[Congressional Record (Bound Edition), Volume 155 (2009), Part 19]
[House]
[Pages 25287-25291]
[From the U.S. Government Publishing Office, www.gpo.gov]




                              HEALTH CARE

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 6, 2009, the gentleman from Michigan (Mr. Stupak) is recognized 
for 60 minutes as the designee of the majority leader.
  Mr. STUPAK. Madam Speaker, thank you for allowing me time to speak on 
the floor on health care.
  I couldn't help but listen to the last group, my colleagues on the 
other side of the aisle, talking about health care and calling it all 
kinds of names, about everything but what it is.
  The health care in America, the bill that we're marking up, H.R. 
3200, is America's Healthy Choice Act. There is no such thing as 
``ObamaCare.'' I guess we use that just to try to scare people, like 
much of the rhetoric I heard in the few minutes I was here.
  I can't help but notice that the folks who were speaking on the floor 
were not in the committee of jurisdiction where H.R. 3200, the House 
health care bill, actually went through; those of us who spent months 
working on this legislation and over 2 weeks in committee considering 
amendments and making sure that this is a bill that actually helps 
America and all Americans.
  As we Democrats look at health care, we take a little different 
perspective. My colleagues in the last hour said, Well, if it ain't 
broke, don't fix it. Well, for the American people, health care is 
broken and it does need fixing. That is why we are bringing forth this 
legislation, H.R. 3200.
  In fact, I have a picture here of a family from Colorado who actually 
came and testified--and I will talk more about them during this next 60 
minutes--on their concerns. But these are the folks that we are trying 
to help: Average Americans who work hard, play by the rules, pay their 
bills, think they have good health insurance until someone gets sick, 
and then they are left financially ruined.
  I sit as chairman of the Energy and Commerce Subcommittee on 
Oversight and Investigations. For the last 2 years, we've been taking a 
look at the private insurance industry. We have held hearings on the 
insurance industry's practices on nursing homes, long-term care 
insurance, Medicare Advantage that the group spoke of, and most 
recently, we've been looking at hearings on the private health 
insurance market.
  The findings of these hearings really highlight the need to address 
the abusive practices, terms such as ``rescission.'' That's when the 
insurance company takes a look at your insurance policy when you get 
sick and finds any excuse to rescind your policy. Or ``purging.'' 
That's when the insurance companies for small businesses in particular, 
they jack up the price, because under Federal law, if you're a small 
business, they can't cancel you, so they jack up the price so bad that 
you can no longer afford it. It's called purging. Or the problem of 
uninsured, which millions of Americans are facing.
  So in June, July, and August, we spent a lot of time looking at the 
most egregious practices found in the insurance industry: abuse of 
consumers, the practice of rescission in the individual insurance 
market, and, as I said, underinsurance.
  Take a look at rescissions. Every night when Americans go to sleep--
more than 45 million Americans do not have any health insurance--they 
do so with the nightmare scenario that if they develop a catastrophic 
illness or are unable to pay for their treatment, what happens to them? 
This fear causes many hardworking Americans who are not covered by an 
employer or government-sponsored health care to purchase an individual 
insurance policy. But those Americans fortunate enough to be able to 
even afford an individual policy--an individual family policy now is 
about $13,000 a year. But if you're fortunate enough to be able to buy 
individual health care coverage, you're not immune from this nightmare 
scenario of health care, not having it there for you and facing 
financial ruin, and that's because of a little thing called rescission.
  Let me tell you quickly about what happened to Otto Raddatz. Otto 
Raddatz was a 59-year-old gentleman from Illinois. He owned a 
restaurant. He had insurance all his life. He was diagnosed with an 
aggressive form of non-Hodgkin's lymphoma. That's a cancer of the 
immune system. He underwent intensive chemotherapy and was told that he 
had to have a stem cell transplant in order to survive. He had 
insurance coverage. He said, no problem, my insurance will cover it. It 
should be provided by my individual policy.
  He was scheduled to have the procedure performed, and the weekend 
before he was scheduled to have his transplant, the insurance company 
suddenly told him it was going to cancel his insurance. Otto could not 
pay for the surgery without his health insurance, and the surgery was 
therefore canceled because the hospital wasn't going to perform the 
stem cell transplant without payment.
  The insurance company told him that it found out that when he 
applied--now, this is years later--he applied for his health insurance. 
Years later, once they found out he has to have this stem cell 
transplant, they go back and look at his application. On his 
application, the insurance company said it showed that he might have 
gallstones and he might have an aneurysm, which is a weakness of the 
blood vessel wall. In fact, testimony showed Otto's doctor never told 
him he had gallstones, never told him he had an aneurysm. Otto told the 
truth on the application, but the insurance company heard nothing of 
it. They said, You didn't tell the truth on your application; 
therefore, we're canceling you. The insurance company was going to 
rescind his policy, effectively tear up the contract as if it never 
occurred, and Otto would be left without a stem cell transplant.
  Otto made a desperate plea to the Illinois State attorney general, 
and also his sister was an attorney. They went after that insurance 
company to reverse the decision. Here's what Otto said when he wrote to 
the insurance company:
  ``I was diagnosed with non-Hodgkin's lymphoma . . . It is a matter of 
extreme urgency that I receive my transplant in 3 weeks . . . This is 
an urgent matter! Please help me so I can have my transplant as 
scheduled. Any delay could threaten my life.''
  What did the insurance company say after that plea? Too bad. You 
falsified your application, even though Otto never knew he had 
gallstones or an aneurysm.
  The Illinois attorney general launched an investigation, confirmed 
that Otto's doctor never told him about the test findings, and the 
attorney general sent two letters to the insurance company saying 
reinstate his policy. The company relented, Otto received his stem cell 
transplant, and he

