[Congressional Record Volume 142, Number 93 (Friday, June 21, 1996)]
[Senate]
[Pages S6634-S6643]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                           HEALTH CARE REFORM

  Mr. COVERDELL. Mr. President, we are now in the 61st day of the 
objection of Senator Kennedy to the appointment of Senate conferees for 
health care reform--a commonsense health care reform issue. It raises 
the question, why ought not everyday citizens be given the opportunity 
to share in the massive benefits that this health care reform proposal 
would bring to America? Why would they be denied this? What does the 
bill do, and why can we not get on with it and get this job done? I 
know every American across the country is asking that question.
  Under this legislation, for the first time, working Americans will be 
able to leave their jobs without having to worry about losing their 
health insurance due to a preexisting condition. The question to 
Senator Kennedy is: Why not get on with this and just do it? We have 
been talking about it now for years. It makes health care coverage more 
available and affordable for small businesses and the self-employed. 
Why not just get this done? Let us move on with this.
  It allows tax deductions for long-term health care needs, nursing 
home coverage, home health care coverage, and allows terminally ill 
patients and their families to receive tax-free accelerated death 
benefits from their insurance companies. That allows a family in a time 
of enormous crisis an option to help deal with that crisis. Why not 
just do it? Let us get this done.
  We have been badgering around here now 61 days trying to get 
conferees appointed so that we can move on with the business of helping 
the American family in the critical health insurance market.
  Here is the point. It creates a medical savings account program--the 
House version does, the Senate did not; there are many, many Senators 
who want to agree with the House--effective next January, according to 
the compromise proposal people are trying to work out, for self-
employed and those who work for small businesses with 50 or fewer 
people. I have heard several versions of this. I know it is a moving 
target. But medical savings accounts are a creature of the market that 
many, many people want to take advantage of.
  This is the principal reason, although there are others, apparently, 
that Senator Kennedy has raised ongoing objections to. The bill fights 
fraud and abuse with new and tough provisions in the health care 
market.
  So here we go. We make it possible for families to take insurance 
benefits and endless job lock, where somebody might get a chance to 
have a new job but they cannot move because they are afraid they will 
lose their insurance. This corrects that. Let us just do it.
  It makes health care coverage more available and affordable to small 
businesses and the self-employed. This is something America needs. Let 
us just do it.
  It allows tax deductions for long-term health care needs. It lets 
people in a time of tragedy accelerate benefits. It creates, yes, a new 
medical savings account, which is a version where the ensured has an 
opportunity to lower their costs, and they actually became paying 
consumers in the marketplace. It fights fraud and abuse.
  We should do these things for the country. By the time we get back, 
we will have waited 63 days just to appoint conferees.
  So America is sitting out here waiting and waiting, and families are 
suffering and suffering and suffering because the Congress will not get 
on and pass this meaningful reform.
  Who supports this commonsense health reform approach? It is a wide 
range of support. The American Hospital Association, Farmers Health 
Alliance, National Association of Manufacturers, National Federation of 
Independent Businesses, National Association for the Self-employed, 
Alliance for Affordable Health Care, American Small Business 
Association, as well as many others, have endorsed this commonsense 
approach to making the health insurance market a friendlier place, an 
easier place for America's families and America's businesses. And they 
are all put on hold because the Senator from Massachusetts and the 
White House are objecting to an open market and a new product for the 
market called medical savings accounts.
  Mr. President, the Senator from Massachusetts, Senator Kennedy, has 
had a lot of things to say about these medical savings accounts. There 
is an article in Investors Business Daily written by John C. Goodman, 
who says this:

       Medical savings accounts give people a new way to pay for 
     health care. The option is a high deductible health insurance 
     paired with a personal savings account. The individual uses 
     his or her account to pay for routine and preventive medical 
     care while the policy pays for major expenses. Individuals 
     who have money left over in the MSA at the end of the year 
     can withdraw it, or roll it over to grow with interest.

  This is a great idea. This is a way in which many Americans have 
saved thousands of dollars in automobile insurance. They bought 
policies where they have high deductibles so they pay lower premiums, 
and they are in a sense self-insuring and paying for small costs 
themselves so that they can lower their overall cost. So the idea has 
been brought over to the health insurance market.
  Some 2,000 employers have adopted some version of an MSA already. 
Senator Kennedy from Massachusetts says that MSA's are only for the 
healthy. The Rand analysis says no. It says no, that that allegation 
from the Senator from Massachusetts is not correct.
  Rand researchers conclude that MSA's would be attractive to those who 
expect to face high health care costs. That is because potential out-
of-pocket expenses under traditional health insurance, which requires 
deductibles plus copayments, are higher than under MSA plans.
  Senator Kennedy says MSA's are only for the wealthy. There are just 
reams of research that say that is not the case. We have example after 
example, person after person, school bus drivers, secretaries in a 
library, in MSA plans. These are not wealthy people. And they are 
coming to the Congress and saying, ``Give us these options, make MSA's 
copartners in the health insurance market so that our costs are 
deductible.''

  Mr. President, I am going to yield at this point after this opening 
statement. I am going to yield to the Senator from Washington, who I 
appreciate very much being here this morning.
  Mr. GORTON addressed the Chair.
  The PRESIDING OFFICER. How much time is yielded to the Senator from 
Washington?
  Mr. COVERDELL. I yield up to 10 minutes.
  The PRESIDING OFFICER. The Senator from Washington is recognized for 
up to 10 minutes.
  Mr. GORTON. Mr. President, I am convinced that the Senator from 
Georgia is correct in his analysis in what he has told us here in the 
Senate. We have now waited for more than 2 months facing a filibuster 
even of a procedural motion formally to appoint a conference committee 
to settle a set of vitally important health care issues for the people 
of the United States.
  Mr. President, there is little controversy over the desirability of 
portability of health care insurance, over

[[Page S6635]]

certain restrictions on health care limitations because of preexisting 
conditions and a number of other features of the bill that passed the 
Senate. But the senior Senator from Massachusetts is so vehemently 
opposed to a concept called medical savings accounts that he and those 
who support it will not even permit a debate in the Senate, a vote in 
the Senate, on the issue.
  The Senator from Georgia pointed out that this is not a new concept. 
It is very much like the automobile insurance that all of us purchase 
in which we can make a set of value judgments and choices. Do we want 
to pay a high premium and have even minor damage to our automobiles 
paid for by the insurance companies, or are we willing to accept a high 
deductible up to an amount which we feel we can afford to pay ourselves 
in return for a much lower premium for an automobile insurance policy 
that will take care of the situation if our car is totaled or badly 
damaged?
  A medical savings account is essentially the same thing except 
because we place such a high value on health care insurance that we 
will offer certain tax advantages to that high deductible health care 
insurance, saying that people can save an amount of money up to that 
deductible on a tax-free basis to pay for the everyday health care 
insurance costs out of it and end up having the money itself if they do 
not actually use it and, at the same time, have a catastrophic health 
care plan which will keep families from bankrupting, or from tremendous 
financial distress in the case of major health care needs.
  One of the reasons that many people lack health care insurance today 
is the fact that they are in States or communities with community 
ratings, which means that young people with young families are required 
to pay far more for standard health care insurance policies than they 
are likely to use. And so they choose to have no insurance at all, 
running a very real risk in the process. As a consequence, if this 
proposal works, more people will have health care insurance against a 
catastrophic event in their lives than have it today.

