[Congressional Record (Bound Edition), Volume 153 (2007), Part 4]
[Senate]
[Pages 4857-4859]
[From the U.S. Government Publishing Office, www.gpo.gov]




                              HEALTH CARE

  Mr. DURBIN. Mr. President, if one travels across the States of 
Maryland or Illinois and stops at any business, large or small, and has 
a conversation about how the business is going, it won't take long for 
the conversation to move to the issue of health care. Virtually every 
business I have visited in Illinois in the last 10 or 20 years--or 
labor union, for that matter--wants to talk about health care. There is 
a growing concern that the cost of health insurance keeps going up and 
coverage keeps going down. It is affecting our competitive edge in 
America. It compromises the security many families want to feel when it 
comes to medical care necessary for their loved ones.
  Yesterday, I was visited by a spokesman for the Business Roundtable. 
They are infrequent visitors in the offices of Democratic Senators, but 
it was a good, positive meeting. We talked about a number of issues and 
started with their concern and our growing concern about the limited 
availability of health care and its cost.
  We now have some 47 million uninsured Americans and many who are 
underinsured and more and more who are vulnerable each year. There was 
a disturbing story in this morning's Washington Post about a young 
mother who lost her son because she had no

[[Page 4858]]

way to pay for the extraction of a tooth. The child's tooth became 
decayed, abscessed, and led to a terrible condition which ultimately 
cost him his life. So for an $80 tooth extraction, this little boy gave 
up his life. It is unthinkable, in a great country such as America, 
that such could occur. It is one small example of a life that has been 
lost because of a lack of concern we have about extending health care 
coverage.
  It has been a long time since we have had a real conversation about 
this issue. One has to go back to the previous administration, when 
President Clinton came forward with a plan. It was complicated. It was 
controversial. I joined in the debate on the plan because I thought it 
was long overdue. After some months, the forces in the health care 
industry, which is very profitable today, came together and killed the 
idea. So for 10 years nothing has happened except the situation has 
disintegrated and we are now facing a real crisis.
  Recently, President Bush put forward a health coverage proposal that 
claims to make health coverage more affordable, make the tax treatment 
of health benefits more equitable, and create incentives for people to 
enroll in lower cost health plans. I welcome the President's proposal 
as a sign that he, too, believes the status quo of health care in 
America is unacceptable and we need to begin the hard work to reform 
it. But when you take a close look at the President's proposals, some 
questions arise, and some concerns.
  The heart of the plan is a proposal to equalize the tax treatment of 
health benefits, whether you obtain health coverage through an employer 
or purchase it yourself in the individual insurance market. On the 
surface, it sounds very appealing. After all, some people simply do not 
have access to employer-sponsored coverage. But such a change would not 
provide people with two equally good options for obtaining health 
insurance.
  Employer-sponsored health coverage is far superior to the individual 
insurance market for the vast majority of people, even if they have 
access to a tax deduction. Unless you are in perfect health, 
individual-market insurance is often unaffordable or unavailable. To a 
much greater extent than employer coverage, insurers in the individual 
market can deny you coverage if you have a preexisting medical 
condition or can refuse to cover you at all. Insurers in the individual 
market also can charge much higher premiums if you are older or sicker. 
In short, if you are not in perfect health, you do not want to be in 
the individual market. Recognizing this, the President's proposal to 
equalize tax treatment is really not as appealing as it sounds unless 
you happen to be one of those very young, very healthy people who can 
go to an individual market and find a competitive rate.
  The President's plan has an even more alarming implication. The way 
he has constructed it, equalizing the tax treatment of benefits could 
weaken employer-sponsored coverage, which is the bedrock of our current 
health coverage system. He could do it in two ways.
  First, offering the same tax deduction, for either employer-provided 
coverage or individual coverage, could create an incentive for some 
employers to drop coverage. They can just basically say: Now you are on 
your own. We are finished providing health coverage. Use the tax 
deduction to buy your own plan. Given the current state of the 
