[Congressional Record Volume 151, Number 90 (Thursday, June 30, 2005)]
[Senate]
[Pages S7805-S7806]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                 EASING THE CRISIS IN HEALTH INSURANCE

  Mr. ENZI. President, I rise today to speak to the ever worsening 
crisis of cost, coverage, and confidence in our health insurance 
system, but, more importantly, to outline what I believe to be several 
positive steps we can take in the near term toward relieving an impasse 
that has long stalled progress toward relief.
  As I speak today. we are nearing almost 5 years of double-digit 
growth in health insurance premiums--increases that have repeatedly 
exceeded more than five times the rate of inflation. Since 2000, for 
example, group premiums for family coverage have grown nearly 60 
percent, compared to an underlying inflation rate of 9.7 percent over 
the same period.
  Not surprisingly, those hardest hit are America's small businesses 
and those individuals outside of employer-provided insurance. These are 
the ones with the least market leverage and the weakest ability to pool 
risk. Already, among the very smallest of our businesses, those with 
fewer than 10 employees, only 52 percent offer coverage to their 
employees.
  Mr. President, I am a realist. The most fundamental drivers of health 
care costs are ones that defy near-term solutions. These drivers 
include advances in costly medical treatments, Americans' continuing 
appetite for such treatments, lack of transparency in pricing, and an 
antiquated third-party payment system that insulates consumers from 
seeing the true cost of care they receive.
  To take just one example, I--like many of my colleagues--would 
strongly support shifting much of our current tax subsidy of health 
insurance away from the employer and toward the individual. However, I 
fully recognize that any change on such a scale is, at best, years 
away.
  And yet, like most Members in this body, I am hearing an ever growing 
chorus of concern from my constituents about health insurance--and most 
especially from small businesses.
  America's families and small businesses don't want us to wait for the 
perfect solution or the perfect moment. They need real help, and they 
need it now.
  Recognizing this increasing concern, and as the new Chairman of the 
Senate's Health, Education, Labor and Pensions Committee, I have made 
it a priority in recent months to seek the counsel of stakeholders, 
citizens, experts, and fellow Members of Congress on how we might come 
together on a package of insurance reforms we can realistically hope to 
enact in this Congress.
  The most visible proposal now on the table--at least for the small 
group market--is the approach known as association health plans, or 
AHPs. Under this proposal, which was introduced in this Congress by 
Senators Snowe and Talent, qualifying trade associations would be 
permitted to band together their members for purposes of offering 
health coverage.
  Association health plans hold significant promise--particularly in 
the pooling of risk, economies of scale, and market clout they could 
lend to thousands of small businesses.
  At the same time, however, the AHP bills in their current form may 
also go too far in allowing some association plans to play by a 
separate set of rules than those governing the rest of the small group 
insurance marketplace, thereby tempting adverse selection and market 
disruption. Another concern is the fact that the current AHP proposals 
would shift primary oversight over many association plans away from 
States and move it to the Federal Government.
  Regrettably, debate over these AHP pros and cons has hardened into a 
political and stakeholder stalemate--a stalemate that has helped block 
constructive action on new insurance reform for nearly a decade.
  It is time we reached an end to this impasse.
  Toward this end, I appreciate the hard work of Senators Snowe and 
Talent and other AHP proponents in working with me on possible 
compromise approaches. And similarly, I am encouraged by what appears 
to be a growing pragmatic spirit amng traditional AHP critics such as 
insurers and State regulators.
  Meanwhile, other of my colleagues, such as Senator DeMint and 
Senators

[[Page S7806]]

