[Congressional Record Volume 147, Number 156 (Tuesday, November 13, 2001)]
[Senate]
[Pages S11715-S11716]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                  HEALTH INSURANCE FOR THE UNEMPLOYED

  Mr. BAUCUS. Madam President, I want to speak a little bit about 
health insurance. As I mentioned before, our country's economic 
downturn has put millions of American workers and their families at 
risk.
  The unemployment rate has increased by 25 percent over the same time 
last year. In October alone, we lost 415,000 jobs. That is 1 month 
alone. That is the highest single jump since 1980.
  In addition to losing jobs and income, many Americans have lost their 
health insurance. Clearly, this is something we need to address. Health 
insurance is necessary because it gives us access to needed health care 
services and it gives families financial security from medical bills.
  Uninsured workers and their families often delay or skip needed 
treatment. When they do seek care, they often end up heavily in debt. 
Many of us serving in this body have encountered many people deeply in 
debt because of needed health care. Many families even go bankrupt as a 
result. In fact, half of all bankruptcies are a direct result of health 
or medical bills, not out-of-control spending by families.
  I believe very strongly that giving laid-off workers assistance so 
they might keep their health insurance is of utmost importance. In my 
view, helping Americans who lose their jobs hold on to their health 
insurance is the right thing to do, not just for the families put at 
risk but for the economy as well.
  Some critics have said we should include health insurance coverage in 
the economic stimulus package. Some say we should not. Some have gone 
so far as suggesting the President should veto a bill that includes 
these provisions. It is not stimulus, they say; therefore, the 
President should veto the bill. I have heard that many times from 
representatives of the President.
  I am the first to admit the arguments that health care coverage is 
stimulative are not as strong as the arguments for some of the other 
provisions of the bill. For example, virtually everyone agrees 
unemployment insurance, while helping people supplement lost income, is 
also stimulative. In fact, the multiplier effect is $2.50 for every $1 
spent on unemployment insurance. Nevertheless, there are several 
reasons I believe health care does represent stimulus, and I would like 
to review them for my colleagues and for the benefit of the critics.
  First, the rate of health insurance coverage is sensitive to economic 
conditions. Over the past several years, a strong economy has helped to 
moderate the growth of the uninsured population. The number of 
uninsured Americans has been growing. In the past several years, the 
strong economy has helped moderate that growth of uninsured population. 
Many employers use health care benefits as a way to attract and keep 
workers in a competitive market.
  During the same period, we created CHIP, the Children's Health 
Insurance Program, to make health insurance coverage available to more 
children. In times of recession, though, things are much different. 
Simply put, a downturn in the economy means many more people go 
uninsured. Employer-sponsored insurance declines, and States struggle 
to pay their share of the cost of public programs, such as Medicaid and 
CHIP. I know that is true in my State.
  According to a recent study, a 2-percent increase in unemployment 
will lead to an additional 3.2 million people eligible for Medicaid. 
That means the October jump in the unemployment rate alone will lead to 
an additional 800,000 people on Medicaid.
  We do not need a report to tell us this. We know this from past 
experience. In the recession of the early 1990s, more than half of the 
workers who lost their jobs became uninsured. Let me repeat that. In 
the recession of the nineties, more than half of the workers who lost 
their jobs also as a consequence became uninsured. We cannot let that 
happen again.

