[Congressional Record (Bound Edition), Volume 155 (2009), Part 19]
[Senate]
[Pages 26357-26362]
[From the U.S. Government Publishing Office, www.gpo.gov]




               HISTORY OF THE MEDICAL INSURANCE INDUSTRY

  Mrs. FEINSTEIN. Mr. President, since most people have some form of 
health insurance, I decided, after many calls from constituents who 
have said to me: I can't afford a 20-percent increase in my medical 
health insurance premium; I had a 10-percent one last year, I began to 
look into the history of the medical insurance industry in America. I 
have come to the floor to discuss the current state of the private, 
publicly owned, for-profit health insurance industry and the ways this 
system must be changed during health care reform. Bottom line: Our 
country is the biggest health care spender in the world. In return, we 
get very average results.
  It wasn't always this way in America. I wish, for a moment, to 
briefly review the history of health insurance in our country. Because 
understanding its development and its transition to the for-profit, 
commercial health insurance model is actually critical to this debate.
  The story began to take shape about 90 years ago. There were very few 
health insurance plans before the 1920s. As a matter of fact, there was 
not much in the way of medical services to insure. Options for medical 
care were primitive by today's standards. In 1900, the average American 
spent $5 each year on health care-related expenses. This amounts to 
roughly $100 in today's dollars. Health insurance was not necessary 
because the cost of care was low. Over 90 percent of medical expenses 
were paid out of pocket. Most patients were treated in their homes, and 
medical technology and treatment options were very limited. The 
earliest private health insurance plans in the United States were 
fairly basic agreements, primarily sponsored through employers or 
unions. Employers deducted funds from participating workers' salaries 
and contracted with local physicians for treatment.
  During the 1920s, medical technology was advancing and the treatment 
of acute illnesses shifted from homes to hospitals. But on the heels of 
the Great Depression, an increasing number of Americans were unable to 
afford medical services, which were becoming more costly. In 1929, the 
Baylor University Hospital developed a plan to guarantee affordable 
treatment options for patients while ensuring a steady stream of 
revenue for the hospital. According to author Paul Starr, the Baylor 
plan provided up to 21 days of hospital care and certain services to 
1,500 local teachers in Dallas, TX, for $6 a year or 50 cents a month, 
if we can believe it.
  A hospital official promoting the plan at the time said:

       We spend a dollar or so at a time for cosmetics and do not 
     notice the high cost. The ribbon-counter clerk can pay 50 
     cents, 75 cents or $1 a month, yet it would take about 20 
     years to set aside [enough money for] a large hospital bill.

  The Baylor plan proved popular and was soon expanded. It served as 
the foundation for what would become Blue Cross, the first example of a 
major, nonprofit medical insurance provider. Throughout the 1930s, the 
number of Blue Cross plans grew and enrollments expanded. By 1937, 1 
million subscribers were covered.
  In response to the lack of coverage by Blue Cross for physician 
services, in 1939, the precursor to Blue Shield, called the California 
Physicians Service, was developed. This plan reimbursed physicians for 
the cost of services based on negotiated payment schedules. According 
to the Congressional Research Service, in 1945, nonprofit Blue Cross 
and Blue Shield plans

[[Page 26358]]

