[Congressional Record (Bound Edition), Volume 155 (2009), Part 19]
[Senate]
[Pages 25631-25633]
[From the U.S. Government Publishing Office, www.gpo.gov]




                           THE PUBLIC OPTION

  Mr. ALEXANDER. Mr. President, I will let the majority leader make his 
own announcements, but there are a lot of discussions in the news media 
today that in a short period of time he intends to hold a press 
conference announcing that he will push ahead with the so-called public 
option in the health care legislation--one that currently includes an 
opt-out provision for States.
  I don't know whether he intends to do that or whether he doesn't. He 
is entitled to make his own announcement, as I said. But it provides a 
good opportunity to talk about what we mean by a public option in 
health care, or a government-run health care plan, putting government 
in the health care business, and how it already works, and how it might 
work if States were allowed to opt out.
  The reason it is easy to talk about this is--and the former Governor 
of Virginia, who is presiding, knows this as well as I do, and maybe 
better because he has been Governor more recently--we already have in 
existence in the United States today a public option health insurance 
program which States may opt out of. It is called Medicaid.
  Medicaid is the largest government-run program we have in health 
care--even larger than Medicare. Medicare, for older people, has about 
40 million persons who depend on it. Medicaid, which sometimes offers 
confusion, is a different program. It is a program for low-income 
Americans. It started out for women and children, but it gradually 
expanded, and today it has nearly 60 million Americans who depend on 
it. The health care legislation, which is coming forward in the Baucus 
bill out of the Finance Committee and the HELP Committee, on which I 
serve, and the bills in the House of Representatives--all those pieces 
of legislation would expand the Medicaid Program--not Medicare for 
seniors but the Medicaid Program--and send part of the bill for that 
expansion to the State.
  So let's talk about that a little bit, particularly if it is true 
that the majority leader is about to propose that we have yet another 
government-run insurance program, giving the States the right to opt 
out, which sounds pretty good. Let's see how this one works that we 
already have, especially since the health reform bill that is headed 
our way would expand Medicaid, and according to the Congressional 
Budget Office, cost States an additional $33 billion in State dollars 
and add 14 million people to Medicaid.
  I guess the first thing to know about a government-run health 
insurance

[[Page 25632]]

program which States can opt out of is that they can't. I mean, in the 
real world, they can't. Not one has. Every State in America has 
Medicaid. The Federal Government pays roughly 60 percent of it; State 
taxpayers pay the rest. Most of the rules are written in Washington. 
States can ask for exemptions from the rules, but it is a long and 
burdensome process. It is not realistic to say the States can opt out 
of the Medicaid Program for low-income Americans. I suppose it might 
not be realistic, therefore, to say the States would be able to opt out 
of a new government-run program--a government-run, public-option 
program--that may be suggested by the majority leader. We should wait 
and see what he proposes, but I think we would be wise to pay attention 
to the fact that in the current government-run program we have today, 
no State finds it realistic to opt out.
  Expanding Medicaid, which is what the health reform bill coming 
toward us on the floor proposes to do, is not just an expensive item 
for the Federal Government and for States, it is a terrible vehicle for 
health care reform. The current Governor of Tennessee--Governor 
Bredesen--a Democrat--has said putting more low-income Americans into 
Medicaid is not health care reform. Why would he say that? Because it 
makes it worse for those Americans as they seek to get access to care 
from doctors and hospitals and as they seek to get good, quality care. 
Plus, the program is riddled with so much fraud and abuse that, 
according to the Congressional Budget Office, $1 out of every $10 is 
stolen or wasted.
  Most Governors who have struggled with Medicaid--and I am one of 
them--agree that its expansion is a bad idea. They unanimously have 
said to us in Congress that if you in Washington want to expand 
Medicaid, then you in Washington need to pay for Medicaid. That is the 
theory of no more unfunded mandates that every Governor whom I know 
about has agreed with for years. In fact, there was nothing that used 
to make me angrier as a Governor than for a distinguished politician in 
Washington to stand, make a speech, come up with a good idea, hold a 
press conference declaring a problem solved, and then send the bill to 
the States. So what does the Governor and the legislature and the mayor 
and the city council have to do? They have to cut services, they have 
to raise taxes, they have to run up tuition, they have to cut out some 
classes because somebody in Washington thought it was a good idea to do 
this. Well, that is what we are proposing to do with Medicaid. We are 
saying to the States: We have a great idea. We want to expand Medicaid 
by dumping another 14 million low-income Americans into this program, 
but congratulations, we are going to send you the bill to help pay for 
it.
  The Washington Post quoted my home State Governor, Governor Bredesen, 
to whom I just referred, this way in regard to health care reform:

       I can't think of a worse time for this bill to be coming. I 
     would love to see it but nobody is going to put their State 
     into bankruptcy or their education system into the tank for 
     it.

