations that were made from the other side. So the very 
people who say changes ought to be made, when the changes are made, 
then they criticize the majority leader for making the changes.
  At the outset of the debate, the majority leader said: ``As we begin 
this debate, I want to say again what I said several times previously--
that I look forward to constructive suggestions to improve the bill I 
introduced last week. Democratic and Republican Senators have been 
active in the health care debate for well over a year.'' Let me 
emphasize that. ``For well over a year. Many have valuable 
contributions to make.''
  And then the majority leader went on to say this, and I was 
particularly reminded of his comment as I just listened to the 
Republican leader, Senator Dole. And I am now quoting Majority Leader 
Mitchell.

       It is my goal that the Senate pass the best possible health 
     care reform bill, not a bill with a Democratic label or a 
     Republican label; not a bill with my name on it, or the name 
     of any Senator on it, but simply the best possible bill that 
     will reach the goal we all should share, guaranteed private 
     health insurance to provide high quality health care for 
     every American family.

  Let me repeat that.

     * * * Not a bill with a Democratic label or a Republican 
     label, not a bill with my name on it or the name of any 
     Senator on it, but simply the best possible bill that will 
     reach the goal we all should share--guaranteed private health 
     insurance to provide high quality health care for every 
     American family.

  And when he closed his opening statement, Senator Mitchell said:

       I say to Members of the Senate that it is time to act. I 
     believe my bill is a good starting point for action. I 
     welcome constructive suggestions and alternatives to it. I 
     look forward to the debate. Let us debate. Let us amend. But 
     in the end, let us all do what is right for the people of 
     this country.

