[Congressional Record Volume 155, Number 170 (Tuesday, November 17, 2009)]
[House]
[Pages H13038-H13044]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                           HEALTH CARE REFORM

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 6, 2009, the gentleman from Louisiana (Mr. Cassidy) is 
recognized for 60 minutes as the designee of the minority leader.
  Mr. CASSIDY. Thank you, Mr. Speaker. Although you called me 
``mister,'' I am actually a physician; and so in my other life--I 
actually saw patients just yesterday at a public hospital in Louisiana, 
a safety net hospital where I have worked for the last 20 years. So 
caring for the uninsured has been my life's work since completing my 
residency and returning home. I've learned that if you don't pay 
attention to costs that it doesn't matter how passionate you are for 
the uninsured; the fact is that you are unable to achieve your goals.
  There are three goals of health reform, and they're commonly said to 
be controlling cost to provide access to high-quality care. In the 
hospital where I work, a safety net hospital, they are committed, they 
are so passionate for the underserved folks who are med techs, physical 
therapists, ward clerks, physicians and nurses. But the problem is, if 
there is a budget shortfall, then inevitably, services suffer.
  So it doesn't matter how passionate we are in our service. The fact 
is that if there are insufficient resources in the State at the end of 
the budget year, then services suffer. It may be that the nurse 
staffing has decreased and hospital beds are closed so that if somebody 
comes to the emergency room, they have to wait in the emergency room 
before they're admitted. And inevitably when that happens, the hospital 
goes into what is called divert, whereas instead of coming to our 
hospital, they will be diverted to another hospital. That's because if 
you don't control cost, inevitably, access and quality suffer.
  Now, I was struck that President Obama agrees with this. President 
Obama continually speaks about the need to bend the cost curve down, 
the need to control costs because if we do not control costs, then our 
economy suffers and the ability to provide care suffers. Now, it's one 
thing to say that we're going to control cost in order to expand access 
to quality care, but you've got to have a plan on how to get there.
  There is a company called McKinsey & Company, and on their Web site, 
they have a great article that you can download called ``The Three 
Imperatives of Health Care Reform.'' Without achieving these three 
imperatives, then, we cannot control cost in a way which expands access 
to quality care. Now the three imperatives that they list are 
decreasing administrative costs, how much money we put into the

[[Page H13039]]

bureaucracy as opposed to patient care, incentivizing healthy 
lifestyle. Put differently, if people insist on smoking and drinking 
and if they're too heavy, it doesn't matter how much we throw at health 
care; we will never control cost because we are always try to catch up 
with the disease as opposed to preventing it. And, lastly, cost 
transparency. Someone going in for knee surgery needs to know how much 
her bill will be before she goes in as opposed to learning about it 2 
months later when she gets the bill.
  It is important for us, therefore, to achieve our goals of cost 
containment to provide access to quality care to work through these 
three imperatives. Now, the bill we just passed, H.R. 3962, on the face 
of it does not achieve these three imperatives. As an example, if you 
are going to decrease administrative costs, you don't achieve a 
decrease in administrative costs by creating 111 new bureaucracies, 
boards, and commissions. It is just laughable to think that we are 
going to put that much more money into administration, build that many 
more buildings, hire that many more people and at the same time say 
we're decreasing administrative costs.
  There is very little in the bill that incentivizes a healthy 
lifestyle. You can argue that those provisions in the bill that address 
this weaken the current provisions that we're finding effective. And, 
lastly, there is not a whole lot that provides cost transparency. 
Indeed, one of the things that has been used to encourage cost 
transparency is the use of health savings accounts, and now health 
savings accounts are being taxed, as they have not been before.
  So it's not surprising if these three imperatives are not addressed 
that we can say that cost is not being controlled. Now, by the way, 
it's not just me who says that costs are not being controlled. We have 
here a quote from The Washington Post, and we also have a quote from 
The Washington Times. The Post article says, speaking of this bill: 
``It does not do enough to control costs, and it is not funded in a 
sustainable way.'' The headline from The New York Times--I think this 
was November 10--``Democrats raise alarms over health bill costs.'' 
Democrats are raising alarms over the cost of this health bill. That's 
so important because if you can look in any health care system, if you 
don't effectively control costs, eventually access to quality care 
suffers.
  I have been living this for 20 years. In my life, I know this to be 
true. So here we see from a couple different sources, The Post and The 
Times, that this bill does not do enough to control costs.
  Now, it turns out it isn't just The Post and The Times that have such 
concerns. There is an article in Reuters, and Reuters says that China 
is now questioning the cost of our U.S. health care reform. Since China 
buys so much of our debt, it turns out they have a vested interest in 
making sure that we have our financial house in order. So to read the 
article from Reuters: ``Guess what? It turns out the Chinese are kind 
of curious about how President Barack Obama's health care reform plans 
would impact America's huge fiscal deficit. Government officials are 
using his Asian trip as an opportunity to ask the White House 
questions. Detailed questions. Boilerplate assurances that America 
won't default on its debt or inflate the shortfall away are apparently 
not cutting it.''
  I think it's important for us as an American people and our country 
to look at the bill that was just passed that is going over to the 
Senate and to analyze how well does it control costs. Are the Chinese 
correct? The Washington Post, The New York Times, are their articles 
correct? Or does it, indeed, actually control costs and everyone else 
is a little bit confused about it?

