[Congressional Record Volume 142, Number 50 (Thursday, April 18, 1996)]
[Senate]
[Pages S3609-S3613]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                FUNDING MEDICARE FRAUD AND ABUSE CONTROL

  Mr. DOMENICI. Mr. President, earlier today we adopted an amendment, 
now that we have had a chance to review, we find creates a concern.
  In effect, in our proper and correct effort to address fraud and 
abuse in the Medicare Program, we converted spending that previously 
had been subject to appropriations into entitlement funding.
  Because of the consent agreement it is too late to fix this problem.
  I had an amendment, however, that would have corrected the problem.
  My amendment would have provided a different funding mechanism for 
the Medicare fraud and abuse control program. Instead of funding this 
program by creating a very large new entitlement program, my amendment 
would have provided a different funding mechanism.
  The issue is not whether we should fund the Medicare fraud and abuse 
control program, but how we should fund this program.
  I strongly support the Medicare fraud and abuse control program, but 
I am troubled by the fact that the bill in its current form would 
create $1.5 billion in new mandatory spending for the administrative 
expenses for three agencies.
  Congress already addressed this issue on the funding mechanism for 
the Continuing Disability Reviews [CDR's]. As part of the debt limit, 
we provided for funding for CDR's by providing a mechanism to give 
these programs additional funding through the appropriations process. 
My amendment would have essentially taken the same approach as we did 
with CDR's.
  Mr. President, Medicare fraud and abuse control is currently funded 
through discretionary spending. Discretionary spending is the funding 
we provide annually for programs through the appropriations process.
  My amendment would have replaced the unprecedented new entitlement 
spending for enforcement in this bill with a mechanism that would have 
provided an automatic upward adjustment for Medicare fraud and abuse 
control spending in the appropriations process.
  The Medicare Fraud and Abuse Control allowance proposed in this 
amendment would have provided an automatic upward adjustment in the 
discretionary spending caps to make sure additional funding for the 
Inspector General of the Department of Health and Human Services, the 
FBI, and HCFA is not curtailed by budget limits.
  However, under my amendment Congress would still have been required 
to annually review and fund these programs.
  I want to emphasize two important points, Mr. President. First, this 
amendment would have done exactly what we did for increasing funding 
for continuing disability reviews in the debt limit bill.
  Second, the policy effects for Medicare fraud and abuse control are 
exactly the same as in the current bill. The increased funding for 
fraud and abuse control would have still occurred, and the savings 
would still have resulted.
  Mr. President, we will never gain control of Federal spending unless 
we gain control of entitlement spending. My amendment would have kept 
us from heading down the slippery slope of creating new entitlements 
for administrative expenses.
  I hope that laying down this concern now, conferees on this bill will 
attempt to correct his problem before we take final action.
  I ask unanimous consent that a copy of the amendment I would have 
offered be printed in the Record.
  There being no objection, the text of the amendment was ordered to be 
printed in the Record, as follows:

       At the appropriate place, insert the following:

     SEC.   . MEDICARE FRAUD AND ABUSE.

       (a) Adjustment to Discretionary Spending Limits.--Section 
     251(b)(2) of the Balanced Budget and Emergency Deficit 
     Control Act of 1985 is amended by adding the following new 
     subparagraph:
       ``(I) Health care fraud and abuse control.--
       ``(i) Whenever a bill or joint resolution making 
     appropriations for fiscal year 1997, 1998, 1999, 2000, 2001, 
     or 2002 is enacted that specifies an amount for health care 
     fraud and abuse control under the heading `Health Care Fraud 
     and Abuse Control' for the Office of the Inspector General of 
     the Department of Health and Human Services, under the 
     heading `Health Care Fraud and Abuse Control' for the Federal 
     Bureau of Investigations, or under the heading `Health Care 
     Fraud and Abuse Control' for the Health Care Financing 
     Administration, the adjustments for that fiscal year shall be 
     the additional new budget authority in that Act for such 
     health care fraud and abuse control for that fiscal year and 
     the additional outlays flowing from such amounts, but shall 
     not exceed--
       ``(I) with respect to fiscal year 1997,
       ``(aa) $14,000,000 in additional budget authority and 
     $13,000,000 in additional outlays for the Office of the 
     Inspector General of the Department of Health and Human 
     Services;
       ``(bb) $8,000,000 in additional new budget authority and 
     $6,000,000 in additional outlays for the Federal Bureau of 
     Investigations; and,
       ``(cc) $18,000,000 in additional new budget authority and 
     $29,000,000 in additional outlays for the Health Care 
     Financing Administration;

