Mr. Speaker, tonight I am honored to be able to speak this evening about the issue of universal health care, one of the biggest domestic challenges that is facing our country at the present time. I am also pleased to be joined this evening…
Mr. Speaker, tonight I am honored to be able to speak this evening about the issue of universal health care, one of the biggest domestic challenges that is facing our country at the present time. I am also pleased to be joined this evening and who will be speaking in just a few minutes, by the gentleman from Connecticut (Mr. Shays) on the issue of universal health care.
Mr. Speaker, again I am very pleased to have this time to speak on a topic that remains of paramount concern to individuals and families across the country, and that is again the issue of health care in America.
Health care costs, Mr. Speaker, are rising in the United States at an alarming, alarming rate. Yet despite the fact that we spend more per capita on health care than any other industrialized country, we produce very disappointing outcomes by a number of important measures. One major attributable factor is the high level of uninsured in America.
Furthermore, the U.S. remains the only developed nation that does not guarantee health coverage as a right to all of its citizens. Today, there are nearly 47 million Americans who lack health insurance coverage, leaving one in six without access to proper medical care. What makes these figures more shocking is that over 80 percent of the uninsured come from working families. As the cost of health care continues to rise, it is clearly burdening our families and placing American employers at more and more of a competitive disadvantage. Therefore, I believe it is our duty as policymakers to offer a new vision and new solutions to fix our ailing health care system.
Providing quality, affordable health care to every American has been a long-time priority of mine. And it is in this spirit of furthering the national dialogue on this important issue that my colleague from Connecticut, Congressman Chris Shays and I have worked together to introduce H.R. 5348, the American Health Benefits Program Act of 2008.
This bipartisan universal health care proposal is based on a tried- and-true program that has stood the test of time, and that is the Federal Employees Health Benefits Program or FEHBP as it is called. Currently over 8 million Federal employees, retirees and their dependents receive health insurance coverage under FEHBP. This includes Members of Congress.
This program uses a system of managed competition between private insurance carriers and provides enrollees with a large menu of coverage options. Its use of bulk purchasing power helps contain costs and brings stability to the system. In 2007, this resulted in an average premium increase of just 1.8 percent compared to the private market average of 6.1 percent. And by the way, I have yet to come across an employer, at least in my home district, or anywhere in the country, for that matter, who has only realized a 6.1 percent increase in their health care costs. Generally it is in the double digits and sometimes you can be talking about 20 or 30 percent or more increases to a given health care plan in any given year. Our proposal basically would use that successful model to provide similar benefits to all Americans, establishing the first ever American health benefits program or AHBP.
Now the development of AHBP will be guided by eight fundamental principles, and they are on this chart to my right: choice, shared responsibility, affordability, portability, continuity, preventive care, and health care reinvestment. I believe these are the types of principles that we have to have in any type of system and they are certainly the core tenets of our universal health care proposal.
Now under AHBP, employers who wish to continue negotiating with private insurance carriers may do so as long as the coverage they offer meets a basic standard set by AHBP. However, employer-sponsored coverage is proving to be more and more cost-prohibitive for businesses as health care costs continue to outpace inflation and insurance options drastically fluctuate from plan to plan. That's why AHBP allows companies to choose to pay a fixed predictable payroll tax according to their size and average employee earnings.
We have a chart here which says that depending on the average number of employees that a company has, as well as according to their average salary, they would pay a certain percentage of their payroll tax. For example, on the very lower end where you have the small businesses that have the lowest average earnings, that company would only pay a maximum of 4 percent of payroll.
On the higher end, you would have the companies that at the very highest end would pay no more than 10 percent of payroll. There would be a certain cap on the average earning itself.
So my point is that there is a range of options here. There is a range of plans to choose from, but this is also an affordable way for employees to have health care coverage.
Basically we are separating out the coverage from the workplace itself. We need to get away from the issue of just employer-sponsored coverage. I think it is the best way to go, and it is a sensible proposal.