  Well, let's go into that. First, remember our three imperatives: you 
have to decrease administrative costs, you have to incentivize healthy 
lifestyles, and you have to put in cost transparency. Let's talk about 
incentivizing healthy lifestyles and how you do so. Now, as it turns 
out, when the President talks about preventive medicine, one of the 
kinds of dirty little secrets of this--and as a physician, I can say 
this--if you are talking about things such as colonoscopy, actually, if 
we did a colonoscope on everybody over 50, as per the current 
recommendation, it actually costs the system a little bit more. Now, 
it's a good cost. If you find a polyp, remove it, and prevent cancer, 
that is actually a very good thing; but it doesn't save money.
  But there are some things you can do that will save money. If you can 
get someone to stop smoking, it actually saves the system money. It 
also helps them in terms of their health. If you can get someone to 
lose weight, it actually saves the system money. General Motors did a 
study--they have got so many employees, they can do this sort of 
thing--and they found that for every 10 pounds that an employee lost, 
that their health care costs went down significantly. If the person had 
high blood pressure, and they lost 10 pounds, their blood pressure got 
better. They required less medicine. If they had diabetes, the diabetes 
became easier to control or in some cases the diabetes would go 
completely away.
  Now, there are ways that you can incentivize a healthy lifestyle. 
Under current law, companies are allowed to decrease by up to 20 
percent the premiums they charge their employees if the employee 
participates in a wellness program. So, for example, Safeway, which is 
a large grocery store chain across the United States, had a program 
where they will decrease their premiums by 20 percent for those 
employees who participate and attend a smoking cessation program. When 
they do so, they find that people--surprise, surprise--stop smoking.
  Similarly, if someone joins an exercise program or a dietary program 
if they are overweight and they lose weight--now, frankly, as I recall 
the way it's structured, is that the person just has to join the 
smoking cessation program. They don't actually have to stop smoking. 
But just as it turns out, people, if exposed to information, act on 
that information, and they adjust their lifestyles. So either by an 
exercise program, a dietitian or by smoking cessation programs, by 
participating in these, they will lose weight. And Safeway has kept 
their costs for their health insurance constant, whereas there has been 
about a 7 to 10 percent inflation rate over the United States.
  I just met with a company based in my hometown of Baton Rouge, 
Edelmayer, and Edelmayer has been having about a 10 percent inflation 
rate. But 2 years ago, they instituted a program where they first had 
all their employees come in for a health assessment. Last year they had 
all their employees come in for a health assessment--for example, do 
you smoke, are you overweight, but also a physical exam. Next year they 
are putting in, as a covered benefit, a smoking cessation program.
  Then 2 years from now--this is a 4-year process--they are going to 
decrease premiums for those that participate in these smoking cessation 
programs. Their premium costs, which have been increasing 7 percent to 
10 percent per year, are projected to only rise 3 percent per year when 
they institute the full program. So by putting in or incentivizing 
healthy lifestyles, they're going to lower their inflation rate to 3 
percent per year.
  Now, H.R. 3962 actually weakens these provisions. Republican 
amendments offered in committee would have increased the amount an 
employee could save if she participated in a wellness program, but 
these were defeated basically on party-line votes. Similarly, there is 
a disassociation in H.R. 3962 from what a company can do to incentivize 
healthy lifestyles and how this provision works.
  As an example, H.R. 3962 requires that a company pay at least 72.5 
percent of an employee's insurance premium. Well, if you've got to pay 
at least 72.5 percent, that limits the amount you can decrease in order 
to incentivize somebody to participate in a wellness program. Now, the 
way you could say it is, if someone participates in a wellness program, 
you would pay 72.5 percent, but if they do not, you are allowed to 
decrease your contribution to 68 percent.

                              {time}  1600

  Now, remember, I'm not saying they have to stop smoking; I'm just 
saying they have to participate in the wellness program to stop 
smoking. So there's a key difference. Some people will not be able to, 
but most people, if given the facts, will be able to do so. So if one 
of our three imperatives of lowering health care cost is to incentivize

[[Page H13040]]

