[Congressional Record Volume 152, Number 96 (Thursday, July 20, 2006)]
[Senate]
[Pages S8060-S8062]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. SMITH (for himself and Mr. Wyden):
  S. 3701. A bill to determine successful methods to provide protection 
from catastrophic health expenses for individuals who have exceeded 
health insurance coverage for uninsured individuals, and for other 
purposes; to the Committee on Finance.
  Mr. SMITH. Mr. President, every Congress and a number I have served 
in since 1997, nearly 10 years ago, Senator Wyden and I, my colleague 
from Oregon, have put forward a bipartisan agenda of things we could do 
as a Republican and Democrat to advance the interests of our Nation and 
specifically the interests of our State. It has been a genuine pleasure 
to work with him in achieving much good for Oregon and trying to set a 
better example of how Republicans and Democrats can function first as 
Americans and not as partisans.
  Today as part of our agenda for the 109th Congress, we introduce what 
was item No. 1 on our bipartisan agenda. We have entitled it the 
Catastrophic Health Coverage Promotion Act. It addresses one of the 
most difficult challenges facing Congress, that of rising health care 
costs. Getting to a solution on this is daunting. It is not easy to 
solve. Health care is the ultimate turf battle. But for decades health 
care costs have increased consistently and little has been done to slow 
them.
  While there are a number of factors driving this growth, the 
uninsured play a major role in driving those costs up. Last year 46 
million Americans reported lacking health insurance coverage. In our 
State of Oregon, 600,000 individuals, 17 percent of the population, are 
uninsured. What some fail to realize is that the individuals without 
health insurance coverage nevertheless get health coverage. They do so 
through emergency rooms, even when they haven't the money to pay. The 
result is billions of dollars of uncompensated care incurred by State 
governments, community providers, physicians, and hospitals.
  In 2006 alone, Oregon's hospitals provided a total of $500 million in 
uncompensated care, a 262-percent increase since 1995. Americans absorb 
the impact of uncompensated care by having to pay higher prices for 
health services overall. They are simply passed on in the cost of our 
insurance policies. Small businesses have been hit hard by rising 
health care costs as well. Most report they would love to be able to 
offer health care, but most small businesses are trying to save their 
economic lives, not cover the health care of their employees. But they 
would like to.
  If we do our work right, Senator Wyden and I may have come up with a 
product that may help them to provide some coverage. If a small 
business had extra protection in the form of a catastrophic policy for 
their employees, it might be able to extend the most basic kind of 
care, the kind that says: If you lose your health, you don't lose your 
home; you don't penalize everyone else in the business.
  I know something of this, Mr. President, because having provided 
health care for hundreds of employees, it was the inexpensive 
comprehensive package that overlaid those that ultimately was tapped by 
one or two employees every year that helped us, in a way, to keep 
health care costs more manageable.
  The legislation Senator Wyden and I have developed will address the 
issue of catastrophic health costs on all fronts. The Catastrophic 
Health Coverage Promotion Act creates at least four State-based pilot 
projects that will provide basic coverage to uninsured, as well as 
additional protection for individuals with significant out-of-pocket 
health costs. One of these projects, we hope, will be located in 
Oregon. Certainly, it can be if it chooses.
  Two of the pilots will target the uninsured. States will be given the 
tools they need to offer hybrid health insurance plans that combine a 
primary and preventive health care benefit with high-deductible 
catastrophic coverage. Private insurance providers will market these 
plans to uninsured individuals and small businesses.
  Creating affordable basic coverage options for the uninsured is a 
much needed step to reduce the impact of uncompensated care on our 
health system. By doing this, we should be able to stabilize, if not 
reduce, overall health care costs. To help make this coverage more 
affordable for low-income workers and families, the bill provides a 
graduated subsidy to reduce the costs of premiums. Individuals with 
incomes at or below 200 percent of the Federal poverty level would be 
eligible for extra help with coverage costs.
  Many have asked why Senator Wyden and I would decide to focus on 
catastrophic health coverage, considering that similar policy options 
already exist and are made widely available. While that may be true, 
the Federal Government is often in a unique position to help to grow 
existing markets. I believe the targeted funding included in our bill 
will help make catastrophic coverage more affordable and more 
attractive to both individuals and small businesses. The solution in 
this case does not necessarily have to be as big as the problem.
  While our proposal may not seem to be the ``silver bullet,'' the kind 
of reform our system so desperately needs, it is nevertheless a step in 
the right direction. As is the case with many difficult problems, 
change is made incrementally. We are hopeful that the four pilot 
projects created in this bill will provide policymakers with much 
needed insight on how to better manage catastrophic health costs.
  At the end of the day, individuals should not lose their homes just 
because they lose their health. Anyone--whether they are uninsured or 
have generous comprehensive coverage--can fall victim to a serious 
health care problem.