  Perhaps the true objection of the senior Senator from Massachusetts 
is that as more people are insured against health care disasters in a 
free and voluntary system, there will be less demand for the 
nationalized health care system that he so vehemently supported in the 
last Congress and which failed when the American people decided that 
they did not want the Government of the United States to be running 
their health care.
  Personally, I think that may be the real objection, because it 
appears to me that there can almost be no other, to at least an 
experiment involving those who are self-employed or those who are 
employed by small businesses, many of which do not provide health care 
for their employees at the present time. If we go into this experiment 
and if this experiment works, more companies will provide health care 
for all of their employees on this catastrophic basis because it will 
cost them less. More employees will be encouraged to say more of us who 
are all consumers of health care will pay more attention to what it 
costs and we may end up with a far more efficient system than we have 
today.
  Right now, we are not only being denied that experiment, we are being 
denied even those other elements on which there is full agreement 
because one group of Members of this body says, no, this is such a 
terrible idea; it is so dangerous to let people make their own choices 
that we will stop the whole thing, the entire health care reform in 
order to prevent this from taking place.
  I appreciate the opportunity to speak on this issue and seek the 
attention of the Senator from Georgia, who was kind enough to lend me 
this time, to ask him as a leader in this effort whether or not he 
agrees with these sentiments. Does the Senator from Georgia not agree 
that perhaps the central real objection here is an objection to 
allowing people a greater degree of choice over how they fund their 
health care, a greater degree of choice over ways in which insurance 
may be provided, a greater degree of attention to costs, simply a 
greater degree of control over their own lives?
  Mr. COVERDELL. I think the Senator from Washington has very 
eloquently described this condition and the source of the disagreement 
because, after all, it was the senior Senator from Massachusetts and 
his colleagues who came forward with an all-inclusive Federal takeover 
of medicine, and the medical savings account is the antithesis of it 
because there is a freedom there, the freedom to the buyer of the 
insurance. There is an access in the system and, indeed, it will reduce 
dramatically the number of people who do not have insurance.
  I tell you a clue, a clue to the objective on the other side is that 
in the negotiation as to whether to allow the experiment, one 
suggestion was that the only business that could buy an MSA was one 
that already had a low deductible plan now. So it was actually 
constructed, the suggestion is constructed to prevent small businesses 
that have no insurance from exercising the MSA option.
  Mr. GORTON. To try to see to it that we did not have more people 
covered by health care insurance.
  Mr. COVERDELL. Correct.
  Mr. GORTON. But have a statistic that you could go out and argue we 
need a national system, we need a national health care system because 
there are millions of people who are uninsured, rather than reduce that 
number by this new and constructive experiment.

  Mr. COVERDELL. First of all, those who oppose it have articulated 
their opposition and I think with specious arguments. Second, they want 
caps on it, they want parameters all around it, so you can draw the 
conclusion that the effort is to prevent people from getting to this 
kind of coverage.
  Mr. GORTON. I have only one more comment and I wonder if the Senator 
from Georgia agrees with this proposition. Does he not believe, as I 
do, that if this bill were to come back to the Senate with this modest 
experiment on medical savings accounts included, it would have a 
significant majority of the votes of the Members of this body, 
Democrats as well as Republicans, and would easily go to the President, 
and that one of the reasons for this filibuster is to prevent that 
majority view from prevailing and to prevent the embarrassment of the 
President either having to veto this proposal as he has threatened to 
do or actually to back off and sign it?
  Mr. COVERDELL. I think we can safely draw that conclusion.
  Mr. GORTON. I thank the Senator from Georgia for yielding me this 
time.
  Mr. COVERDELL. I thank the Senator from Washington. I think he has 
made a very, as I said, eloquent statement with regard to this debate.
  I now yield up to 10 minutes to the distinguished Senator from 
Delaware.
  The PRESIDING OFFICER. The Senator from Delaware is recognized for up 
to 10 minutes.
  Mr. ROTH. Mr. President, as my distinguished colleagues have already 
pointed out, we have been waiting for nearly 2 months to move forward 
on critical health insurance reform legislation. The holdup, we are 
told by the White House and some of our colleagues on the other side of 
the aisle, is this provision to create a tax-free medical savings 
account as a health insurance option for Americans.
  Tax-free medical savings accounts are something Americans want, 
although you would never know it from the hyperbole being used by some 
of my colleagues on the other side of the aisle. A poll released this 
month shows that 77 percent of working Americans would start a medical 
savings account if MSA's were available to them. Americans who have 
MSA's like them, and Americans who do not have MSA's want them.
  MSA's exist now. They have been tested by thousands of companies with 
great success. What we want for MSA's is equal tax treatment with other 
types of employer-provided health insurance for the self-employed, the 
ability to contribute to a medical savings account and receive a 100-
percent deduction for their contribution up to $2,000. This provision 
would end the current Tax Code discrimination against MSA's by ending 
the taxation on MSA deposits.
  Republicans in the House and Senate have been willing to compromise 
on MSA's. We have addressed many of the administration's and Senator 
Kennedy's concerns about MSA's. We have

[[Page S6636]]

put forward proposals that are small, small enough to be considered as 
demonstration projects. This was one of the often-stated criteria of 
the White House and some of our Democrat friends. The American Hospital 
Association this week endorsed our compromise. Both of the latest 
compromises extending MSA's to companies with either 50 or 100 or fewer 
employees would extend this tax free status to the segment of the work 
force that has the highest number of uninsured employees--small 
businesses.
  MSA's are of such importance in our effort to address our health 
concerns that on September 8, 1992, several of my distinguished 
colleagues signed a letter calling for the introduction of MSA's as 
part of their bill.
  Let me quote a portion of that letter.

       Unlike many standard third-party health coverage plans, 
     medical cost savings accounts would give consumers an 
     incentive to monitor spending carefully because to do 
     otherwise would be wasting their own money. Once a Medical 
     Savings Account is established for an employee, it is 
     fully portable. Money in the account can be used to 
     continue insurance while an employee is between jobs or on 
     strike. Recent studies show that at least 50 percent of 
     the uninsured are uninsured for four months or less. . . . 
     Today, even commonly required small dollar deductibles 
     (typically $250 to $500) create a hardship for the 
     financially stressed individual or family seeking regular, 
     preventative care services. With Medical Savings Accounts, 
     however, that same individual or family would have this 
     critical money in their account to pay for the needed 
     services.

  Mr. President, these are important arguments that were made for MSA's 
over 3 years ago. They are equally--if not more--important today. And 
that letter was signed by Senators Breaux, Boren, Daschle, Lugar, 
Coats, and Nunn--a formidable bipartisan coalition of Senators taking a 
necessary stand on a critical issue.
  Medical savings accounts promote portability. It's that simple. After 
a few years of relatively low health expenses, the excess funds in an 
MSA can be available for an unexpectedly high health care cost. Those 
funds can be available for health care during times of unemployment, 
and they can provide extended coverage for long-term needs. These, of 
course, are critical issues when it comes to portability.
  The MSA is an attractive alternative for families. It gives the 
American family the greatest flexibility in choosing its own health 
care provider. With MSA's, you, the patient, are able to select the 
doctor or provider you desire, without interference by the bureaucracy. 
And this can be very important to people, especially when confronted 
with serious illness or disability.
  MSA's provide flexibility for families to purchase insurance in the 
event the family loses its job or if it wants to buy long-term health 
insurance. Under our legislation taxpayers will be able to use money in 
their medical savings accounts without penalty to make COBRA payments--
to continue their catastrophic health insurance policy in the event 
they lose their jobs.
  MSA's allow funds from the account to be used to purchase long-term 
care insurance. Thus, MSA's help provide nursing home care, which, in 
turn, helps relieve those costs borne by Medicaid.
  MSA's will go a long way toward containing health care costs. They 
will encourage consumers to shop wisely, to reject unnecessary 
treatment and conserve scarce medical resources. Why? Because with 
MSA's it's the consumer and not some third party who pays the bills.
  Medical savings accounts will offer millions of employees and self-
employed individuals an affordable health care option. A high-
deductible insurance policy coupled with an MSA is less expensive than 
traditional insurance.
  The American Academy of Actuaries reports that MSA's will be 
attractive to small businesses and their employees as well as to self-
employed Americans. Many of these individuals do not have health 
coverage, and MSA's have the potential to increase health insurance 
coverage among this group.
  Medical savings accounts are proven. They have been used, and they 
have been used successfully by hundreds of companies all across 
America. These companies have found that by empowering their employees 
to take charge of their own care, spending costs have declined.
  Unfortunately, the companies currently using MSA's are limited 
because our tax laws basically penalize employees who choose to be 
covered by MSA's. Under current law, at the end of the year, employees 
have to include the full amount of the money deposited into his or her 
MSA in their taxable income. This is absurd. These people are being hit 
for being responsible, for being self-reliant, for taking charge of 
their own health care needs.
  This must be corrected, Mr. President. In a campaign of 
disinformation the administration claims that MSA's will be a tax break 
for the rich. This is not true. Companies that provide MSA's find them 
to be very popular among their low- and middle-income employees. In 
fact, the Joint Committee on Taxation reports that 78 percent of MSA 
users will have incomes of less than $75,000.
  As Congressmen Torricelli and Jacobs wrote in a letter to the 
President, dated April 17:

       You also should know that the current contract of the 
     United Mine workers provides its members with MSA's. We do 
     not believe the UMW qualifies as healthier and wealthier than 
     the general population--a charge leveled by uninformed MSA 
     opponents.

