Floor Statement Urging Passage of Health Insurance Reform
Mr. President, I thank the chairman for yielding me the time and also thank him for his great effort on this legislation.
It is a profound privilege to have the opportunity to serve the people of Rhode Island and in that capacity to support the legislation before us. This effort has been decades in the making. Every year that passes without health insurance reform has made the task more difficult and, the need for reform, more essential.
Rhode Islanders have seen their health care costs double in just the last decade. In 2000, the average employer-sponsored family health insurance policy cost about $6,700. In 2008, the same plan cost nearly $12,700. Without reform, by 2016, that family will pay over $24,000 in premiums, consuming 24 percent of their projected median income. Such a course is unsustainable by the families of Rhode Island.
Soaring health care costs are hurting family budgets, small businesses, and the national economy. In 1980, Americans spent $253 billion on medical bills. Today, we are paying $2.5 trillion on medical bills. That pressure is pushing Medicare toward collapse and 750,000 Americans into bankruptcy each year.
This legislation will help contain health costs, extend insurance to millions, and give health consumers more protection against discriminatory insurance practices. By shifting the balance of power from insurance companies to consumers, we will make health care more affordable for individuals and businesses and provide families with greater health care access and stability.
This bill is fiscally responsible. It is fully paid for. We trimmed wasteful programmatic spending and imposed new fees on drugmakers, reined in entitlement spending, and imposed taxes on things such as tanning beds, which lead to health care costs. But we also provided every American family with greater health care stability and extended affordable health insurance to 30 million more of our fellow citizens.
The nonpartisan, independent Congressional Budget Office -- the CBO -- estimates this bill will reduce the deficit by $132 billion over the next decade and $1.2 trillion over the following 10 years.
We need urgent action. The delay tactics and the procedural obstacles employed by the other side are hurting our fellow citizens. Every day, 14,000 more Americans lose their health coverage, and every day we remain here delaying this measure, 14,000 more Americans will lose their coverage. We have to, I think, reverse that trend and begin to fix our broken health care system.
Since 1999, Rhode Island's uninsured population has nearly doubled, growing from 6.1 percent to 11.8 percent in 2008, and it has soared up to about 15 percent today in the wake of unprecedented economic issues. But while some of us have made this debate about trying to fix a broken health care system, others have made it clear their real intention was to use this issue to "break President Obama" and make health reform his "Waterloo." Partisanship must not come before providing access to lifesaving health care to children, families, and seniors.
I also don't understand how some party loyalists who spent the past 8 years helping George W. Bush drive our economy into the ground and inflate the deficit to record levels are now obstructing every reasonable effort to fix these problems. How could they help George W. Bush double our national deficit, running it up more in 8 years than all 42 Presidents before him, and then turn around and claim President Obama isn't doing enough to control it?
How could they say this $800 billion insurance reform bill -- which is fully paid for and reduces costs to consumers -- is too expensive, but the $1.2 trillion prescription drug bill they passed -- which was financed through deficit spending and amounted, in many respects, to a giveaway to drug companies -- was somehow good policy?
How can they rail against health care reform right after overseeing the largest expansion of our government in decades?
How will they change their approach when, through hard work, we do, in fact, extend coverage and reduce cost and begin to deal with the deficit that has to be dealt with in the years ahead?
Health insurance reform hasn't always been this partisan. Indeed, many Republicans have said they support a great deal of what is in this bill but, for whatever reason, they refuse to support it. Indeed, by my count, this bill increases competition, which Republicans said they wanted. Indeed, by my count, this bill lowers cost, which Republicans said they wanted. Indeed, by my count, this bill does not contain a public option. I regret that, but that is the position I think most of the Republicans -- not all -- supported. And, indeed, this bill provides Americans with tax credits to purchase insurance, which Republicans said they wanted.
So the bill we will pass seeks to tear down the inefficiencies in the current system, curb the cost, and reduce the waste and abuse Rhode Islanders and Americans experience every day.
It is our responsibility to enact meaningful health reform. Just saying no may be a powerful political weapon, but this country is built on hope and a better future, not fear.