     ``(II) with respect to fiscal year 1998,
       ``(aa) $29,000,000 in additional budget authority and 
     $28,000,000 in additional outlays for the Office of the 
     Inspector General of the Department of Health and Human 
     Services;
       ``(bb) $17,000,000 in additional new budget authority and 
     $15,000,000 in additional outlays for the Federal Bureau of 
     Investigations; and,
       ``(cc) $78,000,000 in additional new budget authority and 
     $89,000,000 in additional outlays for the Health Care 
     Financing Administration;

     ``(III) with respect to fiscal year 1999,
       ``(aa) $41,000,000 in additional budget authority and 
     $40,000,000 in additional outlays for the Office of the 
     Inspector General of the Department of Health and Human 
     Services;
       ``(bb) $27,000,000 in additional new budget authority and 
     $24,000,000 in additional outlays for the Federal Bureau of 
     Investigations; and,
       ``(cc) $143,000,000 in additional new budget authority and 
     $154,000,000 in additional outlays for the Health Care 
     Financing Administration;

     ``(IV) with respect to fiscal year 2000,
       ``(aa) $54,000,000 in additional budget authority and 
     $53,000,000 in additional outlays for the Office of the 
     Inspector General of the Department of Health and Human 
     Services;
       ``(bb) $37,000,000 in additional new budget authority 
     and $34,000,000 in additional outlays for the Federal 
     Bureau of Investigations; and,
       ``(cc) $213,000,000 in additional new budget authority and 
     $224,000,000 in additional outlays for the Health Care 
     Financing Administration;
       ``(V) with respect to fiscal year 2001,
       ``(aa) $70,000,000 in additional budget authority and 
     $68,000,000 billion in additional outlays for the Office of 
     the Inspector General of the Department of Health and Human 
     Services;
       ``(bb) $49,000,000 in additional new budget authority and 
     $58,000,000 in additional outlays for the Federal Bureau of 
     Investigations; and,
       ``(cc) $263,000,000 in additional new budget authority and 
     $274,000,000 in additional outlays for the Health Care 
     Financing Administration; and,
       ``(VI) with respect to fiscal year 2002,
       ``(aa) $88,000,000 in additional budget authority and 
     $86,000,000 in additional outlays for the Office of the 
     Inspector General of the Department of Health and Human 
     Services;
       ``(bb) $62,000,000 in additional outlays for the Federal 
     Bureau of Investigations; and,
       ``(cc) $283,000,000 in additional new budget authority and 
     $294,000,000 in additional outlays for the Health Care 
     Financing Administration.
       ``(ii) As used in this subparagraph--
       ``(I) the term `health care fraud and abuse control' means 
     the administration and operation of the health care fraud and 
     abuse control program including the following activities--
       ``(aa) prosecuting health care matters (through criminal, 
     civil, and administrative proceedings);
       ``(bb) investigations;
       ``(cc) financial and performance audits of health care 
     programs and operations;

[[Page S3610]]