had expanded to cover 19 million subscribers nationally in most States. 
These nonprofit Blue Cross and Blue Shield plans dominated the health 
insurance industry. At this same moment, Congress was reviewing the 
matter of insurance regulation, generally. In 1945, after significant 
lobbying by the industry, the McCarran-Ferguson Act was enacted. By 
passing this law, the Federal Government committed to a hands-off 
approach to insurance regulation, generally, including the regulation 
of for-profit, commercial health insurance companies.
  This is where things began to change. The McCarran-Ferguson Act gave 
States, not the Federal Government, primary responsibility for 
overseeing the insurance business. It meant, as a practical matter, 
that whether insurance companies would be regulated forcefully or with 
little care would be left up to individual insurance commissioners in 
each of the 50 States. Additionally, the McCarran-Ferguson Act included 
a specific antitrust exemption for the business of medical insurance. 
As a result, practices such as price fixing, bid rigging, and market 
allocation, prohibited by Federal law in every other industry, were 
left up to the States and their enforcement mechanisms.
  If insurance companies colluded to raise prices above competitive 
levels, Federal officials would not and could not investigate or 
intervene. All regulation was up to the States and, in fact, very 
little regulation has taken place.
  During World War II, for-profit, employer-based health insurance 
plans expanded rapidly and took a firm hold in our country. Due to 
price and wage controls, employers competed for workers by offering 
health insurance benefits. In 1944, the unemployment rate was 2 
percent. Additionally, unions were able to collectively bargain health 
insurance benefits and employer contributions for health insurance 
which were excluded from a worker's taxable income. By the 1950s, for- 
profit commercial health insurers, such as Aetna and the Connecticut 
General Life Insurance Company, known now as CIGNA, became very active. 
Then things started to change. The market share of Blue Cross and Blue 
Shield was significantly reduced in many parts of the country. As of 
1953, commercial insurers provided hospital insurance to 29 percent of 
Americans versus Blue Cross's 27 percent.
  The widespread entry of commercial insurance into the health 
insurance market had a dramatic impact. First, the commercial health 
insurers did not operate under the same rate restrictions as Blue 
Cross. Second, Blue Cross premium rates were based on the average cost 
of medical services in a defined geographic area or community. 
Commercial insurers, on the other hand, calculated premiums based upon 
the claims of particular groups or individuals and adjusted these 
premiums each year depending on their health status. This also allowed 
commercial insurers to evaluate coverage on an individual rather than 
use the community rating system of Blue Cross. Therefore, commercial 
insurers were able to underbid Blue Cross for firms with very healthy 
workers who were cheaper to insure.
  Right then and there, we begin to see the skewing of the system away 
from a community rate toward an individual assessment; whereby 
companies could cherry-pick only the healthiest and, therefore, make 
more money.
  The loss of these healthier groups then raised average costs among 
the remaining employees, placing Blue Cross at a competitive 
disadvantage with commercial insurers. This competition from commercial 
insurers eventually resulted in Blue Cross changing the way its 
premiums were calculated. The single, community-wide premium pricing 
model was replaced in favor of the commercial approach. This shift 
toward charging premiums based on claims of particular groups or 
individuals changed the nature of competition in the health insurance 
market. Insurers could reduce costs by shifting risk and recruiting 
employers with healthier workers, and they did. Furthermore, because 
they could choose whom to insure, many large, for-profit commercial 
insurers left the individual market altogether in favor of large-scale 
employers because they carried lower operating costs.
  Where does that leave us today? Today we have a health insurance 
industry where the first and foremost goal is to maximize profits for 
shareholders and CEOs, not to cover patients who have fallen ill or to 
compensate doctors and hospitals for their services. It is an industry 
that is increasingly concentrated and where Americans are paying more 
to receive less.
  Here is the bottom line: According to the Kaiser Family Foundation, 
in the last 9 years, American families have seen their health insurance 
premiums more than double, while benefits have been getting worse and 
the industry has been growing less competitive.
  A snapshot of the American health insurance industry today presents 
an alarming picture.
  As of 2007, just two carriers--WellPoint and UnitedHealth Group--had 
gained control of 36 percent of the national market for commercial 
health insurance. Both these companies had more than doubled since 
2000. Since 1998, there have been more than 400 mergers--that is in 11 
years--400 mergers of health insurance companies, as larger carriers 
have purchased, absorbed, and enveloped smaller competitors.
  In 2004 and 2005 alone, this industry had 28 mergers, valued at more 
than $53 billion. That is more merger activity in health insurance than 
in the 8 previous years combined.
  Today, according to a study by the American Medical Association, more 
than 94 percent of American health insurance markets are highly 
concentrated under U.S. Department of Justice guidelines. This means 
these companies could raise premiums or reduce benefits with little 
fear that consumers will end their contracts and move to a more 
competitive carrier.
  In 10 States--Alabama, Alaska, Arkansas, Hawaii, Iowa, Maine, 
Montana, Rhode Island, Vermont, and Wyoming, these 10 States--two 
health insurance companies control 80 percent or more of the State 
market. So in 10 States, 2 health insurance companies control more than 
80 percent of the statewide market.
  In my State of California--nearly 40 million people--just two 
companies--WellPoint and Kaiser Permanente--control more than 58 
percent of the market. The market presence of these two companies is up 
a combined 14 percent in 1 year. Let me repeat that. The market 
presence of two companies in California is up 14 percent in 1 year.
  When you look at specific health markets, the situation is even 
worse. In 2007, the two largest health insurance companies in 
Bakersfield, CA, controlled 76 percent of the market there. In Salinas, 
the top two controlled 65 percent. In Los Angeles, the top two carriers 
controlled 51 percent of the market. This is a huge market. It is a 12-
million-person market, and two companies control over half of that 
insurance market.
  The American Medical Association described it this way:

       The United States is headed toward a system dominated by a 
     few publicly traded companies that operate in the interest of 
     shareholders and not primarily in the interest of patients.

  I think that is a very sobering statement.
  The effects of this market concentration are being felt by consumers 
and families. They are being felt by American businesses. They are 
being felt by doctors and health care providers.
  Premiums are skyrocketing for employers and for individuals trying to 
buy health insurance. According to the Kaiser Family Foundation, since 
1999, the average health insurance premium has more than doubled, 
rising 119 percent. That is an increase of four times the national wage 
growth over the same period and more than four times the rate of 
inflation. So it is ``open sesame.''
  This is an amazing factor. Between 1999 and 2007, the average 
American worker saw his wages increase 29 percent. His insurance 
premiums rose more than 120 percent during that

[[Page 26359]]

same period. This is how disproportionate it is, and it is wrong.
  For some people, this means their employer is paying more and 
struggling more to stay in business. For some, it means they are 
personally paying more and struggling to make ends meet. For some, it 
means they have been forced to join the ever-growing group of 47 
million Americans who simply cannot afford health insurance coverage 
today.
  While premiums are going up, there is no evidence coverage is 
improving. We have heard countless stories from consumers about the way 
insurers are cutting costs and saving money by denying coverage to 
people with preexisting conditions, rescinding care when people fall 
ill and haggling administratively over coverage and benefits.
  These stories come from health care providers too. When just a few 
companies control the market, physicians and hospitals have fewer 
places to turn when they believe they are not being reimbursed fairly. 
Just as American families and their employers have fewer choices for 
purchasing insurance, health care providers have less bargaining power 
over reimbursement rates. The net result is, consumers and health care 
providers are losing out, while health insurance companies and their 
shareholders are bringing in record profits.
  According to Health Care for America Now, between 2000 and 2007, 
profits at the 10 largest publicly traded health insurance companies 
soared up 428 percent, from $2.4 billion in 2000 to $12.9 billion in 
2007.
  The CEOs of these companies took in record earnings. In 2007, these 
10 CEOs made a combined $118.6 million. The CEO of CIGNA took home 
$25.8 million. The CEO of Aetna took home $23 million. The CEO of 
UnitedHealth took home $13.2 million. The CEO of WellPoint took home 
$9.1 million.
  This history, and this failed market, is a uniquely American story. I 
recently read ``The Healing of America'' by T.R. Reid. He is a former 
Washington Post journalist who has a bum shoulder. So he decided he 
would go from country to country and go to doctors in that country, 
examine their health care sector, see what would help him, what they 
recommended, and it is a very interesting book. He writes about the 
health care systems of the countries he visits.
  A few things are clear. First, as Reid says:

       The United States is the only developed country that relies 
     on profit-making health insurance companies to pay for 
     essential and elective care.