  The administration predicts that MSA's will discourage preventive 
care. In fact, Mr. President, many companies with MSA's find the 
opposite to be true. Medical savings accounts encourage people to get 
preventative care because they have money in their account to pay for 
this care. It is interesting to note that many traditional low 
deductible insurance policies do not cover preventative care.
  The administration asserts that MSA's will be attractive to the young 
and, healthy, leaving the less healthy to pay higher insurance 
premiums. Unfortunately for the administration, this again is not true. 
The hundreds of companies that offer MSA's to their employees find them 
to be attractive to workers of all health status. This is because an 
MSA provides first dollar coverage for many medical expenses not 
otherwise covered by traditional low-deductible health insurance.
  Mr. President, it is interesting to note that 12 States and at least 
1 city have passed medical savings account legislation and dozens more 
are moving to pass similar legislation. It is the Federal Government 
that must now move ahead with this idea.
  Again, the need to move ahead is nothing new. Three years ago, 
Senators Daschle, Breaux, Boren, and Nunn joined Senators Lugar and 
Coats to pass what they firmly believed was a much needed program. 
Today that program is needed--now more than ever.
  I urge my Democratic colleagues to end their blockade of health 
insurance reform, and work with us to make affordable health insurance 
a reality for more Americans.
  The PRESIDING OFFICER. The Senator from Georgia.
  Mr. COVERDELL. Mr. President, I thank the Senator from Delaware for 
his very authoritative remarks on this MSA account and on health care 
reform in general. We appreciate his dedication to this work. I yield 
up to 10 minutes to the Senator from Tennessee.
  The PRESIDING OFFICER. The Senator from Tennessee is recognized for 
up to 10 minutes.


                         privilege of the floor

  Mr. FRIST. Mr. President, I ask unanimous consent that a legislative 
fellow on my staff, Dr. Jonelle Rowe, be granted the privilege of the 
floor for today.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. FRIST. Mr. President, I join my colleagues today to expand a bit 
upon the Health Insurance Reform Act, where it stands today, but 
focusing on the area under discussion--which is currently, in essence, 
being filibustered--and that is the medical savings account issue. On 
both sides of the aisle it is apparent that, for the first time, at 
least since I have been here over the last 2 years, we are very close 
to passing a health insurance bill that is market based, that is 
incremental, and that reaches out to many people who do not have health 
insurance today, directly and indirectly. But even more important, I 
think, and more specifically, this bill addresses the issues of 
portability and preexisting illness for people who do have health 
insurance today and who are in group plans; portability being if you

[[Page S6637]]

are in a group plan now and you have insurance, and either you lose 
your job or you go from one job to another job, you can take that plan 
with you.
  It is not quite that easy, but you will have access to a health care 
plan when you switch jobs or if you lose your job, and that is the 
portability concept. The preexisting concept being, if you have heart 
disease and have had a heart attack, you can still get insurance if you 
go from one job to another.
  The Senate has debated again and again, before I was in this body, 
these issues, really for the past 6 years. There is general agreement 
on these two particular issues.
  But today that bill, which is a positive bill, the Kassebaum-Kennedy 
bill, is being held up by this filibuster on medical savings accounts.
  We hear a lot about medical savings accounts, and it is important 
that, on both sides of the aisle, people understand what they are.
  It is very, very simple. A medical savings account is a high-
deductible, say $2,000, catastrophic insurance plan. So, if you have 
medical expenses that are greater than, for example, $2,000, your 
catastrophic insurance plan would kick in and you would have coverage 
for your health care expenses.
  That high-deductible catastrophic plan is coupled with a tax 
deductible personal savings account, in which you would take, for 
example, $2,000 a year over which you have some sort of tax relief, and 
that is placed in a personal medical savings account.
  It is out of that personal medical savings account, a little bit like 
a medical IRA, that you can draw to pay for your routine medical 
expenses, whether it is going to the dentist or paying for 
prescriptions or paying for that annual checkup or paying for that 
treatment of heart disease, whatever it is. The point is, you have 
access to that money and you use that money, you have control over that 
money. It empowers the individual.
  I say that as background, because the issues that are debated on this 
floor again and again are: Will it save money? Will there be just 
healthy people coming in or will it be just the sickest people coming 
in? What will it do to the insurance industry?
  There was a wonderful article that the Senator from Georgia referred 
to earlier that was published just this past week in the Journal of the 
American Medical Association. That article was this past week. The 
article itself is called ``Can Medical Savings Accounts for the 
Nonelderly Reduce Health Care Costs?'' At this juncture, Mr. President, 
I ask unanimous consent that an excerpt from the study be printed in 
the Record.
  There being no objection, the excerpt was ordered to be printed in 
the Record, as follows:

   [From the Journal of the American Medical Association, June 1996]

  Can Medical Savings Accounts for the Nonelderly Reduce Health Care 
                                 Costs?

 (By Emmett B. Keller, Ph.D.; Jesse D. Malkin; Dana P. Goldman, Ph.D.; 
                        Joan L. Buchanan, Ph.D.)

       Objective.--To understand how medical savings account (MSA) 
     legislation for the nonelderly would affect health care 
     costs.
       Design.--Economic policy evaluation based on the RAND 
     Health Expenditures Simulation Model.
       Setting.--National probability sample of nonelderly 
     noninstitutionalized households.
       Participants.--Persons in 23,157 sampled households from 
     the 1993 Current Population Survey.
       Interventions.--Medical savings account legislation would 
     allow all Americans who are covered only by a catastrophic 
     health care plan to set up a tax-exempt account that they can 
     use to pay medical bills not covered by their health 
     insurance. The interventions we evaluate differ in the 
     deductibles of the catastrophic plan and in whether the 
     employee or employer funds the MSA.
       Main Outcome Measures.--Changes in national health 
     expenditures and net social benefits of health care.
       Results.--If all insured nonelderly Americans switched to 
     MSAs, their health care expenditures would decline by between 
     0% and 13%, depending on how the MSAs are designed. However, 
     not all nonelderly Americans would choose MSAs; taking into 
     account selection patterns, health spending would change by 
     +1% to -2%.
       Conclusions.--Medical savings account legislation would 
     have little impact on health care costs of Americans with 
     employer-provided insurance. However, depending on the size 
     of the catastrophic limit, waste from the excessive use of 
     generously insured care could be reduced, and MSAs would be 
     attractive to both sick and healthy people.

  Mr. FRIST. Mr. President, it is a fascinating article, and I had the 
opportunity to meet here in Washington with the principal author on 
this particular study, Dr. Emmett Keeler. We had a chance to talk about 
the study. I do think Members on both sides of the aisle should read 
it. In the conclusions, in the abstract, it goes on, but the last 
sentence basically says:

       Depending on the size of the catastrophic limit, waste from 
     the excessive use of generously insured care could be 
     reduced, and MSAs would be attractive to both sick and 
     healthy people.