       ``(dd) inspections and other evaluations; and
       ``(ee) provider and consumer education regarding compliance 
     with the health care fraud and abuse program;
       ``(II) the term `additional new budget authority' means new 
     budget authority provided for a fiscal year for health care 
     fraud and abuse control under the heading `Health Care Fraud 
     and Abuse Control' for--
       ``(aa) the Office of the Inspector General of the 
     Department of Health and Human Services in excess of 
     $53,000,000;
       ``(bb) the Federal Bureau of Investigations in excess of 
     $39,000,000; and,
       ``(cc) the Health Care Financing Administration in excess 
     of $407,000,000; and
       ``(III) the term `additional outlays' means outlays flowing 
     from the amounts specified for health care fraud and abuse 
     control under the heading `Health Care Fraud and Abuse 
     Control', including outlays in that fiscal year flowing from 
     amounts specified in Acts enacted for prior fiscal years (but 
     not before 1997), in excess of--
       ``(aa) $56,000,000 in a fiscal year for health care fraud 
     and abuse control by the Office of the Inspector General of 
     the Department of Health and Human Services;
       ``(bb) $38,000,000 in a fiscal year for health care fraud 
     and abuse control by the Federal Bureau of Investigation; and
       ``(cc) $396,000,000 in a fiscal year for health care fraud 
     and abuse control by the Health Care Financing 
     Administration.''
       (b) Budget Allocation Adjustment by Budget Committee--
     Section 606 of the Congressional Budget and Impoundment 
     Control Act of 1974 is amended by adding the following new 
     subsection:
       ``(f) Health Care Fraud and Abuse Adjustment.--
       ``(1) In General.--
       ``(A) When the Committee on Appropriations reports an 
     appropriations measure for fiscal year 1997, 1998, 1999, 
     2000, 2001, or 2002 that specifies an amount for health care 
     fraud and abuse control under the heading `Health Care Fraud 
     and Abuse Control'' for the Office of the Inspector General 
     of the Department of Health and Human Services, the Federal 
     Bureau of Investigations, or the Health Care Financing 
     Administration, or when a conference committee submits a 
     conference report thereon, the Chairman of the Committee on 
     the Budget of the Senate or House of Representatives 
     (whichever is appropriate) shall make the adjustments 
     referred to in subparagraph (C) to reflect the additional new 
     budget authority for health care fraud and abuse control 
     provided in that measure or conference report and the 
     additional outlays flowing from such amounts for health care 
     fraud and abuse control.
       ``(B) the adjustments referred to in this subparagraph 
     consist of adjustments to--
       ``(i) the discretionary spending limits for that fiscal 
     year as set forth in the most recently adopted concurrent 
     resolution on the budget;
       ``(ii) the allocations to the Committees on Appropriations 
     of the Senate and the House of Representatives for that 
     fiscal year under sections 302(a) and 602(a); and
       ``(iii) the appropriate budgetary aggregates for that 
     fiscal year in the most recently adopted concurrent 
     resolution on the budget.
       ``(C) The adjustments under this paragraph for any fiscal 
     year shall not exceed the levels set forth in section 
     251(b)(2)(I) of the Balanced Budget and Emergency Deficit 
     Control Act of 1985 for that fiscal year. The adjusted 
     discretionary spending limits, allocations, and aggregates 
     under this paragraph shall be considered the appropriate 
     limits, allocations, and aggregates for purposes of 
     congressional enforcement of this Act and concurrent budget 
     resolutions under this Act.
       ``(2) Reporting revised suballocations.--Following the 
     adjustments made under paragraph (1), the Committees on 
     Appropriations of the Senate and the House of Representatives 
     may report appropriately revised suballocations pursuant to 
     sections 302(b) and 602(b) of this Act to carry out this 
     subsection.
       ``(3) Definitions.--As used in this section, the terms 
     `health care fraud and abuse control', `additional new budget 
     authority', and `additional outlays' shall have the same 
     meanings as provided in section 251(b)(2)(I)(ii) of the 
     Balanced Budget and Emergency Deficit Control Act of 1985.''.
       (c) Control of Mandatory Spending.--Notwithstanding section 
     502(b) of this Act, funding for medicare fraud and abuse 
     control provided by this Act shall only be available to the 
     extent provided for in advance by appropriations Acts.
  Mr. HARKIN. Mr. President, I am pleased to support and serve as a 
cosponsor of the Health Insurance Reform Act of 1995. Senators 
Kassebaum and Kennedy have worked together in a bipartisan manner to 
craft legislation that every Senator should support because it will 
help millions of American families. As a member of the Labor and Human 
Resources Committee, I was proud to join in unanimous support for the 
bill in committee.
  This is not perfect legislation. It does not fix many of the flaws in 
the current health care system. But it represents an important step 
toward reforming health care and injecting some fairness and common 
sense into the system.
  While supportive of comprehensive health care reform in the last 
Congress I also offered a down payment that would have provided for 
insurance reform, enhanced tax deductibility of health insurance costs 
for the self-employed, and increased efforts to crack down on fraud, 
waste, and abuse in health care--all provisions contained in the bill 
the Senate is considering today.
  Millions of Americans would benefit from the insurance reform 
provisions in S. 1028. Provisions that would gradually raise the 
percentage of health insurance costs that the self-employed can deduct 
from 30 percent to 80 percent over the next 10 years would provide 
greater equity with larger businesses. And, I am pleased that the bill 
includes provisions to increase funds for the inspector general to 
combat Medicare fraud and establish tougher sanctions for committing 
fraud.
  Mr. President, Americans should not be denied health care coverage 
for changing jobs, getting sick or having a preexisting medical 
condition. And if someone loses their job, they shouldn't have to lose 
their health insurance, too. This legislation is designed to respond to 
those concerns.
  The Health Insurance Reform Act will provide American families with 
more security and choices. It will offer some welcome relief for 
American families worried about losing their health insurance. It will 
help prevent people from losing their health insurance when they become 
sick. And it will limit preexisting conditions. These are all 
fundamental, necessary reforms.
  I want to thank both Senators Kassebaum and Kennedy for working with 
all the members of the committee to strengthen the bill. I am 
particularly grateful for their help in making sure that the 
legislation prohibits group and individual health plans from 
establishing eligibility, continuation, or enrollment requirements 
based on genetic information. I offered an amendment on this issue 
during committee consideration of S. 1028 and am pleased it is included 
in the bill.
  I am also grateful for their help in ensuring that States are given 
appropriate flexibility. The legislation takes into account the 
progress already made by States like Iowa which just implemented 
additional and very significant insurance reforms on April 1 of this 
year. S. 1028 would allow States to preserve laws such as high risk 
pools that help small groups and individuals purchase insurance.
  The provisions in the legislation related to preexisting conditions 
are important and add some common sense to the current health insurance 
market. The bill limits the ability of insurers to impose exclusions 
for preexisting conditions. Under the legislation, no such exclusion 
can last for more than 12 months. Once someone has been covered for 12 
months, no new exclusions can be imposed as long as there is no gap in 
coverage--even if someone changes jobs, loses their job, or changes 
insurance companies.
  The bill also requires insurers to sell and renew group health 
policies for all employees who want coverage for their employees. It 
guarantees renewability of individual policies.
  It prohibits insurers from denying insurance to those moving from 
group coverage to individual coverage. It prohibits group health plans 
from excluding any employee based on health status.
  The preexisting condition provisions will help real people who have 
already experienced an illness and want to switch insurers or change 
jobs.
  For example, just last week a father from Iowa City called my office 
about his daughter who has a chronic health condition and will graduate 
from college this spring. He was worried that when she graduates and is 
no longer covered under his health insurance policy she will not be 
able to find insurance coverage for her chronic health condition.
  Because the Health Insurance Reform Act would require insurers to 
credit prior insurance coverage, his daughter can move to another 
health insurance plan without being denied coverage for her preexisting 
condition.
  The portability provisions in the bill will help with so-called job 
lock. Workers who want to change jobs for higher wages or advance their 
careers often have to pass up opportunities because it might mean 
losing health coverage. The portability provisions contained in

