[Congressional Record Volume 143, Number 38 (Friday, March 21, 1997)]
[Extensions of Remarks]
[Pages E548-E549]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                THE AMERICAN HEALTH SECURITY ACT OF 1997

                                 ______
                                 

                           HON. JIM McDERMOTT

                             of washington

                    in the house of representatives

                        Thursday, March 20, 1997

  Mr. McDERMOTT. Mr. Speaker, I rise today to once again introduce the 
American Health Security Act. The single payer plan I propose is the 
only plan before Congress that will guarantee health care universality, 
affordability, security and choice.
  While this Congress lacks the political will to enact comprehensive 
health reform, the underlying needs for reform remain prevalent: health 
care costs are more unaffordable to more people and the number of 
people without health insurance continuous to rise. These problems are 
compounded by increasing loss of health care choice and autonomy for 
those people who have insurance leading to disruptions in care and in 
relationships with providers.
  The American Health Security Act I am introducing today embodies the 
characteristics of a truly American bill. It will give to all Americans 
the peace of mind--the security--to which all citizens should be 
entitled. It creates a system of health care delivered by physicians 
chosen by the patient. No one will have to leave their existing 
relationships with their doctors or hospitals or other providers. It is 
federally financed but administered at the state level, so the system 
is highly decentralized. And it provides new mechanisms to improve the 
quality of care every American receives.
  The American Health Security Act (the bill) provides universal health 
insurance coverage for all Americans as of January 1, 1999. It severs 
the link between employment and insurance. The Federal Government 
defines the standard benefit package, collects the premium, and 
distributes the premium funds to the states. The States, through 
negotiating panels comprised of representatives from business, labor, 
consumers and the state government, negotiate fees with the providers 
and the government controls the rate of price increases. The result is 
health care coverage that never changes when your personal situation 
does, never requires you to change the way you seek health care, and 
never causes disruptions in your relationships with your providers.
  The bill provides the coverage under a mechanism of global budgets to 
achieve controllable and measurable cost containment that will yield 
scorable savings over the next five years. Unlike other single-payer 
proposals of the past, it provides for almost exclusive State 
administration provided the States meet federal budget, benefit 
package, guarantee of free choice of provider, and quality assurance 
standards. This bill explicitly preserves free choice of provider by 
providing a mechanism for fee-for-service delivery to compete 
effectively with HMO's. It will not force Americans into HMO models.
  The insurance mechanism of the American Health Security Act is easy 
to use and understand. Quite simply, a patient visits the doctor or 
other provider. The provider then bills the State for the services 
provided under the standard benefit package and the State pays

[[Page E549]]

the bill on the patient's behalf, just as insurance companies pay 
medical bills on the patient's behalf now. The difference is that 
complicated and expensive formulas for patient copayments, coinsurance, 
and deductibles in addition to premium costs are eliminated.
  The standard benefit package is in fact extremely generous. It covers 
all inpatient and outpatient medical services without limits on 
duration or intensity except as delineated by outcomes research and 
practice guidelines based on quality standards. It provides for 
coverage of comprehensive long-term care, dental services, mental 
health services and prescription drugs. Cosmetic procedures and other 
``frill'' benefits such as private rooms and comfort items are not 
covered.
  The extent of State discretion is substantial. The Federal budget is 
divided into quality assurance, administrative, operating, and medical 
education components. The system is financed 86% by the Federal 
Government and 14% by the States. That Federal pie is then apportioned 
among the States. For example, States with large elderly populations 
can be expected to require a larger volume of higher intensity services 
and will receive a larger Federal contribution. However, the States are 
free to determine how that money is allocated among types of providers 
and to negotiate those allocations according to the State's individual 
needs, provided Federal standards are met. The ability of HMO's to 
operate and compete on a capitated basis is preserved.
  The States must demonstrate the efficacy of their methodologies or 
Federal models will be imposed. However, States are not required to 
seek waivers in advance. While the Federal Government will not make 
separate allocations to states for capital and operating budgets, the 
states are free to allocate capital separately to assure adequate 
distribution of resources throughout the State and to develop their own 
mechanisms for doing so.

  The financing package reflects the CBO scoring of this bill's 
predecessor, H.R. 1200, in the 103d Congress. The numbers were provided 
by the Joint Committee on Taxation [JCT] on the basis of the CBO 
scoring. Accordingly, the Bill is fully financed. In fact, JCT 
estimates that the American Health Security Act will lead to deficit 
reduction approximating $100 billion per year by the year 2004.
  Everyone will contribute to the health insurance system, except the 
very poor. Employers will pay 8.7 percent of payroll and individuals 
will pay 2.2 percent of their taxable income. A tobacco tax equal to 
$0.45 per cigarette pack is also imposed. These payroll deductions are 
lower than current insurance costs for most businesses and individuals, 
even while providing universal coverage and a more generous benefit 
package than exists in the private market today. The key is that the 
money necessary to provide coverage to people who cannot afford it 
comes from the administrative savings achieved through the elimination 
of the insurance company middle man. Americans are freed from the 
hassle of obtaining and keeping their insurance and have a federal 
guarantee that their health care costs will be paid for, regardless of 
who their employer is, where they move, or how their personal or family 
situation changes.
  In addition to providing realistic and affordable financing, the Bill 
provides quality assurance mechanisms that enhance systemwide quality 
and truly protect the consumer. It attempts to end the interference 
between doctor and patient. It establishes a system of profiling 
practice patterns to identify outliers on a systematic basis. Pre-
certification of procedures and hospitalization--getting permission 
from insurers before your doctor can treat you--is prohibited except 
for case management of catastrophic cases.
  Practice guidelines and outcomes research are emphasized as the main 
quality and utilization control mechanisms which gives physicians 
latitude to deviate from cookbook medicine where required for 
individual cases without going through intermediaries. Only if 
practitioners consistently deviate are they subject to review to 
ascertain the basis for the pattern of practice. This system includes 
mechanisms for education and sanctions including case-by-case 
monitoring when the review indicates serious quality problems with a 
specific provider.

  The need for a 1:1 ratio of primary care physicians to specialists is 
explicitly set forth. Federal funding to graduate medical education is 
tied to achieving this ratio. Funding to the National Health Service is 
also provided to achieve this goal.
  Special grants are provided to meet the needs of underserved areas 
through enhanced funding to the community health centers, both rural 
and urban, to enable outreach and other social support mechanisms. In 
addition, states have discretion to make special payment arrangements 
to such facilities to improve local access to care. It is anticipated 
that the revenue streams established for the public health service, 
community health centers, and education of primary care providers will 
double the primary care capacity of rural and other underserved areas 
in this country.
  In summary, the American Health Security Act will provide all the 
citizens with the health care they need at a price both they and their 
country can afford. It is clear that we cannot afford the price of 
doing nothing.

                          ____________________