Mr. President, I still hope that we will be able to achieve this measure.
I have gone into, in some detail, the principal concerns of the issues on medical savings account. But there are a few items that have been mentioned with regard to medical savings accounts that were not mentioned here in the course of this afternoon.
Let us understand that if insurance companies want to sell medical savings accounts, they can do that today. They do not need to have additional legislation. For those that say let us have the free choice, individuals can be out and purchase those measures at the present time. A number of States have begun to set up their own medical savings accounts. So the idea that we are denying some kind of free choice is virtually inaccurate and a distortion and a gross misrepresentation about where the medical savings account issue is.
Individual companies--and there are the companies, for example, like the Golden Rule Insurance Co., that are out selling medical savings accounts today. Of course, it is true that Golden Rule Insurance Co. has been drummed out of the State of Vermont because of the way that they have exploited consumers. And it is true that Golden Rule Insurance Co., the principal company that would benefit from medical savings insurance companies, refuses to share market information with even the American Academy of Actuaries so that we could get a real reflection as to what has been the experience of that company. When asked by the American Academy to share their data, Golden Rule said, absolutely no, we will not do that, even though they have experienced extraordinary profits in this area.
Nonetheless, Mr. President, one of the factors that was not raised this afternoon was the fact that we are talking about the cost to the American taxpayers by those that are proposing medical savings accounts. The Joint Tax Committee has estimated that if there were just to be 1 million Americans out of the pool of about 130 million Americans who purchase health insurance, if we have to have 1 million of those, the cost to the taxpayers and to the deficit would be $3 billion for 1 million people. That is not what I am saying. That is what the Joint Tax Committee is saying.
We are talking about when you are going from 1 million to 10 million to 20 million, or as the Rand Corp. considered, 70 million, you do not need much of a slide rule to understand what this is going to do to the Federal deficit, let alone health care policy.
So it is so interesting to me to hear out there many of our Members saying, `All we want is freedom. All we want is freedom.' Sure it is all they want is freedom to put their hands into the till of the Federal Government and take out billions of dollars to subsidize what will be primarily a benefit for the richest individuals in this country; the richest individuals in this country. And we pointed that out over the course of the debate and the discussion. I heard one of my colleagues talk about the fact that there were some Democrats that wanted this at another time. At another time, we were talking in the context of a comprehensive health care reform where we were going to have effective cost controls, an entirely different situation than we have today.
So those who are out on the floor with their big charts saying what is wrong with these words that were stated a few years ago, I daresay that is when we were talking about a comprehensive program with effective kinds of cost containment, which is not what we are dealing with today. Anyone should understand it. I question whether it would have been really justified even at that time. But, nonetheless, there were those that believed it ought to be given a try, and that was an issue within that context that I think was legitimate. But that is not what we are talking about.
Make no mistake about it. We are talking about underwriting the health care insurance for the wealthiest individuals at the expense of the average taxpayer. The Joint Tax Committee has pointed out, well, if you spend $3 billion, how much of that would go to average working families? How much would they benefit from that? One percent of that $3 billion would benefit average working families. Who gets the rest of the 99 percent? The ones that get the rest of the 99 percent are going to be in the highest income brackets. That is just one issue that ought to be debated and discussed.
There is a body of opinion in the Senate and in the House of Representatives that support this concept. Certainly we ought to have an opportunity to review it. We ought to examine it. We ought to have at least an opportunity to see whether the greatest fears about what it would mean in terms of cost and what it would mean in terms of skewing the whole insurance system and what it would mean in terms of preventive care are true--we ought to at least have an opportunity to test that.
The President of the United States has indicated that he would sign a bill, if there was a proposal that would really test this idea, in an area that provided a real test about medical theory and about the costs of this program over a reasonable period of time, which seems to me to be a reasonable position. Why we have to deal with this at this time is beyond me. But nonetheless, it is a matter which is at least before the House of Representatives.
Mr. President, I will include in my full comments the various opinions that have been made about the American actuaries, what they believe will be the impact in terms of the cost of health insurance, the analysis which has been made about who would use this, who would benefit and who would suffer under this program, what the impact would be on children who are so often the ones who are left out and left behind, and the fact that medical savings accounts will effectively discourage all preventive care in terms of needy children in our society and what the Congressional Research Service said was going to be the health implications. These are important matters. I believe that the Senate, before it is going to jump into this program, ought to have very complete answers to it.
So I hope if we are going to have an opportunity--and certainly we should at some time--to get to the issue of medical savings account, the American people ought to understand that we have the opportunity in the House of Representatives and the Senate of the United States to do something meaningful for millions and millions and millions of American families today. We have a proposal that will make a difference to those families--more than 25 million of those families. It passed unanimously in the House and the Senate of the United States, with broad bipartisan support. Our urging is that we take that very important, modest but very, very important proposal and that we move it down to the President's desk and we get on with it. If there are other measures that ought to be debated, let us debate them but not on this bill.
Mr. President, if we follow that recommendation of the Senator from Kansas [Mrs. Kassebaum] and those of us who are members of the committee, we can do something truly worthy to be remembered in the area of health care reform.