  So in every country that has health care reform--the United Kingdom, 
France, Switzerland, Germany, Canada--the United States is the only one 
that allows this open, ribald, for-profit health insurance industry 
that we do in this country.
  Profit-seeking motives do influence insurance companies. Today, 
insurance companies have a financial reason to deny coverage to people 
who may actually get sick, so they exclude people with even the most 
minor preexisting conditions.
  Secondly, if you get sick, insurance companies will comb through past 
records to find a reason to retroactively deny coverage. This means 
people lose their health coverage when they need it the most.
  In other nations, with not-for-profit insurance, there is no 
motivation for companies to engage in these practices. Everyone is 
covered regardless of his or her health history. This allows risk to be 
effectively spread across the entire population.
  Other countries accomplish this with employer responsibility and an 
individual requirement to become part of the insurance system.
  A few examples: In Germany, most people enroll in sickness funds, 
with premiums split between workers and employers. Only the very 
wealthy can opt out to buy separate insurance.
  In Switzerland, everyone must purchase basic, nonprofit insurance. 
Companies can only make a profit on the extra benefits they sell, such 
as for cosmetic surgery or a private room in a hospital, but not by 
providing basic coverage.
  In France, everyone is enrolled in one of several large health 
insurance funds, which are closely regulated by the federal government.
  In the United Kingdom, everyone is automatically covered by the 
National Health Service.
  Americans like to criticize other nations' systems as bureaucratic. 
But in truth, it is our system that is wasteful and inefficient. Many 
other countries are able to deliver better health care for lower prices 
than we do currently. I wish to point this out.
  As T.R. Reid points out, our system, with for-profit insurance and 
medical underwriting, has some of the highest administrative costs in 
the world because, in the United States, roughly 20 percent of every 
premium dollar is spent on administration. This includes advertising, 
profits, and paperwork--20 percent goes to this.
  Let's compare this: Canada, on the other hand, spends about 6 
percent. France spends about 5 percent. One of France's advantages 
comes from an electronic form, a personal health record. It is called 
the Carte Vitale. Here is a picture of it I have in the Chamber. I had 
actually asked some of my family, newly returned from living in France 
for a long time, if they would send me their actual Carte Vitale, which 
I have seen. Unfortunately, they have not arrived. But, as shown in 
this picture, this is what they look like.
  As shown on this part of the picture, this is a small chip. In this 
chip is the entire medical history of a patient--every shot received, 
every diagnosis made, everything about the patient. So the patient goes 
in for a physician's visit, which costs about $27 in France today, and 
the doctor takes the Carte Vitale, puts it into his computer, and the 
entire background of the individual pops up.
  Let's say he prescribes certain medication. That then goes into this 
small chip. Every French citizen over the age of 15 carries a Carte 
Vitale, which has taken the place of the walls of paper records we see 
at our physicians' offices in this country.
  Also, this system allows French physicians to bill automatically for 
the care they provide without paperwork or bureaucracy. The Carte 
Vitale has helped the French achieve what many consider to be the 
world's best health care system.
  As we have seen, other industrialized nations spend less on 
administrative costs. They have nonprofit insurance. They use employers 
and individual responsibility to provide basic health care to everyone. 
This structure does, by independent analysis, provide better results 
because, whatever the indicator, the United States lags behind the rest 
of the industrialized world.
  This is painful, but I believe we have to look at it. According to 
the World Health Organization, France leads the world in overall system 
performance, followed by Italy. America is 37th. These are the top 
health care systems: France, Italy--and, as you can see, the rest. We 
are No. 37.
  In avoidable mortality, which measures a system's effectiveness in 
caring for people who contract a potentially serious medical condition, 
again, France tops the list, again, followed by Japan. The United 
States is 15th.
  The United States lags other developed nations in infant mortality. 
Here it is, as shown on this chart. This is according to the 
Commonwealth Fund. The leader is Japan, with 3 deaths per 1,000 births. 
We are No. 22 on that list.
  This is surprising because you would think, particularly with infant 
mortality, we would be a real leader, but we are not.
  To summarize, I think action is needed.
  Other countries are far from perfect, and I am not saying anything 
other than that. But these lessons show that high-quality health care 
can be delivered for less than we currently spend. Our system of 
relying on for-profit medical insurance, I believe, is broken. We are 
spending more for worse results than the rest of the world. That is 
what I hope to show.
  That is why it is essential that we take action, and take action now. 
I basically believe the medical insurance

