Floor Statements

Mr. President, I ask unanimous consent that the Senate proceed to executive session to consider Calendar Nos. 504, 505, 506 to and including 511, except the nomination of BG Michael J. Walsh, 512 to and including 514, 519, 520, and all nominations on the Secretary's desk in the Air Force, Army, Coast Guard, Marine Corps, and Navy; that the nominations be confirmed en bloc; the motions to reconsider be laid upon the table en bloc; that no further motions be in order; that any statements relating to the nominations be printed in the Record; provided further that the President be immediately notified of the Senate's action; and the Senate then return to legislative session.

Mr. President, I ask unanimous consent that the Senate now proceed to the consideration of S. Res. 326, which was submitted earlier today.

Mr. President, I ask unanimous consent that the resolution be agreed to, the preamble be agreed to, and the motions to reconsider be laid upon the table.

Mr. President, I ask unanimous consent that the Senate proceed to the immediate consideration of S. Res. 327, which was submitted earlier today.

Mr. President, I ask unanimous consent that the resolution be agreed to, the preamble be agreed to, the motions to reconsider be laid upon the table, with no intervening action or debate, and that any statements related to the resolution be printed in the Record.

Mr. President, I understand there are two bills at the desk, and I ask for their first reading en bloc.

Mr. President, I ask for a second reading en bloc and object to my own request.

Mr. President, I ask unanimous consent that when the Senate completes its business today, it adjourn until 9:30 a.m. tomorrow, Thursday, October 29; that following the prayer and pledge, the Journal of proceedings be approved to date, the morning hour be deemed expired, the time for the two leaders be reserved for their use later in the day, and the Senate proceed to a period for the transaction of morning business, with Senators permitted to speak for up to 10 minutes each, with the Republicans controlling the first hour and the majority controlling the second hour; further, that any time during morning business, adjournment or recess of the Senate count postcloture.

Mr. President, if there is no further business to come before the Senate, I ask unanimous consent that it adjourn under the previous order.

I am delighted to join the discussion. One other point merits mention about a public option. The current business model for health care in America is not a good one. The insurance companies try to--if you are not healthy--make sure you never get insurance in the first place. If they give you insurance and then you get sick, they will look for loopholes and try to throw you out. Then they will try to control the way you get treated by your doctors. So your doctors have to spend as much as half of their time on the phone trying to fight and get you the treatment they know is right for you, but they have to clear it with the insurance company, which has a vested interest in taking as long as it can and causing as much trouble as it possibly can because some doctors and patients will just give up.

On the other side, in terms of the quality of care, with all that stuff going on, we have a country in which the quality of care is far below our competitors by innumerable measures. Part of it has to do with the way the system works.

We had an intensive care unit reform that we fought through in Rhode Island that was modeled on the keystone project in Michigan. In Michigan, they went into intensive care units and said: We are going to eliminate hospital-acquired infections, get rid of those. In 15 months, they saved 1,500 lives, $150 million, and 81,000 days that patients would have spent in the hospital with those infections, but they didn't have to because they got out without them. They invested in that.

That is the kind of thing a public option can invest in because it will be around, it is not profit motivated, and it wants to do the right thing for people.

It will be willing to take the long view and say: You know what. This is the right thing to do.

Insurance companies have had a long time to do this, but they have not done it. If you want to believe that by passage of this legislation, all of their motivation and their business model, the way they work, is going to spontaneously change, and they will start doing things they have never done before, is one thing to believe. I think prudence and experience and a practical and serious appreciation of how urgent our situation is all counsel against believing a sudden epiphany happening in the halls of the big insurance companies and, instead, put a new entity on the field, which would be easier to start up and bring a new business model in with it. It is not going to have all that tradition and history. You know, you get in a rut. The only way to change the business model in health care is to have a new entrance--a public entrance and a nonprofit entrance and one that has a dispersed interest in the health of the American people rather than the wealth of the insurance company shareholders.

Would the Senator from Oregon like to jump in?