  Now, I very strongly agree with that. I think we have to work at 
these proposals. That is what we were sent here to do. I do not think 
we should be trying to score partisan points off one another.
  I regret what I saw transpiring earlier this week, when Senator 
Mitchell had to take the floor to make the point that very important 
aspects of his legislation were being completely misrepresented.
  Let me just pick one item. He talked about the subject of choice. A 
Senator from the other side said, ``if this plan is adopted, Americans 
will lose their choice.''
  Senator Mitchell said, ``That statement is untrue, categorically 
untrue.'' And then he went on to outline how, in fact, for many, many 
Americans the proposal contained in his legislation would provide more 
choice than they have today and how hard he has worked to protect 
choice on the part of the American people with respect to their health 
care.
  He stated, ``I think it is important that Americans understand that 
my bill will do the opposite of what our colleagues have alleged. It 
will greatly increase choice in health plans and it will preserve fully 
choice of providers. Anyone will still be able to see any doctor they 
want, choose anyone they want to see in nurses or any other form of 
provider.''
  What is happening, as I perceive it, is an effort is being made to 
scare and confuse people. When you come to deal with major legislation 
such as this which affects everyone, of course people are concerned. 
They ought to be interested. They want some sense of what are the 
changes in the health care system that are going to take place. People 
know what they have now. I think many people perceive it as inadequate. 
I do not think the American people would say we have a health care 
system in place that fully addresses all the needs and problems of our 
population. Therefore, we need to address those questions. But we need 
to do it with a reasoned debate.
  The first thing that needs to be done is to say, here is a problem. 
Do you agree that this is a problem or do you dismiss the problem or 
diminish the problem? That is the first question. If there is agreement 
that there is a problem, for example, people are not covered, people 
will lose their health insurance. Do they need to be addressed? If so, 
then how do we do it?
  Now, in effect, the proposals to simply fold our tents and walk away, 
come perilously close to suggesting that there is no problem. We are 
here now. We need to address this issue. The time to deal with the 
health care issue is upon us.
  Now let me make some observations more broadly about this health care 
issue.
  We devote a much higher percentage of our national resources to 
health care than other advanced industrial countries. And yet we fail 
to provide coverage for the entire population that is provided in those 
other advanced industrial countries.
  In other words, the current system in the United States spends 
significantly more as a percent of our national income on health than 
other advanced industrial nations and yet provides less comprehensive 
coverage for a substantial portion of the population.
  We are spending 14 to 15 percent of our gross national product on 
health care. The next advanced industrial country in terms of 
percentage would be Canada, at about 10 percent; we are spending almost 
half again as much. Germany and France then follow in behind Canada. 
Unfortunately, we do not provide, even with a much higher health care 
expenditure, the comprehensive coverage that exists in those other 
countries.
  Does it not serve our purposes to examine what is happening 
elsewhere. In fact, invariably, visitors from other advanced countries 
when they come to the United States are impressed with the very high 
technological advances that exist at the very upper end of our health 
care system, but they are also struck by the extent to which the 
ordinary American is at risk from major illness, in terms of suffering 
a financial disaster.
  We have a substantial number of our population who have insurance but 
live in constant fear that they will lose it. We have another 
significant number without insurance at all. We have people with bare-
bones coverage, or such large deductibles that it covers, in effect, 
only catastrophic events, and they are constantly taking a hit with 
respect to health care costs because they cannot afford the insurance 
that would provide adequate coverage.
  Currently, we have people locked into jobs they would otherwise leave 
but cannot because they have a preexisting condition and if they depart 
the plan they are under, they will not be able to get full health care 
coverage. If they depart and go to the other plan, they get covered 
with the exclusion of the preexisting condition, which is of course the 
dominant reason why they need the health care coverage.
  It is some crazy system, when you move and you want to change a job 
and you want to get health insurance coverage, and they say: We will 
cover you for everything but this very condition, which is the source 
of the individual's health problems. What kind of insurance is that in 
terms of an overall system that provides real insurance protection 
against health care costs?
  We have people with serious illnesses who find they have lifetime 
insurance limits which are exhausted long before their need for 
coverage ends. We have families with children with medical conditions. 
The families are red-lined out of coverage, thereby putting the entire 
family at risk. The list goes on and on and on.
  One of the reasons I think this is such a critical issue is that I 
think most people would accept the proposition that health care is a 
fundamental human need, and that in a just society there ought to be a 
way to provide for it. In fact, it is demonstrated in our society 
because the people who do not have coverage when they get ill go to an 
emergency room or to a hospital, and we provide the coverage and then 
it is paid for by others. That is cost shifting, which is one of the 
problems with the existing health care system.
  It would be a very hard society that said to someone: You do not have 
the money to pay for your health care and therefore you must go 
without. Actually, that happens to some extent in our existing society 
because they never get to the emergency room, in many instances, until 
they are in very dire, dire circumstances. In order to be a decent 
society, our Nation should have a health care system that has a place 
in it for all Americans. Therefore, I think we need to address the 
issue of universal coverage. In fact, what is happening now, because we 
do not have universal coverage, is that many people are paying twice. 
They pay for themselves and then they end up paying for the people who 
are not covered.
  Take two small businesses that are in competition with one another. 
The owner of one small business wants to do right by his employees and 
he has a health care plan for them. Let us assume he pays part of the 
premium and they pay part of the premium. His competitor down the 
street, another small business, not sensitive to that need of his 
employees, has no health insurance. The employer who provides health 
insurance incurs a cost in order to do so, which then places him at a 
competitive disadvantage with the employer who fails to provide it.
  So, in a sense, the irresponsible employer, in terms of how he deals 
with his employees in not providing for their health care needs, gets a 
cost advantage in the competition between these two businesses because 
he does not incur these health care costs, whereas the other employer 
who is trying to do the right thing by his employees, does incur these 
health care costs.
  That is not the end of it. To compound this competitive disadvantage, 
when the employees of the employer who does not provide health 
insurance get sick and have to find health care somewhere, they go to 
the emergency room of the hospital. And, of course, the hospital 
provides them health care. They have no insurance; they cannot pay for 
it.
  What does the hospital do? The hospital factors the cost of providing 
that unpaid health care into the charges that are made to those who do 
have insurance. In other words, it gets fed into the premiums of the 
people who do have insurance--which, of course, includes the premiums 
of the employees of the competitive small business, the one that is 
providing insurance. So the competitive small business that is 
providing insurance incurs the cost to begin with of providing for its 
people, and on top of that incurs an extra cost in its premiums because 
of the charge that is made to cover the hospital care that I just 
indicated.
  So, in effect, the businesses which currently take the responsibility 
to provide good health care coverage for their employees are paying for 
those businesses that do not take that responsibility. We need to work 
out a system of universal coverage so all people are covered, and not 
only to address questions such as those, but also to address the 
question of the affordability of the health care system. We obviously 
need to find ways to reduce the rate of increase of costs in the health 
care system. In other words, we need meaningful cost containment. But 
that is related to achieving universal coverage. Otherwise, you are 
going to continue to have cost shifting taking place.
  We talk about the projected rise in the cost of health care, and 
obviously it is a matter of concern. Those parts of the health care 
bill that are met through public expenditures are projected to increase 
as we move out toward the end of the century. That would then be a 
concern as we try to address the budget deficit.
  People who have insurance are concerned about the rise in premiums 
which they are constantly confronting. Small businesses which do cover 
their employees face rising health care costs which are reflected in 
the cost of the premiums which they must pay. So everyone has an 
interest in effective cost containment. But to achieve effective cost 
containment and to deal with the cost shifting issue, you need 
universal coverage. That is why developing a system which achieves 
universal coverage is extremely important.
  I want to point out, because we talk about the deficit on the 
financial side--and that is a very important consideration--but I also 
want to point out that there is a deficit on the health care side as 
well, and it is important to keep that in mind.
  A significant number of Americans are experiencing today a deficit on 
the health care side. They are not getting the kind of health care 
which would help to build a truly healthy society. People are in 
constant apprehension and fear on the health care issue. There is no 
question about it.
  Unfortunately for many, they do not fully appreciate the import of 
this question until they are hit themselves by a major health care 
problem. As I said earlier in the debate, when the Senator from Iowa 
offered his amendment dealing with the disabled, many people do not 
fully appreciate the burdens of that until it actually happens to them. 
I think it is very important for people to step back for a minute and 
think to themselves, ``There but for the grace of God go I,'' and to 
recognize that these major illnesses can strike anyone at any time. It 
is, in many instances, simply fortuitous who is affected.
  Now, there are aspects of one's health care that are not, and I am 
going to address that shortly when I talk about preventive health care. 
But many of these major severe illnesses strike people, in a sense, 
like a bolt of lightening. It is nothing they did. They may well have 
done everything right not to have a serious health problem, and yet 
they are hit with a serious health problem.
  Obviously, insurance is based on the principle that by pooling the 
risk you can provide coverage. You may never have to use the coverage. 
Some would say, if that happened, ``Well, I wasted the money on the 
payments.'' What they really should say is, ``I'm grateful that I was 
not struck by major illness, and I covered myself in case it happened. 
I was able to provide for myself and my family in case something of 
that sort happened. It didn't happen, and we were blessed that this was 
the case.''
  Let me turn briefly to the choice issue, which is obviously 
important. We need, of course, to maintain choice--choices of doctors, 
choice of health plan--so people can exercise some discretion in their 
health care decisions. In many respects, choice now in the American 
health care system is being significantly curtailed. In fact, the 
proposal contained in the Mitchell bill and, indeed, in other proposals 
that are before us--other legislation that has been proposed--provide 
more choice for many Americans than now exist.
  Under the current system, most Americans are insured at their 
workplace, in many instances where their employer negotiates a plan 
with an insurance company and presents it to the employee.
  In many, many instances, the only choice available to the employee, 
to the individual, is either to participate in that plan, period, or to 
forgo coverage as far as it being provided, usually in some shared way 
by the employer, obviously. As we address this question, we need to 
enact legislation that protects the rights of individuals to choose 
their health care plan. And most of the serious proposals that are 
before us seek to address this matter--the Mitchell proposal offers 
people three types of health insurance, one including a traditional 
fee-for-service plan.
  It is an important question and we need to focus on it, and we need 
to together work out a solution to it.
  But make no mistake about it, under the current system--in other 
words, if we do nothing, just continue as we are--under the current 
system, the trend in this country is toward significantly restricting 
or limiting choice, not toward expanding it. In fact, as the cost of 
health care increases--again because we have not developed a system 
where we can have effective cost containment--more and more employers 
are choosing approaches in which the individual's choice is further 
limited. So the people actually now are finding that they do not have a 
choice of health care plans and they do not have a choice of health 
care providers.
  I listened the other day as these criticisms were being made of the 
proposal that Senator Mitchell put forward on the choice issue. And I 
could not help but think to myself, the amount of choice now is being 
curtailed and what Senator Mitchell is proposing in his legislation, 
and what others have proposed in legislation--he is not the only one, 
of course, sensitive to this issue in terms of the proposals that they 
have now brought before the Senate--is more choice. Let me just quote 
him:

       It will greatly increase choice in health plans, and it 
     will preserve fully choice of providers.