[[Page 25288]]

was able to live 3 more years before he died earlier this year. Otto 
was one of the lucky ones. The attorney general went to bat for him, 
and his sister, who was an attorney.
  In our Oversight and Investigation Subcommittee, we have looked into 
this investigation into the practice of health insurance rescission and 
the results are alarming. Over the last 5 years, almost 20,000 
individual insurance policyholders have had their policies rescinded by 
the three biggest insurance companies who testified at our hearing. 
These 20,000 individuals lost their insurance because of some honest 
mistake, or they did what the agent told them to put on their 
application only to have the parent company rescind them when they got 
sick. They saved the insurance industry $300 million. That's not 
counting all the follow-up tests. That's just what they saved by 
canceling these 20,000 people.
  So these big insurance companies, like Assurant, UnitedHealth Group, 
and WellPoint, when we looked at it, here's what we found out:
  These three companies, they conducted investigations with an eye 
toward rescinding in every case in which a policyholder submits a claim 
relating to leukemia, breast cancer, or a list of 1,400 serious or 
costly medical conditions;
  they rescind policies based on an alleged failure to disclose a 
health condition entirely unrelated to the policyholder's current 
medical problem;
  they rescind policies based on the policyholder's failure to disclose 
a medical condition that their doctors never even told them they had;
  and they rescind policies based on innocent mistakes by policyholders 
in their applications. And they not only rescind for the applicant, but 
they will rescind the policy for the whole family, leaving all the 
family members without health insurance.
  Our investigation also found that at least one insurance company, 
WellPoint, actually evaluated their employees' performance based in 
part, and put reward systems in, on the more you rescind, the more 
money you save the company, the bigger bonus you receive. In fact, the 
starting point was you had to save $10 million for WellPoint and you 
got a pretty good bonus. You're rated on a scale of one to five.
  These practices reveal that when an insurance company receives a 
claim for an expensive lifesaving treatment, some of them will look for 
any way, any excuse to avoid having to pay for it. This is eerily 
similar to what we found last year in our investigation on long-term 
health care insurance where sales agents for the insurance companies 
would sell policies to seniors and then change the policies once the 
enrollee was locked into a plan and making payments.
  These insurance companies who engage in this rescission practice 
argue that it's entirely legal, and, in part, they are, but that goes 
against the whole point of insurance. When times are good, insurance 
companies are happy to sign you up and take your money in the form of 
premiums, but when times are bad, or if you happen to get diagnosed 
with one of these 1,400 different little characteristics they have in 
their computer program and you're afflicted with a cancer or some other 
life-threatening illness, that's the time when the insurance company is 
supposed to honor their commitments to you based on the premiums paid, 
and in your time of need they should be there to help you. Instead, 
some of the insurance companies use a technicality to justify breaking 
its promise at a time when patients are too weak to fight back.
  I asked the three CEOs of these big insurance companies, I said, 
Look, we've had this hearing today. We've had extreme conditions where 
you've rescinded people who made honest mistakes on their application. 
Will you commit today that your company will never rescind another 
policy unless there was broad misrepresentation in the application? 
Every one of the insurance companies' CEOs said, No, we will continue 
the practice.
  So that's one of the reasons why we need to pass comprehensive health 
care reform. Congress can and must curb this abusive practice, put an 