individual insurance market, this could be terrible news for everyone 
but the youngest and healthiest workers. Most people losing employer 
coverage would likely end up with insurance that costs more and covers 
less--if they are lucky to find a policy at all.
  The second adverse effect is that even if an employer maintains 
health coverage, young and healthy employees would have an incentive to 
leave their employer plan for individual coverage. You know what that 
means: When the younger and healthier workers leave the pool, there is 
more risk and higher premiums for those who remain.
  Another major element of the President's plan is a proposal to cap 
the tax deduction for health benefits at $15,000 for families and 
$7,500 for individuals. Those with health benefits above this cap would 
face a new tax on the health benefits exceeding this threshold. The 
President says capping the tax deduction would dissuade people from 
enrolling in ``gold-plated'' or ``Cadillac'' health plans, which the 
administration has fixated on as a major cause of rising health care 
costs. Some have gone so far as to characterize this part of the 
President's plan as a way to tax the rich and their expensive health 
benefits in order to help lower income people.
  What a curious juxtaposition, that for 6 years this administration 
has argued for tax breaks for people at the highest income categories, 
saying they must be rewarded, even at the expense of middle-income and 
lower income families and now, when it comes to health insurance, the 
tables are turned and the administration is arguing that we should not 
be rewarding expensive health benefits, we should be, in fact, trying 
to help lower income people, though his approach does not achieve that.
  A closer look at his plan raises even more serious questions. It 
rests on a shaky premise that large numbers of Americans have an 
overabundance of health insurance. The President believes Americans are 
overinsured when it comes to health care protection. There may be some 
people out there who fit in that category, but most of the people I 
talk to do not. They are very anxious about their coverage. They are 
anxious about the cost of their premiums, their deductibles, and their 
copayments. We find a lot of important health services are not covered.
  We know what is happening in bankruptcy courts. Those who can make it 
through the new maze that has been created by this Congress and this 
administration usually are there primarily for medical bills. The real 
problem is not the overinsured but the 16 million Americans who are 
underinsured. Their health coverage is not adequate to protect them if 
they have a serious problem. Forty-seven million Americans have no 
coverage at all. The President's focus on the overinsured seems 
misplaced, to put it mildly.
  Part of the problem stems from this notion of ``Cadillac'' health 
plans. The phrase suggests that buying health coverage is like buying a 
car: You can buy the basic model, which allows you to get to work, pick 
up the kids, and go to the store, or, if you have some extra money, you 
can buy the high-end model with lots of extras--leather seats, more 
horsepower, some electronics, and a fancy stereo. Health coverage just 
does not work that way. The cost of health coverage typically has more 
to do with the characteristics of who is being covered: How old are 
you? Do you have a medical problem? Where do you live? These are some 
of the factors which are taken into consideration when people assess 
the cost of a health care plan.
  I am concerned that the new health tax the President proposes would 
hit many people who are older, with chronic conditions, medical 
problems, those who live in high-cost coverage areas. If this is the 
case, the tax is highly unfair. It raises the taxes on the people who 
can afford to pay them the least.
  It also is going to hit people who have sacrificed wage increases in 
the past for comprehensive health care coverage. I cannot tell you how 
many labor unions I visit where they say their members have to make a 
hard call: take-home pay or better health care protection. If they 
chose better health care protection, the President's approach is going 
to penalize them. That is not fair.
  To make matters worse, the $15,000 cap the President proposes could 
increase only at the rate of general inflation, even though the cost of 
health benefits usually rises much faster than inflation. For example, 
since 2000, premiums for family coverage for health insurance have 
increased five times faster than general inflation--a 73-percent 
increase in premiums for family coverage for health insurance in the 
last 6 years; and the overall inflation rate, up 14 percent--73 percent 
to 14 percent. So when the President says he is going to index the 
$15,000 in health