[[Page S3611]]

this legislation would benefit at least 25 million Americans annually 
according to the General Accounting Office. And, these provisions will 
provide greater security for the millions of Americans currently 
covered under group health plans.
  I've heard from Iowans who have had to pass up new job offers or 
forego starting their own small business because they or someone in 
their family has a preexisting condition. Workers with a sick child are 
forced to pass up career opportunities because their new insurance may 
not cover a preexisting condition for 6 months or more. These families 
have played by the rules and have been continuously insured--they 
deserve to know that if they pay their insurance premiums for years, 
they cannot be denied coverage or be subjected to a new exclusion for a 
preexisting condition because they change jobs. The Health Insurance 
Reform Act would allow people to switch jobs without worrying about 
denied coverage for preexisting conditions.
  Many States, including Iowa, have already enacted standards for 
insurance carriers. In fact, legislation passed in Iowa is more 
comprehensive in many respects and includes provisions that help make 
insurance more affordable for small groups and individuals. But, 
Federal legislation is necessary because States are prevented from 
regulating self-funded health plans--the type of plans that cover the 
majority of Iowans. This legislation will also provide a national floor 
and a guaranteed level of protection for all Americans.
  I support this bill and urge my colleagues to not offer amendments 
that will weaken it. We should keep this bill free of the objectionable 
provisions that were included in the House bill--provisions which will 
surely prompt President Clinton to veto the bill, and that will 
ultimately deny long-needed assistance to millions of middle-class 
American families.