That is precisely accurate. If you are a for-profit insurance company and your motivation is to make money, and if you assume your customers are going to stay with you--how long does somebody stay with a company before they change jobs or move to a different State? Five to ten years? You put down 100 cents on the dollar of a prevention strategy or a wellness strategy and help that individual, and if it is an illness, it is going to show up 8, 9, or 10 years later and you haven't saved yourself any money. You have done the right thing for the customer but haven't saved yourself any money. So you have a huge built-in bias to underinvest in wellness and prevention.

Sure enough, we are a country that underinvests dramatically in wellness and prevention. It is impossible not to connect the dots and see that the reason we are so underinvested in wellness and prevention has to do with the motivation of the for-profit insurance sector.

(Mr. UDALL of New Mexico assumed the chair.)

It is a little ironic to have the insurance industry complaining about government entering into the role as a competitor to the insurance industry, which is the best possible way government could enter into this equation, when, for years, they have fought for and protected a government role in the health insurance industry, which is to protect them, the insurance industry, from the antitrust laws. Government has been involved in health insurance for a long time in the worst possible way--protecting these insurance companies from being subject to antitrust laws, like every other business in America except, I guess, Major League Baseball.

Particularly when those two firms aren't subject to the antitrust laws, they are able to price-fix and do things like that. For them to complain about competition after having used government to wall themselves off from the basic law that protects competition, you kind of have to believe the irony department is open late at night at insurance companies.

One of the ironies in all this is that whole scheme of the insurance companies is actually increasing the cost of American health care. I think from 2000 to 2006 the administrative costs of insurance companies went up over 100 percent. So they are loading on more and more people whose purpose is to do just what you said, which is to interfere with the doctors, to require more and more prior approvals before you can get treatment, to do more and more claims denial--all of that. And then not only does that add costs to the health care system within the insurance company, but then the doctors have to fight back.

In Rhode Island, I go all around to doctors and medical practices and community health centers. The standard number that I hear is that 50 percent of the personnel of a doctor's office or a community health center is not dedicated to providing health care but dedicated to having to fight back against the insurance industry.

I visited the Cranston Community Health Center a few months ago, and they said that more than 50 percent of their personnel is devoted not to the health care function but to the ``fighting with the insurance company'' function. Plus they have to spend $300,000 a year that could go to health care for consultants and computer programmers who help them fight with the insurance companies. It is not just half the personnel, it is also a $300,000 consulting expense.

You put the two together, and it is a huge cost and a great opportunity for a public option to cut through all of that, to knock off the administrative expense on their side, costs on the doctors' side, and bring costs down.

(Mr. KAUFMAN assumed the chair.)

There is an alarm bell. An alarm rings when a market is something called heavily concentrated. The Department of Justice has standards for when a market is heavily concentrated. When a market is heavily concentrated, that means they look particularly closely for anticompetitive conduct. Of course, they don't look at the insurance industry because they are exempted from the antitrust laws. But 94 percent of the major metropolitan areas in America--nearly everyplace-- is heavily concentrated. It is in that uncompetitive danger zone.

The public option is not only a useful alternative, but we are dealing with a market where competition is in a very poor state. So it is not as if you are adding an extra competitive element to an already competitive market. You are adding an extra competitive market to a market that is almost virtually certain to be heavily concentrated and to show none of the signs of healthy competition that one looks for in a healthy marketplace.

Think how many Americans from Oregon or from Ohio or from Rhode Island or from Delaware, the Presiding Officer's home State, have been able to achieve their dreams because they were able to go to a public university in their home State as opposed to private colleges. I have nothing against private colleges and universities. I went to one. I think they are wonderful. But I am very proud of the University of Rhode Island, and for many Rhode Islanders and many people who come to Rhode Island to go to URI, that is a great opportunity for them. The notion that it should not be there because it is government run and government supported and, therefore, makes Brown University noncompetitive is just crazy. The facts belie it.

If you look even closer--I know the Senator from Oregon has talked before about the workers' compensation example--half of the States in the country have public options that operate in an insurance market and provide workers' compensation. Indeed, some of the strongest advocates against a public option in health insurance on the other side of the aisle have workers' compensation public plans in their home States.

