[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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