                     Organ Donation Insert Card Act

  Mr. DORGAN. Mr. President, first and foremost, I would like to thank 
the distinguished managers on both sides for agreeing to include this 
critical provision in the Health Insurance Reform Act.
  The Senate's passage of the Organ Donation Insert Card Act is 
particularly timely. Next week is National Organ and Tissue Donor 
Awareness Week, and the need for organ and tissue donors is more 
crucial than ever. Right now, the national waiting list for an organ 
transplant has topped 45,000 people, and a new name is added to the 
list every 18 minutes.
  The Organ Donation Insert Card amendment represents a simple, cost-
effective way for the Federal Government to help save the lives of 
those who are waiting for an organ transplant. The amendment will 
provide millions of Americans with organ and tissue donor information 
with their income tax refund checks in 1997. This one-time insert will 
give taxpayers the opportunity to learn more about this important 
subject and to fill out cards to become donors.
  Each year, we miss thousands of opportunities for organ 
transplantation because of a hesitancy among next-of-kin to authorize 
donation when they do not know their loved ones wishes. Of the 20,000 
deaths each year that fulfill the medical criteria for becoming organ 
donors, only about one-fourth actually become donors.
  As a result, eight people die every day while waiting for a 
transplant. At least some of these deaths could be prevented through 
the information campaign authorized by the Organ Donation Insert Card 
Act.
  I understand that authorizing donation is a difficult decision for a 
grieving family to make, and their task is made much harder when they 
do not know their loved one's wishes. For that reason, I would like to 
take a moment to acknowledge a few of the families I have heard from 
who authorized donation.
  Gary and Bobbie Schroeder say they did not give a lot of thought to 
organ transplantation. I suspect that is true for many of us.
  But on November 26, 1989, their 21-year-old son Jeff was in a fatal 
car accident. Gary wrote to me,

       Jeff was a 4th year pre-med college student in Southern 
     California, when he and his roommate, returning from playing 
     in a college basketball tournament, ran into wet and slippery 
     roads and had a single car accident. Jeff sustained a head 
     injury, even though wearing his seat belt, causing brain 
     death. * * *

  Jeff was on life support, but tests showed absence of brain activity, 
and he was declared brain dead 4 days later.
  We were then given the opportunity of making a decision that would 
give some purpose to a tragic situation. * * * Donating Jeff's organs 
gave us the opportunity to start the healing process. * * *
  Jeff was a giver in life, always helping others; we know he would 
want to continue helping others, even in death.
  Jeff's organs helped sustain life to four other individuals, by 
giving his heart, liver, and kidneys. He helped give hope and extended 
life to the recipients and their families. Our decision to give has 
been a step toward healthy grieving, and we would make the same 
decision again.''
  Patrick Pins, a high school Social Studies teacher in Mandan, ND, 
also knows firsthand the difficult decision that families face when a 
loved one dies. In 1992, his wife Barbara was attending a family 
reunion with her family when she developed a severe migraine, nausea, 
and neck pain. Although she was rushed to the hospital, she had 
suffered severe brain trauma and died within 24 hours of arriving at 
the hospital.
  While only a machine kept Barbara's body alive, Patrick and the 
couple's three children struggled with their grief and talked and 
prayed. Ultimately, they decided to donate Barbara's organs.
  Today, like the Schroeders, Patrick says that confronted with the 
same decision again, ``I'd do the very same thing.''
  Throughout her life, Barbara's family and friends say the popular 
Head Start teacher constantly gave of herself and taught the children 
in her care and the people around her important lessons. Through the 
donation of her organs, she has been able to do the same even in death.
  As I have worked for the enactment of this bill, I have also been 
motivated by the many families who have shared with me their stories of 
agonizing months spent waiting for a suitable organ and of the joy of 
receiving a chance to live. I think it would be appropriate to share 
some of those stories to remind us all that there are names and faces 
behind the statistics.
  Donna Grendahl is a Minnesota mom whose son, Robby, received a heart 
transplant in 1986. In her letter to me, Donna wrote:

       My son received the gift of a new heart in transplant 
     surgery 9 years ago. * * * Now 9 years later, he is a 24-
     year-old college graduate. He teaches American history/civics 
     and coaches hockey and baseball at the high school level. * * 
     *
       Thanks to the availability of a donor, he has been able to 
     enjoy the gift of his second chance at life to the fullest.

       Bonnie Simonet, a wife and mother and a double-lung 
     transplant recipient, told me: ``I suffered for 10 years with 
     a disease to my lungs. . . .
       Oxygen kept me alive, but my lips and fingernails were 
     blue. I was on oxygen 24 hours a day, and I was only 47-years 
     young, which I consider too young to die. I had a life left 
     to live. . . .
       When my doctor suggested a lung transplant, it seemed so 
     drastic, but I wanted to live. I went through a week of 
     evaluation, many tests and had to get approval from my 
     insurance company. When this was set in motion, I was put on 
     the waiting list for a double lung transplant. . . .
       On August 4, 1994, after waiting on the list for 9 months, 
     I was called. . .. I was in surgery 6 hours and came out a 
     new person with a 2nd chance at life and a new attitude about 
     what is important.