The Republican leader, Senator McConnell, has a public option in his home State of Kentucky that provides workers' compensation insurance in competition with private insurers. It has been doing it for years. It has a significant market share. I don't recall that he has ever criticized that plan. I think it seems to be helpful.

In Arizona, our wonderful colleague, Senator McCain, with whom I am very proud to serve, is also very antagonistic toward the notion of a public option. But in Arizona, if I recall correctly, their public option has been in the workers' compensation market for 80 years.

So the notion that when you have a public option it is going to creep, crawl, and take over and force out competition is proven wrong by the actual facts and history of some of the States of Senators who are here making that very argument.

In Wyoming, the workers' compensation system is run entirely by the government. It is a single-payer public plan. As far as I can tell, all of the business community in Wyoming is perfectly comfortable with that plan.

One of the concerns people raise about a public plan is that it will give terrible public service, terrible customer service. It has been described as if you take the IRS and a department of motor vehicles and put them together, that is the kind of customer service you will get from a public plan. I doubt very much that the public plan in Wyoming, which is a single-payer, government public plan, gives that kind of terrible public service because if it did, I would expect the Wyoming business community to be up in arms about the way they are being treated by their only choice of workers' compensation insurer. Judging from the track record, it seems they are pretty satisfied with it.

I think when you actually go out into the field and look at examples of competition, whether it is the Postal Service, higher education, or these public plans that do workers' compensation in half of our States, we find that a lot of the concerns the people have raised, a lot of the fears that seem to animate this debate actually, in reality, appear not to prove out.

That is what competition is all about.

I have to depart, and I yield the floor to the distinguished Senator from Ohio. But before I go, I want to express my appreciation to him for convening us and for his energetic and constant advocacy on this subject. I think he has been a wonderful leader of our caucus, and I wish I could stay longer, but I have a plane awaiting me.

So I yield to the Senator from Ohio.

Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. President, I come to the floor to speak in strong support of the Health Insurance Industry Antitrust Enforcement Act, introduced by the senior Senator from Vermont, the chairman of our Judiciary Committee, Mr. Patrick Leahy. I believe this bill is an important part of health care reform, and I am hopeful it can be included in the final reform bill as it makes its way through this body.

Our antitrust laws embody the proud American idea that democracy shapes capitalism and not vice versa; that vigorous economic competition is not an amoral, Hobbesian contest but disciplined by a strong rule of law tradition; and that ours is not a society in which might makes right and only the powerful write the rule book.

The great Supreme Court jurist and antitrust crusader William O. Douglas, wrote:

Industrial power should be decentralized. It should be

scattered into many hands so that the fortunes of the people

will not be dependent on the whim or caprice, the political

prejudices, the emotional stability of a few self-appointed

men. . . . That is the philosophy and the command of the

Sherman [Antitrust] Act.

The passage of the Sherman Antitrust Act and the Clayton Antitrust Act and the creation of the Federal Trade Commission and the Antitrust Division at the Department of Justice demonstrated a Federal commitment to a level economic playing field. Small businessmen and entrepreneurs, shouldering the enormous task of starting and sustaining a new enterprise, would know that powerful competitors could not collude to keep them out of the market. Consumers could rest assured that prices were not being fixed artificially high by scheming monopolists. Every industry, ever vector of American business, was made subject to these rules of the road--except for one: the insurance industry.

In 1944, insurance companies challenged the Federal Government's very ability to enforce antitrust laws against them, and the Supreme Court ruled that the insurance business was subject to antitrust laws just like everybody else. In response, insurance companies came to Congress, where they launched a massive lobbying campaign, pressuring Congress to invalidate the Supreme Court's decision--not unlike the current lobbying barrage they are aiming at killing health care reform. That campaign back in 1944 was successful. In March 1945, the McCarran- Ferguson Act exempted insurance companies entirely from the reach of America's antitrust laws. If that exemption ever made sense, it no longer does, especially when it comes to health insurance coverage.

