Sure. I thank the gentleman, Dr. Cassidy, my colleague from Louisiana for doing a Special Order today, an opportunity to speak on that very subject. Yes. What you're referring to is a case in which my companies, my nonmedical companies,…
Sure. I thank the gentleman, Dr. Cassidy, my colleague from Louisiana for doing a Special Order today, an opportunity to speak on that very subject. Yes. What you're referring to is a case in which my companies, my nonmedical companies, seeing health care premiums rising an average of 10 to 15 percent per year, we found that to be an unsustainable increase. And we began to analyze what are the choices, what are the options. Maybe we would pay less of the premiums, perhaps we would just stop insurance all together. We really weren't sure what we could do.
And then I recall something that at that time was a brand new concept, and that is a health savings account, where you lift the deductible of the policy to a higher level, saving a premium cost, but then, in turn, put the incremental increase that comes up to what the premium would be into a health savings account. So we began that about 6 years ago. We brought the deductible up to about $3,000. And employees would get as much as $50 a month put into their health savings accounts where they could purchase any health care service or item they needed, pretax.
In explaining this to my employees, however, as we gathered together, I wanted to make sure everyone was on the same page. I suggested to them that this was the way we probably would want to go, but I wanted to get the input as to what their concerns might be.
We had a lady who said, ``Well, you know, the problem with this is my inhalers. If I have to pay for them out of my pocket or my health savings account each month, it is going to cost me $100, maybe $150 a month. And true enough, this would come out of my health savings account, but I don't know that my health savings account would be able to withstand that.''
So I said to her, ``Well, let's think this through. Perhaps you should consider doing a smoking cessation program, stop smoking altogether. You could throw away all of your inhalers; you would save money on the cigarettes; you would save money on the money accumulating in your health savings account.''
Sure.
Basically, you're absolutely right, Dr. Cassidy. What we are really doing is saving her money and saving her life because there is no question there is direct correlation, an inverse correlation, between the use of tobacco and health. By the same context, if you stop smoking, then life span increases.
So we found in very real terms that it saved premium costs--both to the employer and to the patient--by instilling the health savings account and attaching behavior with costs. And even today, we received notice on our most recent new policy for the coming year. The increase was 3\1/2\ percent, which is really amazing when it comes to health insurance policies.
Yes.
This is a fast food business. It's a steep pyramid which means you have a wide base of entry-level employees and then middle management and then just a few high-income folks. Remember, the employer is putting the money into the health savings account. That doesn't mean that the patient or employee can't also put some money in, but the lion's share was put in by us. And now after 6 years or so, those who have taken good care of their health and not wasted the health care dollars now have saved as much as $15- to $20,000 in their family health savings account which is triple, if not quadruple, what the deductible is on their health policy.
Of course the premiums stay even. But what happens is the cash accumulates and it accumulates to the point where there is essentially no deductible, no copayment. Whatever health care needs you have, there is always plenty of money in the bank.
What's also interesting is for whatever reason you get out of that plan and went to something else--let's say you hit 65, you went to Medicare; let's say you just decided you didn't want to have insurance anymore, whatever reason--you still keep that money. It is still there for you for health care needs. And you can use it indefinitely no matter what other health plan you might be on.
Congressman Cassidy, I have looked at this for many years in terms of being a family physician figuring out how to get the best cost care to a patient delivered--and I am sure you have in your specialist role--but also as a business. And I have concluded over the years there are only two ways to control costs in a health care system: either you do as we just discussed, you have the doctor and the patient have a stake in the cost controls for themselves or at least particularly for the patient, in which case as a dividend; you have cost savings throughout the system; or you create a giant, highly bureaucratic system that engineers, micromanages life behaviors from top to bottom in which there is no connection between a patient and his or her behavior--or cost, for that matter--and for that system to be effective--because we see an exponential growth in consumer purchase behavior--and the infinite desire for value coming out of the system, whoever is putting the money in it, we as consumers always want to get as much out of a system as we can, especially when we are not putting anything into it.
When you have that scenario, then it puts an intense demand on the controlling entity which in this case is the Federal Government. It puts an intense pressure and burden to figure out ways of controlling costs, and there is only one way at that point to do it: that is long lines and rationing. That is the only way any system of that size has been able to control costs.
It would have a tremendous negative impact. First of all, if for whatever reason--let me back up a second.
This health care bill provides that whether it is a public option, a government-run insurance, or whether it's a private insurance plan, they all have to go through an exchange and meet certain minimum requirements and certifications. Every constituency out there is going to be knocking on our doors in Washington wanting their aroma therapies, their massage therapies, and everything else which is going to make the minimum requirements go up and, therefore, the cost.
I, as a small business owner, when I am having to decide about purchasing these required minimums and mandates, at some point I may say I can't afford it, in which case I will have to opt out of the health care plan but I will still have to pay an 8 percent of payroll tax or up to 8 percent payroll tax.
So even not covering my employees will lead to higher costs. And as soon as my costs go up, my profits go down, my ability to sustain business will fade, and the first thing I will have to do is lay people off or certainly not hire people.
If the gentleman would yield for one other point on that.
The taxes on the business doesn't stop there. With the Bush tax cuts expiring very soon, the marginal tax rates will go up from 35 to 39 percent and then this bill provides for another excise tax of over 5 percent. So marginal tax rates on small business owners will increase from 35 percent to 45 percent plus the 8 percent that we talked about, taxes that will occur on payroll even if the employer does not have or are able to purchase health care insurance.