[[Page 26360]]

industry should be nonprofit, not profit-making. There is no way a 
health reform plan will work when it is implemented by an industry that 
seeks to return money to shareholders instead of using that money to 
provide health care. This is difficult to accomplish today, but there 
are a number of steps that can be taken in this direction.
  The first is to repeal the antitrust exemption. I believe we must 
take strong action to stop illegal, anti-competitive activity in the 
industry. The Justice Department currently has authority to review 
certain health insurance mergers. But although almost 400 health 
insurance mergers took place during the past administration, the 
Department brought challenges to only two of those mergers. Even those 
that were challenged were later allowed to proceed with relatively 
minor adjustments.
  When a dominant market player tries to subsume a smaller competitor, 
the Justice Department should review the acquisition carefully to 
ensure that consumers, employers, and health care providers still have 
bargaining power. We should also repeal the antitrust exemption for 
health insurance companies. This exception is a relic of the past, and 
it has no current justification.
  The Justice Department should be able to investigate and sue health 
insurance companies when they engage in price fixing, bid rigging, or 
market allocation. These kinds of collusive activities are not fair 
play. They are not allowed in other industries, and they should not be 
allowed in this one.
  I also believe a public option is an essential piece of any effort. 
It will provide robust, nonprofit competition for an industry that is 
broken and profit-ridden. In concentrated markets, the public option 
will provide consumers with real choice. Remember, the largest market 
in America is the Los Angeles market, and a majority of that market is 
controlled by two health insurance companies.
  Because it will not attempt to make a profit, the public option will 
not turn anyone away. It may be able to charge lower premiums because 
its goal will be to provide health care coverage, not to return profits 
to shareholders. Whether it is opt-in or opt-out, States that strongly 
object to providing nonprofit competition to residents should have the 
opportunity not to participate. But make no mistake; the public option 
alone will not solve our Nation's problem with health care. It will be 
available to a relatively few Americans at first. Only those who will 
purchase insurance in newly created exchanges will have the opportunity 
to buy it. But I believe it is a building block as we work to construct 
a new system.
  In addition to creating a public option, we must put health insurance 
companies on a path toward more responsible behavior. That is why I am 
proposing a Federal medical insurance rate authority.
  My proposal for a medical insurance rate authority builds on the 
successful and well-accepted model of utility commissions. Throughout 
this country, providers of gas, water, and electricity need to justify 
any proposed rate increase. This is required because the services they 
provide--water, gas, and power--are considered necessities for life.
  Well, are they more a necessity for life than health insurance? I 
don't think so. Health insurance should be no different. Access to 
affordable medical care is certainly a necessity of life.
  Under my proposal, the Federal Government would be required to 
establish a medical insurance rate authority which would oversee 
premiums charged by the for-profit medical insurance industry. Premium 
increases above a certain threshold would need to be approved. The 
medical insurance rate authority would conduct basic oversight insuring 
that premium funds are spent on medical care and not for profit or 
overhead.
  These safeguards will ensure that the health insurance industry does 
not continue their pattern of astronomic premium increases. It is fair 
for the price of insurance to reflect the actual price of medical care, 
but it is not fair for insurance companies to increase their profits 
while Americans pay higher and higher premiums.
  It has taken many decades for our health system to evolve and break 
down as it has, and we cannot expect to fix it overnight. We need to 
remember what health insurance originally was in this country, 
nonprofit; and what it is around the world, nonprofit; and a way to 
ensure that people can get basic care to stay healthy and they are 
protected from financial ruin when they get sick. I believe strongly 
this must be the underlying goal of any health reform the Senate 
approves this year.
  Mr. President, I ask unanimous consent that a list of sources be 
printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                Sources

       1. Congressional Research Service, The Market Structure of 
     the Health Insurance Industry, 10/21/09.
       2. Congressional Research Service, Health Care Reform: An 
     Introduction, 8/31/09.
       3. Alex Blumberg, All Things Considered, National Public 
     Radio, October 22, 2009, ``Accidents of History Created U.S. 
     Health System.''
       4. Paul Starr, The Social Transformation of American 
     Medicine, 1982.
       5. Melissa Thomasson, ``The Importance of Group Coverage: 
     How Tax Policy Shaped U.S. Health Insurance.'' American 
     Economic Review, 2003.
       6. Blue Cross and Blue Shield, A Historical Compilation. 
     Accessed 10/30/09 at www.consumersunion.org.
       7. Kaiser Family Foundation & Health Research and Education 
     Trust, ``Employee Health Benefits: 2008 Annual Survey.''
       8. American Medical Association, Competition in Health 
     Insurance: A Comprehensive Study of U.S. Markets, 2007.
       9. American Medical Association, Competition in Health 
     Insurance: A Comprehensive Study of U.S. Markets, 2008.
       10. David Balto, Testimony Before the Senate Judiciary 
     Committee Subcommittee on Antitrust, July 31, 2008, Hearing 
     on ``The Right Prescription? Consolidation in the 
     Pennsylvania Health Insurance Industry.''
       11. Corporate Research Group, The Managed Care M&A 
     Explosion, 2005.
       12. Health Care for America Now, Premiums Soaring in 
     Consolidated Health Insurance Market, May 2009, citing U.S. 
     Securities and Exchange Commission filings.
       13. T.R. Reid, The Healing of America: A Global Quest for 
     Better, Cheaper, and Fairer Health Care, 2009.