healthy lifestyles, we actually see some of the programs which are now 
working well are gutted or made less able to work effectively under the 
bill that we just passed.
  Now, we're never going to control cost if we do not incentivize a 
healthy lifestyle. As a physician, I will tell you that part of what is 
driving the cost of health care in the United States is the cost 
associated with diabetes, high blood pressure, heart attack and stroke. 
The prevalence of these diseases is so much more in our country 
relative to Europe that there's at least one article out there that 
suggests that the entirety of the cost differential between the United 
States and Europe is because the increased expense of treating these 
diseases such as diabetes, hypertension, high cholesterol, stroke, 
heart disease; they all kind of go under the term of a metabolic 
syndrome, if I'm allowed to speak like a physician.
  And so if we're not going to get a handle on these, if we're not 
going to incentivize a healthy lifestyle so that we're not treating the 
disease on the back end, as opposed to preventing it on the front end, 
then we will never achieve one of our principle three goals, which is 
to control cost, because, again, working in a public hospital for 20 
years, I've learned, if you do not control cost, you do not have the 
adequate resources to expand access to quality care. And according to 
the independent sources, The Washington Post, The New York Times, 
China, this cost, this bill before us has significant issues as regards 
its ability to control costs.
  Indeed, Centers for Medicare and Medicaid Services, called CMS, the 
Federal government's already paying for Medicare, which is the health 
care program for folks 65 and above, and a large amount of money for 
Medicaid, which is the State Federal program for the poor in each 
State. And there is a new study, the Centers For Medicare and Medicaid 
Services, that finds that the health care reform bill recently passed 
in the House of Representatives will increase health care spending to 
21.3 percent of our Gross Domestic Product, compared to 20.8 percent 
under current law, bending the curve the wrong way.
  If the President says that if we do nothing the status quo is such 
that costs will double, as it turns out, under the reform package 
passed a week ago in this Chamber, costs more than double. As crazy as 
it sounds, the reform bill we passed, according to the independent 
Centers For Medicare and Medicaid Services, the reform bill costs more 
than the status quo. And I keep saying that because the President said 
we've got to have reform to control costs. And according to the Federal 
Government, our reform costs more than the status quo. At a minimum, 
reform should not cost more than the status quo. We shouldn't bend the 
curve the wrong way. We should bend the curve the right way.
  In addition, the CMS study gives a clearer cost estimate than the one 
previously given by the Congressional Budget Office. According to the 
CBO, the 10-year cost of the plan was $894 billion. But the analysis 
included earlier years of very little government spending. According to 
the Center for Medicaid and Medicare Services, the House approach will 
cost $1 trillion from 2013 to 2019, or some $140 billion a year when 
put into effect.
  So, in 7 years, it will cost $1 trillion. Clearly, if the goals of 
health care reform are to control costs so that we can expand access to 
quality care, according to our government, the Chinese government, two 
prestigious newspapers, this bill did not do so. What does it do? Well, 
one thing it does is it takes power away from patients and it turns it 
over to the Federal Government. Now, it's going to sound like rhetoric, 
so let me elaborate. Again, as a physician who's worked for 20 years 
with the uninsured, I've learned that when you put the patient in the 
middle of process, if you say the most important person here is the 
patient, then actually, you tend to lower costs and have healthier 
patients.
  If you think about it, that program which lowers someone's premiums 
20 percent if she participates in a wellness program, it puts the 
responsibility for someone's health on the person with the greatest 
ability to make a change--that is the patient. If she is financially 
rewarded for having a healthier lifestyle, as it turns out she'll have 
a healthier lifestyle. We, as a society--not only will she be 
healthier, she will have lower costs and, frankly, those lower costs, 
among millions of patients, if you will, lowers the cost for the 
system.
  There's one way to explain this. There's something in the Republican 
proposals called health savings accounts. Now, in a health savings 
account, you put the patient in the middle of the process in the 
following fashion: A health savings account takes the money that a 
family would normally spend for a health care premium. It sluices off a 
portion of it and puts it into a bank account. So if with a traditional 
insurance policy, at the beginning of the year, a family of four puts 
up $12,000, if at the end of the year they've not seen a doctor, well, 
they've put up another $12,000 for the next year. At the end of the 
year they put up another 12,000, and every year they put up another 
12,000. In a health savings account you sluice off a portion, and you 
put it into an account.
  Now, that money comes from the money you'd ordinarily be spending for 
a premium. But instead of spending it for a premium, you put it in this 
bank account. And instead of asking the insurance company to pay for a 
flu shot, you pay for it out of your bank account. Instead of asking 
for the insurance company to pay for your arthritis medicine, you'd pay 
for it out of your bank account. The advantage is, at the end of the 
year, if you have money left over, instead of losing it, it rolls over 
until the next year. Or, if you have a family member whose costs are 
excessive, you can donate portions of your health savings account to 
your family member.

  And so, with that money, it is money that you are incentivized to 
spend wisely. I'll give you an example. Two patients come to mind, or 
three patients. There's one patient who's got a traditional insurance 
policy, and a very nice woman. And she's got an expensive policy but 
she's a woman of means and she can afford it. And she says, I never 
look at the bill. If the doctor writes me a generic or a name brand 
drug I don't care. My insurance pays for it. When I get a bill from the 
hospital, I don't look at it. The insurance pays for it.
  And so, because the insurance pays for everything, she likes her 
insurance policy, but she's got the money to pay for it. Contrast that 
with someone like the gentleman I'm about to describe. We're talking 
about health savings accounts. He goes, I have a health savings 
account. I went to my doctor and my doctor wrote me a prescription for 
a medicine that I knew by experience would cost $159. Now, notice, he 
didn't say $160. He said $159, because he's paying for this out of his 
account. And he said, my doctor wrote me for this medicine for $159. I 
said, Doc, I have a health savings account. Do you mind writing me for 
something cheaper? And the physician said, I'm sorry. You have an HSA, 
and he tore up that prescription and he wrote him for a generic.
  Now, you can say, why didn't the doctor write for the generic in the 
first place? He probably should have. On the other hand, who is most 
responsible for an individual's health? The person most responsible for 
an individual's health is that individual. And so, just like if I were 
to go to Target or Wal-Mart and say, okay, I'm going to buy school 
uniforms for my children, it's really not Target's responsibility to 
prove to me that they are cheaper than Wal-Mart. It's my responsibility 
to see who's cheaper and then to go to the place that gives me the best 
value for my money.
  So it puts the responsibility where probably it most rightfully 
should be. And frankly, with that responsibility, the man responded. 
Instead of getting a medicine that costs $159, he got a medicine that 
cost $20. The system saved $139. If you multiply that across the 
millions of transactions, then this system saves millions and even 
billions of dollars.
  Now, we have just gone from the anecdote of an individual patient. 
Let's talk about a study. Kaiser Family Foundation, a little bit of a 
left of center group, but a good group, did a study where they compared 
the cost for a family of four which had a health savings account with a 
catastrophic policy on top, so if they have a terrible illness like a 
liver transplant that exceeded