  One of the most painful letters I have ever read was from Governor 
Bredesen, which he sent on October 5, when he wrote about Tennessee's 
fiscal situation--similar to the condition in most States. He said:

       By 2013 we expect to return to our 2008 levels of revenue 
     and will have already cut programs dramatically--over $1 
     billion. At that point we will have to start digging out--we 
     will not have given raises to State employees or teachers for 
     5 years. Our pension plans will need shoring up. Our rainy 
     day fund will be depleted . . . we will not have made any 
     substantial investments for years . . . There will be major 
     cuts to areas such as children's services. On top of these, 
     there are the usual obligations that need to be met--
     Medicaid, for example, will continue to grow at rates in 
     excess of the economy and our tax revenues.

  Our idea of health care reform is to expand Medicaid and send 
Governor Bredesen a bill for $735 million over the next 5 years, which 
we can't afford.
  The other legislation, from the HELP Committee, would cost the States 
even more. According to an actuarial report from the Centers for 
Medicare and Medicaid Services, Medicaid represented 40 percent of the 
Federal Government's cost expenditures for health care; 41 percent of 
State health care costs. It is the largest source of general revenue-
based spending in health services--larger than Medicare.
  I can vividly remember, 25 years ago, 30 years ago, as Governor, 
every time I made up a budget, I would start with roads. That comes 
from the gas tax. I would go to prisons. The court said to fund that. I 
would go to K-12 grades. Our Presiding Officer, the former Governor of 
Virginia, has had this experience. That is pretty much a set thing. 
Then you get down to the end and what are you choosing between? You are 
choosing between higher education--the University of Tennessee or the 
University of Virginia--and Medicaid. What is happening? Medicaid is 
going up like a rocket and State spending for higher education is flat. 
Our great higher educations systems across this country are under great 
stresses because of poor State funding because we have allowed Medicaid 
to grow out of control.
  Not only do we do that, we are now about to expand it--about to 
expand it and send more of the bill to the States. The Governors are 
saying: Don't do that. Their revenues are down 17, 18, 20, 35 percent 
in some States. If you are going to pass it, they say: Pay for it. That 
is a question Governors should have a chance to ask and get an answer 
to.
  According to the Texas Medicaid office, the current proposal to 
expand Medicaid will cost the State $20 billion over the next 10 years. 
We are passing it, they are paying for that much of it. According to 
the South Carolina Governor's office, $1.1 billion over 10 years. 
Governor Schwarzenegger has said for California it could be as high as 
$8 billion a year.
  A New York Times article, in late September, said this:

       The recession is driving up enrollment in Medicaid at 
     higher than expected rates, threatening gargantuan State 
     budget gaps even as Congress and the White House seek to 
     expand the government health insurance program for the poor 
     and disabled . . .

  The New York Times went on to say:

       . . . enrollment in state Medicaid programs grew by an 
     average of 5.4 percent in the previous fiscal year, the 
     highest rate in 6 years. . . . In eight states, the growth 
     exceeded 10 percent.

  So States have headlines such as this: ``State Looks at $1 Billion in 
Cuts.'' Their Medicaid is already growing at a rate faster than they 
can pay for, and we are sending them more bills than they can pay for.
  Mr. DURBIN. Will the Senator yield for a question?
  Mr. ALEXANDER. I will be happy to yield.
  Mr. DURBIN. We had a bill considered earlier this year--a stimulus 
bill--that sent $80 billion to the States so they could deal with the 
expenses of Medicaid during the recession and also, obviously, their 
State's declining revenue, an attempt for us to help Governors facing 
the horrible decisions which the Senator described.
  If I recall correctly, only three Republicans voted for President 
Obama's stimulus package to help these States with $80 billion in aid. 
Would the Senator like to factor that into his conversation about 
sensitivity to what the States are facing?
  Mr. ALEXANDER. I thank the distinguished assistant Democratic leader 
for raising the point. It is a point I would be delighted to address.
  I voted against that proposal. That proposal was a backdoor effort in 
what was a so-called jobs bill to spend $85 billion over 2 years for 
Medicaid. That is one reason why we have 10 percent unemployment today, 
because the money that was supposed to be for the stimulus was borrowed 
from the biggest deficits we have ever run up in history and spent on 
something other than jobs.
  What it also did was it unrealistically lifted the level of Medicaid 
spending in Tennessee and every other State, forcing an expansion of 
that program, which I will go on to show in a minute is nearly cruel to 
the people who are dumped into the program because doctors and 
hospitals will not serve them.
  So I was glad to vote against that program. I was sorry it passed 
because