end to this unconscionable practice of rescinding people. We should not 
have caps on how much insurance has to pay or caps on how much you're 
covered. Coverage in your health care shouldn't depend on your ability 
to pay; it should depend on the illness you're suffering from, that you 
get proper treatment.
  In H.R. 3200, our health care bill, there are no preexisting 
conditions. If you have a preexisting condition, you can't be denied 
insurance.
  Last week, our subcommittee revisited the private health industry 
practices on underinsured. Let me just show you what underinsured is. 
Underinsured are people who have health insurance. Unfortunately, when 
they get sick, and because of high deductibles or copays or a 
limitation on policy, lifetime cap, or a limit on number of services or 
specialists you can see, when they get sick, their insurance is almost 
worthless. It doesn't cover anything.
  More than one-quarter of adults under the age of 65 with medical bill 
burdens and debt were unable to pay for basic necessities. So, if 
you're one of the underinsured--and according to testimony, 116 million 
adults in this country, 42 percent, 116 million of them have problems 
paying their health care bills. Sixteen percent are unable to pay for 
basic necessities--food, heat, rent--because of medical bills. Another 
39 percent used up all their savings trying to pay their medical bills. 
Another 10 percent took another mortgage out on their house to try to 
pay for medical bills.

                              {time}  1615

  Thirty percent put it on credit cards. With the interest on credit 
cards, I don't know how you could afford to pay off your credit cards, 
let alone the interest on the credit cards. Sixty-one percent were 
insured at the time care was provided.
  These people are uninsured because they can only afford to purchase a 
limited policy. Policyholders believe they have adequate coverage only 
to find out that there are limits buried within the fine print of that 
policy, such as caps. So, regardless of how you define this fragile 
financial group, the sad consequences of being underinsured can be 
devastating, leading to financial ruin, to bankruptcy, and to making 
medical decisions based on cost rather than care.
  If you take a look at it, as the health insurance skyrockets, more 
Americans are finding they can only afford bare-bones policies. 
According to the Journal of the American Medical Association in 2007, 
they said 62 percent of all bankruptcies in the United States were 
related to medical costs. This was 62 percent of all bankruptcies. Of 
those bankruptcies in 2007, 78 percent of them had insurance. So, of 
all of the bankruptcies, 62 percent were related to medical costs, and 
78 percent of those people actually had insurance. They were the 
underinsured. Many of them were well-educated, and they owned their own 
homes. They were the middle class. Unfortunately, they were 
underinsured, and their health insurance did not cover their medical 
costs.
  The Commonwealth Fund reported and testified at our committee that 
more families are experiencing medical bill problems or cost-related 
delays in getting medical care. In 2007, two-thirds of all adults, 116 
million people, who struggled to pay medical bills and who went without 
needed medical care because of cost, were uninsured for a time or were 
underinsured.
  Let me show you this picture. This is Catherine Howard. She testified 
at our hearing. At 29 years old, Catherine had breast cancer and 
survived to tell her story. Being young and healthy, with a limited 
income and just starting out in her professional career, she chose a 
low-premium, high-co-pay health insurance that left her in financial 
shambles after her breast cancer.
  At the time of her illness, she was earning just $20,000, but at the 
time of her illness and when she got done, her outstanding medical 
bills were $40,000. Catherine was unable to work through the surgery, 
through the chemotherapy and through the radiation for 2 years. So, 
when you put it all together, she was in a very tough financial 
situation.