[[Page H13041]]

the amount of money in their account, the catastrophic policy picks it 
up on the top end. They compared it with the cost of a traditional 
insurance policy for a family of four. They found that the family of 
four, with the HSA, the health savings account, and the catastrophic 
policy on top, they found that that family's cost of that HSA and 
catastrophic policy was 30 percent cheaper than the cost of the 
traditional insurance policy for a family of four. And they found that 
both families used preventive services as frequently.
  So what we have here, if our goals of health care reform are to 
control cost, to expand access to quality care by lowering premiums, 
the Kaiser Family Foundation found that the family with the HSA and 
catastrophic policy, their policy costs were 30 percent cheaper 
compared to traditional insurance.
  They also found that 27 percent of those people who had an HSA and a 
catastrophic policy were previously uninsured; that 50 percent of 
people with these sorts of policies had family incomes of $50,000 or 
less, and that about 60 percent of such families had family incomes of 
$70,000 or less.
  So, by controlling cost, the HSA catastrophic policy, 30 percent 
cheaper, by controlling cost, those people who were previously 
uninsured, 27 percent of the folks with these HSAs were previously 
uninsured, were able to now purchase insurance, and with this insurance 
they access preventive services as frequently as those with traditional 
policies. So the goals of reform were achieved. Lowered cost, expanded 
access to quality care.
  I've been joined by a colleague of mine who is also a physician, a 
family physician, also a small businessman. And Dr. Fleming, we're 
discussing costs and how control of cost is so essential to expanding 
access to quality care. Do you mind sharing the anecdote of that 
employee, when your group went to HSAs, because I want to show how the 
two things I've discussed so far have been how you can incentivize 
healthy lifestyles and control costs by decreasing premiums, if you 
will, and also how health savings accounts, by directly connecting 
people with costs, can also be cost savings. Your anecdote combines 
those two. Can I ask you to share that?
  Mr. FLEMING. Sure. I thank the gentleman, Dr. Cassidy, my colleague 
from Louisiana for doing a Special Order today, an opportunity to speak 
on that very subject. Yes. What you're referring to is a case in which 
my companies, my nonmedical companies, seeing health care premiums 
rising an average of 10 to 15 percent per year, we found that to be an 
unsustainable increase. And we began to analyze what are the choices, 
what are the options. Maybe we would pay less of the premiums, perhaps 
we would just stop insurance all together. We really weren't sure what 
we could do.
  And then I recall something that at that time was a brand new 
concept, and that is a health savings account, where you lift the 
deductible of the policy to a higher level, saving a premium cost, but 
then, in turn, put the incremental increase that comes up to what the 
premium would be into a health savings account. So we began that about 
6 years ago. We brought the deductible up to about $3,000. And 
employees would get as much as $50 a month put into their health 
savings accounts where they could purchase any health care service or 
item they needed, pretax.

                              {time}  1615

  In explaining this to my employees, however, as we gathered together, 
I wanted to make sure everyone was on the same page. I suggested to 
them that this was the way we probably would want to go, but I wanted 
to get the input as to what their concerns might be.
  We had a lady who said, ``Well, you know, the problem with this is my 
inhalers. If I have to pay for them out of my pocket or my health 
savings account each month, it is going to cost me $100, maybe $150 a 
month. And true enough, this would come out of my health savings 
account, but I don't know that my health savings account would be able 
to withstand that.''
  So I said to her, ``Well, let's think this through. Perhaps you 
should consider doing a smoking cessation program, stop smoking 
altogether. You could throw away all of your inhalers; you would save 
money on the cigarettes; you would save money on the money accumulating 
in your health savings account.''
  Mr. CASSIDY. If the gentleman will yield.
  Mr. FLEMING. Sure.
  Mr. CASSIDY. By connecting her with costs, if you will, you are 
incentivizing a healthy lifestyle.
  Mr. FLEMING. Basically, you're absolutely right, Dr. Cassidy. What we 
are really doing is saving her money and saving her life because there 
is no question there is direct correlation, an inverse correlation, 
between the use of tobacco and health. By the same context, if you stop 
smoking, then life span increases.
  So we found in very real terms that it saved premium costs--both to 
the employer and to the patient--by instilling the health savings 
account and attaching behavior with costs. And even today, we received 
notice on our most recent new policy for the coming year. The increase 
was 3\1/2\ percent, which is really amazing when it comes to health 
insurance policies.
  Mr. CASSIDY. If the gentleman will yield.
  You said that all of your employees in your group are on health 
savings accounts now?
  Mr. FLEMING. Yes.
  Mr. CASSIDY. We sometimes hear that health savings accounts are only 
for the wealthy, yet you've heard me quote that study that found that 
27 percent of people with HSAs and catastrophic policies were 
previously uninsured.
  And so as I know--and I'll yield back now--your business is a service 
business so I assume that people are of moderate income, and yet this 
is the policy that they have all chosen. So unless you tell me that all 
of these folks are wealthy, I will assume indeed this is something that 
works for middle America.
  Mr. FLEMING. This is a fast food business. It's a steep pyramid which 
means you have a wide base of entry-level employees and then middle 
management and then just a few high-income folks. Remember, the 
employer is putting the money into the health savings account. That 
doesn't mean that the patient or employee can't also put some money in, 
but the lion's share was put in by us. And now after 6 years or so, 
those who have taken good care of their health and not wasted the 
health care dollars now have saved as much as $15- to $20,000 in their 
family health savings account which is triple, if not quadruple, what 
the deductible is on their health policy.
  Mr. CASSIDY. So what you've told me is that families have been 
incentivized to be wise with their health care dollars, and at the end 
of every year, instead of losing that dollar, it rolls over and it 
accumulates. Now they put that much less money for the following year. 
For those particular families, their cost of insurance, if you will, is 
decreasing annually, I would assume.
  Mr. FLEMING. Of course the premiums stay even. But what happens is 
the cash accumulates and it accumulates to the point where there is 
essentially no deductible, no copayment. Whatever health care needs you 
have, there is always plenty of money in the bank.
  What's also interesting is for whatever reason you get out of that 
plan and went to something else--let's say you hit 65, you went to 
Medicare; let's say you just decided you didn't want to have insurance 
anymore, whatever reason--you still keep that money. It is still there 
for you for health care needs. And you can use it indefinitely no 
matter what other health plan you might be on.
  Mr. CASSIDY. If I can contrast your patient-centered approach where 
you put the patient responsible, the person most responsible--the 
patient, your employee--in charge of the dollars she would spend for 
her health care and in so doing she responded in rational economic way. 
She didn't want to spend money on inhalers so she stopped smoking, so 
therefore she stopped needing inhalers and the whole system saved 
money.
  Contrast that with the bill that we passed a week ago in which now 
there is going to be a tax on health savings accounts.
  So the example I gave, if I may continue, is where the patient asked 
for an