  I just quote from the conclusions. I do encourage my colleagues to 
read this study. The cost issue talked about is a great model. It is 
developed from a policy standpoint projecting ahead. I think that is 
terribly important to do.
  I do think we need to come back and say, fundamentally, that we are 
not going to be able to answer whether it is going to cost a little bit 
more or a little bit less with the data that is out there today. 
Therefore, I would like to turn to what nobody talks about--the policy 
people do not talk about, the think tanks do not talk about. I have not 
heard it yet in the debate over the last 18 months on this Senate 
floor. I have not heard it among the think tanks in Washington. I have 
not heard it talked about among the economists. And that is the 
perspective of where health care is delivered, and that is at the 
physician-patient level. It simply has not been talked about yet.
  The debate here 3 years ago, or 4 years ago, when we were debating 
the one-size-fits-all Clinton health care plan, failed in this regard 
as well. There were about 500 people involved, much of it was behind 
closed doors. The public did not have input in those discussions, and 
real-life people and physicians were not even in the room, people who 
are involved in that doctor-patient interaction everyday.
  Why is it important to look at that level? And this is the key point 
that people miss or do not talk about, and that is because it is at 
that level that behavior is actually changed, the behavior of the 
patient who comes in who is suddenly empowered to ask certain 
questions. Why? Because they are spending their own money. Not like 
today, in most cases, where the insurance company is paying for it or 
the public dole is paying for it, or Medicare is paying for it or 
Government is paying for it. It changes the dynamics of that 
relationship because we have empowered that individual who is coming 
in, knowing they are going to be drawing money from their personal 
savings accounts in order to buy health care, to buy health care 
services.
  Let me give you my own experience as a physician who has been 
involved in the field of medicine for the last 20 years before coming 
to this body. And it is this: When somebody comes into that office and 
they have chest pain and they are spending their own money and not 
spending the insurance company's money or spending the Government's 
money, they ask three questions. Those three questions are asked very 
directly, looking you in the eye. Basically, they are:
  ``What are your credentials, Dr. Frist?''
  Second: ``How much do you charge?''
  Why do they ask that? Because they are going to be paying for it out 
of their own personal savings account.
  And third: ``What kind of results do you have?'' ``Are the results 
good or bad?'' ``How do you compare to other people?''
  Why? Because that individual coming into the office is empowered for 
the first time because it is their money they are spending.
  How are these questions really asked? People will come in, with 
regard to credentials, and they will look at your wall to see where you 
graduated from school. All of us, when we go into a doctor's office, 
see the diplomas, but they go beyond that:
  ``Where did you do your internship?''
  ``Where did you do your residency training?''
  ``Do you participate in writing peer review articles in your 
journals?''
  ``Do you participate in your professional societies?''
  ``Are you board certified?''
  Those are the sort of questions that are asked, once you empower 
somebody who comes into your office.

[[Page S6638]]

  What is the end effect of that? The effect of that to me as a 
physician, when people ask me those questions, is to do what? Is to 
take off a week, a year and do that continuing education course. If I 
do not have my boards, it is for me to go back and pass my boards or 
get board certified, because they are asking me that question. If 
enough people ask me that question, I know they are going to be going 
to the board-certified surgeon rather than the nonboard-certified 
surgeon.
  That is the power of having an individual--many individuals--come 
into your office and ask you what your credentials are.
  No. 2, that person is going to come in, because that money is coming 
out of their personal savings account, which, if they are not going to 
spend it, rolls over to the next year by the bill we are proposing, 
they are going to ask, ``How much do you charge?''
  I guess it was 4 weeks ago I went camping with my son, and we did not 
have a flashlight. So I went down to a store here locally and looked at 
the flashlights. There were $25 flashlights that had emergency lights, 
buttons you could push, actually had a horn on it, down to the little 
$3 flashlight, down to the $1 little pen light. I asked, ``How much do 
you charge? What do you get for that?''
  In truth, that is what we are doing when a patient comes in and they 
say, ``How much do you charge to do a heart transplant?'' You would 
think people ask that all the time. It really was not until about 1988, 
maybe 1987, that the first patient, having been doing heart transplants 
since the early eighties, came into my office and said, ``Dr. Frist, 
how much is this heart transplant going to cost me?''
  Why do most people not ask? Because Medicare will pay for it, 
Medicaid would pay for it, large insurance companies will pay for it. 
They knew they never would have to pay for it.
  This fellow came into my office. ``Why do you ask,'' because I did 
not know exactly how much a heart transplant cost. Nobody ever asked 
me.
  Here, I was doing as many heart transplants as anybody in the State 
of Tennessee. But nobody ever asked me. I said, ``Why do you ask?'' He 
said, ``Because I'm going to have to pay for it. I do not have any 
insurance. I'm not 65 years of age, so Medicare is not going to kick 
in. And I'm not poor enough for Medicaid to kick in. It is coming out 
of my pocket.''
  What was my response? My response was, ``I don't know exactly how 
much it is. I know how much my surgical fees are, but I don't know how 
much the hospital charges, I don't know how much the pathologist 
charges or the rehabilitation specialist or the physical therapist. But 
I'll find out.''
  So what did I do? I went back, pulled everybody into a room--
transplantation is fairly complex. It involves lots of people. For the 
first time--I was the director of this transplant center--for the first 
time we had all these physicians in the room deciding how much a heart 
transplant should cost, based on the services they deliver; where in 
the past people just got the bills, passed them to the insurance 
company, paid, with no questions asked, or sent them to the Federal 
Government, and there were no questions asked.
  My point is, if you have one person coming in, asking the right 
questions, it changes my behavior, but also the behavior of the whole 
transplant center, of all the physicians that had, for the first time, 
gotten in the room.
  The third question that people ask, beyond how much you charge, is, 
what is your outcome? Because people want to know the value. Just like 
when I went to buy those flashlights, do I want a flashlight that will 
work for 1 year, 5 years, 1 month, 3 months? You ask the question. For 
the first time, if somebody is paying for it themselves, they will say, 
``What are your results?'' not ``Am I going to live or die,'' but ``How 
do you compare to''--I was in Tennessee--``How do you compare to 
Alabama or Georgia or Baltimore, other transplant programs? What is 
your outcome? When do people go back to work? What is your rate of 
infections? What is the rate of rejection over the period of the first 
month?'' People just do not typically ask those questions. But the 
empowered patient does.
  And what do I have to do? All of a sudden, I say, people are going to 
be looking at me and comparing my quality of care, my standards--I 
think my infection rate is the best in the country, but I do not know. 
Nobody has ever asked me or forced me to report that data. You do not 
have to report that data. But with that one person asking me, I start 
collecting, all of a sudden, that data.
  So do my colleagues in Georgia and Alabama. We start comparing each 
other. Why? Because that patient that is looking for a heart 
transplant, that is going to change their life, is going to go shopping 
around. If he is going to be paying $100 or $150 or $1,500 he is going 
to be shopping around. How is it going to change--this is my point--my 
behavior, the health care industry behavior? What does it do? It is 
going to cost me more because I have to hire a nurse to help me collect 
that data. I have to put it in a computer. I might have to put it in a 
computer, but it improves the quality of care broadly.
  The point of all this is, that medical savings accounts, to work, you 
do not have to have 20 percent of the American population come into the 
medical savings accounts to have a huge impact on the value of health 
care. You do not have to have 10 percent take advantage of it or 5 
percent or 1 percent.
  The real beauty of it is that one person coming into my office and 
asking the right questions--what are your credentials? How much do you 
charge? What are your outcomes?--changes my behavior in the way I treat 
that individual, but also the way I treat all of the other 95 percent 
of the people in the health care system, because I go back and get 
continuing education, I start recording my data that can be compared to 
other people. I have an incentive to do what? Deliver a higher quality 
of care to all Americans because we have empowered those individuals 
through medical savings accounts.
  I say all this, because what I want the other side to do--the other 
side is filibustering this bill of preexisting illness, of portability, 
using this guise of medical savings accounts. I just ask the other side 
to do a simple thing. And that is, to forget the policy for awhile, 
even forget the policy studies and the economic studies, because it is 
going to be hard to make a decision just on that, but tonight or this 
afternoon call your physician, call the physician who delivered your 
child, call the physician who fixed your broken arm, call the physician 
who treats your heart disease or your family's heart disease, and just 
ask them a very, very simple question. And that question is, ``By 
empowering individuals to have some control over their health care 
dollar''--and that is all medical savings accounts do--``will it change 
the way you practice medicine? Will it result in a higher quality of 
medicine? Will it empower that empowered individual to ask you 
different questions than the person who has no incentive to ask the 
questions, like `How much do you charge?' or `What are your outcomes?' 
'' And if that physician, if that health care provider, if that nurse 
comes forward and basically says, ``Yes, it will improve quality, it 
will improve value,'' then I encourage you to drop this filibuster and 
endorse medical savings accounts and support this bill.
  Thank you, Mr. President. I yield the floor.
  Mr. COVERDELL addressed the Chair.
  The PRESIDING OFFICER. The Senator from Georgia.
  Mr. COVERDELL. I thank the Senator from Tennessee for his remarks. He 
has introduced a matter into the debate we have not heard before, and 
that is very basically from the provider standpoint, what happens when 
the consumer has a role to play for the first time. It was very 
enlightening. I appreciate the comments from the Senator from 
Tennessee. I yield up to 10 minutes to the Senator from Ohio.
  The PRESIDING OFFICER (Mr. Frist). The Senator from Ohio is 
recognized for 10 minutes.
  Mr. DeWine. Mr. President, let me first thank my colleague from 
Georgia for putting this time together, and also congratulate my 
colleague from Tennessee. I have heard this MSA discussion many, many 
times, but I do not think I have ever heard it as eloquently expressed 
as he has just expressed it.