Today, Americans pay ever-higher premiums for less care because a small group of wealthy, powerful companies control the health insurance market. Just consider these numbers: A study by the American Medical Association shows that 94 percent of metropolitan areas--virtually every one--has a health insurance market that is ``highly concentrated,'' as measured by Department of Justice standards. This means that if the Department of Justice's Antitrust Division had enforcement authority over the health insurance industry, it would be carefully scrutinizing this market for signs of anticompetitive conduct that hurts consumers. But due to the antitrust exemption, the Department of Justice cannot do that job. That same study shows that, in 39 States 2 health insurers control at least half of the health insurance market and in 9 States a single insurer controls at least 70 percent of the market.

Back in 1945, the insurance industry argued that it should be exempted from the antitrust laws because the market was heavily localized and not concentrated. Well, if that were true then, it is not true now.

Overhead for private insurers is an astounding 20 to 27 percent-- charges that consumers pay for in higher premiums. A Commonwealth Fund report indicates that private insurer administrative costs increased 109 percent from 2000 to 2006--109 percent in those 6 years--and the McKinsey Global Institute estimates that Americans spend roughly $150 billion annually on what the report calls ``excess administrative overhead'' in the private health insurance market. Mr. President, $150 billion a year in ``excess administrative overhead.'' Clearly, this is not a competitive market. If it were, companies would be driven to cut these costs in order to compete effectively in the marketplace.

Without competition and without economic incentive to avoid massive administrative costs, health insurance premiums have increased 120 percent--more than doubled--in one decade, while insurance industry profits increased 428 percent in the same period--428 percent.

Doctors and other health care providers have been hurt as well. For many years, United Health Care, a massive health insurance company, owned and operated a computerized pricing system that was used by almost every other health insurer. The New York attorney general recently found that the system was designed to systematically underpay doctors for their services and that this had been going on for years. United Health paid $400 million to settle lawsuits by the State, but if the Federal Trade Commission or the U.S. Department of Justice had tried to bring suit under the Federal antitrust laws, they would have been blocked by McCarran-Ferguson.

Finally, ironically, health insurers threaten and sue doctors all the time under these same antitrust laws while protecting their own exemption from the laws they seek to impose on the providers and the doctors whom they torment.

One might ask how this exemption has survived so long. A certain school of political thought holds that the only proper relationship of government to the market is hands off, that any government involvement in the marketplace is unnatural and unwelcome. But with respect to antitrust enforcement, we crossed that Rubicon long ago, and every industry in the country is required to play by rules that support the market by increasing competition, again, except insurance. Experience in those other areas has shown that the government referee on the field of play creates a better environment for competition, and the public wins.

Think of the benefits of a competitive health insurance market. Insurers would have to compete on price, lowering premiums for individuals and small businesses purchasing insurance, and work hard to lower those unnecessary administrative costs. New competitors would be able to enter more easily and offer better consumer service, quicker claims processing, streamlined enrollment--competition that is desperately needed in a market where 36 percent of physician overhead is consumed by fighting with the insurance industry over inappropriate denial and delay of health insurance claims.

Senator Leahy's Health Insurance Industry Antitrust Enforcement Act would repeal the unique and peculiar exemption for health insurance and medical malpractice insurance companies. The bill ensures that these companies are no longer permitted to engage in the most egregious forms of antitrust violations--price fixing, bid rigging, and market allocations--while preserving insurers' ability to share statistical information with each other in a procompetitive manner, with appropriate approvals.

Let me conclude with the words of a distinguished Senator, one of the greatest advocates for the elderly, ill, and disabled this Chamber has seen, Senator Claude Pepper. Senator Pepper, at the time, strongly opposed the McCarran-Ferguson antitrust exemption for the insurance industry, and he

warned of the ``carte blanche authority . . . which had been contained in no previous legislation . . . [and] which for the first time gives the States carte blanche to legitimize the very vices against which the Clayton Act and the Sherman Act were directed.''

It appears to me the exemption for the insurance industry was a mistake then, and it is assuredly unwise now. Let's repeal this unfair law and give health insurance consumers the same benefits of free, open, and fair competition that all Americans enjoy.

