[Congressional Record Volume 156, Number 75 (Tuesday, May 18, 2010)]
[Senate]
[Pages S3853-S3855]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                           HEALTH CARE REFORM

  The ACTING PRESIDENT pro tempore. The Senator from South Dakota is 
recognized.
  Mr. THUNE. Mr. President, I wish to speak for a few moments this 
morning about a subject that is on the minds of many Americans and I 
think should still be on the minds of everybody in this Chamber because 
the health care bill that was passed and signed into law recently is 
going to have impacts across this country for some time to come.
  I am interested in the discussion that has occurred here on the floor 
of the Senate over the past several weeks, as Senator Barrasso from 
Wyoming--who also happens to be an orthopedic surgeon, a physician--has 
come to the floor to engage in a series of remarks, what he calls the 
``second opinion.'' I think his second opinion series of remarks here 
on the floor has been extremely well pointed in illustrating, in many 
respects, what is wrong with the health care bill and why this is not 
something that is going to improve the lives of most Americans but, in 
fact, is going to worsen the lives of most Americans because they will 
be faced with higher health care costs, higher taxes, and probably 
higher deficits for years and years to come.
  There is a lot of supporting data now, validation of those arguments 
we heard during the course of the health care debate. The Democrats, 
who were supporting it, as was the President, said this health care 
legislation was going to, No. 1, reduce health care costs for most 
Americans, and No. 2, reduce the deficit. Of course, they talked a lot 
about how it was going to extend the lifespan of Medicare as well, even 
though they were cutting Medicare and using those funds to create a new 
entitlement program. So all those promises made by the President and 
made by the Democrats here in the Senate when we were debating health 
care are now all being completely rebuffed by evidence that comes out 
all the time from those who study this issue closely.
  Frankly, as we get more and more businesses trying to figure out how 
to interact with this new health care legislation, they are coming to 
the conclusion that it might be cheaper for them in the long run to 
drop their coverage and put everybody in the government plan, which is 
what we predicted would happen all along.
  But I think probably the biggest bombshell--certainly the most 
damning piece of evidence--came out just a few weeks ago when the 
Actuary of Health and Human Services, HHS, came out with his analysis 
of the financial impacts the new law would have once it was passed and 
implemented. I wish to share a few things from that report because I 
think it is very important. It does, as I said before, illustrate 
exactly what Senator Barrasso and others said throughout the course of 
the debate in the Senate when health care was under consideration.
  The Actuary of the Department of Health and Human Services--bear in 
mind, this agency is supposed to look at these things in a totally 
objective, nonpolitical way--the Actuary concluded that the Federal 
Government and the country will spend $310 billion more under the new 
law than we would have without it. The Actuary's report went on to say 
that national health expenditures would increase from 17 percent of 
GDP, which is what it is today, to 21 percent under the new law. But 
what is interesting about this is that the $310 billion increase in 
health care costs they now say will result from the passage and 
implementation of this legislation is more than what would have 
happened had we done nothing. Had this body done nothing in terms of 
health care reform, health care costs would have gone up less than they 
will with this legislation. As I said before, this completely refutes 
any argument made by the other side during the course of this debate 
that their legislation would, in fact, drive down health care costs.
  The Actuary has now concluded the point that we made throughout the 
course of the debate; that is, that health care costs will go up, not 
down; the cost curve will be bent up, not down; and for most Americans, 
health insurance premiums are going to go up as a result of this 
legislation. That is what the Actuary is now saying.
  What is even more interesting about that report is it goes on to say 
that health care shortages and price increases are ``plausible and even 
probable'' under the legislation. The report suggests there will be 
perhaps as many as 15 percent of Part A providers--Part A providers are 
hospitals--that will become unprofitable within the 10-year projection 
period absent further legislative action.
  In other words, up to 15 percent of hospitals would have to close as 
a result of this legislation. Because of that, the report says the law 
will jeopardize ``access to care for seniors.'' So all these promises 
about greater access, lower cost--the promises that were made during 
the course of this debate--are being completely now rebutted by the 
report that the Actuary came out with just a couple of weeks ago.
  The other thing I think is important--we emphasized this as well 
during the debate--the Actuary concluded that new taxes that are going 
to be imposed on medical devices, on prescription drugs and insurance 
plans, were generally passed on through to consumers in the form of 
higher drug and device prices and higher insurance premiums.
  Remember, during the course of the debate we said all the new taxes 
that will be levied on medical device manufacturers, pharmaceuticals, 
health insurance plans, would be passed on. This is clearly what they 
are suggesting as well. So not only do we get the double whammy, we get 
the whammy of higher insurance premiums, but we get the double whammy 
of higher taxes that are going to be borne by a lot of people across 
the country. That also is being substantiated and supported by the 
Joint Tax Committee, which took a good look at the distribution of the 
impacts of the tax increases in this bill. A lot of Americans are going 
to see their tax burdens go up as well.
  With respect to the issue of the deficit--which, again, is something 
I will