[[Page S6639]]

  There is just no substitute for personal experience, and there is no 
substitute for coming to this floor and knowing what you are talking 
about. Senator Frist clearly has demonstrated that he knows what he is 
talking about. As my colleague from Georgia has said, he has really put 
a different perspective on this. What empowerment means is, not only 
are dollars going to go further, but the quality of medical care is 
going to go up, consumers are going to be able to choose, and there is 
going to be a reaction on the other side of that table or the other 
side of that examining room where the doctor may in fact change some of 
the things that he or she does.

  So that was, I think a very, very great testimonial to the power of 
empowerment, giving people the right to make their own decisions and 
the reason why, frankly, we need to end this 61-day filibuster that has 
been occurring on this floor. We need to move this bill forward. We 
need to get the conferees appointed. So I just urge my colleagues on 
the other side of the aisle, who have been holding this up, to stop it 
and let us move forward. Let us get the conferees appointed and let us 
move forward.
  Mr. President, last month the Ohio General Assembly approved 
legislation to establish medical savings accounts. The Ohio legislation 
permits Ohio families to make contributions to an MSA, and then deduct 
the contributions from their State taxes. In effect, the State of Ohio 
is telling people, ``We want you to save, we want you to save for the 
future when it comes to your own health care. And we think that you, 
the Ohio taxpaying family, would do a better job of deciding how to 
spend your health insurance dollars than the Government bureaucracy 
would.''
  I think it is time here in Congress that we did the same thing, we 
follow the lead of Ohio and some other States that have passed similar 
legislation. Mr. President, it is a simple fact of human nature. People 
will make wiser choices when they are spending their own money. As my 
colleague from Tennessee said, he gave ample examples of that, real-
world examples of how people come in and see the doctor and ask the 
right questions.
  An MSA is basically, Mr. President, an IRA targeted specifically at 
health care expenses. An MSA gives the health care consumer both the 
freedom and the incentive to shop intelligently for health care 
services.
  Here is basically how an MSA would work for a typical working 
American family. The worker's employer puts, let's say, $2,000 a year 
tax free into the worker's medical savings account. The worker uses 
that $2,000 to pay for checkups, emergency treatment, and whatever 
other medical necessities arise during the course of that year. If the 
worker's family has medical costs above $2,000, catastrophic coverage 
would pay for it, catastrophic coverage would then kick in. If the 
family's medical costs are lower than $2,000, the family could keep 
whatever money is left over. It would be theirs.
  This is a major improvement over current standard practice, I believe 
in a number of ways. First, MSA's offer first-dollar coverage. They pay 
the first dollar of cost the family incurs, the immediate expenses they 
face at the doctor's office or at the emergency room.
  Under the current system, workers have to pay--the current system 
today--workers have to pay a high deductible or high copayments for 
their medical care. The MSA will cover--will cover--that cost for them. 
To the typical American family, this is very important. There are not 
too many Americans, Mr. President, who have hundreds of dollars just 
sitting around in a bank account waiting for a medical emergency.
  Washington Post columnist Jim Glassman tells the story of a woman 
named Penny Blubaugh, who earns $16,000 a year as a secretary in the 
Danville, OH, school system. Her daughter stepped on a nail in their 
garage, and Penny took her to the emergency room.
  Cost: $375 for the emergency room, $70 for the x rays, for a total 
cost of $445. That is $445 that Penny did not have. Fortunately, Penny 
was in an MSA, and MSA paid the bill--no deductible, no copayment. They 
paid the bill--first dollar coverage. That, Mr. President, is a 
dramatic concrete benefit to the typical working family that 
participates in an MSA.
  The second benefit to both the individual working family and the 
country as a whole is the opportunity to save money. If the money in an 
MSA is left unused, at the end of the year the working family gets to 
keep it. I can imagine no better incentive for intelligent consumer 
choices when it comes to health care. A family spending its own money 
with the prospect of keeping whatever is unspent will mean that money 
simply is not wasted.
  It is simple, common, basic sense. It is also the conclusion of a 
study that was conducted by the Rand Corp. between 1974 and 1982. Will 
people make very bad choices, denying themselves essential care to save 
a few dollars? We do hear that argument being made. The Rand Corp. 
study found that was not true. People would not do that. People would 
not act against their own self-interest.
  Mr. President, if you give an American family some resources and 
freedom, they will tend to make the right choices. What we need in 
American health economics is more people making the right choices. For 
too long we have limited the freedom of American health care consumers 
to make these right choices. It should not be a surprise, therefore, 
that we have rapidly rising health care costs at a time when inflation, 
in general, is pretty much under control.
  A recent Cleveland State University study examined 27 Ohio 
businesses, each with under 200 employees, that offered MSA's to their 
employees. The results were remarkable--a triumph of cost containment 
that demonstrates how promising the MSA alternative really is.
  On average, individuals in the MSA plan had lower out-of-pocket 
health care costs than those who had the more traditional kind of 
health insurance. The average savings were $317 for individuals who 
used MSA's and $1,355 for families who used MSA's. The employers saved, 
too. On average, employers saved 12 percent more than they would have 
from the traditional plans, had they been in the traditional plan.
  That, Mr. President, is the right direction for America. That is why, 
as of last year, 17 States had passed MSA laws. That is why Ohio moved 
forward with MSA legislation just this past month. That is why we are 
here today, pressing for the enactment of this extremely promising 
approach on the Federal level.
  I again urge colleagues who have been blocking this now--we are in 
our 61st day of a filibuster--to let us move forward, appoint the 
conferees, let the American people have the benefit of these MSA's, 
which we clearly think, and the evidence is very strong, will make a 
difference.
  I again thank my colleague from Georgia for setting up this time. I 
yield the floor.
  Mr. COVERDELL. I thank the Senator from Ohio for his statement on 
this very important matter. I yield up to 10 minutes to the senior 
Senator from Alaska.

  The PRESIDING OFFICER. The Senator from Alaska is recognized.
  Mr. STEVENS. Mr. President, I was pleased to be here during the 
period of presentation of the distinguished occupant of the chair. As a 
physician, the Senator from Tennessee brings a great deal of 
information to us in a direct way.
  I might say, as I begin my comments, starting in 1987 there was a 
group of us that decided we would meet once a week while the Senate was 
in session to review the problems of health care and insurance reform. 
It has been most enlightening to this Senator to be a participant, 
particularly with regard to these medical savings accounts. When they 
first came up, I realized what a great thing it would be for my State 
to have them put into Federal law.
  In my State, over 90 percent of the employers are small businesses. 
Community ratings often give us very high health insurance costs. Many 
of these small businesses, though they would like to do so, just cannot 
afford to provide health insurance coverage for their employees. We 
live on the edge, under very costly circumstances. It is very difficult 
for these employees to bear the cost of health insurance. Many times 
they are like that person that the Senator from Tennessee indicated 
that came to his office: They are without health insurance, and 
oftentimes face real difficult problems.