[[Page H13042]]

over-the-counter generic instead of the prescription medicine knowing 
that the one was as good as the other, and one costs $20, one cost $39, 
and yet now by the bill that was passed by our colleagues on the 
Democratic side of the aisle, we are now going to tax the purchase of 
over-the-counter medicines when that purchase is made with a health 
savings account. It seems like we're going backwards in terms of 
incentivizing people to use less costly drugs.
  I yield to the gentleman.
  Mr. FLEMING. Congressman Cassidy, I have looked at this for many 
years in terms of being a family physician figuring out how to get the 
best cost care to a patient delivered--and I am sure you have in your 
specialist role--but also as a business. And I have concluded over the 
years there are only two ways to control costs in a health care system: 
either you do as we just discussed, you have the doctor and the patient 
have a stake in the cost controls for themselves or at least 
particularly for the patient, in which case as a dividend; you have 
cost savings throughout the system; or you create a giant, highly 
bureaucratic system that engineers, micromanages life behaviors from 
top to bottom in which there is no connection between a patient and his 
or her behavior--or cost, for that matter--and for that system to be 
effective--because we see an exponential growth in consumer purchase 
behavior--and the infinite desire for value coming out of the system, 
whoever is putting the money in it, we as consumers always want to get 
as much out of a system as we can, especially when we are not putting 
anything into it.

  When you have that scenario, then it puts an intense demand on the 
controlling entity which in this case is the Federal Government. It 
puts an intense pressure and burden to figure out ways of controlling 
costs, and there is only one way at that point to do it: that is long 
lines and rationing. That is the only way any system of that size has 
been able to control costs.
  Mr. CASSIDY. Now, on the other hand--let's be fair to this bill--it 
does attempt to pay for its exploding costs.
  Before you walked in, I mentioned the Centers for Medicare and 
Medicaid Services found that the bill that was passed--although 39 
Democrats joined Republicans in opposing it, it still passed on 
basically a party-line vote--that because of that bill, health care 
spending will increase to 21.3 percent of our GDP compared to current 
law; 20.8 percent would be under current law. And bending the cost 
curve the wrong way, if you will, or bending the cost curve up, we are 
yanking on that thing. But on the other hand, they do attempt to pay 
for it.
  If the gentleman will allow me to go forward. They are creating $730 
billion in tax hikes. Some people have called this a tax bill disguised 
as a health care bill: $460 billion tax on small businesses and high 
earners; $135 billion employer-mandate tax; $33 billion individual 
mandate tax. You mentioned how you are a small businessman as well as a 
physician.
  I am going to yield to you and ask you if you can comment on how 
these taxes would affect you as a small business person.
  Mr. FLEMING. It would have a tremendous negative impact. First of 
all, if for whatever reason--let me back up a second.
  This health care bill provides that whether it is a public option, a 
government-run insurance, or whether it's a private insurance plan, 
they all have to go through an exchange and meet certain minimum 
requirements and certifications. Every constituency out there is going 
to be knocking on our doors in Washington wanting their aroma 
therapies, their massage therapies, and everything else which is going 
to make the minimum requirements go up and, therefore, the cost.
  I, as a small business owner, when I am having to decide about 
purchasing these required minimums and mandates, at some point I may 
say I can't afford it, in which case I will have to opt out of the 
health care plan but I will still have to pay an 8 percent of payroll 
tax or up to 8 percent payroll tax.
  So even not covering my employees will lead to higher costs. And as 
soon as my costs go up, my profits go down, my ability to sustain 
business will fade, and the first thing I will have to do is lay people 
off or certainly not hire people.
  Mr. CASSIDY. So lay people off. It is projected, I see, using the 
methodology of the White House Council on Economic Advisors, that the 
tax hike, $730 billion in tax hikes to address this cost--which, by the 
way, inadequately addresses it--would kill 5.5 million American jobs.
  Mr. FLEMING. If the gentleman would yield for one other point on 
that.
  The taxes on the business doesn't stop there. With the Bush tax cuts 
expiring very soon, the marginal tax rates will go up from 35 to 39 
percent and then this bill provides for another excise tax of over 5 
percent. So marginal tax rates on small business owners will increase 
from 35 percent to 45 percent plus the 8 percent that we talked about, 
taxes that will occur on payroll even if the employer does not have or 
are able to purchase health care insurance.
  So just an explosion of costs without any return on investment. And 
therefore, the business owner, in order to remain competitive, will 
have to reduce his workforce.
  Mr. CASSIDY. So there's mandates on businesses and individuals, there 
is a loss of freedom; there's $730 billion in new taxes, and there's 
5.5 million American jobs lost.
  Mr. FLEMING. Yes.
  Mr. CASSIDY. That is a trifecta of disaster.
  Mr. FLEMING. Absolutely.
  Mr. CASSIDY. I see we've been joined by Congressman Scalise. I will 
yield to the gentleman from Louisiana.
  Before doing so, I'll say we have been discussing costs; how the 
Washington Post, New York Times, the Chinese Government, Centers for 
Medicare & Medicaid Services have all expressed doubts that this bill 
will control costs. And frankly in fairness there were 39 Democrats 
that voted against this bill. Some of them also expressed concerns 
regarding this cost.