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coverage, it is not going to keep up with the actual increase in health 
care costs.
  The administration estimates that 20 percent of people would be 
subject to this new tax. But that number could grow considerably over 
time. Before long, people with below-average coverage would start to 
pay the tax. That approach only makes sense if the goal of the 
administration is actually to reduce health care coverage in America--
hardly a worthy goal of this Nation.
  The President's plan also misses another critical point. A tax 
deduction really does not help people with low or moderate incomes. The 
value of a tax deduction increases with income. Someone with a high 
income receives a large deduction under the President's plan. Someone 
with a lower income, even people with moderate incomes, has little to 
look forward to. The President should have proposed a tax credit.
  The last piece of the President's health plan--called the Affordable 
Choices Initiative--is the part about which we know the least. Under 
this initiative, funds that now go to help hospitals care for low-
income and uninsured patients would be taken away and used instead for 
the purchase of basic private insurance. The plan would snip away the 
existing safety net without guaranteeing health insurance for everyone. 
Even by the administration's own estimates, only a fraction of the 
uninsured would gain coverage. Already hard-pressed safety net 
providers would still be responsible for caring for the uninsured and 
underinsured, yet they would have fewer funds to do so.
  It appears those who would gain private health insurance would be 
enrolled in health plans that may not meet their needs. The President's 
proposal makes reference to changing State benefit requirements and 
premium-setting rules, which could make health insurance more expensive 
or provide less coverage for those who need it.
  I appreciate the President has put forward a plan. My vision of 
health reform differs from his. We should have a health system that 
covers everyone regardless of income or health status. We should make 
sure everyone has the health benefits they need to prevent illness and 
to obtain care when they get sick. We should conduct the research that 
tells us which medical interventions work best and create incentives 
for physicians to provide recommended care, and we need to do a better 
job of managing chronic disease.
  On the insurance front, the starting point should be legislation I 
have introduced with Senator Blanche Lambert Lincoln of Arkansas. Here 
is a radical concept: What if we established a standard across America 
that small businesses would be able to offer the same type of health 
insurance that is available to Members of Congress? How about that for 
a revolutionary statement?
  It turns out that Members of Congress are part of the Federal 
Employees Health Benefits Program. In other words, we are in the same 
pool with 8 million Federal employees and their families all across 
America. Of course, that employee pool includes younger workers, older 
workers, workers who are healthy and those who are not, and people who 
live all across our Nation in large cities and small, in rural areas 
and urban areas. It is a plan that has worked for 40 years. For 40 
years, we have pooled together Federal employees and we have asked 
private insurance companies to bid for their business, and they do.
  We have the best deal as Federal employees. Every year, there is an 
open enrollment period. Think about this in your own family situation. 
Let's assume you are unhappy with the health insurance you have at work 
or what you had to buy in the individual market. Sometimes you are 
stuck with it, you have no choice in changing it. A Federal employee 
has a decision each and every year at the end of the calendar year: Did 
you like the way you were treated last year by your health insurance 
company? If you did not, chose another one.
  In my State of Illinois, my wife and I have nine choices. We can 
choose from nine different health care plans that could protect us. 
Well, of course, we take a look at what the cost might be, what the 
coverage might be, and pick the one best for our circumstances. If we 
pick a plan with more coverage, they take more out of my paycheck; 
lower coverage, less out of my paycheck--just as it should be.
  These are private insurance companies bidding for the business of 
Federal employees. The Federal Government administers this plan with an 
overhead cost of less than 2 percent. It is widely popular. It is 
successful. It has worked for 40 years. Why couldn't we take the same 
model--that is what Senator Lincoln and I believe--and apply it to 
small businesses across America and say no matter where you are, you 
can join a pool of small businesses, and you as a small business 
employer and your employees would be sought after by the same private 
insurance companies?
  We sat down with some of the major health insurance companies and 
said: We don't want to write the bill like legislators. We want to 
write the bill like insurance companies. We want to make sure, when it 
is all said and done, there is some potential business for you here. 
Well, they helped us write the bill.
  We do provide some tax incentives in the bill which I think are 
entirely appropriate. If you have a small business, low-income 
employees, you still want to have health insurance for the owners of 
the business and the people who work for you, and you want to offer 
this and provide a little toward paying those costs, I think we ought 
to reward you. I think the Tax Code ought to create incentives for that 
to happen.
  Now, we have had a debate within the last year on the floor. Senator 
Mike Enzi of Wyoming is my colleague and friend. He sees this issue the 
same as I do in terms of needing a solution. Our approaches have been 
different. We have sat down to speak since then about how we might 
merge our two approaches. I hope we can.
  It would be good for us around here once in a while to cooperate, to 
compromise, and to come up with a bipartisan approach that says to 
families across America: We are just not coming to the floor to score 
political points; we are just not coming here to disagree; we are going 
to try to find areas of agreement and try to move forward so that at 
the end of the day we can point to a positive accomplishment.
  I think this bill Senator Lincoln and I have introduced is a good 
starting point. I believe if a President of the United States said to 
the American people: We are going to eliminate Americans being 
uninsured in America in just a certain number of years--4 or 5 or 10 
years--that would be a positive step forward. We could set a goal, and 
then it would be up to us in Congress to work with the President each 
year to reduce the 47 million uninsured even more. I think we can do 
it. I think we have to do it. We cannot be competitive as a nation, we 
cannot have a compassionate policy when it comes to health protection 
for our fellow citizens unless we show initiative and leadership in the 
area of health care.
  Our vision differs from the President's that I described earlier, but 
the goal is important and affects every American. I welcome the 
President's interest in health care. Let's begin the debate.
  Mr. President, I yield the floor.
  The ACTING PRESIDENT pro tempore. The Senator from Washington is 
recognized.

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