  Mrs. FEINSTEIN. I thank the Chair and I yield the floor.
  The ACTING PRESIDENT pro tempore. The Senator from Iowa is 
recognized.
  Mr. GRASSLEY. Thank you, Mr. President.
  Mr. President, I come to the floor to address the issue of health 
care reform. In order to demonstrate the complicated issues that face 
us, I have with me the House of Representatives health care reform 
bill, approximately 2,000 pages; I have over here the Senate HELP 
Committee bill, approximately 1,000 pages; and over here, the Senate 
Finance Committee bill, approximately 1,500 pages.
  Some on the other side of the aisle are saying their bills do not 
represent a government takeover of the health care system. I want to 
believe that. I would really like to believe it, but the facts seem to 
tell a different story. If we look at the specifics of the bill 
reported by the Senate HELP Committee or the House bill released last 
week, I don't see how one could call it anything but a government 
takeover.
  So I wish to start with the Senate HELP Committee bill.
  On September 17, the HELP Committee finally released what I 
previously said was a bill containing about 1,000 pages--more 
accurately, 839 pages--over 2 months after the majority party on the 
HELP Committee voted to report it. When I was back in my State of Iowa 
for the August recess, I held 17 townhall meetings. Due to the 
controversial health care bill the HELP Committee and the three House 
committees had just voted on, the attendance was the highest I have 
seen in the 2,871 townhalls I have held during my years in the Senate.
  Many of the people who attended were citing sections from the health 
reform bills. They had good questions. I heard repeatedly about the new 
powers being granted to the government in these bills. So I decided we 
should have a catalog of how many times these bills grant new powers to 
the Secretary of Health and Human Services.

[[Page 26361]]

  Well, I have the HELP Committee bill with me today, and there is a 
lot going on in the 839 pages of that bill. We have gone through the 
20,725 lines of legislative text just to see how many new government 
authorities it creates, and here is what we found: This bill creates a 
total of 87 new government programs.
  In addition to the 87 new government programs created by this 
legislation, a substantial amount of new regulatory authority has been 
granted to the Secretary of Health and Human Services. I know the other 
side doesn't like to hear that this bill calls for a government 
takeover of our health care system, but let's let the facts speak for 
themselves. If it isn't a government takeover of our health care 
system, why does the word ``Secretary''--meaning Secretary of HHS--
appear 982 times in this bill? Maybe the other side needs a reminder 
that the Secretary of Health and Human Services is an agent of the 
Federal Government appointed by the President, confirmed by the Senate.
  Iowans keep telling me that Congress needs to just slow down, 
consider all ideas, and, of course, common sense tells us to actually 
read the legislation. But the HELP Committee bill makes it clear that 
the majority leadership and the White House would rather push something 
through quickly and leave the important decisions to an unelected, 
unaccountable government official.
  The long list of new powers granted to the Secretary begin on page 11 
of the HELP Committee bill, and I quote:

       The Secretary shall by regulation establish a minimum size 
     for community ratings areas.

  So let me put it in common language rather than statutory language.
  This bill includes a number of controversial rating reforms, and one 
of those reforms would set a 2-to-1 age rating band. That means 
premiums for the oldest person could be no more than twice the cost of 
the premiums to the youngest person. Now, that is going to reduce 
premiums substantially for older people, and that is a fine goal, but 
the money has to come from somewhere. So to pay for those lower 
premiums for older people means much higher premiums for younger 
people. It is a new hidden tax being imposed on young people. It will 
increase premiums for young people by at least 50 percent.
  This bill would give the Secretary the regulatory power to draw the 
map in each State for these rating areas, and that is where we go back 
to the quote I just cited:

       The Secretary shall by regulation establish a minimum size 
     for community rating areas.