[[Page S6640]]

  I do believe the concept of a catastrophic insurance really fits into 
the frontier problems, because the situation often develops that our 
people would like to deal with someone they know, not only as a 
physician but as an insurance carrier. Catastrophic insurance is 
available through almost all small insurance firms. It is something you 
can deal at home with, and have a strong relationship with a person who 
has sold you the insurance.
  For that reason, I am pleased to be a cosponsor of the Kassebaum-
Kennedy bill. I think it is high time Congress got around to passing 
this bill.
  I personally do not believe it should be a right of any Senator to 
object to the appointment of conferees. I think that ought to be a 
matter of right of the leadership to say when conferees should be 
appointed, and they should not be subject to any debate. We are being 
held up now by a debate on whether or not conferees should be 
appointed. This is probably one of the most important bills we will 
work on during this Congress. Time is running out.
  This objection to allowing medical savings provisions in this bill is 
what is really holding up the Kassebaum-Kennedy bill. Under a 
compromise worked out by the House and the Senate, only employers with 
50 or fewer workers and those who are self-employed could participate 
in medical savings accounts. Most employers who have used medical 
savings accounts that I have heard of know them as the Senator from 
Tennessee indicated: Medical savings accounts concepts allow people to 
choose their own doctors, hospitals, and their on form of care. They 
encourage preventive health care and eliminate out-of-pocket costs.
  Medical savings accounts allow people to use their savings to buy 
other forms of health insurance like nursing home coverage or long-term 
care. Medical savings accounts allow individuals to control their own 
health care dollars and to support the free enterprise system.
  There is just no question that this is a kind of provision that ought 
to be in a health care insurance reform bill. It is a very limited one, 
very limited. It will benefit thousands of Alaskans who change their 
jobs and lose their jobs, enabling them to maintain vitally important 
health insurance coverage for themselves and their families.
  In my State, Mr. President, 65 percent of our women of childbearing 
age work out of the home. They are women that, because they go in and 
out of the work force in order to take time off to bear their children, 
often end up without insurance coverage during the very period of their 
life they really need it. This medical savings account concept ought to 
be involved in this law to help us meet the problems of those women in 
our work force.
  It will also benefit Alaskans who have the so-called preexisting 
conditions, which in the past have prevented many Alaskans from getting 
health insurance coverage because they have changed their jobs or they 
have gone through a period of unemployment. When they go to a new job 
or they go back to work, they find their health insurance is not 
available because when they reapply, they now have a preexisting 
condition which was covered under their prior insurance policy, but 
they lost coverage. I do not think many people realize how many, many 
individuals in a State like ours change jobs, work part time, and find 
themselves without coverage because of this problem of preexisting 
condition.
  The Kassebaum-Kennedy bill is a moderate, sensible approach to 
improving our health insurance system. Its benefits will be felt by 
some 25 million Americans in total, according to a report of the GAO.
  I cannot believe that this could be a program only for the rich, if 
it is going to apply to 25 million Americans. I can say, without 
question, that it will affect hundreds of thousands of Alaskans, 
despite our small population.
  Of particular importance is that this will make health insurance 
available to Alaskans who are self-employed by making it more 
affordable, by increasing the deduction for health insurance premiums 
from the current 30 percent to 80 percent over a 10-year period. I do 
not think anybody has mentioned that. This will bring about a change. 
As we all know, currently self-employed people can only deduct 30 
percent of their health insurance premiums. This bill before us now 
will gradually change that so that discrimination against self-employed 
people, as far as health insurance premiums, is eliminated over a 10-
year period.
  I might also mention a substantial benefit to Alaskan seniors. Long-
term care insurance policies would receive the same tax treatment as 
traditional health insurance under this bill. Unreimbursed long-term 
care expenses would be treated as medical expenses for itemized 
deduction purposes--a change, Mr. President, which will make a 
substantial change in the ability of people to pay for long-term care, 
particularly for the children of those people who need long-term care. 
They are the ones that are paying these expenses.
  This legislation will not affect the right of Alaskans to receive 
health care from chiropractors or alternative medicine people. My 
office has received a slew of telephone calls from Alaskans who fear 
this legislation because of the fraud and abuse provisions added 
through the amendment to title V. They feel that that amendment would 
stop them from seeing a health provider of their choice, especially 
under the Medicare Program. I think I should assure Alaskans and all 
Americans that that is not true. I support the right of Americans and 
my Alaskan people to seek health care from alternative health 
providers. This bill will allow Alaskans and all Americans to get 
health care from the provider of their choice, including alternative 
medicine and chiropractors licensed by the State.
  I believe this legislation will make a vital contribution to the 
well-being of thousands of our people in my home State, who now have 
the prospect of losing health care for themselves and their families 
when there is an interruption in their employment.
  I urge the Senate to name conferees and get this bill to conference 
and to the President as soon as possible. This should not be an 
election year political issue. This is an issue which should rise above 
politics. I challenge anyone in the Senate to defend holding up this 
bill.
  Thank you, Mr. President.
  Mr. COVERDELL. Mr. President, I thank the Senator from Alaska. I 
particularly appreciate his knowledge of the parliamentary nature of 
this body and his expertise. When the Senator from Alaska says we have 
a bolt out of whack on our policy here, the bolt is probably out of 
whack. I join the Senator in an effort to get that straight.
  Mr. President, the remarks of the Senator from Tennessee reminded me 
of a friend in the medical practice that I know in Georgia. Several 
years ago, we were musing, and he talked about a time when the exchange 
might involve something other than money. Somebody might offer, in some 
of the rural areas of our State, crops or produce. He said it was 
always a very serious negotiation, determining what the cost of the 
medical procedure would be.
  Now, you are dealing with a far more sophisticated process. But the 
Senator from Tennessee makes me remember that. He said that the 
customer--or the patient--really paid attention when they were about to 
contract for a medical service. He was convinced that that interaction 
between the patient and the doctor, and the patient and other medical 
providers, was the missing element and was a core reason for the 
geometric escalation in medical costs.
  Senator Gramm from Texas addressed this issue in the health care 
debate, and he said that if we bought groceries the way we buy medical 
services, he would eat a whole lot better, and so would his dog.
  Mr. President, we have been joined by the Senator from Utah, who 
chaired the health care task force that the Senator from Alaska was 
referring to a moment ago.
  I yield up to 10 minutes to the Senator from Utah.
  The PRESIDING OFFICER. The Senator from Utah is recognized.
  Mr. BENNETT. Mr. President, I thank the Senator from Georgia. I am 
interested that he refers to the Senator from Texas and his comment 
about groceries, because I have a somewhat similar analogy that I think 
illustrates the issue we are talking about here.
  Come with me in your mind's eye, Mr. President, to a job interview at 
an imaginary company that operates

[[Page S6641]]

under the principle that we use for health insurance in this country 
today. You are going through the interview, and you have arrived at a 
salary discussion and arrangement. You know your job duties. Now you 
say to your prospective employer, ``Tell me about the benefit package 
that you have.'' Your employer says, ``Well, Mr. Frist, we have a 
wonderful clothing care system here at XYZ Industries. You will really 
like it. Clothing, of course, is absolutely essential to your survival. 
It goes back as long as civilization because people have had to have 
clothing to protect them from the elements. We have the greatest 
clothing program in the world.''
  You say, ``Wonderful, I will come to work for XYZ Industries, and 
under your clothing benefit plan, I will be properly taken care of.'' 
Then you come to clothe your family and you are told, ``Well, at XYZ, 
we cover two suits a year and one sport coat.'' You say, ``Well, I 
would like to buy two sport coats.'' They say, ``No, you cannot have 
it. Our benefit package only covers two suits and one sport coat. And, 
by the way, we only provide for black shoes and not brown shoes to go 
with those suits. Now, under the benefits that are covered by our 
clothing plan, we will cover walking shoes, but not running shoes. And 
there is a limit, of course. We have cost containment, as clothing 
costs have been going through the roof. There is a limit on the number 
of pairs of socks that will be covered under your clothing plan that we 
have decided is the appropriate number of socks.'' And you then get a 
memo through the mail that says, ``Our clothing costs at XYZ industries 
have gone out of sight, and so we have changed to a clothing 
maintenance organization, and now we have made a deal with Sears 
Roebuck. You go down to Sears Roebuck and they will provide all of your 
clothing.''
  You have to go through a clothing counselor, who will meet you when 
you walk through the door of Sears, and he will size you up and may 
say, ``Well, before we will replace the suit you are wearing, we will 
make the decision that it has more wear left in it and, therefore, we 
will not authorize a new suit until there is more wear and tear in the 
knees of the suit that you currently have on.''
  That is how we will get some cost containment and cost control. I 
could go on and on. But I think you understand, Mr. President, how 
absurd this looks to American workers and American wage earners. They 
would say, ``Please, Senator, eliminate this vision and take us back to 
the present circumstance where our employer does indeed pay for all of 
our clothes, but he does it by giving us some money. And we decide how 
many suits we want. We decide what color shoes we want. We decide 
whether we want to shop at Sears, or Nordstrom's, or the Gap, or Wal-
Mart, or wherever. Leave it up to us to make the choices.''
  We do not do that in health care. The health care circumstance is 
just as I have described it with clothing. No, you cannot decide that 
you want this kind of treatment because it is not covered under our 
plan. You cannot decide you want this particular doctor. We have 
decided that we are going in another direction. What if we did the same 
thing with health care that we do with clothing, or food, or shelter, 
or transportation, or any of the other necessities of life, and said, 
``You make your own decisions and pay for it with dollars that you have 
set aside in savings''?
  What if we recognized that we have, in fact, destroyed the insurance 
principle in health care by saying we are not ensuring against risk; we 
are, in fact, paying for everything?
  Let me shift analogies for just a minute. I have said on the floor 
before in the health care circumstance that I have a homeowner's policy 
on my home, and it is a wonderful policy. If my house burns down, I get 
everything I need. The paintings on the wall get replaced. The silver 
in the drawers in the kitchen gets replaced. The dishes, my clothes--
everything that is destroyed in the fire gets replaced. The fire is a 
catastrophe. I have insurance against catastrophe. But there is nothing 
in my homeowner's policy that covers the cost of mowing the lawn. There 
is nothing in my homeowner's policy that covers the cost of repainting 
the front door when the dog scratches it.
  Do you know how much my homeowner's policy would cost if I had to 
file an insurance claim every time I wanted the lawn cut? ``How do you 
pay, Senator Bennett, for the cost of mowing the lawn and painting the 
front door?'' I have a savings account, and I pay American money to the 
son of my next door neighbor to come over and mow the lawn. And 
insurance is reserved for catastrophe.
  I am insured against catastrophe, and my insurance policy is very, 
very reasonable. Why are we not smart enough to do that with health 
care, and say, all right, the little things that we handle in health 
care we pay for out of savings, and we have insurance to cover the 
catastrophic circumstances?
  I have talked to insurance people. I have said, what is the number 
that we need as a deductible in order to make this kind of a system 
work? We have heard, for medical savings accounts, the figure of 
$3,000. The insurance people say the difference between a $1,500 
deductible and a $3,000 deductible is de minimis. It really does not 
make that much difference. If you had a $1,500 deductible, you are only 
saving pennies, if you go to a $3,000 deductible.
  I then went to the leading hospital in Salt Lake City. I said, ``What 
would happen if every bill that was less than $1,500 was paid for in 
cash?'' They kind of blinked at me because they assumed that everything 
that comes in gets paid for by filing an insurance claim. They said, 
``Senator, 80 percent of our emergency room admissions come to less 
than $1,500.'' I said, ``How much administrative savings would you have 
if you didn't have to process insurance claims for that 80 percent of 
your business?'' They said, ``Good heavens, it would save us 
enormously.''