[[Page S3854]]

get to in just a moment--the Actuary notes the bill's Medicare 
provisions ``cannot be simultaneously used to finance other federal 
outlays--such as the coverage expansions--and to extend the [life of 
the Medicare] trust fund, despite the appearance of this result from 
the respective accounting conventions.''
  Essentially what they have said is what they said in a letter in 
response to questions we posed about how this would impact the Medicare 
trust fund. Basically, the Actuary is saying what the CBO said; that 
is, you are double counting revenue, you are basically spending the 
same money twice. In other words, all the additional revenues that are 
supposed to become available because of reductions in Medicare benefits 
or reductions in Medicare payroll taxes that were going to extend the 
life of Medicare and also going to be used to finance the new health 
care entitlement program--that is what we said all along, and that is 
double counting. You can't spend the same money twice, and as a 
consequence of that you are going to see what they promised in terms of 
deficit reduction can be very different from what actually happens.
  They went on to say that the CLASS Act, which is a long-term care 
entitlement program--described, believe it or not, by one of my 
Democratic colleagues as a Ponzi scheme of the highest order, the kind 
of thing Bernie Madoff would be proud of,--will result in net Federal 
cost in the longer term. The program is designed to someday down the 
road to pay long-term care benefits for people who pay premiums into 
that plan and will face significant risk of failure because of the way 
they are counting the revenue.
  It says it is going to be ``a net Federal cost in the longer term'' 
because, obviously, when you take premiums today to pay for the 
unrelated provisions in the health care reform law, and then there is a 
demand for the CLASS Act benefits at some point in the future by the 
people who paid those premiums, you cannot use those revenues to pay 
for the benefits because they have already been spent. To assume 
otherwise is double counting that revenue.
  So you have all this double counting that went on in the course of 
this bill which, again, as I said, understated the overall cost of the 
bill and also the deficit numbers I think were attached to it.
  To me, this study, this analysis was absolutely a bombshell in terms 
of the impacts of the actual implementation of the health care bill. As 
I said, it completely refutes all the arguments that were made that it 
would lower costs, reduce deficits, and it would improve access. All 
three of those points are refuted by the analysis that was done by the 
Actuary at the Health and Human Services Department.
  More recently, last week about this time, the Congressional Budget 
Office came out with a new report. They predicted that the health care 
overhaul will likely cost about $115 billion more in discretionary 
spending over 10 years than the original cost projections. So the 
promises that were made about deficit reduction as a result of this--it 
was going to somehow save $143 billion over a 10-year period--now are 
reduced by $115 billion because, as we said throughout the course of 
the debate, it is going to cost a lot to implement this bill both in 
the form of cost to HHS, as well as cost of the Internal Revenue 
Service, which is going to be required to now impose the individual 
mandate that will fall on a lot of people across this country and the 
penalties associated with that.
  So we have all these implementation costs that are going to add an 
additional $115 billion in spending over the next 10 years which reduce 
dramatically any promises about deficit reduction, not to mention what 
I just stated in terms of the double counting that goes on.
  My view on this is, not only is it not going to reduce the deficit, 
it is going to explode the deficit, particularly in the outyears when 
the demand for Medicare benefits comes and the demands of the trust 
fund for those people who paid into the fund and reached the retirement 
age--a lot of the baby boomers are going to require health care, the 
Medicare fund is going to be tapped for that, and there will not be any 
money there to pay for this program.
  So you have the Actuary at HHS, you have the CBO coming out with new 
information which completely validates the argument we made during the 
course of this debate; that is, it is not only going to increase costs 
for most people across this country and increase taxes, but it is also 
going to have a detrimental impact on the budget and the deficit over 
the long term.
  One of the promises that was made, the so-called good points in the 
health care bill, was that small businesses would benefit from a small 
business tax credit. That is something administration has been trying 
to sell to small businesses, putting out notices from the IRS that 
there are 4 million small businesses that could qualify for the small 
business tax credit. That kicks in in 2010. But, even there, as is now 
coming out, there is a lot of fine print I don't think people read very 
well.
  The Chamber of Commerce said of all the small businesses in this 
country, about 78 percent of those small businesses are self-employed 
people. Self-employed people are not covered. Families are not covered 
under this. More important, there is a disincentive to hire people. We 
have an economy where we are trying to get jobs growing and come out of 
the recession and get people back to work.
  This small business tax credit caps it. In other words, if you get up 
to 25 employees you are no longer eligible for it. If your average wage 
is $50,000 you are no longer eligible for it. So there is a real 
disincentive to pay people higher wages or hire more people because if 
you do, you are not going to be eligible anymore for the small business 
tax credit. A lot of those small businesses are saying: What benefit is 
there to me if I want to grow my business? Yes, I can take advantage of 
it for a short period of time--a very short period of time--but I am 
not going to be able, if I am at that threshold where I start hitting--
first, it says it is available for businesses with fewer than 10 
employees, then it phases out at 25.
  But if you get to 24 employees and you are thinking: My gosh, I would 
like to hire another person; I no longer will be eligible for the small 
business tax credit, or I want to pay my employees higher wages but 
then I hit the $50,000 threshold--it is a real disincentive to create 
jobs.
  One of the things that is being touted as a positive about this 
legislation is it is, in fact, a disincentive for us to get people back 
to work and to create jobs.
  The overall impacts of this, I think, that are still out there I 
don't think we are going to know for some time. In fact, I don't think 
CBO has any idea about what this is going to cost in the second decade. 
They have estimates of the cost in the second decade. They can make 
some predictions, but they will admit there is tremendous volatility 
about that, and unpredictability, when we get into the second decade.
  But one thing we know in the first decade, one thing we are finding 
out now as we get more analysis being completed, is in the first 
decade, according to the HHS Actuary, this is going to increase the 
cost of health care more than if we did nothing.
  In other words, if we had done nothing and we still had health 
insurance costs going up as they were about double the rate of 
inflation, if we had done nothing we would have locked that in. But now 
we are going to continue to have health insurance costs going up, not 
only at that rate but a significantly higher rate to the tune of $310 
billion in more, higher health care costs over the course of the 
decade.
  If we look at how that impacts individual people across the country, 
most Americans are going to see their health insurance premiums go up. 
In fact, some of the provisions of the bill also, as part of the--it 
was just reported last week that this provision that would allow people 
to keep their kids on their health insurance plans until they are 26 
years old will, in fact, increase health insurance premiums by about 1 
percent. That is something that was hailed as one of the benefits or 
virtues of this legislation.
  My point is, contrary to the assertions that were made during the 
course of the debate with respect to lower costs, deficit reduction, 
greater access--none of that, according to these studies and analyses, 
is going to be the case. In fact, it will be the opposite. We will see 
higher health care costs for