For many businesses this may cost less than they currently spend on premium contributions and health care and health plan administration. Payroll tax revenue under the system we are proposing will basically create a funding stream to allow for a fixed government contribution of 72 percent toward health care premiums of every participating American.
Individuals in AHBP will have the responsibility to pay for the remaining share of their premiums, to the extent that they can afford it, again with the lowest income earners receiving subsidies to ensure affordability.
This new program is not a single-payer system. It is not one size fits all, and it does not reinvent the wheel. Medicare, Medicaid and veteran services and other public programs that are tailored to specific populations will remain intact. Additionally, no one will be denied coverage or discriminated against based on their health status or preexisting condition. That is a very important tenet of this proposal.
AHBP will use basically an expanded system of managed competition to ensure that private insurance carriers compete for enrollees on the basis of benefits as well as efficiency, service and price. It will offer portable and continuous coverage and incentivize investment in disease preventive and
long-term preventive care which decrease the costs of care over time.
Investments in health information technology will also lower costs while increasing quality and efficiency.
Mr. Speaker, instituting meaningful systemic reforms will require a fundamental shift in how we view employer-provided coverage and health care delivery. While it is critical that businesses maintain a role, I believe it is essential that we change our perspective of health insurance as a privilege or benefit tied to employment. Instead, we must look at it as a right and a responsibility to be shared by the community. Individuals and employers, health care providers and the government, all have key roles to play in reaching a truly inclusive and efficient health care model.
The unsettling truth is that society already pays for the uninsured. Some think that there is no cost associated with the uninsured. That is completely not true. Society already pays for the uninsured, but it does so at tremendous cost and with staggering inefficiencies. Individuals without health insurance are most often forced to seek care from doctors and hospital emergency rooms only after their illnesses reach catastrophic levels, drastically increasing the risk of complications and the cost of treatment.
Our most recent estimates place total uninsured medical expenses at nearly $125 billion a year. That is staggering. Approximately $41 billion of this total comes in the form of uncompensated care which is predominantly borne by the government and financed by the taxpayer. Beyond this, the cost is also reflected in the form of higher health insurance premiums that everyone pays. This cost is only compounded by the lost income due to reduced employment and job productivity. However, Mr. Speaker, the most disturbing costs are not the monetary costs in nature, but the immeasurable price that we pay in human lives each year as a result of inequitable, inadequate care.
A recently released analysis estimated that 22,000 deaths nationwide occurred last year resulting from adults not having health insurance, averaging one death every 24 minutes. This is simply an unacceptable price to pay for delaying necessary reforms to our health care system, and we need to change it.
The challenges we face in fixing our ailing health care system are great. However, the costs of inaction are even greater.
Mr. Speaker, the time has come for policymakers at all levels and across the ideological spectrum to take action toward developing a health care system that really works for our Nation, one that offers Americans choice, calls for shared responsibility, and is affordable to all.
I believe our proposal introduces a practical model for universal health care while leaving room for further discussion on this very complex issue. And, Mr. Speaker, I believe this is not a Democratic or a Republican issue. It's not a conservative or a liberal issue. It's an issue that matters most to the American people.
And on that note, I am pleased to yield this evening to the gentleman from Connecticut, my partner in this bipartisan universal health care bill and this effort to finally, once and for all, solve our Nation's health care crisis, the gentleman from Connecticut, Mr. Chris Shays.
I thank the gentleman for his words and also his passion and support on this bipartisan universal health care bill. Your input has been invaluable in crafting this bipartisan bill and bringing it to where it is today, and we hope that this, now, continues, where we begin the process of fixing our health care system, bringing it to the top of the public policy agenda. It is clearly long overdue.
The American people are asking, they're demanding that we fix our health care crisis, and that we cover the uninsured, not only cover the uninsured, but making health care affordable. This is something that's long overdue.
