[Congressional Record Volume 142, Number 88 (Friday, June 14, 1996)]
[Senate]
[Pages S6255-S6257]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                           HEALTH CARE REFORM

  Mr. COVERDELL. Mr. President, this past Monday while I was on the 
Senate floor, I suggested that there should be a relevance between what 
public policyholders say in the pursuit of seeking higher office and 
what they do if they are fortunate enough to achieve that.
  In particular, I was alluding to the promise that this administration 
made to middle America that it would significantly lower the tax burden 
on the American middle class, the vast majority of our American 
citizens, but, in fact, by August of the first year in office, they had 
totally reversed that

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promise and had, in fact, increased taxes at historical proportions, 
resulting in most American working families today having a higher tax 
burden, having less of their paychecks in their checking accounts than 
at any time in American history.
  But the administration made another promise that it did try to keep, 
in all credit. They promised to revise the health care system in the 
United States. Indeed, when they came before the American people, their 
proposal was to totally federalize or take American medicine and have 
the American Government take it over.
  So what that meant was that the Federal Government would increase to 
unprecedented proportions, that a new entitlement would be created that 
would be larger than any entitlement in American history, including 
Social Security, that 17 percent of the American economy would be taken 
over by the Government, and for the first time, Mr. President, the 
Government would control over half the American economy.
  I can remember saying at the time, as a kid, I never believed that it 
would be possible for me to be in the U.S. Senate debating whether or 
not the Government should control over half the American economy. But, 
indeed, that is what we were doing just 2 years ago.
  It was a very elaborate system that controlled every aspect of 
medicine. By the time the debate was over, Mr. President, the American 
people had defeated President Clinton's health care proposals. By the 
time the final cast was set, less than one-third of the American people 
supported the idea. Over two-thirds opposed it, because they saw it for 
what it was, a massive explosion in the growth of our Government, a 
massive incursion into the personal affairs of every American citizen 
and family and business and community, an enormous and explosive cost.
  Mr. President, at the time we were debating this proposal, often 
those of us, such as myself, were asked, ``Well, what would you do?'' 
We talked about targeted reform. We talked about making benefits more 
portable so that they could move with the employee and we could put an 
end to this job lock where a person who developed a medical problem 
could not move from one job to another because they would not have been 
able to keep their insurance.
  We talked about making the insurance marketplace more friendly. We 
talked about making it more possible for people to obtain insurance. We 
talked about making it a guaranteed issue, all of these targeted 
reforms that we thought would modestly change the marketplace and make 
it easier for uninsured people to gain insurance.
  Mr. President, this Senate and the House have both fulfilled that 
promise. They have done exactly that. They have passed health reform 
that eliminates job lock. It allows an ambitious worker to leave a job 
and move to a better one without losing health coverage. It allows the 
self-employed to deduct on their taxes 80 percent of their health 
insurance premium. This is an egregious--an egregious--error in the 
workplace. If you work for a large company, your health premiums are 
deductible, they are tax deductible. If you work for yourself, they are 
not. This corrects it. It allows the small business with 50 or fewer 
employees or the self-employed to have tax-free medical savings 
accounts.
  We have been joined by Senator Gramm, the senior Senator from Texas, 
who wants to speak on this subject. But let me just say that the 
designers of massive Government control of the health system are 
blocking this reform proposal through parliamentary means. They are 
refusing to allow the conferees to be selected. It is because they do 
not want the product of medical savings accounts, which allows the 
worker or the citizen to create a savings account to help them manage 
health costs, to lower health costs, to give them more freedom in the 
health care system. They do not like that. So they have systematically 
blocked these reforms that the Nation overwhelmingly supports.

