[Congressional Record Volume 157, Number 171 (Wednesday, November 9, 2011)]
[Senate]
[Pages S7231-S7233]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                            HEALTH INSURANCE

  Mr. JOHANNS. Recently, the Des Moines Register reported that an Iowa-
based insurance company has decided to exit the health insurance 
market, abandoning insurance sales directly to individuals and 
families. So what is the net effect of all of that? Thirty-five 
thousand policyholders will lose their insurance. It calls to mind the 
famous promise by the President: If you like your plan, you can keep 
it.
  The story doesn't stop there. It has an even more profound impact on 
the lives of real people. The impact goes on. One hundred ten employees 
will lose their jobs. Seventy of those employees are in Nebraska. That 
calls to mind Speaker Pelosi's broken promise: The law will create 4 
million jobs--400,000 jobs almost immediately.
  The driving factor for all of this is a Health and Human Services 
regulation required by the health care law which micromanages how 
insurance companies can spend their revenues.
  Unfortunately, this job loss in Nebraska is not an anomaly. A recent 
survey of nearly 2,400 independent health insurance agents and brokers 
from all over came to this conclusion. One month after this HHS 
regulation took effect, more than 70 percent had experienced a decline 
in their revenues. And, more shocking, nearly 5 percent had lost their 
jobs.
  The Government Accountability Office reported that most of the 
insurers they interviewed were reducing individuals' commissions. These 
are not the big insurance companies that were railed against in the 
health care debate. These are not the big insurance companies that are 
being squeezed. The good folks who are being squeezed are the mom-and-
pop agencies that we find on Main Street throughout the United States. 
Yes, these are the folks we go to to support the local football team, 
the local high school, the local 4-H club, whatever the civic cause may 
be. And yet, with unemployment hovering around 9 percent, the health 
care law puts the hammer on these people. I reached the conclusion long 
ago that the health care law is bad for job creation and it is bad for 
keeping your job.
  The Des Moines-based insurance company's CEO's job loss, according to 
him, was:

       A fairly predictable consequence of the regulation.

  UBS Investment Research called the health care law:

       The biggest impediment to hiring . . . which has the added 
     drawback of straining State and Federal budgets.

  The National Federation of Independent Businesses said:

       Small business owners everywhere are rightfully concerned 
     that the unconstitutional new mandates, countless rules and 
     new taxes in the health care law will devastate their 
     businesses and their ability to create jobs.

  What we are seeing with this law is a massive amount of 
overregulation. According to a recent Wells Fargo-Gallup small business 
poll, government regulations are the most important problem facing our 
small business owners. If we just focus again on the health care law, 
that legislation alone has resulted in 10,000 pages of new Federal 
regulations and notices--10,000 pages. How could any small business 
comply?
  The employer mandate penalizes employers for growing. It is as simple 
as that. It forces employers who do not provide acceptable coverage to 
pay a penalty of $2,000 per full-time employee. But, you see, the 
penalty is applied to firms with more than 50 employees. And as a small 
business owner in the Bellevue, NE, area recently explained to me:

       I'm not growing my business over 50 employees. I don't want 
     to deal with your health care law.