Health insurance reform will offer Rhode Islanders access to stable and affordable health insurance coverage. Here are some of the changes that will happen immediately with the enactment of this bill:
Insurance coverage for the uninsured with preexisting conditions will be provided through a high-risk pool within 6 months of this bill being signed into law. In my State, one plan already acts as the insurer of last resort and provides coverage for those who have preexisting conditions. This bill will support their efforts. And, all insurers will be prevented from denying coverage to children immediately due to a preexisting condition.
There will be no lifetime limits on coverage for all new policies. This means no one will exhaust their coverage plan, no matter how sick they become.
There will be restrictions on annual limits for all new policies. Insurance companies will have more difficulty denying care in the middle of treatment.
All new policies sold will cover children up to the age of 26. This is particularly helpful since graduates from college often -- particularly in this economy -- have a hard time finding employment with health care benefits.
Insurers will no longer be able to rescind coverage upon illness -- when treatments, checkups, screenings, and medication are absolutely critical.
Insurance companies will be required to cover -- free of charge -- preventive care for new policyholders.
Beginning next year, in 2011, small businesses will be eligible for a tax credit to purchase insurance for employees.
Then, in 2014, after allowing the States a time to design and develop and prepare themselves, our bill will extend affordable coverage to over 30 million uninsured Americans through a new health insurance exchange which promises to expand choice, increase competition, and rein in cost.
Rhode Islanders without a job will be able to purchase insurance on a newly established and government-regulated health insurance market. Many will receive Federal support for the purchase of coverage.
Rhode Islanders employed by a company that does not provide insurance -- or inadequate insurance -- will be able to purchase insurance on this new market exchange.
Small business owners will be able to easily compare the cost of insurance coverage offered by a multitude of plans through a new health insurance exchange, and it will allow small business owners to pick the coverage that fits the needs and budget of their employees.
Rhode Islanders on Medicare will no longer have to pay out of pocket for important preventive services and no longer spend portions of the year in the so-called doughnut hole without paid drug coverage.
Low-income adults, without children, will have access to Medicaid, which will provide them with insurance at reasonable costs.
Having access to health insurance is important. Individuals, employers, employees, and families will have access to new insurance options after reform, which is important. However, affordability -- the amount a family has to pay -- is also critically important.
We have examples of States that have already enacted insurance reform that covers their entire population, and what we found is, premiums have gone down significantly since this reform was enacted. We have learned a lot from their efforts, and Federal reform will improve upon those efforts for the rest of the country.
As I suggested before, the average premium for a Rhode Island family is $12,700. If we don't do something, experts predict this premium will double in just 6 or 7 years. Rhode Islanders will be looking at health insurance bills -- just the bills of annual premiums -- of over $25,000. Again, that is not sustainable. It will literally bankrupt the families of Rhode Island, and they will make a very difficult choice: paying this much money -- which for many, if not most, is extraordinarily difficult -- or not having insurance or doing other things, such as limiting the access their children have for college or not saving for their retirement. We can change that today by moving forward with this legislation.
The Congressional Budget Office has also analyzed the effect of this bill on the premiums that Rhode Islanders pay, and they expect premiums to decrease anywhere from 14 to 20 percent. CBO found these decreases will result from an influx of enrollees with below-average spending for health care.
One of the problems we have in the health care system today is, healthy, young people -- unless they are offered health insurance through their employer -- don't typically purchase it. They are the classic free riders. If they get hurt in an accident, they will go to the emergency room and be treated for free. They will not have paid into the system that cares for them. The whole principle of insurance is spreading risk across the largest population to reduce cost. That is precisely what we are doing. This is fundamental to any insurance program.
So this approach will actually lower the cost, as the CBO has reported. Additionally, the bill will provide permanent tax credits for Rhode Islanders to purchase insurance.
Depending on income, individual Rhode Islanders can expect a $500 to $3,000 break on their insurance costs because of these tax credits. Rhode Island families can expect to save much more -- $1,400 to $8,500 -- on their insurance through these credits. Everyone should recognize the insurance reforms in this bill will mean people will get better coverage at lower costs.