  We have a control group that we can refer to, Mr. President, that 
demonstrates the wisdom of paying for things with cash as opposed to 
filing insurance claims for a flu shot, filing insurance claims for an 
office visit, filing an insurance claim for everything that comes 
along. You may have heard of it. I hope more people have heard of it. 
The Shriners Hospital system. The Shriners are a fraternal organization 
that raises money that it spends to take care of children who cannot 
pay. The only requirement for you to get into a Shriners Hospital is 
that you do not have the capacity to pay for the treatment. That is it. 
You have to be sick, of course. But if you are sick, and you do not 
have the capacity to pay for your treatment, you can get into a 
Shriners Hospital.
  Here are the numbers from the Shriners Hospital in Salt Lake City, 
UT: 4 percent of their budget goes for administration; 96 percent goes 
for health care. Why? Because they do not deal with a single insurance 
company, and they do not deal with a single Government agency. They do 
not have to fill out any forms or screen anybody for eligibility beyond 
convincing themselves that these people cannot pay.
  What is the cost of treatment in the Shriners Hospital? Here is the 
number: $95 a day. I have said this, somehow you are missing a decimal 
point. It has to be $950 a day. That is what it cost in a modern 
hospital: $95 a day because they do not have any of these 
administrative costs. It does not pass the Bob Newhart test.
  I ask unanimous consent that I might have another 3 minutes to 
explain the Bob Newhart test.
  Mr. COVERDELL. Mr. President, I yield the Senator from Utah 3 
minutes.
  Mr. BENNETT. Here is the Bob Newhart test. Have you ever heard Bob 
Newhart discuss, as if he had no previous experience at all, the 
smoking of tobacco with Sir Walter Raleigh?
  Bob Newhart is on the phone, and he is saying, ``Let me get this 
straight, Walt. This is a weed, right? This has no food value, and you 
want to bring it over here? Tell me, Walt, what do you do? You roll it 
up? And, yeah, OK, Walt. Now you stick it in your ear. Right? No, no. 
You stick it in your mouth? Come on, Walt. What do you do with it? You 
roll this weed up and stick it in your mouth? Yeah, Walt. You set fire 
to it, and you start breathing the fumes?''
  Bob Newhart has made a great comedy career out of doing that kind of 
analysis of the stupidities of the things that we do in our lives. Our 
medical system of insurance does not pass the Bob Newhart test.
  I have tried to put it in that context by saying this is what would 
happen if

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we bought clothing the way we buy health care, if we had to file an 
insurance claim for the cost of mowing the lawn, and everybody laughs. 
But that is where we are, and the people who are opposing medical 
savings accounts are the people who do not realize the absurdity of the 
present circumstance, who have gotten themselves in the mindset that 
since we have done it this way, this is the way it always has to be. If 
you can only step back and look at it honestly, you realize how many 
problems you solve if you say that health insurance should be like car 
insurance and homeowners insurance and flood insurance and earthquake 
insurance and tornado insurance. Health insurance should insure us 
against a catastrophe, just as we use money to make the decision 
whether we want brown shoes or black shoes, just as we use money to 
make our own decisions on whether we want to replace the suit or wear a 
sport coat. We should use money to say, ``I am going to get a flu shot; 
I am going to take care of this hangnail; I am not going to file an 
insurance claim with all of the administrative costs connected with 
that.''
  It is just plain common sense, and it more than passes the Bob 
Newhart test.
  I thank the Chair. I yield the floor.
  Mr. COVERDELL. Mr. President, I thank the Senator from Utah not only 
for these remarks but for the extended effort that he has made on the 
issue of reform for our health care system. The Senator from Utah has 
dedicated many, many hours to that.
  We have been joined by the Senator from Iowa, and in a few moments we 
are going to hear from him on this vital question. I do want to point 
out in the national journal Congressional Daily this morning it says, 
``A group of moderate to conservative House Democrats Thursday sent a 
letter to President Clinton urging him to accept some form of 
compromise on medical savings accounts in health insurance reform 
legislation.'' The letter was authored by Representative Gary Condit, 
Democrat of California, and it asks the President to sign off on the 
evolving Republican compromise already accepted by Senate Labor and 
Human Resources chairwoman, Senator Kassebaum of Kansas.
  Mr. President, I am going to ask unanimous consent the time under our 
control be expanded by up to 5 minutes.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. COVERDELL. I now yield to the Senator from Iowa for up to 10 
minutes.
  The PRESIDING OFFICER. The Senator from Iowa is recognized.
  (Mr. COVERDELL assumed the chair.)
  Mr. GRASSLEY. Mr. President, I congratulate each of my colleagues 
under the leadership of the Senator from Georgia for discussing this 
very important issue of making sure that we get health insurance reform 
legislation through, that this reform legislation operates in a way so 
it minimizes Federal Government bureaucracy interference in the 
marketplace and in the doctor-patient relationship, and that we 
eventually reduce the cost of health care.
  I think every one of these are motives for this legislation, in 
addition to creating a situation where people who can afford health 
insurance and are denied health insurance because of preexisting 
conditions will be able to have that guarantee of health insurance and 
its renewability, and also for the individuals who find it difficult in 
bargaining with the insurance companies for an affordable package, and 
also for small businesses that have a difficult time doing that, that 
we allow these people to come together in health insurance purchasing 
cooperatives to be able to do this. So I thank the Senator from Georgia 
for promoting this discussion at this particular time.
  Regardless of all the good aspects of this bill, there is one aspect 
holding it up, and it is an aspect of the bill that I very much 
support, and that is the drive for the medical savings accounts. When I 
say it is a drive for medical savings accounts, it is not a drive 
within Congress for medical savings accounts. Medical savings accounts 
are an established fact of the delivery of health care in America 
because they have been proven out there in the private sector, but they 
do not have the advantages that other types of health insurance or 
vehicles for paying for health care have like their tax deductibility.
  So if we are going to promote medical savings accounts which are 
proven worthy and effective in the private sector already, then they 
ought to have the same tax treatment that a lot of other instruments we 
have used for a half century have had in order to give people effective 
health coverage. And so this debate is about medical savings accounts. 
All the other good things in this bill are kind of forgotten. All the 
attention is on medical savings accounts, I think for one simple 
reason, and that one simple reason is that there are people in 
Washington who still believe that Washington knows best, and they do 
not want a system of medical savings accounts where the individual is 
going to make the decision of spending money on health care. They only 
think it can be a big insurance company or some Washington bureaucrat 
that can make this judgment for the individual. The success of medical 
savings accounts proves that tradition wrong, the tradition that 
Washington knows best. And so we need this legislation. It should not 
be held up.
  Mr. President, the American people are waiting for final action on 
the Kennedy-Kassebaum health insurance reform legislation. They have 
been waiting 2 full months.
  The American people want this legislation enacted because they 
understand that it promises portability of health insurance. They want 
it enacted because they understand that it would limit the practice of 
denying health insurance coverage to people because of preexisting 
conditions.
  This legislation passed the House on March 28. It passed the Senate 
on April 23. We should have sent it to the President weeks ago, Mr. 
President. Why have we not?
  We have not because some obstinate Senators of the other party refuse 
to allow the conference between the House and the Senate to proceed. 
They refuse to allow it to proceed because they oppose the medical 
savings accounts provisions. They refuse to allow it to proceed despite 
concessions on the MSA provisions by the Republican leadership. They 
refuse to allow it to proceed because the President will not tell them 
he wants to sign it with an MSA provision in it.
  I say some Senators of the other party because many Members of the 
other party have supported medical savings accounts. Many still do. 
Thirty-eight Democrats in the House of Representatives voted for the 
House health insurance reform bill which included medical savings 
accounts. I understand the Democratic Representatives Bob Torricelli 
and Andy Jacobs wrote to the President 6 weeks ago to urge him to 
support MSA's. In the past, leading members of the other party have 
spoken favorably of MSA's. Two short years ago, in 1994, Representative 
Gephardt is quoted as saying on CNBC: ``I think its a great option.'' 
Then, just today according to Congress Daily, a group of moderate-to-
conservative Democrats in the House of Representatives sent a letter to 
President Clinton asking him to sign off on the evolving GOP compromise 
on MSA's.
  I am having a hard time understanding why some Senators are putting 
up such die-hard opposition to medical savings accounts, Mr. President. 
And I am having a hard time understanding why the President of the 
United States will not tell his troops in the Senate that he will sign 
a bill with an MSA provision in it.
  Because they are a good idea. They are basically IRA's. Everybody 
understands IRA's. Medical savings accounts are IRA's that can only be 
used to pay for medical care. Individuals who have a medical savings 
account would also have to purchase conventional health insurance with 
a high deductible. This high deductible health insurance policy would 
protect them against truly catastrophic health care costs.
  They are a good idea for several reasons:
  They should make health care coverage more dependable for those who 
have them because they are completely portable.
  Medical savings accounts are easy to administer compared to 
conventional insurance or to managed care plans. Therefore, 
administrative savings will be realized when people use them.
  They put the patient back into the health care equation. People with