  Well, as I mentioned, this discussion starts, at least today, with 
that article in the Des Moines Register.
  With me today is the very respected Senator from the State of Iowa, 
Senator Grassley. I would ask Senator Grassley, what impact does he see 
arising out of this health care law in his State and, even more 
broadly, across this country?
  Mr. GRASSLEY. I thank Senator Johanns for his leadership in this 
area. He has spoken on regulations quite regularly on the Senate floor 
and also in our caucus, and I thank the Senator for his leadership in 
that area.
  No. 1, I would say there is a certain irony between a President who 
is going around the country now and talking about, We have got to pass 
legislation to create jobs, at the very same time as the Senator 
demonstrated in his remarks that there is a health care bill law being 
instituted that is making people unemployed.
  There is also a certain irony in what the President does and the 
Secretary of HHS does with what Speaker Pelosi said at the time the 
bill was up: You know, we have got to pass this bill to see what this 
bill does. Well, now we are finding out what it does, and people don't 
like what it does.
  You spoke about regulations causing unemployment, and you spoke about 
10,000 pages of regulations. That is probably 10,000 pages of 
regulations out of the 66,000 pages of regulation that we have had this 
year, and 10,000 of that deals with health care. But think about the 
other 57,000 pages that deal with other pieces of legislation that are 
a problem for small businesses--particularly small businesses. I guess 
it is a problem for all business, but particularly for small business. 
And so far, a few regulations have been issued adding up to that 10,000 
pages.
  People can read this 2,700-page bill and understand what is in it, 
and most of them read it and understood what was in it before Speaker 
Pelosi said, ``We have got to pass it to find out what is in it,'' and 
didn't like what was in it. But in this bill, there are 1,693 
delegations of authority to write regulations. So if you have 10,000 
pages so far based upon the new regulations that have been written, 
just think what it is going to be like when all of the pages are 
printed for the 1,693 regulations. So I think we are at the tip of the 
iceberg so far in this legislation, and the damage that is done to 
employment and lack of job creation has just started. That is my 
comment on that.
  I have some remarks I wish to make, if it is okay with the Senator; 
and if he has to go to a committee meeting, I understand.
  This is not the first time this situation has happened in Iowa, and 
it is coming at a time when people need stability. American families 
are struggling to put food on their table, pay their utility bills as 
winter arrives, and purchase health insurance as costs are 
skyrocketing.
  In other words, the President has promised: Pass this legislation and 
it is going to keep health care premiums down, but that is misleading 
people, and at a time when, as Senator Johanns said, another promise 
made was: If you like what you have, you are going to be able to keep 
it.
  Well, I don't know exactly the figure--I have got it here coming up. 
There is a figure of several thousand people in our State who aren't 
going to be able to keep the health insurance they like and they 
already have because of this company closing down individual policies.
  Unemployment continues to hover around 9 percent and 1 million 
Americans are underemployed, and here we have a health care bill that 
is causing more people to be unemployed, as well as not keeping the 
health insurance they want. With the economic situation our country is 
facing, Congress must reexamine its actions and realize the errors that 
were made because of partisan votes. This bill was an entirely partisan 
piece of legislation, unlike most social contracts in America that have 
been passed, such as Social Security, Medicare, and Medicaid, civil 
rights legislation. Those were bipartisan pieces of legislation because 
it was felt that when you are making this difference in America, you 
ought to have a broad consensus that major changes such as this ought 
to be made. But in this particular case, it was very partisan.
  I want to go over to what Senator Johanns said about the Des Moines 
Register article. The American Enterprise Group, an insurance company 
participating in individual health insurance markets in Iowa and 
Nebraska, is leaving the market. This action

[[Page S7232]]

shows the importance of repealing and replacing the health care 
overhaul passed by Democrats in Congress and signed by the President 
last year before the situation deteriorates even further. Just think 
what it is going to be like when we get the rest of these 1,693 
delegations of authority to the bureaucracy to write regulations.
  American Enterprise notified 110 employees in Iowa and Nebraska that 
they will lose their jobs sometime during the next 3 years. American 
Enterprise is leaving the individual health insurance market as a 
result of the instability caused by the implementation of this health 
care reform bill. American Enterprise stated it will no longer sell 
individual health insurance policies because of the regulatory 
environment created by the health care reform bill.
  This isn't an isolated incident for Iowa, this one company, because 
the Principal Financial Group left the small group insurance market in 
2010, and Principal Financial isn't a small Main Street operation. It 
is one of the major financial groups in the United States, but still, 
they could not find it to be competitive to stay in the individual 
market.