Let me finally add that the state of the health insurance market reinforces the need to which I have spoken, and so many of my colleagues have spoken before, for an efficient, nonprofit public health insurance option. The health insurance industry has been artificially sheltered by government for decades, building huge profit margins, massive market share, and colossal overhead and administrative costs. Now these same companies argue vehemently against the public option on the grounds that it would amount to government interference-- government interference with their government protection from competition. That irony just doesn't pass the laugh test.

According to the AMA study I quoted in the beginning of my remarks, Rhode Island is the second most concentrated health insurance market in the country. Just two insurers control 95 percent of the market. My constituents desperately would like the chance to choose a public option and would benefit from a more competitive health insurance market, one in which vigorous competition brings down costs and improves the quality of care and encourages health insurers to treat people decently.

Mr. President, I have concluded the remarks on the McCarran-Ferguson exemption. I wish to turn to another topic, but I see the majority whip on the Senate floor, and I would be delighted to yield to him if he wishes to take a moment.

I will continue, then. I thank the distinguished majority whip.

Bipartisan Campaign Reform Act

Mr. President, I wish now to say a few words about the colloquy that took place between Senator McCain and Senator Feingold on the Senate floor a few moments ago over the need to protect our Nation's political system from the influence of corporate money.

For more than a decade, Senators McCain and Feingold have been stalwart defenders of the integrity of our political system, and they achieved a hard-fought victory in 2002 with the passage of the Bipartisan Campaign Reform Act, which everybody around here knows as the McCain-Feingold law. As they said in their remarks, we face a real danger that an activist Supreme Court will strike down portions of that law, overturn the will of Congress and the American people, and allow corporations to spend freely in order to elect and defeat candidates and influence public policy to meet their ends. The consequences of such a decision by our Supreme Court could be nightmarish.

Federal laws restricting corporate spending on campaigns have a long pedigree. Back in 1907, the Tillman Act restricted corporate spending on political campaigns. While various loopholes have come and gone over the years, the principle embodied in that law that corporations aren't free to spend unlimited dollars to influence political campaigns is a cornerstone of our American system of government. That principle now appears to be at risk as the Supreme Court may be poised to open the floodgates now holding back corporate cash.

In September, the Supreme Court heard oral argument in Citizens United v. The Federal Election Commission. Citizens United is an organization that accepts, channels, and funnels corporate funding. It sought to broadcast a documentary attacking our former colleague, Senator Clinton, now Secretary of State Clinton, at the time a candidate for President, on On Demand cable broadcasts. Current law prohibits the broadcast of this kind of corporate advocacy on the eve of an election. Citizens United filed a lawsuit arguing that the law infringed on its first amendment rights.

Many observers expected the Court to rule narrowly on the case, perhaps focusing on whether McCain-Feingold applies to On Demand broadcasts. Instead, after hearing oral argument, the Court asked for an additional briefing and a new round of oral argument, something the Supreme Court does very rarely, to consider whether the first amendment bans such restrictions on corporate campaign spending. There is some indication that the activist conservative wing of the Court believes it does. We may be on the verge of another effort by a Roberts court to advance its ideologically charged view of the Constitution. In so doing, the Court would overturn its own longstanding precedents, opinions such as Austin v. Michigan State Chamber of Commerce where Justice Thurgood Marshall warned of ``the corrosive and distorting effects of immense aggregations of wealth that are accumulated with the help of the corporate form and that have little or no correlation to the public support for the corporation's political ideas.''

Should the Court upturn so much long-settled law, it would upend our entire political system and we could see a new era of corporate influence over politics not seen in the history of our Republic.

Imagine for a moment what our political system would look like if the Court takes the fateful step of allowing corporations to unrestrictedly spend money to influence campaigns. Corporate polluters under investigation by the Department of Justice, running unlimited advertisements for a more sympathetic Presidential candidate; financial services companies spending unlimited money to defeat Members of Congress who have the nerve to want to reform the way things are done on Wall Street; defense contractors overwhelming candidates who dare question a weapons program they build. It would become government of the CEOs, by the CEOs, and for the CEOs.