So just an explosion of costs without any return on investment. And therefore, the business owner, in order to remain competitive, will have to reduce his workforce.
Yes.
Absolutely.
I want to add that apparently Puerto Rico and, I believe, Guam or Northern Mariana Islands had the 99th District, which I don't think they have but one district, but they are already up to 99th District with all of the jobs, the fake jobs, the artificial jobs that were created.
There is really, again, a two-tiered approach to increasing aspects to care. One is to do what this bill that just passed does, and that is to say we are going to cover as many people as we can and we will worry about costs later on. Another would be to attack cost first, create a more efficient system, such as we talked about a little earlier, and then organically you are able to cover more people because there is more money to go around.
So I really am concerned that we have started off in the wrong direction here. Of course, the Senate has some kind of bill, although we haven't seen the details of it from the majority leader, but I think it still attacks this whole problem in a sort of government takeover way.
If you look at the statistics, Mr. Speaker, what you find is that the American people oppose, and it depends on which poll you look at, but either by a slim margin or by a large margin, they oppose the government takeover of health care. The American people get it. Republicans in the House and in the Senate get it, so why can't the White House and the Democrats in Congress get that government has never proven to run anything well when it comes to a business-like, cost- effective, and efficient manner. So why are we going to take over one- sixth of the economy and do just that?
We covered the cost that is going to occur to small businesses and to individuals, perhaps those who opt out of insurance, having to pay 2.5 percent of their adjusted gross income or a $250,000 fine or 5 years in prison. But what about the States? You know, the States, Mr. Speaker, cannot have legal counterfeiting of money the way we in Congress do. They can't create a currency that doesn't exist. And all of a sudden we have a mandate by increasing Medicaid from 100 percent of poverty to 150 percent of poverty.
Yes, and that money is not going to come off the backs of our children and grandchildren as it does here in Washington. That is going to come directly out of taxpayer pockets. That is going to be roads that aren't going to be built, bridges that aren't going to be built, projects that aren't going to go forward, things that would stimulate job production. That is money sucked out of the economy.
And remember, as you expand Medicaid to higher and higher income levels, you are pulling people off of private insurance where premiums are being paid by employers and the families, to some extent. You are pulling them into Medicaid which is now 100 percent government paid for. And again, we are concentrating power in the government and cost on top of the taxpayer, really a terrible combination of things in an era where we are looking at pushing above a $12 trillion limit where our deficit spending has quadrupled within 1 year, where even the Chinese who lend us the money we live off, our credit card, if you will, have become terrified of our spending as well. I don't know where this ends, Mr. Speaker.
What we are talking about may sound theoretical, but we actually have a model by which, on a much more microscopic level--we actually have many, but one that I think is the best is Medicare itself. Medicare is a government-run health care program. Those who are served by it like it, but there is a good reason why they like it, because they get a lot more out of it than what they actually put into it. It is heavily subsidized in different ways. It is running out of money. I believe the estimate today is that it will be completely out of money in 8 years. The cost today, the annual cost of Medicare is exponentially greater, magnitudes greater than the estimates ever were in the past. It has always run much higher in cost than was ever predicted. And yet, we somehow think we are going to be able to take a much larger health care system controlled by a much larger governmental set of agencies, 111 new bureaucracies and mandates, and that what we couldn't do with a much smaller system that was a lot less complex, somehow we are going to miraculously do with a much bigger, more costly system. And even if it didn't, we don't have the money as it is. We are living on our future, our descendants, if you will. We are living off their dime at this point.
It is clear that all of these things--Medicare that exists today, running out of money; Social Security that exists today, running out of money; Medicaid already out of money and bankrupting States; jobs, killing jobs, and jobs are what keep our current health plans in place; $13 trillion in debt and rising--many, many dollars spent right here in this House that we have absolutely no way of paying for, and we see a confluence of events here, costs that are coming rapidly together that very quickly just the interest alone will begin to squeeze out all of the other services that we look to government to help us with, like common defense.
What are we going to do when we don't have the money to protect our country both internally and externally? What are we going to do when we don't have money for some of the programs that we use as kind of a safety net for Americans today who don't make enough to live off of, or used to be employed but became unemployed because of our spending? What are we going to do? We have to change direction.
I just spoke at a TEA party this weekend, and people are absolutely-- they are past angry. They are actually terrified at this point.
You mentioned, Dr. Cassidy, this summer, all of the town halls, and of course TEA parties have sprung up during that period of time. I think we have to look at that as sort of the canary in the mine shaft. That is the early warning sign that the citizenry out there is fed up with the irresponsible spending that we are doing here. It is time we begin to look at reinstating individual choice and individual freedom rather than the government controlling and micromanaging our individual lives and taking our own money away from us to give back to us in order to control us.
I thank the gentleman. I absolutely agree. And, again, it looks like, from what you've presented today, The New York Times, The Washington Post, and I read today from Reuters, and CMS just came out--all of these groups, very nonpartisan in many cases, and certainly no one can say that The New York Times is a Republican or even conservative publication--all of these groups, these publications, these boards, editors are coming out with great anxiety over the cost of this.
And you might say, well, why are they complaining after the fact? Well, remember that we debated for weeks on H.R. 3200, but we only had 1 day really to vote on H.R. 3962, which really doubled in size and doubled the number of bureaucracies virtually overnight. And I think now that all the celebration is over in the House, we may have a little hangover going forward.