  I am pleased that my colleague and I were able to work together in a 
bipartisan fashion to develop a modest yet workable solution to this 
longstanding and nagging problem. I urge my colleagues to support the 
legislation, and I encourage the Senate's leadership to move it quickly 
through the process.
  With that, I yield the floor to my colleague from Oregon, Senator Ron 
Wyden.
  Mr. WYDEN. Mr. President, how much time remains under the Smith 
unanimous consent request for a half hour?
  The PRESIDING OFFICER. Twenty-two and a half minutes.
  Mr. WYDEN. Thank you, Mr. President.

[[Page S8061]]

  Mr. WYDEN. Mr. President, I have come to the floor today to join my 
colleague at this time to discuss the Catastrophic Health Coverage 
Promotion Act that Senator Smith and I are introducing today.
  Mr. President, first, I want to say how much I appreciate Senator 
Gordon Smith. At a time when our citizens all across the land and in 
our home State of Oregon believe there needs to be more bipartisanship, 
Senator Smith doesn't just talk about it, he is consistently willing to 
meet me more than halfway on critical issues, and he does that with 
other colleagues in the Senate.
  As we begin our time discussing this legislation, I want to let him 
know how much I appreciate the chance to cooperate with him once again. 
As he stated, we did put the issue of catastrophic health coverage at 
the top of our bipartisan agenda for the Senate session.
  What it comes down to, Mr. President, is that Senator Smith and I 
believe it is a moral blot on our Nation for a country as good and rich 
as ours to send millions of its citizens to bed at night fearing they 
will be wiped out if a serious medical illness hits them. That is the 
reality. It is the reality for families who have no coverage at all, 
and it is the reality for families who have some measure of coverage, 
say, through an employer, but it doesn't stretch far enough.
  Senator Smith and I want, in a bipartisan way, to tackle both of 
those kinds of concerns. That is why we have put forward the 
legislation we introduced today. I think now is an ideal time for 
bipartisanship on the catastrophic health coverage issue.
  If you look back over the last few years, Senator Kerry, in the 2004 
Presidential campaign, had an excellent proposal with respect to 
catastrophic coverage, and I said so in the course of that campaign. 
But I also said at the time that I thought our distinguished majority 
leader, Senator Frist, also had a good catastrophic coverage proposal. 
You could debate the various merits of the Kerry proposal and the Frist 
proposal--which approach involved a little more government, which 
approach involved the private sector--but at the end of the day, for 
the purposes of government work, they were pretty darn similar.
  So when Senator Smith and I sat down after the 2004 election, we said 
let's finally get this done. Democrats and Republicans have been 
talking for years about how to make sure that all our citizens have a 
safety net under them so that they will not get wiped out from medical 
illness. We settled on this approach, which we thought would give us 
the opportunity to try some fresh, creative ideas for protecting our 
citizens.
  Let me give an example of what happens in, for example, South 
Carolina, Oregon, or anywhere else in this country. If you have a small 
business with six people working there, and one of them gets sick, that 
essentially blows up the whole health premium structure for all six of 
the employees.
  What we ought to look at is something called reinsurance. Under 
reinsurance, that employee who gets sick could get a bit of help for 
their high bills through a modest role for government, and if 
government steps in, in that kind of instance, you have an opportunity 
to hold down all of the costs for the entire six-person firm. So we 
should have been looking at reinsurance years ago, but because Senator 
Smith, who chairs the Senate Aging Committee, has been examining these 
questions and has worked with me, now we are going to have a chance to 
tackle it in a way that I think is going to give us the opportunity to 
get the job done.
  We are also very concerned about people who have no coverage at all. 
So what happens if you have no coverage at all is folks walk into a 
hospital in Oregon or in South Carolina, usually they show up in the 
emergency room, and the hospital has to absorb those costs. What we 
would do is give that person who now has no coverage at all the 
possibility of actually buying some private coverage in the marketplace 
with a bit of a subsidy in order to be able to have coverage that would 
pick up at least a portion of those bills that the hospital is now 
absorbing.
  At the end of the day, those are the two principal kinds of instances 
we are facing--folks who have some coverage through a private employer, 
but it doesn't stretch far enough, and folks who don't have any 
coverage at all. Under that approach, we would like to make it possible 
for them to get into the private insurance market, protect them from 
catastrophic illness. We think we can do it with a modest subsidy 
coming from government.
  My sense is that we are now looking at health care on two tracks in 
our country. The first track is a track that suggests we can take steps 
right now in areas like catastrophic coverage to protect our citizens. 
There are other ideas I have advanced during this Congress. For 
example, Senator Snowe and I have now gotten a majority of Senators to 
agree with our proposal to lift the restriction so Medicare can bargain 
and hold down the costs. That, like the question of catastrophic 
coverage, is a step you can take right now. Let's protect our citizens 
from the catastrophic illness and let's hold down the costs of 
medicine. Those are practical, bipartisan approaches that can be taken 
today. We ought to pursue them and get them done.