[[Page 25289]]

To her credit, she did not declare bankruptcy. She survived her breast 
cancer, but she is paying $1,800 a month on her medical bills.
  Let me go back to the original picture. This is the Null family from 
Colorado. The young lady right there is Tatum Null. She was diagnosed 
with liver failure at the age of 7. David had bought health insurance, 
an individual family policy, to cover them in emergency situations.
  He told the agent, I don't want one for the common cold. I need a 
policy that will take care of my girls and my family if something 
serious happens.
  They sold him a policy. Then, while away on vacation, suddenly 
Tatum's kidney started shutting down, and they had to rush her to the 
hospital. They put her on life support. They told David Null, Tatum's 
dad, that she needed a $560,000 kidney transplant. They looked at his 
insurance policy. The insurance policy would cover $25,000 to $30,000 
in hospital costs.
  They said to David Null, Before we can save Tatum's life with a 
transplant, you have to put down $200,000.
  His daughter is on life support. He is at the hospital. They find out 
their insurance policy is no good. They say you have to come up with 
$200,000 or your daughter is going to die. What are you going to do?
  Well, without really much of a hope or a prayer, David and the 
hospital officials got together, and they decided that if they could 
put David and the Null family on Medicaid, the government-run, 
government-sponsored Medicaid health care, the entire hospital bill 
would probably be paid retroactively. The catch is, once you go on 
Medicaid, you have to have low income. The Nulls could only earn $1,614 
a month; or they would lose their Medicaid coverage, which paid for 
Tatum's medication to prevent organ rejection and which can cost 
thousands of dollars each month.
  Let me show you another person. This is Thomas Wilkes. His dad, 
Nathan, had an employer who provided health insurance with a $1 million 
limit for each family member. $1 million. Unfortunately, $1 million 
doesn't go very far when you're 6 years old and when you're diagnosed 
with severe hemophilia.
  Even though the Wilkeses paid another $25,000 each year out of 
pocket, in just over a year young David here would go through the $1 
million cap on their medical expenses. The Wilkes family is now on 
their third insurance policy. They're bumping up against the cap, and 
he doesn't know what he's going to do for his son, who needs expensive 
medical treatment because he's a hemophiliac. He does not know how he 
is going to be able to afford his son's life-saving medical treatments, 
once again, when they hit the $1 million cap.
  Each of these individuals, the Wilkes family and the Null family, did 
what they thought was right for their families. They purchased health 
insurance. They worked hard. They paid their premiums, but they're 
still left in financial ruin.
  Each of us knows a family member, a relative, a friend who did not go 
to the doctor when sick or who skipped a dose of medication, who failed 
to fill a prescription, who intentionally missed a medical test or a 
follow-up appointment or who didn't see a specialist because he 
couldn't afford the service, the medication or the test he needed.
  I would hope every American, as we debate health care, would take 
time to look at their own insurance policies and would really 
understand what medical conditions those policies cover or don't cover. 
What's your co-pay? What are your potential out-of-pocket expenses? Do 
you have a lifetime cap or are services limited underneath that policy?
  In a couple of weeks, we hope the U.S. House of Representatives will 
vote on H.R. 3200, America's Affordable Health Choices Act of 2009, 
because H.R. 3200 does not allow the insurance companies to rescind 
your policies when you get sick. It does not have a lifetime cap on 
benefits. It puts a limit on what you have to pay out-of-pocket. It 
covers all Americans, and you can't be discriminated against because of 
preexisting injuries or illnesses.