Mr. President, medical savings accounts do not belong in the Kassebaum-Kennedy health insurance reform bill. They have already been rejected by the Senate. A bill containing them cannot be enacted into law and signed by the President. They are an untried idea with the potential to destroy the access to affordable, comprehensive coverage that tens of millions of Americans now enjoy.
Millions of Americans need insurance reform, so that they can be secure in the knowledge that their health care, coverage cannot be taken away because they become sick, because they change jobs, or because they lose their job. Their hopes should not be held hostage to this extremist, special interest proposal. But because the Republican leadership in the House and Senate is pursuing a rule or ruin approach to this legislation, their hopes may be dashed once again.
Medical savings accounts sound good in theory. Why not encourage businesses and individuals to buy less costly high-deductible health insurance policies and put the premium savings into a tax-free account that can be used to pay some routine medical costs? But in this case, what sounds like good medicine in theory is quack medicine in practice.
Medical savings accounts are an idea whose time should never come. Under conservative estimates by the Joint Tax Committee they are a $3 billion tax break for the wealthy and healthy. As the Center on Budget and Policy Priorities said, `MSAs create new tax shelter opportunities. Use of an MSA would be highly advantageous to substantial numbers of higher income taxpayers. Low and moderate-income taxpayers would receive little or no tax benefits from using MSAs because they either do not pay income taxes or pay taxes at much lower rates.' The American Academy of Actuaries concluded that medical savings accounts are `Taxing money from the unhealthy and giving it to the healthy.' The Joint Tax Committee estimated that only 1 percent of the tax benefits would go to people with incomes of less than $30,000.
If more people enroll in these accounts than Joint Tax has estimated, as many analysts believe will happen, the cost could rise to the tens of billions. How ironic that those who are loudest in their clamor to reduce the deficit are willing to waste these vast sums on this destructive special interest boondoggle. If we have billions to spare, they should be spent on reducing the cost of coverage for hard-working American families or on deficit reduction--not on a perverse income transfer from the poor and sick to the healthy and rich.
Medical savings accounts raise premiums for the vast majority of Americans--especially those who are sick and need coverage the most--by siphoning the healthiest people out of the insurance pool. As premiums rise, more and more working families will be forced to drop coverage. In the words of the Congressional Budget Office, medical savings accounts `could threaten the existence of standard health insurance.' Mary Nell Lenhardt, Senior Vice-President of Blue Cross and Blue Shield concluded, that MSAs destroy `the whole principle of insurance.' A new report by the Urban Institute concludes that, even under conservative assumption, premiums for comprehensive coverage could rise by 40 percent. If a higher proportion of people shift to MSAs, the cost of comprehensive coverage could rise by more than 300 percent.
Moderate income people who choose medical savings accounts could be exposed to financial disaster if someone in the family becomes seriously ill. As the American Academy of Actuaries said, `individuals and families who experience significant medical expenses soon after the establishment of MSA programs will face high out-of-pocket costs. These high out-of-pocket costs will not be randomly distributed. They will be concentrated among older workers and their families and among those with disabilities and chronic illness.' The last thing that the American people need--especially those who need health care the most--is another massive increase in the cost of medical care.
Because they encourage high deductible plans, medical savings accounts discourage preventive care. According to the Congressional Research Service, high deductible plans that come with MSAs have meant that poor children are 40 percent less likely to get the care they need as compared to fully-insured children. This is the wrong direction for health policy.
Medical savings accounts are a giveaway to the insurance companies who have the worst record of profiting from the abuses of the current system. But the American people should not have to pay such a high price to reward them--even in return for $1.5 million in campaign contributions over the last 5 years. It is no accident that a company like Golden Rule Insurance favors medical savings accounts. This is a company that is ranked near the bottom by consumer reports because of its inadequate coverage, frequent rate increases, and readiness to cancel policies. When Golden Rule withdrew from Vermont because they were unwilling to compete on the level playing field created by insurance reform, Blue Cross and Blue Shield took over their policies. They found that one in four policies included an exemption. Whole body parts, like arms, backs, breasts, and even skin were written out of coverage. Newborns were excluded unless they were born healthy.
The Republican medical savings account plan includes absolutely no guarantees that companies profiting from selling these policies will be prevented from abuses like this in the individual market. Moreover, although MSA's are billed as providing catastrophic protection, there is no requirement that they have reasonable life-time limits or not impose excessive co-payments when the deductible level is reached.
It is shocking that the very company that has provided the financial engine behind this right-wing proposal has refused to share any data about its plans with the American Academy of Actuaries or other impartial analysts. Golden Rule knows that medical savings accounts can't stand the light of day--and that's why they are tying to ram them through on a bill that the American people want.
Some Republicans are anxious to include MSA's in the insurance reform bill because MSA's are part of their long-run plan to dismantle Medicare and turn it over to private insurance companies. This is a foot in the door for that item on the right-wing agenda--and this, too, has no place in an insurance reform program.
No respectable health policy analyst supports medical savings accounts. Newspapers from the Washington Post to the New York Times to the Los Angeles Times to the Boston Globe have condemned them. The President has said that they could doom the bill's prospects for becoming law. They don't belong in this bill--and I urge my colleagues to reject them.