  Keep in mind, under current law this sort of policy is presently 
decided by 50 different State legislatures or by 50 different insurance 
commissioners. But some in Congress want to take this responsibility 
away from the States and turn it over to unelected bureaucrats in 
Washington, DC.
  I spoke on the Senate floor earlier last week about how the 
Democratic proposals for health care will increase premiums and overall 
health care spending. Quite the opposite: I think to most people 
hearing us talk in Washington, DC, about health care reform, the word 
``reform'' would mean to them not increasing premiums and overall 
health care spending.
  To offset the increase in premiums, they say they will subsidize them 
using taxpayer dollars. But guess who is given the power to decide what 
benefits are eligible for these new subsidies? I will read the answer 
straight from the bill on page 90, line 11. It says:

       The Secretary shall establish . . . the essential health 
     care benefits eligible for credits. . . .

  My friends on the other side of the aisle claim their proposal will 
increase choice and competition in the health insurance industry. But 
after reading this bill, it is clear that only 1 percent will have a 
choice, and that person is the Secretary of HHS.
  On page 74, line 17, the Secretary is given the power to regulate 
what type of health plan works best for you and your family. I will 
read that quote:

       The Secretary shall, by regulation, establish criteria for 
     certification of health plans as qualified health plans.

  After the Secretary chooses what plan works best for you and your 
family, the Secretary can choose what conditions your doctor must meet 
in order to contract with the plan chosen for you.
  On page 80, line 14, it says that a qualified health plan may 
contract with `` . . . a health care provider if such provider 
implements such mechanisms to improve health care quality as the 
Secretary may by regulation require.''
  That means if you want to purchase coverage through a new exchange 
established by this bill, the Secretary of HHS will be deciding what 
health plan and what doctor is best for you and your family.
  This bill also extends the Secretary's influence into classrooms, 
where our future doctors are being trained. On page 685 of the bill, 
line 10, it says:

       The Secretary shall support development, evaluation, and 
     dissemination of model curricula for . . . use in health 
     professions schools . . . and for other purposes determined 
     appropriate by the Secretary.

  That is a lot of power in a sentence of the law that says ``and for 
other purposes determined appropriate by the Secretary.''
  Are all of these new requirements and regulations going to help our 
health care system? Will they make Americans healthier? The truth is, 
we have no way of knowing since so much in this bill, including what I 
have highlighted, is left to the regulatory decisions of an unelected 
government bureaucrat.
  The proponents of this bill say it isn't a government takeover of 
health care. But after reading only a fraction of the bill out loud, as 
I have done, it is hard to argue the fact that the Secretary of HHS is 
granted a lot of power over our health care system.
  The Secretary will determine the size of new rating areas. The 
Secretary will decide what benefits health care plans have to cover. 
The Secretary will decide what health plan works best for you and your 
family. The Secretary will decide what conditions your doctor must meet 
to be included in your plan. The Secretary will decide what curriculum 
should be taught in our medical schools.
  You may be tired of hearing me say ``Secretary,'' because I am tired 
of saying it. I have only said it 25 times in this speech. But this 
bill uses the word ``Secretary'' another 957 times, which is an 
indication that the HELP Committee bill is moving control of our health 
care system in what many people in this country consider the wrong 
direction.
  That brings me to the House bill that was released last week. The 
House bill, right here--2,000-some pages--seems to be heading in the 
wrong direction also. In fact, a spokesman for the small business 
industry said to the Hill newspaper:

       [The House bill] is a ``how to'' on how not to do health 
     care reform.

