[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.
____________________