Nothing in the history of the first amendment requires the protection of such activities. To the contrary, Congress long has been understood to hold the power to protect the electoral process from the corrupting flood of corporate money. This is because, as the Supreme Court long has recognized, a corporation holds no inalienable right to participate in an election. Unlike the people from whom the sovereign power of the State is drawn, a corporation is created by and subject to the sovereign power of the State. Indeed, as Chief Justice John Marshall explained in 1809, only 18 years after ratification of the first amendment, a corporation is ``a mere creature of the law, invisible, intangible, and incorporeal and certainly not a citizen.''

In 1906, a century later, the Supreme Court explained that:

The corporation is a creature of the state. It is presumed

to be incorporated for the benefit of the public. It receives

certain special privileges and franchises, and holds them

subject to the laws of the state and the limitations of its

charter. Its powers are limited by law.

Corporations are created by government charter. They are legal fictions, tools for organizing human behavior. Neither logic nor history justifies unleashing them from the bonds of government to master and control the very government that created them--new monsters on the political landscape, bending public wealth to their peculiar private purposes.

How might they do that? Well, let's look at one recent case involving Bank of America.

All of us remember in September of 2008, Bank of America announced that it would buy Merrill Lynch for $50 billion. In August of this year, the Securities and Exchange Commission filed a civil suit against the Bank of America alleging that it had made a misrepresentation to its shareholders that Merrill Lynch would not pay bonuses to its executives in 2008 when, in fact, Bank of America had agreed that Merrill Lynch could pay up to $5.8 billion in bonuses to its executives. That is the background.

Bank of America and the Securities and Exchange Commission submitted a proposed final consent judgment proposing to resolve that case by giving $33 million of shareholder money to the Securities and Exchange Commission. The U.S. District Court in New York took a look at this proposal and threw it out. The judge rightfully rejected it as neither fair nor reasonable nor adequate. The Court said it well; I can't improve on the Court's decision:

The parties were proposing that the management of Bank of

America--having allegedly hidden from the bank's shareholders

that as much as $5.8 billion of their money, shareholder

money, would be given as bonuses to the executives of Merrill

who had run that company nearly into bankruptcy--would settle

the legal consequences of their lying by paying the SEC $33

million more of their shareholders' money.

As the Court noted, this was all done ``at the expense not only of the shareholders, but also of the truth.''

That is a pretty stark example of corporate management trying to use shareholder money to serve its own ends, even against shareholder interests. Well, guess whose interests corporate managers would pursue politically if they could open the spigots of shareholder money in elections.

Longstanding statutes and judicial precedents that limit corporate involvement in campaigns rests on the well-established and long- accepted recognition that corporations and their corrupting self- interests must be controlled. There is no reason now for a fundamental rethinking of such a plain and well-settled principle. The rightwing of the Supreme Court will be hard pressed to justify departing from such settled understandings of the first amendment, from the century-long tradition of controlling corporate spending, to invent new constitutional rights for corporations against real human beings.

In closing, I stand with my colleagues, Senator McCain and Senator Feingold, in readiness to do what it takes to protect our system of campaign finance laws from the danger of corporate corruption. I look forward to working with them and my other colleagues to ensure that our elections remain enlivened by a robust debate among human participants in which CEOs don't have favored princely status because they can direct corporate funds to drown out people's voices.

I thank the Presiding Officer, and I yield the floor.

Mr. President, today I congratulate Rajiv Kumar, a medical student at the Warren Alpert Medical School of Brown University, for receiving the Community Health Leaders Award from the Robert Wood Johnson Foundation. Mr. Kumar received this prestigious award for his efforts to reduce obesity among Rhode Island residents. In 2005, he established Shape Up RI--a statewide exercise and weight loss challenge. Since then, over 35,000 Rhode Islanders have participated in the program including my staff and me, and I can personally attest to its fun and effectiveness. I had the pleasure of meeting with Mr. Kumar earlier this month to discuss the great work he has done to encourage personal responsibility in an engaging and innovative new format, and I look forward to the continued growth and success of Shape Up RI.