       Janet Johnston's 19-month-old grandson, Colton, is alive 
     today because he received a new liver. According to Janet,

       My grandson, Colton, went through his first surgery at a 
     month and a half old, which didn't take care of his problem. 
     He was put on a list in January for a liver transplant. We 
     waited six long months, always worried if he was going to 
     live long enough before a liver became available. On July 
     16th we got our gift.
       We are pleased to support your proposed ``Organ Donation 
     Insert Card Act. Please continue to work hard. There are 
     people who do benefit and have happy endings.

       Finally, Gary Rux, a heart transplant recipient shares his 
     story:

       I recently received a copy of your proposed legislation for 
     an ``Organ Donor Insert Card.'' I want you to know that I 
     support this legislation with all of my new heart. . . .
       I have firsthand knowledge of what it is like to spend over 
     2 years dying, not knowing for sure if I would be around to 
     provide

[[Page S3612]]

     for my family. In spite of the time I spent waiting for a 
     heart, I ask that you offer no sympathy to me. I am one of 
     the lucky ones. . . . There are many, however, who are not so 
     lucky. It is they who need and deserve our sympathy. 
     Fortunately for them, you are in a position to do more than 
     simply offer sympathy. I thank you on behalf of the many 
     individuals who are waiting, and dying, at this very moment. 
     Bear in mind as you promote this legislation that some of 
     these individuals who are dying are just children. I believe 
     they deserve a chance, and with your and our support, perhaps 
     they can have that chance.

