Madame Speaker, the American healthcare system is clearly in need of reform. Yet at the same time our system of healthcare continues to be the envy of the world in producing life saving innovations in the pharmaceutical industry, medical procedures and treatment. Congress must act to help bring down costs and expand access to health insurance while preserving the quality of care patients receive in this great nation.
I have heard many of my Democrat colleagues and the President speak of the need to increase competition in the health insurance marketplace to help reduce cost. I could not agree more. But, where I part company with my Democrat colleagues is their prescription for the problem. The way they want to increase competition is to create a new government insurance company, better known as the public option, to provide this competition.
They have demonized insurance companies in an effort to build support for this misguided plan even though recent public opinion surveys have shown that 80% of Americans are satisfied with their current plan.
My concerns with the public option, which are shared by wide swaths of the American people, are that it would have an unfair advantage that could crowd out private healthcare and it would put huge new costs on the American taxpayers. For months the President has said “If you like what you have – you can keep it.” Then last week the President changed that and instead said “there is nothing in the bill to force you or your employer to change what you have.”
It’s true that nothing will force you or your employer into the public option, but the bill before the House has perverse incentives to encourage your employer to do just that. The bill mandates individuals to purchase insurance and it requires large employers to provide care for their employees.
Businesses that don’t provide healthcare insurance will be taxed at 8% of their payroll as a penalty. Most employers will tell you that healthcare costs typically runs about 14 to 16% of their payroll. So businesses that are struggling to make ends meet will now face a choice, either continue to pay about 15% of payroll to provide coverage of their employees or dump them onto the public plan and pay the 8% penalty. That’s a pretty easy business decision that unfortunately has broad implications on their workforce.
Additionally, employers will now have an equally perverse incentive to keep wages down and to not add jobs because if your employer gives you a raise or adds new jobs they also raise their own taxes. Mr. Speaker There is a better way to reduce the cost of insurance at virtually no cost to government.
And that is simply to allow individuals and businesses to purchase health insurance across state lines. Lifting this restriction would bring hundreds if not thousands of new competitors into the private marketplace to compete for business. That would absolutely reduce costs and is a simple change which we could enact immediately.
The President made an analogy to private auto insurance. I would remind the President that auto insurance can be purchased across state lines and there is no public option for auto insurance. The market regulates itself to keep costs down.
Additionally, millions of Americans today have their healthcare covered by a health savings account. If H.R. 3200 is enacted health savings accounts will be gone and those who utilize them will be forced to change coverage. That is actually less choice and less competition in the healthcare industry. We can do better.
I was glad last week that the President said he would look at pilot programs with regard to medical liability reform. For too long trial lawyers have looked at doctors as ATM machines and filed countless junk lawsuits.
This has driven up costs by forcing insurance companies to settle because these suits cost too much to fight regardless of their merit and the costs are passed along to doctors in the form of higher premiums and ultimately to healthcare consumers. It also has made it more difficult for specialty doctors like OB-GYN’s to practice and limits access, particularly in rural areas.
Many states have enacted caps on non-economic damages. In every place this has happened doctors have moved in, lawyers have moved out and costs have gone down. So I was disappointed when the President said on 60 Minutes this weekend that he doesn’t believe caps work.
Respectfully Mr. President, actually, caps on non-economic damage is medical liability reform. The American people are rightfully concerned about how any reform will impact out of control federal spending and our exploding deficit.
It just stretches credibility when people are told we can create a public option, expand access and availability of care and do so without dramatically increasing taxes or expanding the deficit. You can’t get something for nothing, particularly when the government is involved.
And seniors find it difficult to believe that we can pay for some of this by reducing spending on Medicare by $600 billion and not impact their level of care. The proponents say these cuts would just be waste, fraud and abuse. Well if there is that much waste, fraud and abuse in Medicare we should be attacking it regardless of other health reforms and we should prove those numbers before we put the taxpayers on the hook for more government spending.
And many of the American people simply aren’t buying the idea that the plan outlined in H.R. 3200 is deficit neutral. Just six months the administration told us that the 10 year budget deficit would be an astonishing $7 trillion. Then late last month the administration revised those numbers and told us it would be $9 trillion. A nearly 30% increase in long term deficits in the space of six months.
This out of control spending is literally burying our children and grandchildren under a mountain of debt and must be stopped. Madame Speaker, I agree that we need health care reform, but this radical plan is not the right approach.
We can do better.
155 Congr. Rec. H9493. (2009). https://www.congress.gov/congressional-record/volume-155/issue-130/house-section/article/H9493-5.