  Only with the passage of meaningful health care reform, then and only 
then will Americans not have to worry about how to obtain medical care 
for their families while remaining financially secure.
  Yesterday, our subcommittee, again, did another investigation of the 
private insurance market. We focused on the challenges faced by small 
businesses. I said earlier that, in small businesses, you can't cancel. 
Once you have a small business, underneath the HIPAA provisions, you 
can't cancel. You're guaranteed a renewal every year; but insurance 
companies, because they feel they're not making enough money, can jack 
up their rates. There is no limitation on how much you have to pay.
  Small businesses are really the cornerstones of the American economy. 
As one of them testified, when the businesses testified the other day, 
they really are the American Dream. Small businesses employ 59 million 
Americans, and they have created a quarter of our Nation's jobs from 
1992 to 2005.
  Our subcommittee sent documents to the six leading health insurance 
companies that all sell policies to small businesses across the 
country. We wanted to know how they set their premium rates and what 
some of the largest premium rate increases have been in recent years. 
Here is what we learned:
  The insurance companies take advantage of lax State laws and 
regulations, and they purge out small businesses because they're 
unprofitable if someone gets sick. Because Federal law guarantees small 
businesses can't be denied insurance once they have it, they impose 
unpredictable, increasingly unaffordable premium increases. These 
unsustainable premiums force the small businesses to drop their health 
insurance because it's no longer affordable. Thus, a small business is 
really purged. Their premium increases are based on factors that are 
beyond the control of the small business, such as: every covered 
employee and their families, what are their health statuses? What's the 
size of the small business? What's the age? What are the genders of 
these employees? As a result of these discriminatory practices, small 
group premiums are subject to unpredictable and enormous increases. 
Here is what we learned:
  In January 2008, one insurance company offered a 232 percent premium 
rate increase to an engineering services company in Kentucky. The 
number of employees in the plan had dropped down from eight to one, so 
its policy went up 232 percent.
  This year, another insurance company offered a small technology firm 
in Georgia to renew its current HMO insurance policy with a 214 percent 
increase in their premiums. The basis for the rate hike was that the 
average worker in the firm had become older because they had laid off 
so many younger workers, and most of the workers were going to be 
female. The size of the company decreased, and the workforce was older.
  By the way, if you're in a small business, you pay more for female 
workers than you do for male workers.
  These large annual premium increases can devastate these small firms. 
Businesses are struggling to stay afloat in this economic downturn. 
Health insurance costs consume even a greater portion of a company's 
profits, and they make it harder every year to cover their employees.
  Yet, even before the most recent economic downturn, the costs of 
employer-sponsored health insurance was the primary concern of small 
businesses. The average family premium for a small business, if you're 
going to cover your family, is nearly $13,000. That has gone up 123 
percent since 1999. Meanwhile, the median family income only grew 29 
percent. Because of these high costs, nearly a quarter of all small 
businesses are making difficult decisions on whether or not to provide 
health care. Small businesses are shouldering a greater burden of the 
cost.
  Over the last 10 years, workers' contributions for health care 
premiums have doubled while their deductibles have greatly increased. 
Less than 50 percent of the smallest firms, those with fewer than 10 
employees, offer coverage. As a result of reductions in