  This has cost many Iowans their jobs, while leaving scores of small 
businesses and their employees to choose from health insurance plans in 
a health insurance market where there is less and less competition. The 
regulatory culprit in this incident is a medical loss ratio regulation 
of this legislation. This regulation requires insurers to pay a certain 
percentage of premiums in claims.
  I know supporters will defend the regulation as ``keeping insurers in 
check.'' But the real world effect is to force insurers to leave the 
market, thereby reducing competition and choice available to 
consumers--not exactly what the President promised, that we are going 
to have competition, keep price down, and people are going to have 
choice, they are going to be able to keep what they want if they have 
it. But in this case, for these people, that isn't a promise kept. That 
turns out to be a falsehood.
  The small group and individual markets happen to be very vulnerable. 
That is the problem. Insurers risk and set their premiums accordingly. 
Insurers are making a rational decision to get out of the market 
because the risks have become too great. Competition is reduced. Costs 
rise.
  Once upon a time, the President promised Americans that if they liked 
the insurance program they have, they can keep it. This is more 
evidence that that promise rings hollow.
  This recent planned pullout will leave 35,000 individuals without 
insurance plans that they have grown accustomed to. Forcing people to 
choose a different insurance option can lead to higher costs and may 
limit the health care accessibility these individuals have depended on 
for years. This is especially detrimental when these individuals have 
preexisting conditions or acute chronic disease. The President 
specifically promised that if these people want to keep their health 
care coverage, they would be able to do it with the passage of that 
law. This is just one of the many examples of how this overhaul has led 
to broken promises made by the President when pushing through the 
passage of this legislation in a partisan way.
  These problems will certainly continue as more regulations are 
written. The Congressional Budget Office expects people in the 
individual market to see an average of a 10-percent to 13-percent rise 
in premium costs solely based on the passage of the health care law. 
Does that increase accessibility or affordability? No, of course it 
doesn't.
  Not only has the health care overhaul caused health insurance 
companies to leave parts of the health insurance market and health 
insurance costs to increase, it has also put added burden on employers. 
Some employers will no longer offer their employees health care 
coverage. Higher taxes and mandates put on employers by the new health 
care law have left many employers without resources to maintain current 
coverage for family members of their employees. The negative impact 
this legislation is having on large employers and those insured by 
employers was demonstrated by the National Business Group on Health. In 
its recent annual survey, overall planned costs for larger employers 
are expected to rise by 6 percent in 2012. The National Business Group 
on Health also notes that 7 out of 10 employers will lose their 
grandfather status, meaning employees will lose their current health 
care plans and employers will be subject to additional regulations.

  According to the same survey, 3 out of 10 employers are unsure if 
they will continue to insure employees due to the health care overhaul. 
Other employers will increase the employee share of the insurance 
premium, and many employers state they will likely lower the level of 
health care coverage offered to their employees. Walmart, as an 
example, will not allow many of its new part-time employees to receive 
health care insurance through the company. Many of these workers are 
underemployed. They work hard yet do not always have adequate resources 
to purchase health care insurance on their own, especially as costs in 
the insurance markets continue to increase due to the new law.
  Additionally, many businesses are simply dropping coverage for their 
own employees because of the extra costs incurred in the legislation. 
It is more affordable for some employers to drop coverage for their 
employees and pay the fine associated with the employer mandate. An 
employer must provide health insurance for their employees if they have 
more than 50 employees or 50 full-time equivalents. Employers who are 
required to insure employees will be fined $2,000 per employee who 
seeks health insurance through one of the exchanges created under the 
health care overhaul, and any employer-sponsored plan must meet the 
definitions of HHS on what an adequate plan is under the mandate.
  This requirement will increase insurance costs for employers and 
employees when they must upgrade health insurance benefits in order to 
meet the standards defined by HHS. Forcing employers to provide health 
insurance when they have a tough time hiring new employees just adds to 
the burden employers are facing in this struggling economy. Employers 
will likely pay their increased health insurance costs by reducing 
employee take-home pay or by increasing the employee share of health 
insurance premiums. Also, employers will continue struggling in future 
years as the Federal Government increases year by year the requirements 
of health insurance benefits needed to avoid a penalty.
  Furthermore, employers already faced with economic uncertainty have 
to deal with the government regulations that continue to change, adding 
to uncertainty. An HHS rule released last November allows fully insured 
group plans to switch insurance providers as long as the insurance 
benefit provided to the beneficiaries remains comparable. However, this 
is only for group plans that switched after November 15 last year.
  HHS wrote this new rule so more group plans can find affordable 
coverage and shop around for similar coverage at cheaper rates. But if 
the group insurance plan carrier was changed before November 15, the 
plan would lose grandfather status and then be subject to a whole bunch 
of new regulations. Ironically, what created the need for this new rule 
was another rule the President's administration and HHS crafted in June 
last year that stated plans would lose their grandfather status if they 
switched carriers. This chaotic situation shows what happens when the 
government is given more authority to regulate the health insurance 
market.
  What we have is a mess. We need to put a halt to the implementation. 
We need to repeal the law and start over again with commonsense 
solutions. We need to move away from the regulatory and bureaucratic 
nightmare that is costing Americans their coverage and too many 
Americans their jobs.
  With 10,000 pages of regulations at this point, just think what it 
will be like when all 1,693 regulations get written.
  I yield the floor.
  Mr. JOHANNS. Mr. President, I thank Senator Grassley for this 
explanation of what this law is doing and the impact it is having. 
Today, of course, we are starting our discussion with the article from 
the Des Moines Register which talked about the regulatory impact. But 
we cannot forget there are other pieces to this law that

