[Congressional Record (Bound Edition), Volume 155 (2009), Part 11]
[Senate]
[Pages 15186-15190]
[From the U.S. Government Publishing Office, www.gpo.gov]




                              HEALTH CARE

  Mr. McCAIN. Mr. President, tomorrow the Committee on Health, 
Education, Labor and Pensions will begin consideration of a 615-page 
bill that seeks to reform our Nation's health care system. This bill, 
introduced by Senator Kennedy and others last week, has very great 
ambitions.
  We all agree that health care reform is necessary. We all agree that 
Congress must act. But we must not act recklessly. We must not act with 
haste and political expediency. Health care reform will affect each and 
every American and we must do it right. I strongly believe that we have 
to start over and act in a truly bipartisan manner to address the 
issue.
  Unfortunately, the legislation before that committee seeks to enact a 
massive government-run health care program that intrudes into the lives 
of all

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Americans by making decisions on each American's choice of doctors, 
employer health plans, and insurance providers, and it leaves major 
questions unanswered.
  Every American should know the answer to how much will this massive 
expansion of government cost. And every taxpayer should have a clear 
answer to how are taxpayers going to pay for this massive government 
expansion.
  Yesterday the Congressional Budget Office released a letter which 
stated that the Kennedy bill, the bill now pending for markup beginning 
tomorrow in committee, would insure only one-third--would insure only 
one-third--of the 47 million Americans who are currently uninsured, for 
a cost of $1 trillion--$1 trillion--over 10 years.
  Again that only insures one-third of the uninsured. Let me quote from 
the Congressional Budget Office report. It says:

       Once the proposal [that is the bill that we are now 
     considering in the HELP Committee] was fully implemented, 
     about 39 million individuals would obtain coverage through 
     the new insurance exchanges. At the same time, the number of 
     people who had coverage through an employer would decline by 
     about 15 million or roughly 10 percent, and coverage from 
     other sources would fall by about 8 million. So the net 
     decrease in the number of people uninsured would be about 16 
     million, because 47 million are without health insurance in 
     America.

  So this matches an executive summary entitled ``The Impact of the 
2009 Affordable Health Choices Act'' which was completed by the HSI 
Network, done by Steve Parente, Ph.D., and Lisa Tornai, M.S.
  I ask unanimous consent that this report be printed in the Record.
  The ACTING PRESIDENT pro tempore. Without objection, it is so 
ordered.
  (See exhibit 1.)
  Mr. McCAIN. This study authenticates the Congressional Budget Office, 
because what it says is, if you want to insure every American, it is 
going to be $4 trillion--not $1 but $4 trillion--over a 10-year period.
  So to insure coverage for all Americans, as proposed in the 
legislation, it would cost $460 billion annually or $4 trillion over 
the next 10 years, according to a report issued last week, as I 
mentioned.
  The best we can tell, the cost of the legislation that we are now 
considering is $4 trillion. How are we going to pay for that? How are 
we going to pay for it? Is there a proposal yet, besides eliminating 
fraud, abuse, and waste?
  It is unacceptable. It is not health care reform. I believe the CBO 
letter should be a wake-up call to all of us in this Chamber to scrap 
the current bill and start all over, and start all over in a bipartisan 
fashion with true negotiations.
  Yesterday the President of the United States said the opponents of 
his legislation or his proposal were fear mongering. I cannot agree 
with that assessment nor do I accuse the proponents of this bill of 
that motivation. This is not health care reform. Any bill that strips 
23 million Americans of their current health care coverage and insures 
a mere third of the 47 million uninsured Americans is not what 
Americans are looking for in legislation.
  Let me say, Americans are not calling for a massive government 
expansion. They are not calling for a new government insurance plan 
that will do away with existing private insurance plans or an act of a 
broad government panel exerting command and control of individual, 
small group and large employer health care plans. They are not calling 
for new tax cuts to health care services or penalties to individuals or 
small businesses if health coverage does not comply with Washington's 
standards. They are not calling for $1 to $4 trillion to be spent to 
fund the appetite of some who are hungry for more government intrusion 
into the daily lives of Americans.
  Americans need health insurance, good and complete health care 
coverage, the security of knowing they have a job, and even better, a 
job where an employer can afford to provide health care coverage. If 
the employer does not provide coverage, we need to make it easier and 
affordable to get health care coverage for an American.
  Two ideas: One, give every American family a $5,000 refundable tax 
credit and let them go out and get an insurance policy that meets their 
needs. And let them go across State lines if they feel like doing it. 
That is pretty simple. It is not real complicated. It can be done in a 
bipartisan way in a matter of weeks.
  That is not what is happening here, despite all of their calls, along 
with the President's, for bipartisanship. But it can be done if we 
wanted to solve the problem for the American people.
  I believe it is time for Democrats and Republicans to come together 
and draft a bill that gets Americans the health care coverage needed at 
affordable rates. This should be our goal, ensuring that all Americans 
have coverage, not just 16 million as the Congressional Budget Office 
study indicates, but have everybody covered, not an unsustainable 
government expansion.
  Again, I am calling on the White House and the Democrats to scrap 
this unsustainable bill and sit down and let us start from scratch. 
According to news reports in New York, Robert Gibbs states this 
morning, ``This is not the Administration's bill,'' after the CBO 
letter came out.
  Well, where is the administration's bill? We are supposed to be 
enacting legislation before the end of July. Where is the 
administration's bill?
  We cannot afford this one. We cannot afford the one that is 
supposedly going to be enacted into legislation that will come to the 
floor of this Senate. It does not do justice to our taxpayers and their 
children. Forty-two percent of U.S. voters say cutting the deficit is 
the most important priority for the country. The bill that is being 
considered tomorrow in the HELP Committee is an extraordinary step in 
the wrong direction.
  So let me just say, scrap this bad bill. Pay attention to the 
Congressional Budget Office. Understand it does not achieve the goal of 
coverage. Understand the costs would be around $4 trillion over a 10-
year period for which, so far, there is almost no provision to pay for 
it. Let's sit down together and work together in order to provide 
Americans with the health care they need at a reasonable cost.

