[Congressional Record (Bound Edition), Volume 157 (2011), Part 4]
[Senate]
[Pages 5028-5030]
[From the U.S. Government Publishing Office, www.gpo.gov]




                              HEALTH CARE

  Mr. KYL. Mr. President, I want to address two things but start with 
health care. I recall that during the debate over health care--and we 
celebrated the 1-year anniversary of the signing of the health care 
legislation a little over a week ago. But I recall then-Speaker of the 
House Nancy Pelosi saying: We will have to pass the bill in order to 
find out what is in it. I do not think she realized how true her 
statement really was.
  I just read something over the weekend from a March 31 edition of the 
Washington Examiner. I ask unanimous consent to have this article by 
Byron York printed in the Record at the conclusion of my remarks.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (See exhibit 1).
  Mr. KYL. I will read the first sentence and then a couple of other 
items from it. The headline is ``Uncovered: New $2 billion bailout in 
Obamacare.''
  Here is the first sentence in the story:

       Investigators for the House Energy and Commerce Committee 
     have discovered that a little-known provision in the national 
     health care law has allowed the Federal Government to pay 
     nearly $2 billion to unions, state public employee systems, 
     and big corporations to subsidize health coverage costs for 
     early retirees.

  Then the article goes on to point out that they discovered this in 
oversight hearings of an obscure agency known as the CCIO, or the 
Center for Consumer Information and Insurance Oversight. The idea under 
the law apparently was to subsidize unions and States and companies 
that had made commitments to provide health insurance for workers who 
retired early.
  They point out that there was a $5 billion appropriation in the bill, 
and at the rate of spending by this agency they will burn through the 
entire $5 billion as early as 2012. And where is

[[Page 5029]]