[[Page 25633]]

it borrowed money we don't have to spend on programs that didn't create 
jobs, and it artificially lifted and expanded Medicaid, which is 
already bankrupting the States.
  Medicaid expansion is not real health care reform. One reason is 
because 40 percent--according to a 2002 Medicare Payment Advisory 
Committee survey--of the physicians restrict access for Medicaid 
patients; meaning they will not take new Medicaid patients because 
reimbursement rates are so low. Only about half of U.S. physicians 
accept new Medicaid patients compared with more than 70 percent who 
accept new Medicare--those are the seniors--patients.
  According to a 2002 study in the Journal of American Academy of 
Pediatrics, the national rate for pediatricians who accept all Medicaid 
patients was 55 percent. In Tennessee, it was lower than that. Why is 
that? It is because reimbursement rates are so low. Today, doctors who 
see patients who are on Medicare get paid about 80 percent of what 
private insurers pay. Doctors who see patients who are on Medicaid get 
paid about 61 or 62 percent of what private insurers pay. For doctors 
who see children, it is sometimes lower than that. So doctors don't see 
those patients. What is going to happen if we dump 14 more million low-
income Americans into a system such as that? Those patients--especially 
those children--are going to have a harder time finding doctors and 
hospitals to take care of them. It would be akin to giving somebody a 
ticket and a pat on the back to a bus line that only operated 50 
percent of the time.
  Further, the quality of care for Medicaid patients is significantly 
lower than those with private insurance and even those with no 
insurance. According to a survey by the National Hospital Ambulatory 
Medical Care, Medicaid patients visit the emergency room at nearly 
twice the rate of uninsured patients. A 2007 study by the Journal of 
the American Medical Association found that patients enrolled in 
Medicaid were less likely to achieve good blood pressure control, 
receive breast cancer screening, have timely prenatal care than similar 
parents in private plans, and they had lower survival rates.
  I mentioned this a little earlier. According to the Government 
Accountability Office, Medicaid--the program we are seeking to expand, 
the government-run insurance program that sounds so good, the so-called 
largest public option plan we have to date, the plan where about half 
the doctors will not take new patients who are on the program--had 
$32.7 billion in improper payments in 2007 alone; 10 percent of the 
program's total spending is wasted.
  So as we consider a so-called public option, I hope we will look at 
the public option we already have--called Medicaid--one which already 
has an opt-out provision for States, one which already has 60 million 
low-income Americans in it, one into which we plan to put 14 million 
more Americans, so that 50 percent of the doctors will say to new 
patients: I can't see you because the reimbursement rates are so low. 
Medicaid is the public option we have right now. States could opt out 
of it, but quality is low, fraud is high, costs are up, and Governors 
of States on both sides of the aisle are saying: We are headed toward 
bankruptcy at the present rate. If you are sending us more bills, if 
you want to expand it, pay for it. And doctors are turning away 
patients.
  The American people deserve better than that. I am a cosponsor of a 
bipartisan bill that would actually reduce the number of patients on 
Medicaid. It is called the Wyden-Bennett bill. It adds no cost to the 
government. That bill is not being seriously considered.
  The other approach that we Republicans believe we should take is 
focusing on reducing costs to the government, focus on reducing the 
cost of premiums; take four or five steps in the right direction and 
expand services to uninsured patients as we go. One way to do that, of 
course, would be the Small Business Health Insurance bill, which has 
broad support in both Houses, which would permit small businesses to 
come together and pool their resources. The estimates are that at least 
1 million more Americans would be covered by employer insurance if that 
were to happen. Some estimates say many more millions.
  But especially on a day when the press has it rumored that the 
majority leader may offer a new government-run insurance program with 
the States having the opportunity to opt out, I hope Americans will 
look carefully at the current government-run insurance program which 
States have the option to opt out of, but none do, and note that it has 
60 million Americans--it is soon to have 74 million; half the doctors 
won't see new patients because of reimbursement rates; and $1 out of 
$10 is wasted. It is not a solution to health care and neither is a new 
public option.
  I yield the floor and thank the Senator from Illinois for his 
question.
  The ACTING PRESIDENT pro tempore. The Senator from Illinois is 
recognized.

                          ____________________