  That is pretty disappointing, since the bill costs about $2.2 million 
per word. You would think we would be getting something for that kind 
of investment.
  The Wall Street Journal today calls the House bill ``the worst bill 
ever.'' Quoting, ``Epic new spending and taxes, pricier insurance, 
rationed care, dishonest accounting: the Pelosi bill has it all.''
  Again, that was from the Wall Street Journal.
  Let's start with what is in the 2,000 pages and $1 trillion in 
spending in this new bill.
  The bill includes a government-run insurance provision. All the 
caveats aside, it is still a government insurance plan--or let me say 
government insurance company, plain and simple.
  Interestingly, after all the promises about lower costs, the 
Congressional Budget Office has said that premiums in the government-
run plan would be more expensive than premiums in the private market. 
That report just came out within the last couple of days.
  The bill also locks every American with an income below 150 percent 
into Medicaid. Today, a family of 4 with an income of $33,000 is at 150 
percent of the poverty level. Under this new House bill, that family 
would not get

[[Page 26362]]

any assistance to get private health coverage. In other words, they 
would not have choice.
  Let me point out that Medicaid is already financially unsustainable 
in its current form. This is the biggest expansion of Medicaid in its 
history. With this Medicaid expansion, the new House bill continues to 
leave States liable for a significant share of that new spending--a 
share States cannot afford. Ultimately, that will force States to raise 
taxes to pay for their share of this expansion of Medicaid. That is a 
hidden tax, although it will come separately among the 50 States.
  The bill also proposes a host of new Federal insurance market reforms 
that will actually raise costs for most individual Americans.
  With the creation of a new unelected Federal bureaucrat, called the 
``health choices commissioner,'' the Federal Government will now be in 
charge of deciding what insurance you have to buy.
  If this isn't a government takeover of health care, I don't know what 
it is. If you don't like what the new health choices commissioner comes 
up with or you cannot afford it, you will be hit with a new individual 
mandate tax penalty, and that will be enforced by the IRS.
  Despite all the promises about being able to keep what you have, the 
bill cuts more than $150 billion from Medicare Advantage plans, 
endangering the existing coverage for millions of seniors.
  Don't take my word for it, because the Office of the Actuary--that is 
a professional office, not a political office--at the Department of 
Health and Human Services said that with this level of cuts 
``enrollment in [Medicare Advantage] plans would decrease by 64 
percent.''
  The CBO has taken a look at some of the changes in the Medicare Part 
D drug benefit and concluded that the changes will actually raise 
premiums.
  So whether you are in Medicare Advantage, Medicare Part D, or private 
insurance, this new House bill means higher costs, more government 
interference, and less choice. I don't think that is what people in my 
State of Iowa have in mind when they ask us to fix the health care 
system.
  The House bill also includes a part that is called the CLASS Act, 
which creates a new long-term care entitlement. I happen to be very 
supportive of taking steps to improve long-term care for Americans. But 
the CLASS Act is fiscally irresponsible. I am not going to name the 
prominent Senate Democrat, but one has been quoted as calling the CLASS 
Act a Ponzi scheme that Bernie Madoff would have been proud of.
  Finally, I hope everyone out there pays special attention to what 
House Democrats call ``shared responsibility.''
  If you make money in America, the House Democrats expect you to do 
some extra sharing. Lots. The bill includes a massive tax increase to 
pay for it.
  Now I wish to go to what is not in the bill. Even though President 
Obama continues to support medical liability reform, as I do, the House 
still refuses to consider it. In the ``devil's in the details'' 
category, I find it particularly worrisome that the House bill failed 
to include a prohibition on rationing that was in their original 
discussion draft. The discussion draft of H.R. 3200 stated that the 
committee should ``ensure that essential benefit coverage does not lead 
to rationing of health care.''
  Every time you get the government more involved in health care, the 
issue at grassroots America comes up: Will we have rationing? A lot of 
committees have tried to say that there would not be any rationing 
coming from this, and that was in the original House bill. But as it is 
put together as one final package, as it is here, that section, 
unfortunately, was dropped. In other words, the prohibition on 
rationing is not in this bill.
  This is what the latest House bill proposes: more taxes, more 
spending, higher premiums, fewer choices, a government-run plan, the 
biggest Medicaid expansion in history, unsustainable new entitlement 
programs, and 2,000 pages.
  Despite all the promises, the facts don't lie. The House bill and the 
HELP Committee bill I referred to during these remarks represent an 
unprecedented government takeover of our Nation's health care system--a 
takeover that this country cannot afford, and a takeover that the 
American people don't want.
  I thank my colleagues for giving me this time beyond the hour of 4, 
when the unemployment compensation bill was to be taken up, so I could 
keep another obligation.
  I yield the floor.

                          ____________________