[[Page 25290]]

small group coverage, more than half of all small businesses in 2007 
were uninsured or underinsured. It's clear that the high cost of health 
insurance is crippling our businesses.
  You know, when we take a look at small businesses and at the group 
that testified before us this week, one was a Mick Landauer. He is from 
Iowa. He owns a muffler and brake shop, and he has owned it for 30 
years. He has shops in Iowa and Illinois. At his shops, he employs 11 
workers. This year, he was quoted an increase in his premium of 42 
percent. It went up 42 percent from last year. Mr. Landauer believes 
that the increase is due to his own congenital heart condition which 
has required three surgeries in the past and will require possibly more 
in the future. This year, instead of accepting the 42 percent increase, 
he negotiated with his insurance company that the deductible will go 
up.
  So, if you're under a plan and if you're a single person, besides 
paying your monthly premium, your out-of-pocket cost is $8,000 before 
you can access it. If you're a family, your out-of-pocket cost is 
$16,000 before you can access the health care plan. Plus, you've got to 
pay your monthly premiums.
  Now, next year, he's telling us his company can't afford this 
anymore. He wants to provide his employees with health insurance. He is 
probably going to drop himself off his business plan since he is the 
one with the congenital heart condition. He believes the right thing to 
do is to provide his employees with health care. He's trying to do the 
right things.
  Mr. Bruce Hetrick is from Indianapolis. He testified the other day. 
He had 15 employees. His company has received double-digit increases 
every year from his health carrier, Anthem. His insurance plan also 
covered his late wife, who developed breast cancer. In her last year of 
life, she ran up bills of $300,000. Unfortunately, she died. In that 
year, when his wife was so sick, they increased his health insurance by 
28 percent.
  After his wife passed away, since they were still in that policy 
year, he asked Anthem, What will it cost now that my wife is no longer 
on?
  They said, Instead of a 28 percent increase, we're only going to 
increase it 10 percent.
  Then there was Fred Walker from St. Petersburg Glass and Mirror in 
St. Petersburg, Florida. It is a company he started 15 years ago, and 
he has always offered health insurance because he wanted to have good 
employees. His carrier, United Health, has increased his premium rates 
every year, including a 14.6 percent increase this year.
  To keep his business afloat during this downturn, he was thinking 
about dropping his health care coverage because he could no longer 
afford it. It was a 15 percent increase from last year, and he just 
couldn't afford it. He was talking to his employees about it. One of 
his employees, the secretary, went to have a breast examination, and 
she found out she had breast cancer.
  To his credit, Mr. Walker decided to do the right things, and he 
maintains the health care coverage for his workers and especially for 
his secretary so she can get treatment. To afford the coverage, they 
had to take out a plan which has a $6,000 deductible. So, before you 
make any claim, you've got to pay $6,000 out-of-pocket plus your 
monthly premiums. Because the group coverage was renewed, the secretary 
has been able to maintain some treatment for her cancer.
  Again, we're going to vote on America's Affordable Health Care 
Choices Act of 2009, H.R. 3200. It contains critical insurance reforms 
that will end these abusive insurance company practices that we see. 
Under the bill, insurance companies can no longer rescind policies 
after people get sick based on minor mistakes or on technicalities. The 
bill prohibits an annual lifetime cap on coverage. You will no longer 
be denied insurance because of preexisting injuries, and insurers will 
no longer discriminate against small businesses based on how small they 
are or the health statuses of their workers.

