[Congressional Record (Bound Edition), Volume 156 (2010), Part 7]
[Senate]
[Pages 8901-8902]
[From the U.S. Government Publishing Office, www.gpo.gov]




                          THE HEALTH CARE PLAN

  Mr. JOHANNS. Mr. President, I rise to speak a little bit about the 
health care plan that was passed now a few months ago. Of course, there 
was a lot of buildup to that plan. One of the things that was said over 
and over again by President Obama was: ``If you like your health care 
plan, you can keep your health care plan.''
  The White House, of course, has very vigorously defended that 
promise. In fact, the White House responded to an op-ed that was 
entitled ``No, you can't keep your health care plan.'' That is what 
that op-ed was titled. The White House responded last week on the White 
House blog and they said this:

       The 150 million Americans with employer-sponsored health 
     insurance--who make up the vast majority of those with health 
     insurance today--will not see major changes to their 
     coverage.

  The White House's Stephanie Cutter went on to say:

       At the end of the day, employer-sponsored insurance will be 
     improved but will look much the same as it does now.

  The administration is continuing to try to convince the American 
people that, in fact, that is going to be the case. However, no matter 
how many times they say it, study after study tells us the opposite. 
Less than 2 months ago, after the bill became law, clear evidence is 
now emerging that the promises are impossible to keep. Recently, 
certain companies were required by securities law to report the impact 
of the new health care law on those companies. The company reports so 
concerned supporters of the health care law that they said we are going 
to bring these companies in. We are going to do an investigation. We 
will have a hearing on this. However, when they reviewed these 
companies' internal documents, the supporters of the health care law, 
those demanding the hearing, immediately backed off. You see, they saw 
in black and white why so many Americans are going to lose the health 
care coverage they like under this legislation.
  Companies with longstanding employer-sponsored health plans were 
legitimately, lawfully, legally contemplating just paying the fine 
instead of continuing the more expensive employee insurance programs. 
Yes, all of a sudden the hearing was canceled. There was no interest in 
the hearing. One can speculate it was canceled because the findings 
would have exposed a very serious policy flaw of the health care law.
  Headlines are hard to defend when they shout: ``Companies contemplate 
dropping employer-sponsored health insurance plans.''
  This is very worrisome, but it is not unexpected. Last July I spoke 
about this on the Senate floor, right at this spot. I and many others 
warned that the proposed penalties for businesses would create a very 
perverse incentive. I said this:

       When you do all the math, this is no penalty at all 
     compared to the cost of private insurance. It would encourage 
     employers to dump their employees from their health 
     insurance.

  That is what I said a year ago. But supporters of health care reform 
denied it. They provided assurance to the American workers that they, 
in fact, would be able to keep their health insurance plan. Now, 10 
months later, what is happening? Companies are, in fact, contemplating 
dropping their plans. Why? Because that perverse incentive is there.
  To do so would significantly lower their costs and increase the costs 
for taxpayers and Medicare beneficiaries. Let's look at AT&T, for 
example. You see, for them, paying the Government fine instead of 
providing employee insurance would cut their annual health care 
expenses from $2.4 billion annual expenses to $600 million. That is a 
75-percent savings.
  Other companies, though, have sent similar signals. An official with 
John Deere has indicated they should look into, ``just paying the 
fine.'' Caterpillar said this: They are giving this ``serious 
consideration.''

[[Page 8902]]

  Another survey showed that these are not isolated cases. A Washington 
State University survey, published in the Puget Sound Business Journal, 
concluded this:

       [A]bout a third of Seattle area executives said it may be 
     cheaper for their businesses to stop offering health care 
     benefits and pay fines.

  If a major employer discontinues health insurance for its employees, 
brace yourself, because its competitors will do the same. The savings 
are just too dramatic, and that is not the only problem out there. The 
Congressional Budget Office cost estimate assumed that companies would 
be covering more employees in 10 years, not less. This optimistic view 
may have led to a very optimistic cost projection. If employees lose 
their employer-sponsored insurance plans, then they are going to be 
forced to get their health insurance elsewhere, likely through the 
health insurance exchanges. Then they would be eligible for government 
subsidies.
  Let me state that another way: They would be eligible for taxpayer-
paid subsidies to cover that cost. This will cause the actual cost of 
the bill to skyrocket. From almost a year ago until early this year, 
many of us warned that this law was built on the shakiest of policy 
grounds and even shakier projections relative to its financing. Yet 
proponents said don't worry. As we go forward, though, expect more bad 
news about this very flawed piece of policy.
  The White House can do all it wants to try to convince Americans of 
the merits of this law. But you know what. When Americans lose the 
insurance they like and businesses struggle to grow and expand, 
Americans will wonder how Congress could have been so foolish to pass 
such poor policy.
  Many warned this was coming. Unfortunately, the warnings were ignored 
in the effort to try to get this passed. I remember standing here on 
Christmas Eve, voting against this piece of legislation.
  But this new law is far from reform. It spends $2.6 trillion to take 
this great Nation in the wrong direction. Now, hopefully, I pray that 
in the near future more rational minds can agree on a more rational 
national policy. But until then, the adverse consequences will continue 
to fill the headlines and, more important and sadly, Americans will be 
hit by the realities of this flawed policy. They will have no recourse 
if one day their boss walks in and announces that it is more cost-
efficient for this company to say to them: Go to the exchange. We will 
not be providing a health insurance plan. You see, in this country 
employees do not work by contract.
  My hope is we can agree on a more efficient policy before we are left 
wondering why there are so many broken promises.
  I yield the floor.

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