  I also think there is another track to health care. I noticed that 
Senator Hatch was on the Senate floor. He and I were the authors of the 
legislation creating the Citizens' Health Care Working Group that is 
going to look at opportunities to make sure that all Americans have 
decent, affordable coverage. We have only been on that issue for more 
than 60 years--going back to the 81st Congress, in 1945, and Harry 
Truman. I have said let's also work on that second track that involves 
getting all Americans under the tent for essential and affordable 
health care coverage.
  That obviously isn't going to get done in the next 15 minutes. But if 
the Senate, on a bipartisan basis, as Senator Smith and I have sought 
to do on the catastrophic issue, and as Senator Hatch and I have sought 
to do on a broader approach to look at health care that works for all 
Americans--if we team up and look at health care on those two tracks, I 
think we can make a great contribution for our country.
  There are no costs going up in the United States like medical bills. 
We spent $1.7 trillion last year on health care. There are 290 million 
Americans--I guess we are approaching 300 million. When you divide $1.7 
trillion by 290 million Americans, it comes to something like $25,000 
that could be sent to every family of four in America with the amount 
of money now being spent on health care.
  So while we are spending enough money, my sense is that we are not 
spending it in the right places. Once again, Senator Smith has given us 
an opportunity to think creatively about better ways to approach the 
use of the health care dollars. I was pleased when Senator Smith 
suggested in our legislation that we also make it possible to include a 
focus on health care prevention. We are not doing enough with health 
care prevention in this country. The Medicare Program shows that pretty 
well. Medicare Part A, for example, will pay huge checks for senior 
citizens' hospital bills, but Medicare Part B pays virtually nothing 
for prevention to keep people well. That makes no sense. We need a 
sharper focus on health care prevention, and one of the things that I 
think is attractive about Senator Smith's leadership on this issue is 
that he has said even in the context of looking at catastrophic health 
care, let's put a sharper focus on prevention. We are going to make it 
possible in this legislation to do that.
  I note we have other colleagues on the floor. I have secured time to 
focus on the Voting Rights Act legislation later in the afternoon, but 
I am very pleased to have the opportunity to talk for a few minutes 
about the Catastrophic Health Coverage Promotion Act Senator Smith and 
I are introducing today. We have focused on a number of issues in a 
bipartisan fashion over our years in the Senate, but this has the 
potential to be the biggest as it relates to the needs of our citizens 
at home.
  We want to make sure when folks go to bed at night, they don't have 
to fear they are going to be wiped out financially by a serious medical 
illness. This legislation moves us one step closer toward the goal. We 
hope many colleagues on both sides of the aisle will want to support 
the legislation.
  Mr. WYDEN. Mr. President, Senator Snowe and I today are introducing 
the

[[Page S8062]]

Medicare Prescription Drug Lifeline Act. This legislation provides a 
solution for those seniors falling into the coverage gap, also known as 
the doughnut hole of the Medicare prescription drug benefit. The 
doughnut hole occurs when the spending for a senior's drug expenses 
reaches $2,250: at the point, the senior is on their own until their 
spending for prescription drugs reaches a total of $5,100, where the 
benefit picks up again. The Kaiser Family Foundation estimated that 
nearly 7 million seniors will fall into the coverage gap this year.
  Seniors who enter this ``no man's land'' of spending face the same 
problems seniors faced before the drug benefit even began: they skip 
doses, they don't take all their medicine to make it stretch, and they 
are forced to choose between their food and fuel costs and their 
prescription drug costs.
  This legislation would take three steps to deal with this problem: 
First, the Secretary of HHS would be required to let seniors know they 
are approaching the coverage gap. Second, it would allow seniors, when 
they are notified that they are reaching the coverage gap, to switch 
plans to avoid the gap. Finally, the legislation requires the 
Government Accountability Office to examine ways in which the benefit 
could be redesigned to eliminate the gap without increasing Federal 
spending. Together, these provisions will give seniors a lifeline to 
coverage.
  Senator Snowe and I both voted for the legislation that created the 
Medicare prescription drug benefit. When we did so, we pledged that we 
would continue to work to improve the benefit. Senator Snowe and I have 
teamed up together on many occasions to try to reduce the cost of the 
prescription drug program by giving the Secretary the same power other 
Government officials have to bargain for better prices. Our legislation 
has won a majority of votes in the Senate, and we intend to continue to 
press for that power.
  The latest effort is aimed at another shortcoming in the law: finding 
a way to help seniors avoid falling into the coverage gap. Senator 
Snowe and I believe that our legislation will help seniors a 
straightforward way to avoid the gap.
  Congress needs to address both these issues and we will continue our 
strong commitment to seniors by working to improve the drug benefit.
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