Finally, Mr. President, I would like to say a word about the charge that I am blocking the appointment of conferees. The fact is that the list of proposed conferees the Republican leadership has offered is unprecedented in its unfairness. In the last three Congresses, there has been no conference that has been so stacked. The only reason for this unacceptable proposal is to try to ram medical savings accounts--a proposal the Senate has already rejected and which will kill the bill--into insurance reform.
Republicans leaders know that Americans want the reforms promised in this bill and have little interest in medical savings accounts. That is why Representative Kasich said, on March 24, `We will not let medical savings accounts destroy the ability to give people portability and eliminate pre-existing conditions.' On March 29, Speaker Gingrich said he would not let medical savings accounts stand in the way of a Presidential signature. But the American people should know that there is a vast gap between the words and the reality. In spite of repeated offers from the Democrats to sit down and discuss the issues in the bill, in spite of three separate Democratic proposals for a sensible compromise on medical savings accounts, Republican leaders have been unwilling to negotiate and unwilling to back off their insistence on this poison pill.
Whether the issue is tax fairness, preservation of comprehensive health insurance for the vast majority of Americans, or the special interests versus the general interests, medical savings accounts are bad medicine for our health care system. They are a poison pill that would kill health insurance reform. The Senate has already spoken. It is time to send a clean bill to President Clinton without further delay. The American people are waiting.
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PROBLEMS WITH MEDICAL SAVINGS ACCOUNTS
1. LAVISH TAX BREAKS FOR THE RICH
The $1.7 billion revenue loss will go almost exclusively to the highest income and healthiest Americans.
Joint Tax Committee Analysis concludes that less than 1% of those who will purchase MSAs under this amendment will make less than $30,000 a year. Virtually no one will purchase these plans who makes less than $20,000 a year.
The well-to-do will be able to use MSA as a second IRA, except that this IRA will have no income limits and will accrue disproportionately to the extremely wealthy. People choosing this option with large assets can use their own money to pay their medical bills and protect their tax deferred MSA savings.
Health care analysts are virtually unanimous in their opposition to MSAs.
The American Academy of Actuaries says that MSAs are, `Taking money from the unhealthy and giving it to the healthy.'
The Center on Budget and Policy Priorities says, `MSAs create new tax shelter opportunities. Use of an MSA would be highly advantageous to substantial members of high income taxpayers.'
2. HAND-OUT TO GOLDEN RULE INSURANCE COMPANY
To select MSAs, an individual is required to select a catastrophic insurance plan, and Golden Rule is one of the largest marketers of catastrophic plans in the country. MSAs would simply allow Golden Rule to greatly enlarge their market.
The company has given $1.6 million in political contributions to Republicans over the last 5 years.
They are near the bottom of insurance company rankings done by consumer groups, such as Consumers' Union, because they provide inadequate coverage, frequent rating increases, very aggressive underwriting, and readiness to contest claims and cancel policies.
3. UNRAVELS HEALTH INSURANCE AND INCREASES PREMIUMS FOR WORKING AMERICANS
Because healthy and wealthy individuals are most likely to purchase MSAs, those who remain behind in the traditional insurance plans will likely face higher premiums because the insurance pool has been weakened.
The premium increases could be high enough to force lower income working people to drop their coverage.
Insurance pool for ordinary Americans without MSAs will suffer both from healthy people pulling out to obtain MSAs and also from individuals with MSAs who become sick going back into the traditional insurance pools.
4. PART of THE REPUBLICAN PLAN TO `WITHER AWAY' MEDICARE
This Golden Rule plan is the tool that Republicans want to use to have Medicare `wither on the vine.' It is advocated by Speaker Gingrich--who coined this phrase and by Leader Dole, who proudly talks about his vote against the original enactment of the Medicare program.
Clearly, Medicare MSAs have an even greater potential to undermine the financial stability of the Medicare program to both beneficiaries and the taxpayers who support it by exposing the program to an option that rewards cherry-picking healthy beneficiaries--not competition over cost and quality. Medicare MSAs were included in the Republican reconciliation bill vetoed by President Clinton in December, 1995.
Today's amendment is just the first step back toward the Republicans and Golden Rule's ultimate goal of putting in MSAs into the Medicare program. They were rejected doing Medicare MSAs when the President vetoed their excessive Medicare cuts; now--through today's amendment--they are setting the stage for pushing Medicare MSAs as the next logical step.
5. DISCOURAGES PREVENTIVE CARE
MSAs may discourage cost-saving preventive care, such as annual check-ups, immunizations and other wellness efforts. The high deductible coverage associated with MSAs may lead to delayed care and under-utilization of routine and preventive health care services.
MSAs divert participation from managed care. Capitated plans and other managed care arrangements hold the promise of coordinated, quality-tested care and cost efficiency not provided through MSAs.
MSAs will not promote cost containment in the long-run. By allowing people to have MSAs when they are healthy but switch to more traditional coverage when they become ill, the MSAs simply become a vehicle for sheltering income, not a means of promoting more cost-conscious consumers.