                              {time}  1630

  We must reform health insurance so small business can compete and 
American businesses and families can be secure.
  In the Energy and Commerce Committee we had the main jurisdiction on 
the health care bill and spent months looking at it. These are just 
some of the examples we found and why we need health care. When my 
colleagues on the other side of the aisle talk, well, it ain't broke, 
don't fix it. For the American family, health insurance is broken. We 
do need to fix it.
  My friends were saying on the other side of the aisle, we need more 
competition, we need more choice, you need more choice. Our 
investigation again shows, there really is no choice.
  The market share for large insurance companies by largest health 
plans in the State, the darkest States, there's only two health plans 
to choose from, not a lot of competition there. In these lighter blue, 
it's 70 to 79 percent are covered, like my home State of Michigan, by 
just two of the large health insurance plans.
  Where is the choice? Where the competition? How do you drive down 
these costs when there is no competition. Actually, there are really 
only about six main insurance companies, there are about 1,300 of them 
on the books, but they are owned by about six of the major companies 
that we talked about here tonight, the lack of competition.
  But these are the faces that we are fighting for every day when we 
try to look at health care. These are the people that we are trying to 
help out. Like Thomas here, through no fault of his own, a hemophiliac, 
in just over a year his dad plows through their policy, $1 million, 
that is the cap on it and they go through it within about 14 or 16 
months. They go through it. Who is sticking up for these people?
  Take a look at some of the things, here is one I like looking at, 
what we have found. Look at this. This is a joke in one of the 
magazines, one of the newspapers here. It's not really much of a joke 
for the American people though. Here is the guy who is sick. He has got 
his oxygen mask on. He has got his denied paper here.
  It must be rescinding his individual policy. It says, ``Denied.'' 
Why? ``Look, it costs us nearly $120 million in deceptive ads to fight 
health care reform, so there is not enough money left to pay for your 
stupid little claim.''
  It's a joke, but it's really not for people who have their insurance 
policy rescinded. It's really not for the small businesses who are 
seeing 30, 40 percent increase each year. It's really not for the 
underinsured who pay their premiums and then they don't have enough 
money to cover their medical costs.
  It's really talk about $120 million in deceptive ads to fight health 
care. They are spending over $1 million a day on ads to defeat H.R. 
3200.
  I hope that the Members of the House of Representatives will remember 
people like Thomas here or like Tatum or these families who play by the 
rules, work hard, pay their premiums, and, when they get sick, are 
abandoned by the health insurance industry. That's why we need health 
insurance reform in this country. That's just one of the many reasons.
  It's one of the reasons why we hope to have a bill on the floor later 
this month or early in November so we can vote on this.
  We have to bring back some sanity to this health insurance industry. 
We have got to end their abusive practices, and we must make sure that 
all Americans and their businesses are secure, not only in their health 
security but also financially secure as they try to do the right thing, 
play by the rules, work hard, pay their insurance. Let's make sure 
there is coverage for them when they get sick.
  Mr. WAXMAN. Mr. Speaker, the premise of health insurance is that if 
you buy a policy, and then get sick, your insurance company will 
protect you.
  But what we heard at the committee's hearing last week on 
underinsurance--and what we have been hearing throughout our 
investigations of the private insurance industry--is that that is not 
how the system works. In reality, we have learned, private health 
insurance companies have become expert at collecting premiums and then, 
denying claims.
  Our witnesses on Thursday were normal people who had done the right 
thing and had

[[Page 25291]]