Durbin and Lincoln, have also come forward with serious contributions 
to the discussion.
  I look forward to working with my colleagues of both parties, as well 
as with key stakeholders, in putting forward a full proposal for 
consideration by the HELP Committee and by the Senate.
  However, as we move forward with this process, I want to pause today 
to identify certain foundation principles and reform components I 
believe should guide the direction we pursue:
  No. 1, association-based plans should have the opportunity to harness 
the advantage of independent pooling and play a commercially meaningful 
role in the coverage marketplace--and if that puts market pressure on 
insurers, so much the better. At the same time, however, the coverage 
provided to association members should be subject to underlying 
regulatory and consumer protection requirements substantially 
comparable to those applicable to all entities offering similar 
coverage. In short, associations deserve a real seat at the coverage 
table, but that table should not have a substantial tilt one way or the 
other.
  No. 2, the current hodgepodge of varying state health insurance 
regulation should be streamlined, thereby easing administrative and 
regulatory costs, and facilitating a larger number of plans in more 
states. Such ``harmonization'' was among the options put forward last 
year by the Senate's Republican Task Force on Health Care Costs and the 
Uninsured. Under such an approach, states would be encouraged or 
required to adopt common sets of rules in targeted areas of health 
insurance regulation, such as rating and underwriting, though State 
oversight and enforcement authority would remain.
  No. 3, individuals and businesses should have the opportunity to 
purchase lower-cost plans free or largely free of state benefit 
mandates. Though most purchasers will likely choose fuller coverage, it 
is important to assure that lower-cost alternatives exist as a 
safeguard for those who are struggling at the margin. Not everyone 
needs or wants the same degree of coverage, and where possible, our 
insurance laws should accommodate this reality.
  No. 4, primary responsibility for most insurance oversight and 
consumer protection should remain with the state insurance 
commissions--including the right to assess health plans, including 
association plans. Although some degree of new Federal involvement will 
likely be necessary, it should be kept to a minimum. Though far from 
perfect, our State insurance commissions are much closer to the real 
problems confronted by purchasers of insurance in their communities 
than would be a federal agency in Washington.
  No. 5, the focus of our immediate effort should be on policies that 
do not require significant Federal outlays. Many laudable proposals 
have been put forward by the President and others for tax-based and 
other financial assistance for the purchase of insurance, and many of 
these should be pursued with vigor. We should not, however, allow the 
fiscal challenge of enacting such policies to sidetrack our efforts to 
advance less costly improvements.
  I am open to suggestions, and I am open to compromise--but I am not 
open to continued inaction.
  My intention is for these principles to serve as a foundation for the 
swift finalization and passage of a health insurance reform package 
that will deliver real relief to America's small businesses and 
struggling families.
  I ask unanimous consent that a summary overview of these principles 
be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                         Foundation Principles

                        Health Insurance Reform

                           Senator Mike Enzi


 u.s. senate health, education, labor, and pensions committee june 2005

       Meaningful role for associations, but on a level playing 
     field: Association-based plans should have the opportunity to 
     harness the advantage of independent pooling and play a 
     commercially meaningful role in the coverage marketplace, but 
     provided that the coverage offered to association members is 
     subject to underlying regulatory and consumer protection 
     requirements substantially comparable to those applicable to 
     all entities offering similar coverage.
       Associations deserve a real seat at the coverage table, but 
     that table should not have a substantial tilt one way or the 
     other.
       Streamlining of regulations: The current hodgepodge of 
     varying state health insurance regulation should be 
     streamlined, thereby easing administrative and regulatory 
     costs, and facilitating a larger number of plans in more 
     states.
       Under such an approach, states would be encouraged or 
     required to adopt common sets of rules in targeted areas of 
     health insurance regulation, such as rating and underwriting, 
     though state oversight and enforcement authority would 
     remain.
       A version of such ``harmonization'' was among the options 
     put forward last year by the Senate's Republican Task Force 
     on Health Care Costs and the Uninsured.
       Access to reduced-cost options: Individuals and businesses 
     should have the opportunity to purchase lower-cost coverage 
     free or largely free of state benefit mandates.
       Though most purchasers will likely choose fuller coverage, 
     it is important to assure that lower-cost alternatives exist 
     as a safeguard for those who are struggling at the margin.
       Not everyone needs or wants the same degree of coverage, 
     and where possible, our insurance laws should accommodate 
     this reality.
       Strong state-based consumer protection and oversight: 
     Primary responsibility for most insurance oversight and 
     consumer protection should remain with the states--including 
     the right to assess health plans, including association 
     plans.
       Although some new federal involvement may be needed, it 
     should be kept to a minimum.
       Though far from perfect, our state insurance commissions 
     are much closer to the real problems confronted by purchasers 
     of insurance in their communities than would be a federal 
     agency in Washington.
       Budget neutrality: The focus of our immediate effort should 
     be on policies that do not require significant federal 
     outlays.
       Many laudable proposals have been put forward by the 
     President and others for tax-based and other financial 
     assistance for the purchase of insurance, and many of these 
     should be pursued with vigor.
       We should not, however, allow the fiscal challenge of 
     enacting such policies to sidetrack our efforts to advance 
     less costly improvements.

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