  Let me just turn briefly to the quality issue, which is, of course, a 
very important question. As I said before, we have at the top line, at 
the most sophisticated level, health care that is unparalleled 
worldwide. Unfortunately for many Americans, the current system is too 
expensive or too inaccessible to allow access to such health care.
  What we need to do is ensure the continuation of the high quality of 
care that exists, while expanding access to it. I do not pretend this 
is a simple issue, but it is an issue that is possible, in my judgment, 
to solve. And people who have that access now need to always keep in 
mind that they are in risk of losing it tomorrow. People get sick, they 
find their insurance canceled; children get ill, parents find that 
there are maximum limits on the coverage that is available to them; an 
individual gets laid off and cannot acquire insurance because of 
preexisting condition; middle-income families are increasingly finding 
themselves priced out of the market. We have not gotten effective cost 
containment so they end up consistently downsizing their health care 
coverage, then they are hit by something major, the coverage is 
inadequate, the financial burden of that, in effect, wipes out the 
family.
  I have two of the world's great academic medical centers in my State, 
the University of Maryland and Johns Hopkins University. Of course, 
much of the quality of American medicine comes from the work that is 
done in the academic health centers and, therefore, it is very 
important, I think, in any legislation that is before us that we focus 
specific attention on the status of the academic medical centers and 
how we provide for them.
  That is done in the Mitchell bill. It is done in other legislation 
that is before us. It is very important that this be part of the 
ultimate solution.
  Now, Mr. President, let me turn for a moment to preventive health 
care. One of the most significant developments that could come from a 
rational health care system that embraces all of our people is a shift 
in the focus from curative health care to preventive health care. This 
offers to all Americans the possibility of longer, healthier, more 
productive lives. It would be one of the most effective ways to hold 
down health costs. We need to shift the emphasis of our health care 
system toward preventive health care. Now it is focused on curing 
people after they become ill instead of keeping them from becoming ill 
in the first place.
  Now, there are a number of employers who recognize the desirability 
of this. They have developed workplace wellness programs, often fully 
funded by the company, designed to achieve this very objective. The 
Baltimore Gas & Electric Co. in my State has such a model program. It 
recognizes a very simple proposition, that it is cheaper to keep people 
healthy in the first place than to try to make them well after they 
become ill.
  Now, there are three basic components of prevention: clinical, 
community based, and policy. Clinical preventive services include 
immunizations. The benefit-to-cost ratio from the immunization programs 
are staggering. The expenditure of a relatively small amount of money 
for the immunization realizes tremendous savings in not having to deal 
with illness.
  Screening for early stages of disease. Again, if you catch the 
disease in the early stage, it is obviously far better for the 
individual's health, and it also saves you a lot of money.
  Important community-based preventive services include injury 
prevention programs, a protection against environmental and 
occupational hazards, health education, disease surveillance. All of 
these help to meet the problems that might arise from vulnerable 
populations. Programs can be developed to improve individual health 
practices--something we need to pay more attention to in this country.
  I spoke earlier that it was fortuitous for people, whether they were 
hit by a major illness or not. On the other hand, it is clear that many 
people are not engaged in the kind of health practices that would 
enhance their health and make it more likely that they could continue 
to be healthy and productive members of the society.
  We need increased investments in all three areas to better educate 
people about public health and the importance of prevention and 
improving and protecting the health of all Americans. And the Johns 
Hopkins University School of Public Health, the Nation's oldest school 
of public health, is, of course, a leader not only in our own country 
but worldwide in trying to place an emphasis on those programs and has 
consistently documented the savings to be realized.
  Senator Dodd offered an amendment early on in the debate moving up 
the effective date for providing prenatal services for low-income 
pregnant women. Every study has shown that not only is that clearly 
better for the health of the mother and the child, which is, after all, 
the prime concern, but, in addition, the cost savings are extraordinary 
because the costs involved in looking after children who have been born 
prematurely are enormous.
  Any large hospital that has a substantial pediatric unit can show you 
these premature birth babies and the enormous costs that are being 
expended on them. Clearly, it would be far better to take a portion--it 
is a very small portion--of that money and spend it earlier for 
prenatal care and better health practices so that you do not have the 
premature birth to begin with.
  We have to start thinking in a more reasoned and rational way about 
this issue. We have built up a system that has many, many good aspects 
to it, but there are blanks, there are large blanks. The costs continue 
to rise at above the rate of inflation. Actually, a year or two ago, it 
was double the rate of inflation.
  With all of this discussion about health care and about health care 
costs, and the concerns in the health care industry, the increase in 
costs has come down a bit. I understand that historically such 
restraint has happened every time we have had a serious debate in the 
Congress about health care costs. There seems to be a tendency out 
there, feeling the pressure, to restrain the costs and then once the 
debate fades from view to go back to the higher trend line. And as I 
said, only 18 months or 2 years ago the trend line in the increase in 
health care costs year to year was running at double, more than double 
the trend line for the ordinary CPI and the cost of inflation.
  So as we conclude this week and look forward to next week, first of 
all, I urge that we continue to stay with this issue. We have not faced 
this issue in the serious way that it is now being dealt with in a very 
long time in this country, indeed, if ever. I understand the issue is 
complicated. And I understand that the issue is controversial. There 
are sharp differences of opinion about what ought to be done. 
Unfortunately a great deal of hyperbole is being used in some of the 
debate. I think Senator Mitchell and his proposal were subjected in the 
debate this week to a verbal assault that departed from reality.
  As I said at the outset, we need to identify the problems and see if 
we can reach some range of agreement on the dimension of the problem.
  Obviously, if one person feels there is a problem and another one 
does not think there is a problem, then they are going to differ over 
what ought to be done about it because the latter person will think 
nothing should be done because he does not think there is a problem.
  When we talk to our constituents, they identify problems. Often what 
happens, unfortunately, is in order to identify the problem people must 
have experienced it. Some people, unfortunately, if they have not 
experienced the problem, find it difficult to imagine that it might 
happen to them even though it is clear that that possibility very much 
exists. I have in fact talked to people who had never experienced one 
of these problems, preexisting condition, exhaustion of coverage, being 
red lined in terms of insurance with one of their children, not able to 
obtain insurance for one of their children, and find they are not 
sensitive to it. So they tended to have one attitude about health care. 
Then, unfortunately, they experienced the problem, and they came to 
understand that there was a blank in the existing health care system. 
There was a flaw in the existing health care system that failed to 
provide for such situations. All of a sudden that situation came into 
their lives. And then they saw, firsthand, with a personal and 
immediate impact, what the flaw of the system was. I think we have a 
responsibility, in the course of analyzing this problem, to identify 
those flaws and to seek to do something about them. People should not 
actually have to go through that brutal process, which is destructive 
for many families, in order for us to come out at the other end and say 
we have to do something about this weakness or this flaw in the 
existing system.