I think it's a national disgrace that we have 47 million people in this country without health insurance. And as we have both pointed out, that because of that, it's a major contributing factor in that we have the highest cost and the worst outcomes in comparison to other industrialized nations. Again, the high number of uninsured is a major contributing factor to that statistic.
So the fact that we have a bill now is exciting because it's based on a template, a tried and true program that's already working.
When I first came to this debate, I said, this is one of the most, the biggest challenges facing our country right now. And I said, why can't we solve it? And is there anything out there that is working now that serves as an example of what we could base a universal health care system on?
And after studying it and looking at it, I said it's really right before us, and that's the Federal employees health benefits program. Right now, we have, the Federal Government, as mentioned earlier, negotiates a variety of different health care plans for more than 8 million Federal employees, dependents and retirees. You've got everything, and the choices of options that are available, from the very basic plan with the small premium and the small copay, up to the more classic comprehensive Blue Cross-type plans and everything in between.
That's right. Using bulk purchasing power is the thing, by getting more people into one insurance pool, we spread risk around, and it achieves cost containment and stability in the system.
That's right. Absolutely. And it's equally important to recognize that this is not a big government-run plan. We're not creating another big government bureaucracy. It's government negotiated but it's private competition. It's managed competition. Private insurers would be able to compete for now enrollees based on benefits, efficiency service and price. So the insurance companies have an incentive now to economize, find efficiencies. They would have to deliver on what has been negotiated in the various plans, and that would be clearly spelled out, but they would now be challenged to find ways to do things like invest in preventative and early care, which there really isn't necessarily the incentive, I believe, right now for insurers to do that, because, for example, when it's tied to employment, you know, we all, people change jobs several times throughout their careers. There's no guarantee that an enrollee that starts with an insurance company today is going it would be Insurance Company B, you know, wouldn't be with the Insurance Company A years down the road. They would be with potentially another insurance company, which means, you know, why should Insurance Company A invest in all this early preventative care, when, down the road, when someone gets older and we all become greater consumers of health care, that, why would they, that company wouldn't benefit from the investment that they made, where under this system they would. You may change plans within a particular company, but you may very well be with the same insurance company or plan throughout most of your life.
Right.
Right.
And I think that is an important point, if I could just interject. The high costs of health care now are putting not only a tremendous burden on our individuals and families, but it's putting our companies at a significant competitive disadvantage in terms of those companies overseas whose nations have universal health care. And so it is not particularly burdening in individual business itself in foreign countries where it is here where companies bear much of the costs of providing universal health care.
So we're helping to change the dynamic, if you would, of how health care is provided in America. And, again, we're changing it from an employer kind of run system, a sponsor system, to now a universal health care model that everybody is participating in, and it's not necessarily tied to employment. Again, businesses still have an important role to play, we all do. Businesses, government, health care providers.
Right. And that's an important point to make.
There are some employers that, though they offer health insurance, the company may only offer one plan, and it may not fit the needs of all of the employees. It may be good for some but, again, not everyone.
Under this plan, there would be a variety of plans to choose from: again, a very basic plan with a small premium, a small copay, up to the more comprehensive-type programs, and several options in between. And it's basically bringing everyone into one insurance pool.
So you're bringing a younger, healthier population into the program; you're spreading risk, which leads to more stable costs; and we talked about the fact that the Federal Employees Health Benefit Program under last year only had a 1.8 percent increase in its health care plans on average and the private sector had about a 6.1 percent increase. And I think that's even modest.
So, again, a good model here.
I'm glad that you raised the issue of the commission because it is important to look at the reasons for the rising costs of health care and then look at what options we can employ to achieve cost containment and bring stability to the system. Things like employing health information technology, the electronic medical records that we're talking more and more about these days, the cost of prescription drugs and how that system is run, and how we pay for prescription drugs. I'm looking at performance-based outcomes that the commission would look at. Again, all important tenets of achieving cost containment.