  I'd like to yield to you for your thoughts, please.
  Mr. SCALISE. I want to thank my colleague from Baton Rouge--in fact, 
both doctors from Louisiana who have exhibited so much leadership on 
this broader issue of health care reform. But I think, as you've 
pointed out, what so many Americans are finding out now as they are 
looking at more and more of the details of that 1,990-page bill that we 
opposed but unfortunately passed the House a week and a half ago, is 
they're realizing not only all of the taxes, as you pointed out, over 
$700 billion new taxes that would cripple small businesses and 
families, the $500 billion in cuts to Medicare that our seniors know 
will lead ultimately to rationing of health care and other devastating 
consequences.
  When this whole debate started, it was about lowering costs of health 
care. Now they're realizing that Speaker Pelosi's 1,990-page government 
takeover of health care will actually lead to increased cost for health 
care, which is the ultimate irony and really the ultimate kick in the 
teeth to the American people who want--as we want--real health care 
reform to lower cost.
  In fact, the alternative bill that we presented here on the House 
floor where we had a record vote here on the House floor that same day 
that Speaker Pelosi's bill passed, our bill actually would have reduced 
health care cost by 10 percent scored by the Congressional Budget 
Office, would have had no absolutely no tax increases, no cuts to 
Medicare; but on the other side, we're seeing more and more now how 
many costs are now increasing. In fact, we just saw a report come out 
earlier this week that showed that prescription drug prices have 
increased this year by 10 percent because some of these drug companies 
that supposedly are going to help out with lowering costs, what they 
did was they jacked up their costs 10 percent this year to accommodate 
for the increased cost down the road by Speaker Pelosi's government 
takeover.
  So not only are all of our families across this country that have 
health care that they like, realizing that the bill will actually take 
away, potentially, their health care, it will also lead to higher 
health care costs overall and even higher prescription drug costs. So 
it is really a double whammy for American families who were expecting 
something completely different

[[Page H13043]]

from this Democratically controlled Congress.
  Unfortunately what they're seeing is a 1,990-page government takeover 
of health care that raises taxes, cuts Medicare, and they'll increase 
costs for health care, which is just the opposite of what Americans 
were promised.
  So it is a very big disappointment as more details come out. 
Hopefully, we can stop this from actually becoming law so that we can 
do real health care reform to address pre-existing conditions, to bring 
in more competition so families can buy across State lines, have true 
competition, have portability to take their health care with them, and 
have medical liability reform which we actually put in our bill which 
would have reduced costs saving American families millions and millions 
of dollars every year.