  Senator Mitchell has made a real effort to build on the existing 
system. He has taken the existing system and sought to add to it. It is 
not a radical restructuring of the system. In fact, it is a shift even 
more toward private health insurance and coverage.
  I hope we may be coming closer to focusing intently on the substance 
of the problem before us. I do not think we ought to leave the field on 
this issue. I think we need to stay with it and work through it, and we 
need to try to work through it in a reasoned and rational way. Senator 
Mitchell was very clear himself that he thought his own legislation 
should be amended. In fact, he said the opening day at the conclusion 
of the debate, ``I believe my bill is a good starting point for action. 
I welcome constructive suggestions and alternatives to it.''
  I do not agree with some of the proposals in his or in the other 
legislation. I do not think, in some instances, they fully recognize 
the problem. And if they fully recognize the problem, I do not think 
they provide an adequate solution. I am prepared to discuss both of 
those dimensions in a reasoned fashion. I do not think we ought to 
engage in this kind of labeling, a lot of which has happened over the 
last couple of weeks, because the task in which we are engaged is too 
significant and too important for that. We are truly engaged in a 
debate of historic dimensions, and it ought to be a debate about the 
best way to deal with the real life problems of real life Americans 
when they fall ill, when their children fall ill, when their parents 
age and need medical care.
  The health care debate is not about a particular party's proposal, 
not about a particular Senator's proposal. The health care debate 
really goes to the heart of the quality of life of all Americans. I 
think that the future quality of life of millions of Americans depends 
on our ability to engage in a process here of crafting the best 
possible reform legislation of which we are capable. And I very much 
hope, Mr. President, we continue to move forward in that task.
  I yield the floor.
  Mr. DOLE addressed the Chair.
  The PRESIDING OFFICER. The Republican leader is recognized.
  Mr. DOLE. Mr. President, I do not disagree with many of the things my 
colleague from Maryland stated about the need to pursue health care 
reform. But his initial statement seemed to indicate the partisanship 
on this side and the statesmanship on that side. I hope there is 
statesmanship on each side.
  It has been reported to me that the White House has a daily meeting 
with certain of my colleagues on the Democratic side, and they give the 
orders and suggestion to go out and demonize Bob Dole and the Dole 
effort. Maybe that is not partisan, but it appears to me rather 
partisan. That was reported to me. It was brought up at the luncheon 
that the way to succeed is to go out and demonize the Dole-Packwood 
plan and the American option. Maybe that is not partisanship, and it is 
statesmanship.
  I think we have to address the differences in these bills. If we do 
not, the American people are not going to know. If we are not willing 
to define the differences accurately in all of these bills, then I 
think we are doing a disservice to the American people. I assume, 
having been around here for a while, that there has been some of that 
going on for some time.
  I remember that during the last several months of the Bush 
administration, every Friday the Senator from Maryland, the Senator 
from Tennessee [Mr. Sasser], and the Senator from Michigan [Mr. 
Riegle], would rush to the floor at three in the afternoon and spend a 
couple of hours berating President Bush and his economic policies. 
Maybe that was not partisanship; maybe that was setting the record 
straight, or statesmanship.
  So I suggest that we understand the politics when we see it. We have 
been castigated--or I have, and our plan has--by the President and by 
Mrs. Clinton, and by a lot of special interests that line up with the 
Democratic Party. We try to ignore most of that, because we think there 
should be an effort to get a health care bill. But to indicate what the 
Senator did--that it is all on this side, and nothing is ever said of 
any political nature on the other side--to me, either the Senator has 
been absent the last few days, or somebody has not informed him of some 
of the debate that has gone on. So we are prepared to continue 
discussing health care reform. It is an important issue. I noted that 
the Senator never mentioned cost. It is funny the Democrats never 
mention cost.
  Mr. SARBANES. Will the Senator yield?
  Mr. DOLE. They do not mention cost to the families out there. We talk 
about the horror stories; we talk about what ought to be done; we talk 
about adding children and pregnant women. But somebody is going to have 
to pay for that, and young people are going to have to buy that 
standard benefits package even though they do not need all that 
service. So there has to be some reality here and some equity here and 
some fairness here for different age groups, different people and 
circumstances, and I think cost is very important. The cost of our plan 
is very important. We do not know yet the cost of the so-called 
mainstream plan.
  We have been told by the distinguished Senator from West Virginia, 
the chairman of the Appropriations Committee, that the Mitchell plan is 
$895 billion in new spending, and that bothers the Appropriations 
Committee chairman, along with Senator Hatfield, the ranking 
Republican. We can have this debate about everything that is good and 
everything we ought to do and everything we ought to cover, and it is 
going to be hard to say no, but somebody has to pay the cost. We can 
either borrow the money as a Government, or we can raise taxes. I do 
not know of any other way we might be able to do it. Sooner or later, 
we have to debate the cost of all these different programs--the Dole-
Packwood plan, the Mitchell plan, or any other plan that may be offered 
here on the floor.
  I certainly do not disagree with the majority leader. We have spent a 
lot of time together and have worked together, and we are good friends. 
But this is a give and take process. There has to be give and take; it 
cannot be just take or just give. Give and take. We will have a lot of 
that debate, I am certain over the next few days, maybe weeks, maybe 
months.
  Again, I will just suggest there are so many plans, and unless I miss 
completely the American attitude, I think most Americans say all these 
plans are so complicated. In fact, there is a TV spot saying that it 
takes 10 years to develop a drug to treat whatever, and we are trying 
to pass health care, consisting of 1,400 or 1,500 pages, in 10 or 20 
days. That is hard for the American people to understand, and they are 
very bright people. It is hard for them to understand what is in this 
package. I do not think probably one Senator has read what is in this 
package.
  But as we do read it and other people read it, we find things in this 
package that certainly have pretty healthy votes, striking out 
provisions that call for penalties on small business, calling for 
meetings to meet secretly to talk about a lot of things that deal with 
health care, the benefit package, and in one case even said you did not 
have to pay the premiums and you will still get coverage. Those are the 
reasons we need to spend time on an issue this important.
  So, if there is something we have said on this side that particularly 
offended the Senator from Maryland, we would be happy to look it up and 
have that debate next week in fairness to the staff who have been here 
all day and all week. I would say that the debate has been fairly 
well--I do not know if ``balanced'' is the right word; I think there 
have been probably some partisan statements made on each side. But for 
the most part the debate has been talking about shortcomings in the 
bill before us.
  The Dole bill is not even before us, the Dole-Packwood bill, and it 
has been criticized up and down. They have had charts and everything 
else. It is not even pending. I hate to see what is going to happen 
when it is pending. We have already had a blizzard of criticism from my 
colleagues on the other side of the aisle, though I think many of my 
Democratic friends would vote for the bill if we get to that point 
because it is a real effort. It was a real effort. It was not put 
together in 5 minutes, or 5 days, or 5 weeks. We believe, and we are 
not going to be defensive about it, it does a lot of things the Senator 
from Maryland said ought to be done. Nobody can quarrel with many of 
these areas, and they are covered in our bill.
  There may be more in Senator Mitchell's bill. It may cost more. There 
may be more taxes and more spending. But in my view, that may not mean 
it is a better health care reform bill.
  So we look forward to the debate, I guess, next Monday and through 
next week, and maybe through the next week and through the next week. 
And we will see what happens.
  Mr. SARBANES. Mr. President, will the Senator yield?
  The PRESIDING OFFICER. The Senator from Maryland.
  Mr. SARBANES. Mr. President, before the Republican leader leaves the 
floor, I want to correct his comment that I did not mention cost. I did 
mention cost at some length in the course of my statement, and I 
recognize it as an important issue as we address the health care 
question.
  The PRESIDING OFFICER. The Senator from Maine is recognized.
  Mr. COHEN. Mr. President, I can comment later about any charges of 
partisanship on this side. There may be some Members who are so 
committed, passionately committed, against health care reform this year 
that they have indicated they would filibuster the bill. That may be 
confined to one or two Members. But I must say, the notion that we 
should not take as much time as is necessary to go through this 
document page by page, concept by concept, to understand exactly what 
we purport to be undertaking on behalf of the American people, I think 
it would be a great disservice if we did anything less.
  I am astonished that anyone would accuse Members on this side of 
engaging in a filibuster by taking 10 days to discuss perhaps the most 
important social legislation--that is, health care reform--that is 
likely to take place or has taken place in the past 50 years; we are 
told we have been trying to get this bill up for 50 years. Now it is 
here and now is the time, it seems to me, to take our time and go 
through and understand exactly what is involved.
  I daresay that many Members of this Chamber, the Senate, have not 
read every page of the Mitchell bill or even the Finance Committee 
bill, and certainly have not read the Dole bill all the way through. 
They have not read the legislation that we proposed or will be 
proposing next week, the so-called mainstream group.
  This is important business that we are about. We take 2 to 3 weeks to 
debate a defense authorization bill every single year. We spend nearly 
2 weeks, at least 2 weeks, on the defense bill. We have a committee, 
headed up by Senator Sam Nunn, a renowned expert in the field. He is 
joined by Members who have spent their 16, 17, 18 years on the 
committee with him devoting themselves to defense issues. And yet, 
before we come to the floor with a defense authorization bill, there 
are as many as 200 or 250 amendments pending every year, the same 
thing.
  So it seems to me it is not unreasonable that when we have a bill 
that comes to the floor, that has not been here before for 40 or 50 
years and that is of this size and dimension and consequence, that we 
take as much time as necessary without one side or the other hurtling 
accusations that Republicans are simply interested in delay and deny, 
delay and deny.
  Mr. SARBANES. Mr. President, will the Senator yield?
  Mr. COHEN. Let me finish.
  Mr. SARBANES. Surely.
  Mr. COHEN. There are Members on this side, and I want to say a few 
words about Senator Dole, because I heard my friend from Maryland 
mention there may have been some people here who have never suffered, 
who do not know what it means to suffer or to lose insurance. That may 
be the case.
  That certainly cannot be said of Senator Dole. Anyone who knows his 
history knows the kind of suffering he has endured most of his life and 
even to this day. Most of us who know anything about Senator Dole know 
about his past in terms of not coming from a well-to-do family, having 
no insurance, of having to raise money with a tin cup, so to speak; 
asking neighbors and friends to chip in to pay for travel so he could 
get health care treatment.
  So I think if there is anyone in this body who knows about pain and 
suffering and what it means to be without health insurance, it is 
Senator Dole. He may have a different view. He may have a different 