       Fortunately, these stories all have happy endings and they 
     are heartwarming to hear, but we must also remember the many 
     families who do not have a happy ending. In my view, the most 
     common tragedy of organ transplantation is not the patient 
     who receives a transplant and dies, but the patient who has 
     to wait too long, dying before a suitable organ can be found.
       But today, the Senate has taken a step to prevent some of 
     these needless deaths.
       In closing, I want to thank the many organizations and 
     supporters who have endorsed this bill and that worked 
     tirelessly for its enactment. I also want to mention my 
     Senate colleagues who have cosponsored the bill, Senators 
     Bradley, Cochran, DeWine, Frist, Helms, Inouye, Bob Kerrey, 
     John Kerry, Leahy, Levin, Moseley-Braun, Murkowski, Robb, and 
     Simpson.
       Finally, I want to again thank the managers, Senators 
     Kassebaum and Kennedy, for accepting this amendment, and I 
     look forward to working with them to retain it in conference.
  Mr. KYL. Mr. President, the U.S. Congress has begun the debate on 
legislation that will affect the way millions of Americans get their 
health insurance. Both the House and the Senate bills are intended to 
address a serious concern among millions of working Americans who 
currently have employer provided health insurance: the threat of losing 
private health insurance when they lose or change jobs or, try to 
obtain coverage when they have a preexisting medical condition.
  The Kennedy-Kassebaum bill contains some useful provisions and 
addresses some important problems in the health insurance market. 
However, I believe these problems are more effectively addressed in the 
health insurance reform plan passed on March 27 in the House of 
Representatives--and reportedly contained in the Finance Committee 
amendment.
  I believe the Kennedy-Kassebaum bill could be improved and expanded 
by incorporating important provisions in the House bill--and in the 
proposed Finance Committee amendment. These provisions more 
successfully address the health care problems faced by millions of 
Americans, such as:
  The Problem: An ambitious worker who wants to pursue a career 
opportunity, but can't change jobs because his son has cancer, and 
wouldn't be covered by a new employer's insurance.
  The Solution: The House bill guarantees that anyone with employer 
provided insurance can move to another job with employer provided 
insurance without losing coverage for a preexisting condition.
  The Problem: A worker is laid off, and can't get coverage for a 
preexisting condition in the individual market.
  The Solution: The House bill includes group-to-individual 
portability, so that when you leave a job that provided coverage for a 
chronic condition, you cannot be denied coverage in the individual 
market.
  The Problem: An uninsured entrepreneur who can't afford insurance as 
a self-employed person today.
  The Solution: The House bill allows the self-employed to deduct 50 
percent of their premiums from their taxes. Increasing deductibility 
makes health insurance more affordable for self-employed individuals. 
The Finance Committee amendment may increase the deduction to 80 
percent.
  The Problem: An uninsured person, out of work, who can't afford a 
costly individual policy because it is loaded down with State mandated 
benefits.
  The Solution: The House bill includes medical savings accounts, so 
that an individual can buy a high-deductible policy, with a much lower, 
more affordable premium.
  Mr. President, MSA's offer the ultimate in portability and 
affordability, and I want to further address this critical issue later 
in my remarks.
  The Problem: A small business employee, whose employer can't afford 
to purchase insurance for his five employees, because one of them has a 
chronic illness.
  The Solution: The House bill allows small businesses to group 
together to purchase health insurance.
  By grouping together, they can share risk and spread administrative 
costs over a larger group, lowering premiums for everyone.
  These ERISA regulated arrangements would be exempted from state 
mandated benefits and pooling prohibitions that can drive up the cost 
of care.
  The Problem: The federal tax code often discourages citizens from 
providing for their own health care needs.
  The Solution: The House bill provides for tax deductibility for long-
term care insurance premiums and expenses and, tax free use of 
accelerated life-insurance benefits for health expenses.
  The Problem: Fear of frivolous lawsuits and outrageous recoveries 
forces many doctors to practice costly ``defensive medicine.''
  The Solution: The House bill reforms medical malpractice claims. 
Patients who are injured as a result of malpractice deserve to be fully 
compensated.
  But in today's system, an enormous amount of money that should be 
dedicated to health care spending goes instead to lawyers--sometimes as 
much as 40 percent to 50 percent.
  The Problem: Fraud, waste, abuse and administrative inefficiency cost 
the health care system billions per year in wasted resources.
  The Solution: Tougher penalties for waste, fraud, and abuse along 
with administrative simplification through electronic billing and 
uniform forms.
  II. Mr. President, during this debate I plan to support the proposed 
Finance Committee Amendment. The provisions in this amendment will 
increase portability, tax equity, and affordability.
  Mr. President, it is my understanding that the following provisions 
will be included in the Finance Committee Amendment to the Kennedy-
Kassebaum Health Care Reform Act: an increase in the self-employed 
health care tax deduction to 50 percent or higher; medical savings 
accounts providing for deposits of $2,000 for individuals and $4,000 
for families; deductibility for long-term care premiums and expenses; 
and, tax-free treatment of accelerated death benefits for the 
terminally ill.
  Mr. President, assuming these provisions are included in the 
committee's amendment, it would not be my intention to offer any 
amendments; further, I would not object to a unanimous consent (UC) 
agreement.
  However, in the event that any of the above provisions are not 
included in the amendment, I will offer and support amendments to 
replace these provisions.
  III. The importance of MSAs. MSAs are one feature of the House bill--
and reportedly the Finance Committee Amendment--that will increase the 
portability, availability, and affordability of health insurance. MSA 
are a simple, low cost alternative to traditional health care insurance 
for the millions of Americans who cannot afford today's health 
insurance options or, who are not happy with available insurance 
options.
  Here is how an MSA can work: The employer purchases a high-deductible 
health insurance policy and places an amount of money equal to the 
employees' deductible in a special savings account called a medical 
savings account. The money in the MSA, tax-free, to cover most medical 
costs. The individual keeps what is not used after one year, collects 
interest, and the balance rolls over into the next year, when the 
employer makes additional contributions to the account.
  In addition to covering basic medical services, these funds can be 
used to cover services not covered by health insurance, such as 
elective surgery and long-term care. Money accumulated in an MSA can 
only be withdrawn for medical expenses as established by the Internal 
Revenue Code. For MSAs to receive the same tax treatment as employer-
provided health benefits plans, a high-deductible plan would have to be 
combined with the MSA. A high-deductible plan would have a deductible 
of at least $1,500 in the case of an individual, and $3,000 for a 
family. Individuals--including the self-employed--could make tax-
deductible contributions: up to $2,000 if single, $4,000 if married. 
The inside build-up would be tax-free. The amounts could be withdrawn 
from the MSA tax- and penalty-free if used for medical purposes. 
Employer contributions to an MSA would

[[Page S3613]]

not be taxable to the employee on whose behalf the contribution is 
being made.