And you rightly pointed out that employers, in determining whether they like the system or not, are going to look at the range of costs or percentage of payroll that they would contribute based on the size of their company. Employers, I suspect right now, hopefully this will encourage them to ask, what are we paying as a percentage of payroll right now, and that figure will determine, in many ways, whether this system works better or worse for them. I suspect that in many cases it will be better.
And we pointed out that the smaller companies with the lowest average salaries would pay no more than 4 percent of their payroll toward this payroll tax. And the larger companies with the highest salaries would pay no more than 10 percent of payroll and not to exceed more than $12,000 per employee.
Absolutely.
I couldn't agree more. This is one of the most challenging issues facing us in our time right now. It's going to take time and effort to get the message out and hopefully encourage support for our plan.
I'm glad that you and I have made a commitment to travel the country so that we can help to bring the plan before people, hopefully to educate the American people about what we're proposing, and offering this as a viable solution to our Nation's health care crisis. It's clearly long overdue. And in my home State of Rhode Island, it's the number one domestic issue that I hear most about. It is directly tied in many ways to the health of our economy and making sure that our companies can be competitive in this global market. It's important to individuals and families.
And no person should have to worry if they're going to lose their home because they come down with a catastrophic illness or a family member comes down with a catastrophic illness, but that happens every day across this country right now because of the present health care system. And again, it's not that there is no cost associated with the uninsured. If someone is that sick and they need to be treated, they're going to go, very often, to the hospital, to the emergency room where they're going to be seen. But usually by then it's at the end stage of an illness where a person is so sick that they have to be likely hospitalized, or the cost of treating them is far more expensive than it otherwise would have been at the earlier stages when early intervention, early care would have made all the difference if it were with a prescription or some other treatment. Now we're offering a system to change that.
I thank the gentleman from Connecticut again for his words and his support in helping to craft this bipartisan universal health care bill.
Like you, I believe that the American people deserve the same kind of health care coverage as Members of Congress. And this is a bill that achieves that goal. It's something that is long overdue. It's something that is vitally important to every family across America, making sure that our families are taken care of, our businesses can stay competitive, and that we're offering something that is affordable, not only for the short term, but for the long term.
In closing, for individuals, the American Health Benefits Program offers choice, affordability, and portability. You can take the coverage with you if you change jobs. And on the side of how we provide this coverage, it's managed competition whereby insurers would now have to compete for enrollees based on benefits, efficiency, service and price; again, a good model for guaranteeing coverage, but making sure that it's affordable, with an important component of cost containment, making sure that we're looking at using the most innovative technologies out there, such as health IT records, and other things that would make sure that we're providing the most efficient and affordable care possible, but comprehensive care.
I think my friend has some other comments that you would like to make as we close?
I thank my colleague. And I couldn't agree more. We want people to look at this plan, tell us what part of it they like, what they don't, what works, what doesn't, so that we can improve upon it. And certainly it's important for people to get educated because this is an issue that is clearly confronting our country. It is serious, it is challenging, but the time to solve it is now.
We're beginning the process. We invite the American people to be partners with us in this effort. I look forward to traveling the country with you as we talk to groups across the country and hopefully enlisting their support,
and ultimately the support of all the Members of this House and the Senate.
I look forward to the day where we can pass this bill in both Chambers and put it on the President's desk for the President's signature, and again, truly make a difference for the people that we serve. I think it's the right thing to do.
With that, I thank my colleague from Connecticut for his friendship, his valuable input and support on this bipartisan universal health care bill. And I also want to take a minute just to thank the Speaker for giving us time to discuss this very important issue.
Thank you. I thank my staff as well. It is something that often gets overlooked, and I want to make sure that it's not because your staff and my staff have worked so closely on this, as well as the effort that you and I have put in. A lot of great work has come from this collaborative effort. And I thank you again for your support and your input.