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most Americans. We will see higher taxes for a lot of Americans. We 
will see higher taxes for sure--for certain--for a lot of small 
businesses. And I think we are going to see a lot of businesses that 
are going to just say--and we have already seen reports of that, as a 
lot of these businesses look at the impact this would have on their 
bottom lines--it will cost them a lot to cover their employees. It 
might be cheaper to pay the penalty and to just shove them into one of 
the government-run exchanges. I think that is something we have yet to 
see the impact from.
  My prediction would be we will see a lot of small businesses, and for 
that matter a lot of large businesses, that will come to that 
conclusion and say it makes absolutely no sense for them to continue to 
provide health coverage for their employees when they can have the 
government do it and save their companies a lot of money.
  So I think the unintended consequences are something we have yet to 
see, but we do know for certain the consequences of this legislation, 
these analyses that have been completed, and studies that have been 
done by those who are supposed to know a lot about this subject--by 
that I mean the Actuary at the Health and Human Services Department, as 
well as the Congressional Budget Office--they are now seeing higher 
insurance costs, higher premiums, and a significant reduction in the 
so-called deficit reduction that was promised by the administration.
  Furthermore, because of the double counting that is done and the way 
in which Medicare revenues are double counted--CLASS Act revenues are 
double counted--even for that matter Social Security revenues, payroll 
taxes are double counted in this--dramatically understate the deficit 
impact and the long-term debt implications of this legislation and what 
it will mean to the next generation of Americans who are going to be 
stuck paying our bills.
  I say all that, not to be the Grim Reaper. We tried during the course 
of this debate to illustrate as much as we could these very points. We 
tried to offer amendments that we thought made more sense in terms of 
controlling costs; to actually address the actual underlying drivers of 
health care costs in this country as opposed to just expanding 
coverage, which is essentially what the legislation did. It will cover 
more people. In some ways it will cover more people by putting more 
people into Medicaid which will pass on more mandates and more costs to 
our States.
  We have already seen a lot of Governors across the country reacting 
to that, talking about that, how we are going to pay for that. But 
there is an additional 34 million people, additional people, who are 
supposed to be covered in this legislation; about 16 million of those 
are already going into the Medicaid Program which already under-
reimburses providers and also imposes huge new costs and new burdens on 
our State governments.
  There is not a lot of good news to report about this. I think that is 
going to be the case. I think, regrettably, we could have gone a 
different direction. We should have gone a different direction. But 
that being said, we are where we are. I hope over time we will have an 
opportunity to revisit this issue. If we do not, it is going to have a 
dramatic impact on future generations, on our economy, both in the 
short term and long term, as a result of higher costs built into the 
cost structure for health insurance, higher taxes that will impact 
small businesses and families across this country, and higher deficits 
for which future generations are going to be assessed and have to pay.
  With that, I yield the floor.
  The ACTING PRESIDENT pro tempore. The Senator from New Hampshire is 
recognized.

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