  Second, personal spending on health care means less consumer 
spending. Families with health insurance are able to spend more on 
other priorities. Families without health insurance spend more out of 
pocket on health care, making it harder for them to spend on other 
things.
  A study by the Kaiser Family Foundation tells us that nearly one in 
five uninsured cannot meet their essential expenses. Nearly one in four 
uninsured cannot pay their full gas, electric, or oil bills; one in 
seven persons who do not have health insurance cannot pay their full 
rent or mortgage.
  Third, States are facing serious fiscal problems. State budgets are 
more unstable in the wake of the September 11 attacks. Revenues are 
declining while the need for spending on important programs is 
increasing. Sales tax revenues have dropped in States that rely on 
tourism at the same time disaster relief efforts and unemployment are 
increasing.
  Last month, the Washington Post reported a number of States 
particularly hard hit by the recession are already calling special 
legislative sessions and taking dramatic action to reduce spending. 
Many of these States are thinking about making reductions in Medicaid 
benefits or cutting eligibility to alleviate budget pressures, despite 
the fact that more people will likely be turning to States for help 
with health insurance.
  Putting money into the health care system, which represents 13 
percent of the national economy and employs millions of people, will 
itself stimulate the economy. This is particularly true in rural areas 
where the local hospitals are often the biggest employer.
  Including health insurance in an economic stimulus package is of 
critical importance both to the economy and to the American people.
  What about the specifics of my proposal? The health provisions in my 
package are short term; they are temporary. My bill provides direct 
subsidies to the purchase of private COBRA coverage. It would give a 
75-percent Federal premium subsidy for those eligible for COBRA 
coverage. Anyone who lost their job after September 11 would be 
eligible to receive this assistance for up to 12 months. The program 
would be strictly short term and would end December 31, 2002.
  Why focus on COBRA? Because COBRA coverage was specifically designed 
to help workers maintain their health coverage when they change or lose 
their jobs. Unfortunately, though, this coverage is very expensive: 
$2,600 a year for individuals and a full $7,000 for families. That is 
almost $600 a month for family coverage.
  Consider the average unemployment check is just over $800 a month, 
and one realizes why fewer than 20 percent of displaced workers 
actually sign up for COBRA. It is just too expensive. They cannot 
afford it.
  According to the Congressional Budget Office, the COBRA subsidy will 
help up to 7 million Americans hold on to their health insurance even 
after they lose their jobs. But COBRA subsidies will not help everyone 
who loses their job. It will not help those who are not eligible for 
COBRA either because they worked for a small employer who is exempt 
from COBRA or that firm went bankrupt.

[[Page S11716]]

  To help those workers, my bill also includes a short-term, temporary 
Medicaid option for individuals and families who are not eligible for 
COBRA. This is a State option. It is up to the States. They can decide. 
I propose to give States an enhanced matching rate to encourage States 
to adopt this new coverage option.
  Like the COBRA subsidies, this coverage is available to people who 
become unemployed after September 11 this year, and like the subsidies, 
Medicaid coverage will be available for 12 months.
  Some say that States cannot afford to take up this option, even with 
an increased Federal match. I understand that. That point is well 
taken, and it is one of the reasons I am also proposing to increase the 
matching rate for Medicaid. By giving States a higher Medicaid match, 
an F-match, as it is called, States will have an easier time 
maintaining coverage.
  The additional funding may give the States what they need to take up 
the new coverage option for displaced workers. All told, this may 
maintain health coverage for millions of people who have lost their 
jobs or stand to lose them in the difficult months ahead.
  I have also heard critics argue my proposal is an indirect way to 
establish a new entitlement program. It is not. That is not the 
intention. We are responding to a temporary crisis with a temporary 
solution. All coverage, whether received through corporate or Medicaid, 
will be provided on a temporary basis. The program ends after 1 year. 
It is in the law, black and white, underlined. It is there. It ends in 
1 year.
  Critics argue the COBRA Program and Medicaid coverage will be slow 
and cumbersome to implement. First, I disagree. I think we can get the 
program up and running in short order but not if we wait 6 months for 
new regulations to be published. My proposal specifically states the 
program should be implemented regardless of whether a final rule has 
been published. That is not new. It is not unusual. It is a step that 
is taken in times of emergency, and I argue the current economic 
situation dictates we are in such an emergency.
  Let us also be candid. There are several competing proposals to 
provide temporary health care coverage, and they all raise the same 
issues. Whether we are talking about direct payments, COBRA, tax 
credits, as some propose, or block grants to States, as the President 
has suggested, we have to come up with a system that works quickly and 
works efficiently.
  I say let us work on solving these implementation issues together 
rather than trying to undermine each other or pointing fingers and 
saying it cannot be done.
  Let me conclude by reiterating how important health care coverage is 
to Americans and how devastating it can be for a family to lose its 
coverage. I believe the package of health proposals I have put together 
will go a long way toward helping those who are truly in need. It will 
also provide a quick, temporary boost to the economy.
  I realize not everyone agrees with our approach, but I do hope we all 
can agree health insurance coverage is a crucial element of any 
economic stimulus package. It is the right thing to do, and it is good 
policy.
  I look forward to working with all my colleagues to reach an 
agreement that keeps our primary goals in mind; that is, stimulating 
the economy and helping American families.
  I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The bill clerk proceeded to call the roll.
  Mr. REID. Madam President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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