the money being sent to? Well, by far and away, the biggest single 
recipient is the United Auto Workers Labor Union, which so far had 
received well over $200 million.
  Other recipients include AT&T, Verizon, General Electric, General 
Motors Corporation, and a few State public employees retirement 
systems. But, by far and away, the contribution to the United Auto 
Workers and the Teamsters and United Food and Commercial Workers was 
more than the amount of money sent to the State pension funds--the 
point being that we learn something new almost every week about 
Obamacare.
  As I said, it was just a little over a week ago that it celebrated 
its first anniversary, and we are only now discovering some of the 
things that were hidden away in it, which I think had we been able to 
debate the bill in a more appropriate fashion--remember, it passed on 
Christmas Eve day of the year before last--we probably would have been 
able to discover these things. Had the bill been read, had we had time 
to read all of the fine print, these are the kinds of things that we 
would have discovered; and I suspect the proponents of the bill, those 
who voted for it, might not have been so quick to vote for it.
  Maybe we will have a chance to repeal this particular provision of 
the bill if there is any money left that has not been spent by the time 
we get around to doing that. I will propose to my colleagues that we 
try to accomplish that.
  The second point with respect to Obamacare that continues to trouble 
me is something called the Independent Payment Advisory Board. This is 
troublesome for three reasons, two of which have to do with process and 
the third the substance. The Independent Payment Advisory Board goes by 
the acronym of IPAP, and it was created in order to try to find savings 
in the Medicare Program.
  Now, obviously, we have read a lot about the billions, tens of 
billions of dollars of waste, fraud, and abuse in Medicare. The problem 
is, this board is not likely to get at that waste, fraud, and abuse 
because its primary mission--and, in fact, it is restricted to finding 
cost savings only as a result of reducing the payments to providers. In 
fact, James Capretta of the Ethics and Public Policy Center has done 
some very good writing on this subject, and he notes that the board is 
strictly limited to what it can recommend and implement and that the 
board can only ``cut Medicare payment rates for those providing 
services to beneficiaries.''
  Well, that is a problem because it does not get to the real heart of 
a lot of the waste, fraud, and abuse in Medicare. Secondly--and I will 
conclude my remarks with this main point--when we cut the payment rates 
for the doctors, for example, who are taking care of Medicare patients, 
what happens? We get fewer doctors willing to take care of Medicare 
patients.
  We are all familiar with the stories in our own States of more and 
more physicians either not taking any Medicare patients or at least not 
taking any new Medicare patients. As a result, there are far fewer 
doctors available to treat folks, which means there is a much longer 
waiting time for people to get the care they need. The end result of 
that is, of course, care delayed is frequently care denied. That is the 
problem that exists in other countries such as Great Britain, our 
neighbor to the north, Canada, and it is coming to your own community 
pretty soon as a result of the fact that we are not paying the 
physicians and other providers enough as it is. That is the only thing 
that IPAP can do to further reduce the costs.
  But I mentioned two procedural problems. The first is that this board 
is comprised of 15 unelected bureaucrats. The President makes the 
appointments. He does not have to balance them politically, so they can 
all be members of one political party. He can make recess appointments 
so the Senate may not even have an opportunity to pass on these 
individuals.
  The second procedural problem is, when they make their 
recommendations it comes to the Congress in a take-it-or-leave-it 
procedural posture; that is to say, either Congress adopts the 
recommendations of the board or at a number equal to that, with what we 
decide ourselves is the appropriate way to achieve that amount, or the 
Department of Health and Human Services must implement the board's 
original recommendations, period. That is it.
  So we are ceding authority to an unelected board of people whose 
political views could reflect, for example, only those of the President 
of the United States, and whose recommendations almost automatically 
become law. Only if the Congress, within a specified period of time, is 
able to recommend an alternative that can get the votes, and it would 
have to be a 60-vote majority, would the recommendations of the board 
be overridden.
  So for procedural reasons this was not the right way to tackle the 
problem of costs of the Medicare Program that we do need to get a 
handle on. It is a very undemocratic approach. But as I said, the 
procedure is part of the problem. The real question is, how are we 
going to address costs in Medicare?
  Now, we are going to see some very innovative ideas from the House of 
Representatives, from the Budget chairman, Paul Ryan, this week when 
the House budget is released. He will tackle the tough problem of 
helping to constrain the costs of Medicare. One of the ways I find very 
unappealing to control Medicare costs is putting a cap on how much we 
can spend and reimbursing the providers, in particular physicians, with 
that particular cap in mind.
  As I said, the reason is because it is going to cost physicians a 
certain amount of money to take care of each patient. If they cannot be 
reimbursed in an amount sufficient to cover their expenses and a little 
bit more, they are simply going to turn to other kinds of patients.
  They have already turned away from Medicaid patients because Medicaid 
does not reimburse at a level that meets their requirements. As a 
result, it is a dirty little secret in the medical profession that 
Medicaid is rationed health care. That is not right. These are the 
poorest in our society. They need support. They need help. But they 
have to wait a long time. A lot of times, there just aren't the people 
to take care of them. Now we are going to convert the system that takes 
care of senior citizens into the same kind of whatever-we-have-
available kind of service because when we begin reducing payments to 
providers, we will get fewer providers, with the result that we will 
get less care. It is a simple matter of economics.
  This is being recommended not by physicians, not by the patients 
groups, and so on, but by people who are unelected bureaucrats 
appointed to this board. According to Mr. Capretta, under the law this 
is all the board can do. This is what it is restricted to doing. By 
cutting Medicare patients, the board will only delay and deny care. 
That is the critical point.
  I am painting this picture of physicians not being paid enough. The 
reality is that today Medicare already pays physicians 20 percent less 
than private insurance companies do. Part of that is because private 
insurance companies are cost shifters. When a physician can't make 
enough money serving government-paid-for patients--Medicare--then they 
charge more to private sector-paid patients. We therefore are paying 
more in the private sector for our insurance than it really would cost, 
but that is in order to subsidize the payment of physicians who don't 
make enough under Medicare today. What the IPAB would do is reduce 
those payments even more. This, in turn, will lead to reduced access to 
care for seniors, and reduced access to care means rationed care.
  I quoted James Capretta before. He says:

       In a very real sense, seniors will be the ones holding the 
     bag from these cuts when they can't access care due to a lack 
     of willing suppliers.

  I will close this point by noting that there is another government 
health care program I am very familiar with because of the large number 
of Native Americans in Arizona who have access

[[Page 5030]]