[[Page S7233]]

have just as severe an impact. I would like to spend a minute or two 
talking about the destructive taxes that are in this legislation.
  When we add it all up, the new health care law basically requires new 
taxes of about $\1/2\ trillion--not to pay down the national debt, not 
to solve the Nation's debt woes but to create a new entitlement. The 
Treasury Department's Inspector General for Tax Administration has 
looked at the impact of the health care law on the Tax Code and said 
this: ``The law is the largest set of tax law changes in 20 years.''
  That is no small undertaking when we think about all that has 
happened over the last couple of decades, that we ended up with an 
impact on the Tax Code that is the largest set of tax law changes in 20 
years, according to the Treasury expert who looked at this. There are 
42 separate provisions adding to or amending the Internal Revenue Code 
in the health care law. So much of this law was put together in the 
last days of this debate, people were scrambling around trying to read 
it and understand it and get information out to their constituents.
  Speaker Pelosi said: We will probably have to pass this law to figure 
out what is in it. And we are now figuring out what is in it, and it is 
so much more than a health care law. There are 42 separate provisions 
that add to or amend the Internal Revenue Code.
  The Boston Globe weighed in on this. They pointed out the 2.3-percent 
excise tax on medical device suppliers, according to the Globe, ``will 
force industry leaders to lay off workers and curb the research and 
development of new medical tools.'' There is no question about it. When 
we add up the tax law changes, the impact from a regulatory standpoint 
and the other provisions of this law, this is not going to result in 
the promised jobs that Speaker Pelosi spoke of. It is a job killer.
  If we look at what this law is doing, it will actually shrink the 
labor force, actually create a disincentive to work or to receive a pay 
raise. I referenced earlier in my comments a small business owner in 
the Bellevue, NE, area. I was sitting in a Business Roundtable a little 
more than a year ago. We were just going around the room, and I was 
listening to small businesses describe to me some of the challenges 
they face.
  A woman, a small business owner, said to me: Mike, we have studied 
this health care law every which way we can. I am right on the edge of 
having 50 employees. I am told if I go over 50 employees, I am now 
subject to all of the ramifications of the health care law. After 
looking at this I have decided I will not grow my business beyond 50 
employees. I do not want to deal with this health care law.
  Her discussion with me has stuck with me all of these months. Why is 
it that Washington would actually pass legislation that would 
discourage her from hiring additional employees to grow her business? 
It makes no sense whatsoever. Why are we here in Washington creating a 
disincentive for the small business owner? Why are we costing Americans 
jobs?

  The Congressional Budget Office has looked at this legislation. They 
have come to the conclusion that the American labor supply will be 
reduced by 100,000 workers. The CBO quote is this:

       The law will encourage some people to work fewer hours or 
     to withdraw from the labor market.

  The more we learn about this health care law, the more we come to 
realize this is flawed policy. It passed and it was signed into law by 
the President of the United States, but it goes beyond flawed policy. 
It impacts real people who are trying to make a real living.
  My comments today started with a story about 50 Nebraskans who lost 
their jobs or are about to lose their jobs because of the health care 
law. I am concerned that it is not going to stop there; that as 
employers are more and more burdened with the thousands of pages of 
regulations, they will come to realize their best strategy is to try to 
figure out how to deal with these new requirements and they will pull 
back on hiring, which is exactly what we do not want to have happen in 
this economy.
  With that, I conclude my remarks and our colloquy today.
  I yield the floor. I suggest the absence of a quorum.
  The PRESIDING OFFICER (Mr. Udall of Colorado). The clerk will call 
the roll.
  The legislative clerk proceeded to call the roll.
  Mr. ENZI. Mr. President, I ask unanimous consent the order for the 
quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. ENZI. I also ask unanimous consent that the Senator from Illinois 
and the Senator from Tennessee be allowed to enter into a colloquy with 
me for the time that we have allotted.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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