                               Exhibit 1

                           EXECUTIVE SUMMARY

                   2009 Affordable Health Choices Act

  Independent Assessment by HSI Network LLC, for Public Dissemination


                            Summary Snapshot

       The Senate Committee on Health, Education, Labor and 
     Pensions (HELP) have proposed a health reform bill called the 
     Affordable Health Choice Act (AHC) that seeks to reduce the 
     number of uninsured and increase health system efficiency and 
     quality. The draft legislation was introduced on June 9th, 
     2009. The proposal provided adequate information to suggest 
     what the impact would be of AHC using the ARCOLATM 
     simulation model. AHC would include an individual mandate as 
     well as a pay or plan provision. In addition, it would 
     include a means-tested subsidy with premium supports 
     available for those up to 500% of the federal poverty level. 
     Public plan options in three tiers: Gold, Silver and Bronze 
     are proposed in a structure similar to that of the 
     Massachusetts Connector, except that it is called The 
     Gateway. These public plan options would contain costs by 
     reimbursing providers up to 10% above current reimbursement 
     rates. There is no mention of removing the tax exclusion 
     associated with employer sponsored health insurance. There is 
     also no mention of changes to Medicare and Medicaid, other 
     than fraud prevention, that could provide cost-savings for 
     the coverage expansion proposed. Below, we summarize the 
     impact of the proposed plan in terms of the reduction on 
     uninsured, the 2010 cost, as well as the ten year cost of the 
     plan in 2010 dollars.

                   HELP Affordable Health Choices Act

       Insurance is reduced by 99% to cover approximately 
     47,700,000 people.
       Subsidy-Tax Recovery = Net cost: $279,000,000,000 subsidy 
     to the individual market; $180,000,000,000 subsidy to the ESI 
     market with; Net cost: $460,500,000,000 (annual); Net cost: 
     $4,098,000,000,000 (10 year)
       Private sector crowd out: 79,300,000 lives.
       The underlying simulation model used is 
     ARCOLATM, a proprietary version of a health reform 
     coverage and cost assessment analytic engine. A peer-reviewed 
     presentation of the core model structure is summarized in the 
     journal Health Affairs and a longer version is available as a 
     DHHS report at www.ehealthplan.org