to health care from the Federal Government under the Indian Health 
Service. In Indian Country, they have a saying that is not really 
facetious. They say it with a bit of a wry smile on their face, but 
they are not at all happy. They say: Just get sick before July. The 
reason is, there is a definite limit on how much the program will pay 
out. They set a cap at the beginning of the year, and when enough 
people have gotten sick enough to a certain point in the year, that is 
the end of the coverage. So they wait until money is available the next 
year.
  That is an oversimplification, but it is what a total single-payer 
government system does. When we need to cut costs, we reduce the amount 
of money available. And who suffers? The people to whom we promised 
care. We see it in the Indian Health Service. We are seeing it now in 
Medicaid. We are going to see it in Medicare if we are not careful.
  That is why we need to repeal the IPAB, the Independent Payment 
Advisory Board established under ObamaCare. There is legislation 
introduced to do this. Senator Cornyn and I cosponsored the Health Care 
Bureaucrats Elimination Act, S. 668, which would eliminate the IPAB. I 
hope we will have an opportunity to bring that legislation to the floor 
so that my colleagues can join us in excising this piece of ObamaCare 
so that our seniors don't suffer from rationed health care. There is a 
long group of organizations which joins us in our opposition to IPAB, 
groups such as the American Health Care Association, the American 
College of Radiology, National Senior Citizens Law Center, National 
Association of Social Workers, Volunteers of America, and others.
  I hope that when the time comes, we will have an opportunity to have 
a debate about this aspect of ObamaCare. I know the supporters of the 
health care reform act did not intend this negative result. I am not 
suggesting that colleagues who supported ObamaCare love seniors any 
less than I love my mother, and they love their parents and others. 
That is not the point. Laws have unintended consequences. When we 
create a mechanism to save money such as this one and constrain it the 
way we have, I know what we will get, and we will not like it. We will 
hear from seniors. And before I hear from my mother, I would just as 
soon get this problem fixed.

                               Exhibit 1

                   [From the Examiner, Mar. 31, 2011]

             Uncovered: New $2 Billion Bailout in Obamacare

                            (By Byron York)

       Investigators for the House Energy and Commerce Committee 
     have discovered that a little-known provision in the national 
     health care law has allowed the federal government to pay 
     nearly $2 billion to unions, state public employee systems, 
     and big corporations to subsidize health coverage costs for 
     early retirees. At the current rate of payment, the $5 
     billion appropriated for the program could be exhausted well 
     before it is set to expire.
       The discovery came on the eve of an oversight hearing 
     focused on the workings of an obscure agency known as CCIO--
     the Center for Consumer Information and Insurance Oversight. 
     CCIO, which is part of the Department of Health and Human 
     Services, oversees the implementation of Section 1102 of the 
     Affordable Care Act, which created something called the Early 
     Retiree Reinsurance Program. The legislation called for the 
     program to spend a total of $5 billion, beginning in June 
     2010--shortly after Obamacare was passed--and ending on 
     January 1, 2014, as the system of national health care 
     exchanges was scheduled to go into effect.
       The idea was to subsidize unions, states, and companies 
     that had made commitments to provide health insurance for 
     workers who retired early--between the ages of 55 and 64, 
     before they were eligible for Medicare. According to a new 
     report prepared by the Department of Health and Human 
     Services, ``People in the early retiree age group . . . often 
     face difficulties obtaining insurance in the individual 
     market because of age or chronic conditions that make 
     coverage unaffordable or inaccessible.'' As a result, fewer 
     and fewer organizations have been offering coverage to early 
     retirees; the Early Retiree Reinsurance Program was designed 
     to subsidize such coverage until the creation of Obamacare's 
     health-care exchanges.
       The program began making payouts on June 1, 2010. Between 
     that date and the end of 2010, it paid out about $535 million 
     dollars. But according to the new report, the rate of 
     spending has since increased dramatically, to about $1.3 
     billion just for the first two and a half months of this 
     year. At that rate, it could burn through the entire $5 
     billion appropriation as early as 2012.
       Where is the money going? According to the new report, the 
     biggest single recipient of an early-retiree bailout is the 
     United Auto Workers, which has so far received $206,798,086. 
     Other big recipients include AT&T, which received 
     $140,022,949, and Verizon, which received $91,702,538. 
     General Electric, in the news recently for not paying any 
     U.S. taxes last year, received $36,607,818. General Motors, 
     recipient of a massive government bailout, received 
     $19,002,669.
       The program also paid large sums of money to state 
     governments. The Public Employees Retirement System of Ohio 
     received $70,557,764; the Teacher Retirement System of Texas 
     received $68,074,118; the California Public Employees 
     Retirement System, or CalPERS, received $57,834,267; the 
     Georgia Department of Community Health received $57,936,127; 
     and the state of New York received $47,869,044. Other states 
     received lesser but still substantial sums.
       But payments to individual states were dwarfed by the 
     payout to the auto workers union, which received more than 
     the states of New York, California, and Texas combined. Other 
     unions also received government funds, including the United 
     Food and Commercial Workers, the United Mine Workers, and the 
     Teamsters.
       Republican investigators count the early-retiree program 
     among those that would never have become law had Democrats 
     allowed more scrutiny of Obamacare at the time it was pushed 
     through the House and Senate. Since then, Republicans have 
     kept an eye on the program but were not able to pry any 
     information out of the administration until after the GOP won 
     control of the House last November. Now, finally, they are 
     learning what's going on.

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