  While Congress has been considering MSAs, many companies have gone 
ahead on their own and have developed highly successful MSAs or MSA-
type programs. A March 1995 study by the Evergreen Freedom Foundation 
analyzed the experience of 1037 companies nation-wide who had 
implemented MSAs. For instance, in 1994, the Valley Surgical Group 
Health Plan of Phoenix implemented an MSA plan for its 14 employees. 
According to the Evergreen Report, annual employer costs were reduced 
by $400 per employee in the first year alone. Mr. President, here is 
why MSAs will work:
  1. Parity in tax treatment: MSAs grant high-deductible health plans--
paired with an MSA--comparable tax treatment to that of other forms of 
employment-based group health plans, and allow people to claim the 
deduction even if they do not otherwise itemize taxes.
  2. Positive incentives: MSAs provide Americans the incentives to 
purchase health care more carefully by letting them keep what they 
don't spend.
  The current unlimited exclusion for employer-based health care 
encourages unnecessary spending.
  3. Major medical protection: MSAs insure that the necessary coverage 
will be there in the event of an illness or accident.
  4. The ultimate in portability: MSAs provide for real portability. 
Unlike other forms of employer-based health plans, medical savings in 
the MSA can be taken from job to job.
  5. More choices for consumers: The MSAs empower people to make their 
own health care decisions.
  Funds in the MSA may be spent, on qualified medical expenses that may 
not be covered under high-deductible plan (e.g., prescription drugs, 
durable medical equipment, etc * * *).
  6. MSAs Help meet long term care needs: MSAs will help people who 
want to protect themselves against future long-term care needs.
  MSA funds can be used to purchase long-term care insurance or 
services.
  7. States are moving toward MSAs: Arizona is one of 15 states that 
have already passed laws granting favorable tax treatment to MSAs.
  The failure to establish federal tax rules regarding MSAs will 
inhibit innovations that many states have decided is good health 
policy.
  Mr. President, in spite of the overwhelming evidence that MSAs are a 
viable health insurance alternative with wide appeal, there are still a 
few who say MSAs favor only the healthy and wealthy. This is 
inaccurate. While MSAs will be attractive for the healthy, they will be 
equally attractive for the sick. The reason: The MSA gives individuals 
the ultimate freedom to choose their health care providers, thereby 
allowing individuals to seek out the best health care services that 
meet their budget.

  The accusation that MSAs will work only for the wealthy is also 
inaccurate. According to a 1996 analysis by the Joint Committee on 
Taxation, middle-income Americans will choose MSAs. According to the 
Joint Committee, one million Americans are expected to sign up for 
MSAs. An estimated 650,000 people who earn between $40,000 and $75,000 
a year would chose MSAs., 120,000 with incomes between $30,000 and 
$40,000 would choose MSAs.
  MSAs could lower overall health care costs. Voluntarily uninsured 
workers might receive an incentive to obtain health insurance as a 
result of MSAs. Younger, healthier workers who don't purchase health 
insurance because they believe they will never get sick, would now have 
an incentive to be covered against major illnesses as a result of MSAs. 
This would increase the number of healthy people in the insurance pool 
and would lower overall health costs.
  Are supporters of MSAs out of the mainstream? No. As part of the 
Kennedy/Kassebaum bill, the Labor Committee passed a ``Sense of the 
Committee'' resolution that said:

       It is the sense of the Committee that the establishment of 
     medical savings accounts . . . be encouraged as part of any 
     health insurance reform legislation passed by the Senate.

  Also in the Kennedy/Kassebaum bill, there is a provision that allows 
Medicare risk HMOs to offer medical savings accounts.
  The Democratic support MSAs. In 1994, all the Democrats on Ways and 
Means voted to include MSAs in the Clinton plan. In 1994, 
Representative Gephardt included them in his Democratic Leadership 
bill. In 1992, Senator John Breaux introduced a bipartisan MSA bill. 
Senators Tom Daschle, Sam Nunn, Alan Dickson, Richard Shelby, David 
Boren co-sponsored the legislation. In 1994, Senator Paul Simon was a 
cosponsor of MSA legislation.
  Mr. President, MSAs are one of the keys to portability, 
affordability, and choice of health insurance for millions of 
Americans. I believe the Senate must pass MSAs.
  The PRESIDING OFFICER. The question is on agreeing to the committee 
amendment in the nature of a substitute, as amended.
  The committee amendment in the nature of a substitute, as amended, 
was agreed to.
  The PRESIDING OFFICER. The question is on the engrossment and third 
reading of the bill.
  The bill was ordered to be engrossed for a third reading, was read 
the third time.
  The PRESIDING OFFICER. Under the previous order, the clerk will 
report H.R. 3103.
  The legislative clerk read as follows:

       A bill (H.R. 3103) to amend the Internal Revenue Code of 
     1986 to improve portability and continuity of health 
     insurance coverage, and for other purposes.

  The PRESIDING OFFICER. By previous order, all after the enacting 
clause is stricken and the text of S. 1028, as amended, is inserted in 
lieu thereof and the bill is deemed read a third time.
  Under the previous order, the vote on final passage will occur on 
Tuesday, April 23, at a time to be determined by the majority leader.

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