                              {time}  1630

  Mr. CASSIDY. There are a couple of ironies here. One irony is that we 
were told we had to do this to control costs, yet we see it does not do 
enough to control costs. The GDP amount going to health care will be 
more under this bill.
  The other irony, we were told we had to do this to preserve jobs, yet 
it is estimated that we will lose 5.5 million jobs related to the $730 
billion in taxes in this bill.
  Mr. SCALISE. On that issue of jobs, we are seeing more and more on 
the stimulus bill, the so-called stimulus bill that we also opposed, a 
bill that added another $787 billion to our national debt, was 
completely financed on the backs of our children and grandchildren. I 
noticed and I am sure my colleagues from Louisiana will be happy to 
find out, when you go to the White House's Web site, Louisiana has 15 
different congressional districts and they talk about the jobs that 
were created by the stimulus bill in Louisiana's Eighth Congressional 
District, and the only problem, and you are laughing and it is almost 
comical, while they talk about on the White House's Web site all of the 
jobs created by the stimulus bill in Louisiana's Eighth Congressional 
District, Louisiana only has seven congressional districts. In fact, 
when we looked across other States, we were seeing the same exact 
thing.
  So there is a whole lot of not only deception, but fraudulent numbers 
being reported on the White House's own Web site about jobs that were 
created in districts that don't even exist in this country. And it was 
using money that doesn't exist because it was borrowed from our 
children and grandchildren.
  Mr. FLEMING. I want to add that apparently Puerto Rico and, I 
believe, Guam or Northern Mariana Islands had the 99th District, which 
I don't think they have but one district, but they are already up to 
99th District with all of the jobs, the fake jobs, the artificial jobs 
that were created.
  There is really, again, a two-tiered approach to increasing aspects 
to care. One is to do what this bill that just passed does, and that is 
to say we are going to cover as many people as we can and we will worry 
about costs later on. Another would be to attack cost first, create a 
more efficient system, such as we talked about a little earlier, and 
then organically you are able to cover more people because there is 
more money to go around.
  So I really am concerned that we have started off in the wrong 
direction here. Of course, the Senate has some kind of bill, although 
we haven't seen the details of it from the majority leader, but I think 
it still attacks this whole problem in a sort of government takeover 
way.
  If you look at the statistics, Mr. Speaker, what you find is that the 
American people oppose, and it depends on which poll you look at, but 
either by a slim margin or by a large margin, they oppose the 
government takeover of health care. The American people get it. 
Republicans in the House and in the Senate get it, so why can't the 
White House and the Democrats in Congress get that government has never 
proven to run anything well when it comes to a business-like, cost-
effective, and efficient manner. So why are we going to take over one-
sixth of the economy and do just that?
  Mr. CASSIDY. I think that was the message from the town hall meetings 
in August. In August, the people spoke. They came out in droves to say 
we want reform, but we want reform that doesn't concentrate power in 
Washington, DC, doesn't raise taxes by $737 billion and still does not 
do enough to control costs, doesn't kill 5.5 million jobs. No, we want 
something which you and I would call patient centered, something which 
recognizes there is a heck of a lot of money in the system now. If we 
just create the economic model in which people are incentivized, as 
your employee was, to live a healthier lifestyle, thereby saving her 
and the system money, thereby saving small businesses money, we can 
accomplish something.
  So I think the American people spoke loudly and clearly in August. 
The only question is will they be heard.
  I will compliment my Democratic colleagues. Thirty-nine of them heard 
and joined with Republicans voting against this bill which sacrifices 
personal freedom, which increases taxes by $737 billion, which is 
estimated to cost 5.5 million jobs and still does not control costs. So 
I think the American people are, frankly, where you and I are.
  Mr. FLEMING. We covered the cost that is going to occur to small 
businesses and to individuals, perhaps those who opt out of insurance, 
having to pay 2.5 percent of their adjusted gross income or a $250,000 
fine or 5 years in prison. But what about the States? You know, the 
States, Mr. Speaker, cannot have legal counterfeiting of money the way 
we in Congress do. They can't create a currency that doesn't exist. And 
all of a sudden we have a mandate by increasing Medicaid from 100 
percent of poverty to 150 percent of poverty.
  Mr. CASSIDY. Reclaiming my time, just for those watching who are not 
familiar with Medicaid, Medicaid is the program where States put up 
some money and the Federal Government puts up other money and it covers 
the poor. Right now in many States they are either having to raise 
taxes to cover the cost of it or cut back services to the poor. And yet 
what this bill does is says that you shall, the States shall increase 
the percent of their population that they are paying for medical 
services with Medicaid. The Federal Government will pay for a portion 
of that, but not all, and the State taxpayer has to pay the rest.
  In our State, Louisiana, it is estimated that will cost $610 million 
extra State dollars that will come out of roads and highways and 
schools. I think Schwarzenegger in California said $6 billion for 
California.
  Mr. FLEMING. Yes, and that money is not going to come off the backs 
of our children and grandchildren as it does here in Washington. That 
is going to come directly out of taxpayer pockets. That is going to be 
roads that aren't going to be built, bridges that aren't going to be 
built, projects that aren't going to go forward, things that would 
stimulate job production. That is money sucked out of the economy.

  And remember, as you expand Medicaid to higher and higher income 
levels, you are pulling people off of private insurance where premiums 
are being paid by employers and the families, to some extent. You are 
pulling them into Medicaid which is now 100 percent government paid 
for. And again, we are concentrating power in the government and cost 
on top of the taxpayer, really a terrible combination of things in an 
era where we are looking at pushing above a $12 trillion limit where 
our deficit spending has quadrupled within 1 year, where even the 
Chinese who lend us the money we live off, our credit card, if you 
will, have become terrified of our spending as well. I don't know where 
this ends, Mr. Speaker.
  Mr. CASSIDY. I think people back home are concerned that in this 
Chamber we are too partisan. That is why I am trying to make it a point 
to not speak from a Republican viewpoint, but to quote The Washington 
Post and The New York Times, which says that this bill does not do 
enough to control costs. To quote the Centers for Medicare & Medicaid 
Services, which is a Federal agency: In aggregate, we estimate that for 
the calendar years 2010 through 2019, national health expenditures will 
increase by almost $290 billion.
  Most of the provisions in H.R. 3962 that were designed in part to 
reduce the rate of growth and health care costs would have relatively 
small savings.

[[Page H13044]]