The bill also mitigates the costs facing small businesses, which in my State accounts for 95 percent of all businesses. Every year, these business owners face increasing premiums of 15 to 20 percent. They do not have much choice. Two companies control 80 percent of the market in Rhode Island, and you either accept what is offered or you go without insurance. Every year, they see double-digit increases. Again, this is not sustainable, not only over the long term but over the next several years.
Starting a business and finding the right personnel is a challenging and expensive proposition. Innovation and entrepreneurship is risky. Often startup companies have difficulty hiring qualified individuals because the business owners can't face these increasing costs of health insurance. In Rhode Island, these kinds of pressures have led to the loss of employer-sponsored health care or reduction in premium assistance from employers.
What has happened over the last several years is, real wages have been flat because health care has been taking all the extra money that in other times would have gone to increased wages. As a result, if you are a middle-income American and you look around through all the struggle and all the work you are doing and you have this sense that you haven't made a lot of real progress in terms of additional wealth or additional money put aside, it is no wonder. You have been paying the indirect costs of an ineffective, inefficient health care system. The money is going into health care. The money is going into -- in many respects -- health care that is not efficient or effective and it is not going into the paycheck of working Americans.
The reforms set forth in the Patient Protection and Affordable Care Act will strengthen the employer-sponsored health insurance market. There has been some suggestion that this is going to create no opportunities or options for employers to continue to provide health insurance for their workers.
But, according to the CBO, 83 percent of the privately insured Americans will be insured through their employers. That is a dramatic change, nearly double the total of Americans insured through their employer today.
What we are going to see is not a decrease in employer insurance but an increase. I think this is something that will match the best aspects of our economy -- individual business men and women making judgments about what plan is best for them and providing that benefit in a cost-effective way to their employees. It will occur because of a few simple changes:
First, as I mentioned, small business owners will actually receive a tax credit to purchase insurance for employees, should they choose, beginning next year, 2011. I will repeat, small businesses will get a tax credit, a tax break which they are not getting now, to help provide insurance for their workers.
Second, individuals will have the option of finding affordable insurance on their own with increased competition to drive down costs, as more people shop effectively for health care insurance.
Third, there will be lower administrative overhead and greater simplification of insurance as a result of this legislation.
Under the proposal we are considering, premiums for small businesses will stop the never-ending trend of increase after increase and will begin to come down. Making health insurance more affordable for small business owners will help them by defraying their startup costs and ensuring individuals can seek employment regardless of the benefit options.
It will foster innovation and put companies in a situation where they have an edge over foreign competitors and can win in the global marketplace. American companies today are competing against nations around the globe that either have a national system, which does not directly affect their balance sheet in terms of health insurance costs, or they have no health insurance at all, and as a result, that is not on the balance sheet of these companies. Every one of our businesses is, in some way or another, competing against other countries that heavily subsidize their insurance, that provide an advantage, a competitive advantage. We want to in some small way diminish -- in fact, in a large way at least begin to diminish that advantage.
While there have been many ill-founded claims about the reform package, the simple fact is that the tax credits provided in this bill is the largest health tax credit bill that has ever been considered in Congress. Over $400 billion in tax credits will be provided to Americans in order to increase affordability.
Since health insurance reform will provide Rhode Islanders access to affordable health coverage, our providers should no longer face the financial pressure from uncompensated care. Hospitals will care for patients with insurance, and doctors will be able to prescribe preventive measures to patients so they do not become ill. Today, it is estimated that of all the private insurance premiums we pay in Rhode Island, at least $1,000 of those premiums is to pay for uncompensated care in our hospitals, in our clinics throughout the State. When we have a significant number -- 95, 94-plus percent -- of Rhode Islanders covered, those uncompensated costs won't be uncompensated. There will be an insurance program behind these individuals, so they can seek preventive care and they can pay for emergency care and pay for regular care.
Each one of the hospitals in my state is contributing in our efforts to insure more Americans and doing so with the knowledge that they can potentially benefit from the fact that people will not be showing up in their emergency rooms without insurance but will bring their insurance card, and the support their card ensures, to the emergency room.