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MSA's would have complete freedom to choose their doctor. Because 
patients would be spending their own money, doctors would be under 
pressure to provide economical treatment and to discuss with their 
patients the costs and the benefits of particular treatments to a 
greater degree than they do now.
  They would level the health insurance playing field by making the tax 
treatment of health insurance fairer. Now, employers who pay for health 
insurance for their employees get a tax break for what they spend. The 
employees get a tax break for what is essentially compensation. But in 
those businesses which can not afford health insurance, neither the 
employer nor the employee gets tax help from the Federal Government. 
The self-employed, who pay for their own health insurance, get no help 
from the Federal Government.
  Medical savings accounts should increase personal savings. The tax 
benefit associated with Medical savings accounts should be a strong 
incentive to save.
  They will ultimately contribute to retirement savings for many 
people. In the future, many people would become eligible for Medicare 
with substantial medical savings account balances. These could be 
withdrawn for any purpose at age 65.
  Finally, they will help cover long-term care expenses because one of 
the permitted uses will be for the purchase of long-term care 
insurance.
  Mr. President, the Republican congressional leadership has offered 
the President and the Democrats a compromise. The compromise would 
limit the opportunity to have an MSA to where the core uninsurance 
problem is--in the small business community and among the self-
employed.
  Still, some Senate Democrats refuse to let us send the Kassebaum bill 
to the President.
  They say that the MSA provisions are in the bill only as a pay-off to 
a single insurance company. This is really one of the most preposterous 
allegations made in this debate.
  A single insurance company? Then why are the MSA provisions supported 
by the farm community, including the American Farm Bureau Federation, 
Communicating for Agriculture, the National Wheat Growers, the National 
Grange, the National Milk Producers Federation, and the National 
Cattleman's Beef Association?
  Why are they supported by the small business community, including the 
National Federation of Independent Businesses, the Business Coalition 
for Affordable Health Care which includes the National Association of 
the Self-Employed, the U.S. Federation of Small Business, the U.S. 
Business and Industrial Council, the National Food Brokers Association, 
and many other business groups.
  Why are the MSA provisions supported by many physician organizations, 
led by the American Medical Association? Why are they supported by not 
just one, but several insurance companies?
  A single insurance company? I do not think so, Mr. President. It is 
clear to anyone who wants to open their eyes. The medical savings 
account concept, and the specific provisions in the Kassebaum bill, are 
supported by a broad coalition of Americans.
  Those holding up the bill say that MSA's will be used only by the 
young and the healthy. They say that the sick will prefer regular 
insurance or HMO's. Maybe they really believe it. But now we have 
evidence to the contrary from a recent study by the Rand Corp. The Rand 
study concluded that MSA's could be attractive to both the sick and the 
healthy.
  In fact, the Rand study concluded that MSA's might not reduce health 
care costs as substantially as MSA proponents have claimed. Why not? 
Because they probably would be attractive to the sick. Furthermore, 
those who are sick will probably prefer to have the unrestricted 
freedom of choice of doctor that would come with an MSA.
  If the sick and the poor would use MSA's, it hardly seems likely that 
MSA's would fragment the insurance pools because of adverse selection, 
another concern of those opposed to MSA's.
  Those holding up the Kassebaum legislation argue that MSA's would 
appeal only to the wealthy. But Rand concluded that the ``median user 
would be only slightly wealthier than people in conventional insurance 
plans and HMOs. * * * '' Furthermore, a recent survey by the Marketing 
Research Institute of 1,000 workers found that a large majority of 
lower income workers, if given the choice, would choose MSA's.
  What is really going on here, Mr. President, is that the Senators 
trying to stop medical savings accounts really do not want individual 
citizens to take charge of their own health care. They do not want the 
system to be controlled and driven by individual consumers in 
cooperation with their doctors. They are frightened to death that 
medical savings accounts will prove so popular with the citizenry that 
there will be an irresistible demand to make them available to 
everybody. If that happens, their dream of a nationalized health care 
system will be impossible to realize.
  In any case, Mr. President, it seems to me that we can add medical 
savings accounts to the things a great many Americans want in the 
Kassebaum-Kennedy health insurance reform bill. Many other Americans 
are probably more concerned about the Kassebaum bill's portability 
provisions. Or about the bill's limits on the ability of insurers to 
deny coverage to people because of preexisting conditions. These 
citizens are going to have a very hard time understanding why some 
Senators, and the President, are denying these reforms because of 
opposition to the medical savings account compromise the Republican 
leadership is offering them.
  The American people are going to get none of these reforms unless the 
Senators obstructing the legislation stop playing dog in the manger, 
and get out of the way so the American people can have the benefits of 
the legislation. The President needs to tell his troops in the Senate 
that he wants to see this bill enacted. He should tell his troops to 
let the conferees be appointed and to accept the MSA compromise he's 
been offered.
  Mr. BROWN addressed the Chair.
  The PRESIDING OFFICER. The Senator from Colorado should be advised 
the next 90 minutes is controlled by the Democrat leader or his 
designee.
  Several Senators addressed the Chair.
  The PRESIDING OFFICER. The Senator from Nevada.
  Mr. REID. Mr. President, I ask also since the time has gone over 12 
minutes or 13 minutes, let me extend it past the 12:30 hour so there is 
equal time for both.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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