  I find it a bit unusual that the last vestige of those who want to 
make the Government consume over half our economy, who want to run 
every aspect of our personal lives by controlling medicine and every 
doctor and every hospital, every cure that you may or may not want to 
use, just cannot abide the idea of allowing citizens this product to 
make choices on their own. I will come back to this subject in a bit. 
We have been joined by the senior Senator from Texas. I yield up to 10 
minutes to the Senator from Texas.
  Mr. GRAMM addressed the Chair.
  The PRESIDING OFFICER (Mr. Bond). The Senator from Texas.
  Mr. GRAMM. Mr. President, let me thank our dear colleague from 
Georgia. I want to say a few words on another subject, but let me 
address the subject at hand first. Let me say to our dear colleague 
from Georgia, I do not think he ought to be surprised.
  I believe that the final battle for the rights of man, the final 
determination of whether freedom, both economic and political freedom, 
will survive and prosper on this planet is not going to be determined 
on the frozen tundra of Russia, it is not going to be determined by 
debate in the Kremlin; it is going to be determined right here on the 
floor of the United States Senate.
  I try to make a distinction because I think Americans get confused 
about what freedom is. Freedom is not just the right to get up and 
criticize the Government. Freedom is not just the right to exercise 
political choices. Freedom is the right to exercise economic choices. 
Freedom is the right to buy the products you choose. Freedom is the 
right to spend your own money which you have earned by the sweat of 
your own brow. That is what we are talking about here today.
  I think probably most people are totally confused about what this 
debate is. Our Democratic colleagues are hoping they are. Because what 
this debate is all about is freedom. There are some Members of the U.S. 
Senate who are for it and there are some Members of the U.S. Senate 
who, in its economic manifestation of the right of people to choose 
what kind of health insurance they want, are against it.
  Senator Kennedy and the Democrats are saying, in holding up the 
conference on a health care bill that passed the Senate 100 to 0--100 
to 0--he is saying that he is opposed to it because if we go to 
conference with the House to work out our differences, medical savings 
accounts could end up in the bill.
  What are medical savings accounts? What we are talking about here is 
simply the right of people to choose between buying a low-deductible 
health insurance policy, which for a family of four costs about $4,200 
a year, where the insurance company starts paying almost immediately if 
somebody in your family gets sick. That is conventional health 
insurance. It has one big problem, and that is, once you are sick, you 
are spending somebody else's money. You have no incentive to be 
conscientious. Costs are exploding.
  Just imagine if you went to the grocery store, and you had a grocery 
insurance policy. For everything you put in your basket, the grocery 
insurance policy paid 95 percent of it. You would eat differently, and 
so would your dog. But what would happen is, grocery insurance would 
explode in cost. That is exactly what has happened in health insurance.
  What we are trying to do is to let people, especially young people 
who do not have much money, buy a new kind of health insurance policy 
that would have a higher deductible. You could buy a Blue Cross-Blue 
Shield policy, with a $3,000 deductible, for about $2,200 a year rather 
than the $4,200 a year you are paying for by buying the comprehensive 
low-deductible policy.
  Why $2,000 less? Because a lot of that is, for all practical 
purposes, prepaid medicine. What we are proposing is that people be 
able to take that $2,000 they save and put it into a tax-free savings 
account and use it to pay deductibles. But the magic, almost magical 
power of it, is that if they do not use the money for medical purposes, 
they get to keep it. So unless they get very sick, 92 percent of 
American families would never spend beyond their medical savings 
account in a year. So unless they get very sick, they have an incentive 
to be cost conscious because they are spending their own money.
  Here is the point. We are not trying to make people buy medical 
savings accounts. There is nothing in our proposal that makes anybody 
buy it. What we are trying to do is to let them do it. This is about 
freedom.
  Senator Kennedy and the Democrats claim, ``Oh, this program only 
helps

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rich people.'' Have you ever noticed that everything Democrats are 
against supposedly helps rich people? They did not want to cut taxes on 
working families, a $500 tax credit per child, because they say that 
helps rich people. If they want to raise taxes, of course, they claim 
they are taxing only rich people.
  In any case, do rich people care about this? What difference does it 
make to rich people whether they buy a low-deductible or high 
deductible policy? By definition, if you are rich, you have a lot of 
money. It cannot make possibly any difference.
  But let me tell you who it makes a difference to. I have a son who 
just turned 23 years old. He is off my insurance policy. For the first 
time in his life, he is trying to decide how he is going to get health 
insurance and how he is going to buy it. He is as healthy as most 23-
year-old males and females are. Why not allow him to buy a high-
deductible policy and take the savings, put them into a medical savings 
account and build up a nest egg to go to graduate school, or to try to 
start a business, or to buy a home when he gets married?

  When we debated this subject before, I had quotes from two so-called 
rich people who use medical savings accounts. One of them was a united 
mine worker, because the United Mine Workers Union has medical savings 
accounts, but they do not get fair tax treatment on them. They have to 
pay taxes on them. The other was a part-time bus driver. They were 
arguing they ought to be treated fairly, and I agree with them and not 
with the Senator from Massachusetts, who is objecting to letting us 
appoint conferees and bring this bill up.
  The second argument is, well, look, this helps young people and 
healthy people. Who does not have health insurance? Basically, young 
healthy people are not buying health insurance because, A, they do not 
think they need it right now and, B, they cannot afford it. Why not 
have a policy available that may not be used by everybody, but that 
will be used by young people so that they can buy basic coverage. The 
Democrats' solution is to guarantee that they can buy insurance in the 
future once they get sick rather than now when they are young and 
healthy, but at the cost of charging everybody else higher rates.
  We need medical savings accounts, and this is about freedom. The 
Democrats want the Clinton-type health care bill. That is what they 
want. And they know medical savings accounts move us toward private 
family decisions. They want Government decisions. That is what this 
debate is about, and if you believe in freedom, you are with us.

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