view of how we go about trying to restructure our health care system so 
as to expand coverage for more and more people who are in need of it.
  I must say, it is an oversimplification, but I believe we come at the 
problem from two philosophically different points. I believe that many 
on this side feel that if you can deal with a problem of cost, if you 
can reduce cost down low enough, you will be able to expand the 
coverage to cover those who are now without it. There are those on the 
Democratic side who feel, well, the answer really is to mandate 
coverage for everyone; if you mandate coverage for everyone, then cost 
will come down.
  The answer may be somewhere in the middle. I do not know. I am not 
wise enough to know where the true answer is. But I do believe there is 
a philosophical difference. That is why we are Republicans and that is 
why we are Democrats, and that is why it is the purpose of this 
institution to debate this as long as necessary to come to a fair 
conclusion of how we achieve whatever one wants to achieve, and that is 
the better social goal.
  So I think we have to be careful in terms of how we undertake to 
reform our system. I do not question anyone's motives. I listened to 
the debate. They say we must cover everyone for everything and deal 
with the cost at a later time, or at least it is deficit neutral.
  One of the problems is--and I say this to the Senator occupying the 
chair, who has been concerned about entitlement costs--the explosion in 
entitlement growth. Here we stand up on this floor to debate it, and 
those of us on this side, in particular, ask: Can we not do something 
to contain the growth of entitlement costs? The answer we always 
receive is: Look, the problem is not in the growth of entitlement 
programs; it is health care costs. Wait until we get to health care 
costs, and we will deal with that problem. So now we come to a health 
care bill, and we have not dealt with the problem.
  It is not enough to say it is deficit neutral. That does not put us 
any better off, when looking at deficits running in the range of $200 
billion or $250 billion into the indefinite future. We are running the 
risk of bankrupting our children.
  So I know the Senator from Nebraska is deeply concerned about this 
issue. I do not think enough attention has been paid to it. I think 
that mainstream group in the last 2 days came to a different conclusion 
on this. We were headed in a direction of saying: Let us see what we 
can do to put together a package of amendments, or bundle of 
amendments, or a new bill that can achieve the goal of covering those 
who are without insurance as best we can, holding down costs, giving 
more incentives for people to insure the people they employ, reforming 
our tort system, malpractice reform, insurance market reform--do all of 
these things.
  But we found out CBO came in and said: Wow, this is going to cost you 
many hundreds of billions of dollars. Suddenly, we had cold water 
thrown on our efforts. We said: We had no idea it was going to cost 
this much. We, in a period of 24 hours, maybe 48 hours, came to a 
slightly--not slightly; quite a different--conclusion. The conclusion 
is, we want to do something to help the people of this country. We also 
do not want to bankrupt our children, who will be paying the bill.
  So we started to look at cost containment and deficit reduction in a 
much more serious fashion.
  We ought to be cautious in all of that, because when we first passed 
Medicare--correct me if I am wrong on this--but I think when we passed 
Medicare, President Johnson said we can afford, as a nation, $600 
million, I think the bill was the first year. The bill for Medicare 
this year is about $150 billion--not $600 million, but $150 billion--
and rising.
  And so, even though we have noble intentions and perhaps even modest 
assessments of what it is going to cost, and if the past is any prelude 
to the future, any lesson to be learned from the past will tell us that 
whatever we estimate, it is going to be grossly understated.
  So I think it is important that we take enough time to debate this 
issue thoroughly, that we not hurl partisan accusations back and forth.
  There are people on this side who have legitimate differences of 
opinion about whether the Mitchell bill is the correct way to proceed, 
whether the Clinton bill was the correct way, even whether the Dole 
bill is.
  There is a group of us on both sides, Democrats and Republicans, that 
has been meeting now for several weeks and just finished today at 
roughly 5 o'clock, who have come to what we think is a mainstream 
proposal. Virtually no one will be happy with it. Virtually everyone 
has to pay some kind of a price in that particular proposal. And that 
may be something new; that we are not going to make promises and tell 
people there is no pain involved, there is no pay involved, that you 
can have added benefits, but it will not cost you any more. The time 
for doing that has long since passed. So we may end up with no bill at 
all.
  I think the mainstream coalition, consisting of a group of about 15, 
16, maybe 18 people, pretty nearly divided between Republicans and 
Democrats, I think it is perhaps the best hope we have for reaching 
some kind of an agreement this year. It may be, as I said before, 
unacceptable to virtually every group that is in this town that will be 
outside these doors on Monday and Tuesday, because, as they look 
through it, they will figure out they either receive less or pay more.
  But it is time we level with the American people and say we are going 
to give this particular benefit, it is going to cost this amount, and 
we will have to pay for it either through raising taxes or lowering 
benefits. We can no longer lead you down the path of saying we can give 
you something for nothing.
  So, Mr. President, I just want to say that I wanted to commend 
Senator Dole, who came to our meeting today. He and Senator Packwood 
were invited in to listen to the presentation that the group made to 
him and to Senator Packwood.
  I was impressed with the response. They thought we made a good-faith 
effort. There was a lot in that proposal, I think, that they could 
agree with. There were some things, undoubtedly, they could not agree 
with. But they indicated to us they are going to take it back, wait to 
see the legislative language.
  Now we criticized the Mitchell bill which is 1,446 pages and the Dole 
bill is about half that, maybe 700-plus. We have no idea how long our 
bill is going to be, but I am told it will grow exponentially between 
tonight at 7 o'clock and Monday when we get the legislative language. 
It may look something close to the Dole bill, if not the Mitchell bill.
  But Senator Dole said he is waiting to see the language. He will read 
it. He will obviously want to take it up with the Republican caucus.
  Senator Mitchell was invited in and he, too, was impressed with the 
effort that we all made and thought that there were a lot of good 
provisions in it. Obviously, he found some provisions he would object 
to in that proposal, of course.
  But I think that that presents the best opportunity we will have this 
year.
  I must say, in my own opinion, it will have to be a new proposal, a 
new bill, and it will have to have the support of both Senator Mitchell 
and Senator Dole. Without their mutual support, I think we will see it 
break down. I think we will see each side really going back to their 
more extreme demands on our side and on the other side as well, and 
nothing will happen this year.
  What the Senator from Maryland has said is that next year we will be 
back here and people will be complaining to us that we did not do 
anything.
  I would like to say just a word about who are people reading the 
polls right now or the telephone calls that are coming in or the 
letters they have received. They are running heavily against anything 
now, because they are convinced, for a variety of reasons--television 
commercials, attack ads, radio talk shows, each side, depending upon 
which side one is on, exaggerating the benefits of the bill, minimizing 
the disruptions, the costs; the other side demeaning the significance 
of the reform effort.
  As a result, people are confused. They do not know what is in the 
legislation. They have no idea what it will do or will not do. And they 
are scared that we are really engaging in a field in which we are not 
well informed, that we have little, if any, idea about the ultimate 
consequences of how it will spin out, unfold, into the actual 
marketplace.
  And so the calls are coming in, the letters are coming in, saying, 
``Don't touch it whatsoever.''
  But I daresay that a year from now, if we do not take some action to 
reform the current system, prices will continue to escalate, and the 
growing numbers, millions of people currently without health insurance, 
will continue to grow, there will be hardship experienced by many, many 
millions of people, and that public sentiment will turn. They will say, 
``Look, we elected you to do something. That is why you are down in 
Washington, to do something constructive.''
  And so anyone who is reading the polls today who comes to the 
conclusion that the public does not want any action whatsoever, I think 
will come to a different conclusion next year. Because I think the 
momentum next year will be less, it will lose whatever momentum is 
building, and may be dissipating as I speak, but next year, I think 
there will be less chance for passing legislation. And some may say, 
``Well, all to the good, let the marketplace dictate what takes place 
for the millions of people who are without health insurance today.''
   But I have a deep-seated belief that American people, when they find 
that we have done nothing to change some of the deficiencies in our 
current health care system, that we have made no improvements, that we 
have not begun to come to grips with the costs, both emotional and 
financial, in terms of long-term care and other important aspects of 
our health care system, that they will turn on the Congress, the House 
and the Senate Members, and say, ``Why didn't you do something?''
  So I think that the mainstream group that has been denigrated by some 
who think that we are just in the mainstream inside the beltway--I come 
from the mainstream outside the beltway. I come from a family of very 
modest means. I come from a working father and mother, a father who, at 
85 years old, still works 18 hours a day, 6 days a week, and has never 
had a vacation in the last 15 or 20 years. So I think I know a little 
bit about what small businessmen and women have to contend with every 
day. I do not consider myself to be in the mainstream only inside the 
beltway, but I would say in the mainstream of mainstream America.
  So I hope, Mr. President, that there will be a lot of goodwill left, 
not hurling the accusations back and forth, but rather to say there are 
people of goodwill who are searching for the best possible solution for 
a very serious problem, and I include Senator Dole in that effort and 
many Members on this side, as well as the other.
  I hope that we can lay aside the partisanship and try to do the 
Nation's bidding, as such, and do well for the Nation, not do harm, and 
to bring some level of credit to this institution.
  I yield the floor.
  Mr. SARBANES addressed the Chair
  The PRESIDING OFFICER. The Senator from Maryland.
  Mr. SARBANES. Mr. President, I have worked with the Senator from 
Maine for many years in the Congress, and I know that he comes to a 
debate in a reasoned and rational way, which is very important.
  In the course of my presentation I was not addressing the problem of 
the pace of working through these issues. They are complex and they 
need to be very carefully worked through. And I welcome the comments of 
the Senator about moving now in a constructive fashion.
  What I was addressing was the mischaracterization that 
some in this body are making about the proposals that are before us; 
mischaracterizations that have the effect and perhaps are intended to 
have the effect to confuse and scare people. Let me give one example, 
and I want to quote Senator Mitchell in doing that. It was asserted by 
one of your colleagues that if the Mitchell plan was adopted, 
``Americans will lose their choice.''
  Of course, I believe the matter of choice is an important issue, and, 
in fact, I do not want people to lose their choice. I want to enhance 
their choices as does Senator Mitchell. But that was the 
characterization that was placed upon the Mitchell proposal.
  If a grossly inaccurate statement is made about the Mitchell 
proposal--and I want to read what Senator Mitchell said about it--how 
can you have a rational debate?
  Here is what Senator Mitchell said about the characterization that 
his plan would cause Americans to lose their choice:

       That statement is untrue, categorically untrue. There are 
     two types of choice in health care. The first is in choice of 
     health care plans. How much choice does the individual 
     American have in selecting a health insurance plan? Right 
     now, almost none. Most Americans are insured through 
     employment. The employer negotiates a plan with the insurance 
     company and presents it to the employee, and the only choice 
     the employee has is to accept or reject that plan, to either 
     participate in it or not to participate in it.
       Under my plan, the individual employee will be offered a 
     minimum of three different plans. They will have the same 
     standard benefits package, but they will deliver care in 
     three different ways: either in the form of traditional fee-
     for-service, or a health maintenance organization, or in some 
     other form. So in the first dimension of choice, that of 
     health plans, my bill will dramatically expand choice for 
     almost all Americans. For the first time, individual 
     Americans will be able to choose from more than one health 
     plan.
       Second, the element of choice in physician or other 
     providers. It is simply not true that choice will be denied 
     under my plan. Since everyone will be offered at least three 
     types of plans, one of which must be traditional fee-for-
     service, every American will have the opportunity to continue 
     to have the fullest freedom of choice with respect to 
     physicians. No one will be denied that opportunity.
       Interestingly enough, the current trend in the country is 
     in the other direction. As costs of health care rise, 
     employers are increasingly turning to managed plans, HMO-type 
     plans in which the individual's choice is limited. So if we 
     do not adopt health care reform, more and more Americans will 
     be denied choice in provider. So you have a reduction of 
     choice in the one area where it now exists and continuing 
     lack of choice with respect to health plans.
       So I think it is important that Americans understand that 
     my bill will do the opposite of what our colleagues have 
     alleged. It will greatly increase choice in health plans and 
     it will preserve fully choice of providers.