In addition, the safety net providers throughout the country, our community health centers, will find great support in this legislation.
There will be direct improvements for physicians in Rhode Island. The looming 21 percent Medicare payment reduction will be eliminated, as it is impending. We will continue to look for permanent solutions, not only to this issue of Medicare payments but also a payment formula used to pay doctors in a more equitable and more appropriate way.
I am also pleased that we have taken steps to improve and enhance training of a new generation of primary care physicians who will be necessary to fill the increased demand. These improvements will help our overall efficiency.
This bill will also provide seniors with an improved Medicare Program. Nearly one-fifth of my State is on Medicare; over 180,000 Rhode Islanders rely on Medicare. Seniors have paid into Medicare during their lifetime. They deserve a program that will provide comprehensive coverage at the lowest cost without risk of coverage being terminated. However, that is not the Medicare coverage Rhode Islanders always receive today. Here is what Medicare does today. Medicare frequently allows the same test for the same complaint to be performed multiple times. This costs money, but it doesn't necessarily improve patient care. Medicare leaves over 31,000 Rhode Islanders without prescription drug coverage for parts of the year. This costs them money. And Medicare today is on the path toward insolvency in just 8 short years, which will affect every senior in Rhode Island.
Instead of allowing Medicare to go bankrupt, the comprehensive health reform bill we are currently debating would extend Medicare solvency for at least 5 additional years. Some predict it will be extended for nearly a decade. This is important for seniors enrolled in the program today and those who will soon enroll in the program.
Solvency is extended by reforming the system. Seniors in my State will not have to make multiple trips to their doctors' offices for the same test for the same complaint because we will eliminate unnecessary duplication and tests and services. They will not fear being readmitted to a hospital after discharge because we will encourage care coordination after discharge. And they will not put off important preventive care because the out-of-pocket costs are just too great because the cost-sharing component for preventive care will be eliminated.
Many of my seniors are on the Medicare Advantage Program, which is a privatized version of traditional Medicare. Over 65,000 seniors in my State have elected to enroll in this option, and there has been an effort to characterize the changes to this program as undermining that program. The private insurance companies have been saying that for over a month now. Why? Because they profit very handsomely from Medicare Advantage. They spent months telling seniors health reform will take away their coverage. These claims are inaccurate.
We will eliminate excessive overpayments to private insurance companies. In my State, Medicare Advantage plans are paid over 20 percent more per beneficiary than traditional Medicare fee-for-service. This overpayment is particularly astounding given the fact that the Government Accountability Office found that 19 percent of Medicare Advantage beneficiaries pay more than traditional Medicare for home health care and 16 percent pay more for inpatient services. Seniors should be angry and upset at insurance companies, that they continue to profit from the Medicare system while simultaneously taking more money from seniors' pocketbooks as they charge extra for these services. This was not the intent of the program. In fact, the intent of the program -- the argument the insurance companies made is: Give us the flexibility to manage Medicare patients, and we will lower costs. Very shortly after that, it became clear that they were not managing the costs that well.
Of course, the bill is going to target waste, fraud, and abuse. For every $1 we spend in this effort -- and you have to invest in this fraud detection -- we expect to recover $17.
Our efforts will improve health care of seniors and will stabilize Medicare.
Also, we should note that we will be doing significant amounts with respect to children. I particularly applaud Senator Bob Casey's amendment to ensure that Rhode Islanders on Rite Care will not have to fear losing their safety net coverage.
Finally, it is important to note, as I mentioned before, that these reforms are paid for. This is a stark contrast to others. We voted on the Medicare prescription bill in 2003, which I opposed. It was unpaid for, and it was more costly than the amendment which was originally presented to us.
We voted on countless measures outside the normal process of budgeting to fund the wars in Iraq. We voted tax cut after tax cut for the wealthy, which has left my State not prosperous and wealthy but 13 percent of my State unemployed and 15 percent of my neighbors uninsured.
We are moving forward to reduce the deficit with this bill, to provide valuable coverage, to ensure the promise of health care in the United States is fulfilled, not denied.
I yield the floor.