                           Scoring Components

       Major policy components considering for scoring:

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       Employers would have to offer health insurance or pay a tax 
     not as yet specified.
       Individuals would have to be covered by a qualified plan or 
     pay a tax.
       Medicaid for everyone up to 150% of poverty.
       Sliding scale subsidy from 150% to 500% of poverty.
       The government would define a qualified plan with 3 levels 
     of coverage: gold, silver and bronze. We assume the subsidy 
     would be priced at the silver level of benefit design.
       All plans must use modified community rating: premiums can 
     vary only by geographic region (to be defined), family 
     structure, actuarial value of benefits, and age (maximum 2:1 
     range).
       Public plan that pays Medicare rates +10%.
       Small-employer tax subsidy


                                Summary

       The plan lowers the uninsured significantly, to less than 
     1% of the population, but not without a cost of over four 
     trillion dollars over 10 years. There are no provisions in 
     the legislation to offset this course. Even if the most 
     generous estimate of the employer sponsored tax exclusion 
     ($300 billion per year, including collecting FICA 
     contributions from employers) where used and combined with 
     fraud estimates and block granting all of Medicaid (acute and 
     long term care), this would be a challenging proposal to 
     finance with budget neutrality. Finally, the public plans 
     will be quite successful in recruiting large numbers of 
     Americans. They will also likely crowd out at 79 million 
     individual contracts with existing private insurers. 

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     TS16JN09.001
     


[[Page 15190]]




              ARCOLATM Technical Documentation

       The ARCOLATM model is a national health policy 
     impact micro-simulation model designed to estimate the impact 
     of health policy proposals at federal and state levels. The 
     model predicts individual adult responses to proposed policy 
     changes and generalizes to the US population with respect to: 
     (1) health insurance coverage and (2) financial impact of the 
     proposed changes.
       This model was first used for the Office of the Assistant 
     Secretary (OASPE) of the Department of Health and Human 
     Services (DHHS) to simulate the effect of the Medicare 
     Modernization Act of 2003 (MMA) on take-up of high-deductible 
     health plans in the individual health insurance market 
     (Feldman, Parente, Abraham et al, 2005; Parente et al, Final 
     Technical Report for DHHS Contract HHSP233200400573P, 2005). 
     The model was later refined to incorporate the effect of 
     prior health status on health plan choice--a necessary step 
     if one wants to predict enrollment more accurately. The 
     latest model also used insurance expenditures from actual 
     claims data to refine premiums and then predict choices again 
     with the new premiums. The model then iterates the choice 
     model until premiums and choices converge, and then finds an 
     equilibrium state. A subsequent change to the model permitted 
     state-specific predictions of policy changes as well as total 
     federal health policy impact.


                    Model Components & Data Sources

       There are three major components to the ARCOLATM 
     model: (1) Model Estimation; (2) Choice Set Assignment and 
     Prediction; and (3) Policy Simulation. Often, more than one 
     database was required to complete the task. Integral to this 
     analysis was the use of consumer directed health plan data 
     from four large employers working with the study 
     investigators.
       The model estimation had several steps. As a first step, we 
     pooled the data from the four employers offering CDHPs to 
     estimate a conditional logistic plan choice model similar to 
     our earlier work (Parente, Feldman and Christianson, 2004). 
     In the second step we used the estimated choice-model 
     coefficients to predict health plan choices for individuals 
     in the MEPS-HC. In order to complete this step, it was 
     necessary first to assign the number and types of health 
     insurance choices that are available to each respondent in 
     the MEPS-HC. For this purpose we turned to the smaller, but 
     more-detailed MEPS Household Component-Insurance Component 
     linked file, which contained the needed information. The 
     third step was to populate the model with appropriate market-
     based premiums and benefit designs. The final step was to 
     apply plan choice models coefficients to the MEPS data with 
     premium information to get final estimates of take up and 
     subsidy costs.

  Mr. McCAIN. Madam President, I suggest the absence of a quorum.
  The PRESIDING OFFICER (Mrs. Gillibrand). The clerk will call the 
roll.
  The legislative clerk proceeded to call the roll.
  Mr. MARTINEZ. Madam President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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