bought health insurance. But each of them found that, when they needed 
coverage the most, their policies came up short.
  We heard from Nathan Wilkes, who had an insurance plan through his 
employer. Then, his son, Thomas, was born with hemophilia, an expensive 
and life-long blood-clotting disorder. Thomas is six years old now, and 
thankfully, his condition is well-managed. But, he has already exceeded 
the million-dollar lifetime caps of two separate insurance plans, and 
the Wilkes' current plan has a $6 million cap that Thomas is sure to 
meet soon. As Mr. Wilkes put it, the insurance companies have turned 
the hourglass over on Thomas again--this time with just a little more 
sand.
  Catherine Howard testified about how, as a healthy 29-year-old, she 
bought a basic policy that she thought would protect her if she fell 
while snowboarding. When it was discovered that she had breast cancer, 
Ms. Howard found out that her plan asked her to pay 30% of the cost of 
treatments, like radiation, that she needed to survive. Though she 
feels lucky to be alive, Ms. Howard's coinsurance payments put her into 
deep debt that she continues to pay off to this day.
  David Null bought what he thought was a catastrophic coverage plan. 
But when catastrophe struck--and his daughter, Tatum, needed a liver 
transplant--he found out that the plan had a lifetime cap of $25,000. 
The Nulls were saved from crushing medical bills only after Mr. Null's 
small company turned away business so that the family's income was low 
enough to qualify for Medicaid, which covered the surgery 
retroactively.
  These stories are not unique. In 2007, there were 25 million 
underinsured Americans, up 60% from 2003. Underinsurance often causes 
debilitating medical debts, and a recent study found that 62% of all 
personal bankruptcies are medically related.
  In recent years, insurance companies have been asking Americans to 
pay more, but are providing them with less. In the last decade, the 
average cost of a family's premium has risen 131%, but average wages 
have risen less than a third of that. At the same time, insurance 
companies are imposing more limits on what their policies will provide. 
Some policies, like the Nulls' or the Wilkes', have caps that limit the 
amount the insurer will pay in a lifetime, or a year. Other policies 
have expensive co-insurance provisions, like Ms. Howard's, that 
overwhelm the policyholder.
  And caps and coinsurance are just some of the problems people face in 
the private insurance market.
  This past summer, our committee held a hearing on the health 
insurance companies' practice of rescission. This is when insurance 
companies attempt to cut costs by cancelling policies after people get 
sick and make claims. The companies go back through their 
policyholders' application forms, looking for any tiny mistake or 
omission for an excuse to cancel the policy and deny coverage.
  Rescission is unconscionable because it cuts policyholders loose when 
they need coverage the most. But even worse, when we had insurance 
company executives sworn in before our committee, we asked them if they 
would commit to ending the practice of rescission except in cases where 
the policyholder had intentionally hidden a health condition. The 
executives refused to make that promise. I think that speaks to the 
insurance companies' motivations.
  Just yesterday, we held a hearing on the small group insurance 
market. We found that insurance companies sometimes raise small 
businesses' premiums an astronomical amount--up to 250% in a year--
based on factors like the ages and genders of employees, if a single 
employee had made a large claim the previous year, or if the business 
had too few employees.
  What is so disappointing in our examination of these issues is that, 
even where small business owners want to do the right thing for their 
employees, and provide them with access to quality health care via 
insurance, industry practices and policies today punish their desire to 
provide proper benefits for their employees and their families. This is 
wrong, and this is why we need health insurance reform in America.
  Indeed, what all of this shows is that the private insurance system 
is broken. The way insurance is supposed to work is for the insurance 
companies to spread risk among their policyholders so that, while most 
people will remain healthy and cost little, the company can pay when 
other policyholders get sick.
  But schemes like rescission, preexisting condition exclusions, 
lifetime caps, and the way companies are gaming the small group market 
show that private insurers are not interested in spreading their risk. 
Rather, they want no risk at all. The companies are happy to insure 
healthy people who will pay premiums and make few claims, but they want 
to exclude, rescind, or purge anyone whose health care costs they might 
actually have to cover.
  Well, that's not how health care works.
  The House reform bill, H.R. 3200, would restore the proper balance to 
the health care system. It would end rescission, preexisting condition 
exclusions, and lifetime caps. It would place limits on out-of-pocket 
costs and create a required basic set of benefits so that people know 
what they are signing up for, and so that they will get what they need. 
And it would prohibit the problems small businesses face in terms of 
discrimination based on gender and group size, and in terms of lack of 
choice.
  At Thursday's hearing on underinsurance, Mr. Null told the committee 
that to him, the biggest tragedy that came out of his daughter Tatum's 
liver failure was not his family's resulting financial hardship. It was 
that, under the current system, Tatum's preexisting condition limits 
her future. He said, ``When she asks me what she should be when she 
grows up, I can't tell her the same thing that you probably tell your 
kids. I can't tell her she can be anything she wants, and you guys need 
to fix that for me.''
  On Thursday, I looked at Tatum and told her that if we enact health 
care reform legislation, neither her future, nor anyone else's in 
America, will be hindered by an inability to get health insurance. 
Please join me in that promise.

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