  That is very simply my point. You cannot even cross over the 
threshold of a reasoned debate if the criticism of a proposal 
completely mischaracterizes the proposal.
  So I think we have to have an accurate and a realistic portrayal of 
it and then let the debate go from there.
  Mr. President, I very much hope in the coming weeks we can bring to 
this debate a constructive attitude.
  It is clear, if we continue our current system, more and more of 
these gaps, these flaws, these blanks that I earlier alluded to in the 
health care system will worsen, will become even more manifestly 
obvious to the American people.
  I very much hope in the coming weeks all of us will be able to work 
through this issue in a constructive way in order to help address the 
health care needs of the American people.
  I yield the floor.
  Mr. President, I suggest the absence of a quorum.
  Mr. SARBANES. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                  self-insurance and the mitchell bill

  Mr. HATCH. Mr. President, over the course of the past few days we 
have had an opportunity to learn about the Clinton-Mitchell health care 
reform bill. This bill, all 1,443 pages of it, is one of the most 
complex pieces of legislation introduced in the Senate in recent 
memory.
  We are now beginning to learn what is in this massive piece of 
legislation. Just yesterday we approved an amendment essentially 
designed to delete a provision that was inadvertently included in the 
final draft. Just how many more of these stealth provisions are there 
in the Clinton-Mitchell bill?
  Well, I believe I have found another one, at least, one that has not 
received as much attention as other provisions such as the employer 
mandate and all those taxes the American people are concerned about.
  If I were to say to my colleagues that there already exist a way to 
provide quality, prevention-oriented health care for millions of 
Americans at a significantly lower price, I would imagine that most of 
my colleagues would want to sign-up immediately on such a plan. Well I 
can tell you that such a plan does exist.
  It is not known as the Clinton proposal, or the Mitchell proposal, or 
the Gephardt proposal. It is known as self-insurance, and self-
insurance is health reform that is already working for over 40 million 
Americans. More than two-thirds of U.S. employers who provide health 
benefit coverage self-insure their benefit plans.
  Unfortunately, the Clinton-Mitchell health care bill would prevent 
all companies with fewer than 500 workers from self-insuring health 
benefits for employees and their families. I believe that we should 
continue to provide self-insured employers, both large and small, with 
an equal opportunity to manage their own health care costs.
  When employers self-fund their health plans, they directly pay the 
bills employees get from doctors, hospitals, and other providers. 
Companies with as few as a dozen workers set aside a preset amount of 
funds for routine health claims. Firms manage their own health plans 
but usually rely on third party administrators to handle the paperwork. 
In addition, firms will purchase insurance, called stop loss, to cover 
extraordinary or catastrophic medical expenses as well as to ensure 
plan solvency.
  Self-insurance works for small and medium businesses for the same 
reason it works for larger firms--through cost controls and quality 
plans. In all, for both small and big firms, about 85 million Americans 
receive health care through self-insurance.
  The success of this program has been remarkable. Approximately 67 
percent of all employees receiving health care benefits through their 
employers do so through a self-insured arrangement. This is a dramatic 
increase over the 1988 figure of 48 percent.
  For the employer, self-insurance has been a proven mechanism in 
controlling rising health care expenditures. The average administrative 
costs for self-insured plans are 6.1 percent of total costs compared 
with 9.9 percent for conventionally insured plans.
  Small businesses and farmers self-insure for one primary reason: it 
helps control costs. The advantage of self-insuring is that employees 
consume health care more reasonably when it comes from employer/
employee funds. When employees know that reasonable consumption of care 
may result in more money for bonuses or better salaries, they consume 
more responsibly.
  With self-insurance, small employers exercise greater flexibility in 
health care plan design, creating plans tailored to the particular 
needs of their work forces.
  Data from the Department of Health and Human Services show that self-
insured companies are more likely to offer health promotion and 
employee wellness activities than conventionally insured businesses. 
For example, 36.3 percent of self-insured businesses provided their 
employees blood pressure screenings, while only 28.2 percent of 
companies with conventional health plans did so.
  Employer self-insured health care is reform that is already here. 
Under an amendment that Senator Coats and I plan to offer, businesses 
from 2 employees and more could continue to self-insure health 
benefits. Self-insurance coverage works and is consistent with all 
significant insurance reform proposals. There is no need to change it.
  Mr. President, the July 3, 1994 edition of The Arkansas Democrat 
Gazette contained an article by a Mr. F. Mac Bellingrath who is 
president of Automatic Vending of Arkansas. In his article he writes 
about his first-hand experience of providing health care benefits to 
his employees through a self-insurance mechanism.
  He writes:

       Self-insured small businesses are already achieving what 
     many in Congress want to achieve through legislation--more 
     widespread health coverage and lower cost. It is discouraging 
     to me that there are some in Congress who want to outlaw 
     successful, grassroots health reform here in Arkansas and 
     throughout the country. They propose forcing self-insured 
     small employers into mandatory alliances or mandatory 
     insurance buying pools run by the government. Even if the 
     insurance buying pools they propose are voluntary, they would 
     force small employers to give up their self-insured plans, 
     and compel them to buy conventional insurance.

  He continues:

       That's really not the way to go. Why should Washington 
     force small businesses to get rid of what is already working 
     and working well? It is the private sector that has the 
     reputation for developing ways to deliver more goods and 
     services for less money--not the Federal government.

  Finally he states:

       There is simply no compelling argument for Congress to 
     interfere with the concept of self-insurance for small 
     businesses. Such interference, based on a company's number of 
     employees, seems to me to be unfair and unwise. Every 
     employer, regardless of size, should have the right to 
     continue to self-insure its health benefit plans. Employer 
     self-insurance is health reform that is already working.

  Mr. President, I ask unanimous consent that the entire article from 
the Arkansas Democrat Gazette be included in the Congressional Record 
at the conclusion of my remarks.
  I hope my colleagues in the Senate will support the amendment that 
Senator Coats and I will offer at the appropriate time to preserve the 
self-insurance option for thousands of small employers and millions of 
Americans who are already benefitting from this cost-effective and 
proven method of health care reform.
  There being no objection, the article was ordered to be printed in 
the Record, as follows:

    Self-Insured Health Coverage Works, There's No Need To Change It

                        (By F. Mac Bellingrath)

       There is a lot of talk in Washington these days about how 
     the federal government can help small employers provide their 
     employees with health benefits. Unfortunately, for all the 
     talk, Congress is coming close to outlawing one of the best 
     ways small employers throughout Arkansas and elsewhere have 
     found for providing good health benefits at a reasonable 
     cost--self-insurance.
       Through my own company, an Arkansas-based employer that 
     provides health care coverage for some 60 employees and their 
     families, I know first-hand of the savings that can be 
     accrued through self-insurance. Those savings have allowed 
     our company to be more cost-competitive in the marketplace 
     and have allowed our employees to enjoy a higher standard of 
     living through lower payroll deductions for their share of 
     the health-benefit cost.
       Legislation under consideration on Capitol Hill this week 
     would, for the first time, prohibit employers from self-
     insuring solely based on number of employees. That comes 
     despite the wide-spread adoption of self-insurance by 
     employers of all sizes--from the largest to many smaller 
     firms, such as my own. According to the U.S. Department of 
     Health and Human Services, 42 percent of small businesses 
     employing 50 to 99 people that provide health-care benefits 
     do so on a self-insured basis.
       Self-insurance makes it possible for small companies to cut 
     back on administrative expenses. Instead of paying between 16 
     percent and 40 percent of claims for conventional insurance 
     coverage, processing for self-insurance is typically done for 
     less than 6 percent of claims--about what a large business 
     might pay. Self-insured companies simply pay most of their 
     employees' medical expenses through a third-party 
     administrator, and buy aggregate stop-loss coverage to insure 
     against catastrophic losses above a chosen level.
       Secondly, many of us are being pro-active by working hand-
     in-hand with healthcare providers in the development of 
     innovative new approaches to sound managed care. With studies 
     showing that, aside from administrative expenses, health care 
     for a large employer costs as much as it does for a small 
     employer, self-insuring has proven to be an effective way for 
     small businesses to deliver excellent health benefits to 
     their employees at costs rivaling those of much larger 
     companies.
       Additionally, as a group, we self-insuring employers offer 
     more health promotion and wellness programs than the average 
     employer that relies on conventional health insurance, 
     according to the U.S. Department of Health and Human 
     Services. It found that self-insured companies were more 
     likely to offer these programs to workers in all 20 
     categories studied--ranging from blood pressure screening to 
     smoking cessation programs.
       Self-insured small businesses are already achieving what 
     many in Congress want to achieve through legislation--more 
     widespread health coverage and lower cost. It is discouraging 
     to me that there are some in Congress who want to outlaw 
     successful, grass-roots health reform here in Arkansas and 
     throughout the country. They propose forcing self-insuring 
     small employers into mandatory alliances or mandatory 
     insurance buying pools run by the government. Even if the 
     insurance buying pools they propose are voluntary, they would 
     force small employers to give up their self-insured plans, 
     and compel them to buy conventional insurance.
       That's really not the way to go. Why should Washington 
     force small business to get rid of what is already working, 
     and working well? It is the private sector that has the 
     reputation for developing ways to deliver more goods and 
     services for less money--not the federal government
       There is simply no compelling argument for Congress to 
     interfere with the concept of self-insurance for small 
     business. Such interference, based on a company's number of 
     employees, seems to me to be unfair and unwise. Every 
     employer--regardless of size--should have the right to 
     continue self-insuring its health benefit.
       Employer self-insurance is health reform that is already 
     working.

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