  Again, some of my colleagues, Democrats, said: I fear this bill will 
not reduce long-term costs and our debt and deficits will suffer and 
balloon in the years ahead.
  Another Democrat colleague: My primary concerns have been that the 
legislation does little to bring down out-of-control health care costs, 
which is what burdens families and small businesses and also leads to 
our skyrocketing budget deficits.
  The Congressional Budget Office, an independent agency, says that the 
cost has grown at about 8 percent per year, which more than doubles 
cost. If you compound 8 percent per year, when the President says the 
cost of doing nothing is that the cost will double, in this case the 
cost of doing this something, costs will more than double, according to 
the Congressional Budget Office.
  On balance, during the decade following the 10-year period, the bill 
would increase Federal outlays for health care and the Federal 
budgetary commitment to health care relative to the current amount. 
That does not include the State dollars that we have been referring to.
  Mr. FLEMING. What we are talking about may sound theoretical, but we 
actually have a model by which, on a much more microscopic level--we 
actually have many, but one that I think is the best is Medicare 
itself. Medicare is a government-run health care program. Those who are 
served by it like it, but there is a good reason why they like it, 
because they get a lot more out of it than what they actually put into 
it. It is heavily subsidized in different ways. It is running out of 
money. I believe the estimate today is that it will be completely out 
of money in 8 years. The cost today, the annual cost of Medicare is 
exponentially greater, magnitudes greater than the estimates ever were 
in the past. It has always run much higher in cost than was ever 
predicted. And yet, we somehow think we are going to be able to take a 
much larger health care system controlled by a much larger governmental 
set of agencies, 111 new bureaucracies and mandates, and that what we 
couldn't do with a much smaller system that was a lot less complex, 
somehow we are going to miraculously do with a much bigger, more costly 
system. And even if it didn't, we don't have the money as it is. We are 
living on our future, our descendants, if you will. We are living off 
their dime at this point.
  Mr. CASSIDY. We have spoken about the irony, about how the bill we 
have to pass in order to control costs is more expensive than status 
quo. We spoke about the irony about the bill we had to pass to rescue 
jobs will cost 5.5 million American jobs.
  There is another irony here. Medicare, a great program but going 
bankrupt in 7 years, according to the folks that run it; Medicaid, 
another Federal program which is bankrupting States, is now going to be 
rescued by a third public program which is based upon the one and 
expands the other. So two going bankrupt or bankrupting will be saved 
by a third which builds upon those first two.
  To go back to Scripture, you are building a house upon a foundation 
of sand. In this case, it is a fiscal foundation of sand which should 
concern us, as it concerns newspapers like the Post and the Times which 
wonder if it does enough to control costs.
  Mr. FLEMING. It is clear that all of these things--Medicare that 
exists today, running out of money; Social Security that exists today, 
running out of money; Medicaid already out of money and bankrupting 
States; jobs, killing jobs, and jobs are what keep our current health 
plans in place; $13 trillion in debt and rising--many, many dollars 
spent right here in this House that we have absolutely no way of paying 
for, and we see a confluence of events here, costs that are coming 
rapidly together that very quickly just the interest alone will begin 
to squeeze out all of the other services that we look to government to 
help us with, like common defense.
  What are we going to do when we don't have the money to protect our 
country both internally and externally? What are we going to do when we 
don't have money for some of the programs that we use as kind of a 
safety net for Americans today who don't make enough to live off of, or 
used to be employed but became unemployed because of our spending? What 
are we going to do? We have to change direction.
  I just spoke at a TEA party this weekend, and people are absolutely--
they are past angry. They are actually terrified at this point.
  You mentioned, Dr. Cassidy, this summer, all of the town halls, and 
of course TEA parties have sprung up during that period of time. I 
think we have to look at that as sort of the canary in the mine shaft. 
That is the early warning sign that the citizenry out there is fed up 
with the irresponsible spending that we are doing here. It is time we 
begin to look at reinstating individual choice and individual freedom 
rather than the government controlling and micromanaging our individual 
lives and taking our own money away from us to give back to us in order 
to control us.
  Mr. CASSIDY. I think the point just hit upon, we all want reform and 
we know the goals of reform are to control cost and to expand access to 
quality care.
  Now, there are some who think that to do that you have to sacrifice 
freedoms, you have to raise taxes, kill jobs and still not control 
costs.

                              {time}  1645

  But you and I know from our practice and our life experience that you 
can do it differently. You can actually increase freedom by giving that 
person the ability to control her account that she can use to spend or 
not spend, to seek value. In so doing, you lower the administrative 
costs. You kind of cut the insurance company out of the deal because 
now she has her own account, and she doesn't have to submit a payment 
claim. She just pays for it with a debit card.
  You can control costs in a patient-centered way, one that 
incentivizes a healthy lifestyle. And in so doing, the patient becomes 
healthier; and by becoming healthier, you control costs, not by 111 
different bureaucracies, boards, and commissions. It stays with 
conservative values of individual responsibility, limited government, 
and free enterprise. It actually works in this segment of our economy 
as it does in every other segment.
  I yield.
  Mr. FLEMING. I thank the gentleman. I absolutely agree. And, again, 
it looks like, from what you've presented today, The New York Times, 
The Washington Post, and I read today from Reuters, and CMS just came 
out--all of these groups, very nonpartisan in many cases, and certainly 
no one can say that The New York Times is a Republican or even 
conservative publication--all of these groups, these publications, 
these boards, editors are coming out with great anxiety over the cost 
of this.
  And you might say, well, why are they complaining after the fact? 
Well, remember that we debated for weeks on H.R. 3200, but we only had 
1 day really to vote on H.R. 3962, which really doubled in size and 
doubled the number of bureaucracies virtually overnight. And I think 
now that all the celebration is over in the House, we may have a little 
hangover going forward.
  Mr. CASSIDY. I think that people are waking up. Again, if we're going 
to achieve our goals of reform for all, health care accessible and at 
affordable costs, you can't have it with a program which drives up 
costs and drives up costs despite the high taxes and the loss of jobs. 
So we're not through yet. The American people still have time to weigh 
in on this, to weigh in as the bill goes through the Senate side and 
then comes back to conference.
  But what I challenge the American people to do is to do as they did 
in August, to contact those Representatives that voted for this bill 
and express their concern regarding the cost, the taxes, the loss of 
jobs, but also to contact their Senators and to say that they want 
reform, but they want reform that doesn't kill jobs, raise taxes, or 
deprive us of personal freedom. I think in that way we can have a bill 
which serves the American people without sacrificing our values.

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