Madam President, I ask unanimous consent the order for the quorum call be rescinded.

Madam President, I ask unanimous consent to speak as in morning business for up to 20 minutes.

Madam President, I have spoken many times on this floor about the urgency of the need to reform our broken health care system, to expand access to insurance, to improve below average results, and to bring down costs. In a speech to the joint session of Congress, the President eloquently described the challenge of this moment:

I am not the first President to take up this cause, but I

am determined to be the last. It has now been nearly a

century since Theodore Roosevelt first called for health care

reform. And ever since, nearly every President and Congress,

whether Democrat or Republican, has attempted to meet this

challenge--in some way. . . . Our collective failure to meet

this challenge--year after year, decade after decade--has led

us to the breaking point.

We are at the breaking point for Nancy from Barrington, RI, a single mother and accomplished music teacher who lost her full-time job and currently teaches part time at a local university. Nancy has paid the full cost of health insurance out of pocket so her two children would not go without coverage. But now they have graduated from college, they are no longer eligible to be on her insurance policy, and they work at jobs that don't provide health care benefits. So Nancy is now thinking about selling her home, their childhood home, to prevent her family from going without health insurance. Nancy writes:

Between the three of us, we are desperate for a workable

solution to our health insurance needs. For the first time in

my life I feel utterly disenfranchised by my own society.

We are at the breaking point, not just for Nancy but for so many Rhode Islanders who have shared with me their stories--stories of loss, stories of sorrow, stories of frustration, stories of personal and family disasters, in a treacherous health care system that offers all the care you need until you need it.

We are also at the breaking point nationally. Our country's economic future may well depend on the reforms and investments we now craft to control costs and wring savings from the system.

One measure of the potential savings is the recent report of President Obama's Council on Economic Advisers, comparing the share of America's gross domestic product spent on health care to the share spent by our industrialized international competitors, and evaluating the wide variation in health care expenses region to region within the United States.

The report estimates annual excess health care expenditures of about 5 percent of GDP. That translates to over $700 billion a year in excess cost. They are not alone. The New England Health Care Institute reports that as much as $850 billion in excess costs every year ``can be eliminated without reducing the quality of care.'' That is $850 billion.

Former Treasury Secretary O'Neill, the Treasury Secretary in the Bush administration, has written recently that the excess cost in our health care system is $1 trillion a year. The Lewin Group, a consulting firm that is well regarded on health care issues, has estimated that excess cost exceeds $1 trillion per year. So is it $700 billion a year? Is it $850 billion a year? Is it $1 trillion a year? Whatever it is, it is a savings target worth an enormous executive and legislative effort, particularly when the evidence is that achieving these savings will actually improve health care for the American people.

Where will these savings come from? Well, the savings await us in quality of care. For instance, the Keystone Project in Michigan reduced infections, respiratory complications, and other medical errors in some of Michigan's intensive care units between March 2004 and June 2005, a little over a year. The project saved 1,578 lives, 8,120 days that patients otherwise would have spent in the hospital but did not have to because they did not get the infections or the complications and, as a result, over 165 million health care dollars, just in Michigan, just in intensive care units, just in 1 year, and not all of the intensive care units.

In my home State, the Rhode Island Quality Institute has taken this model statewide with every hospital participating. We are already seeing hospital-acquired infections and costs declining. There is a similar opportunity in disease prevention. The Trust for America's Health found that investing $10 per person per year in programs that increase physical activity, improve nutrition, and prevent tobacco use could save the country more than $16 billion annually within 5 years.

Out of that $16 billion in savings, Medicare would save more than $5 billion, Medicaid would save more than $1.9 billion, and private payers would save more than $9 billion. So that is quality of care and prevention.

A third area for significant efficiencies and savings is the insurance industry's contentious, inefficient billing and approval process. The battle over approvals for treatment and claims for payment creates a colossal burden on our health care system, causing perhaps 10 to 15 percent of the insurance industry's expenditures because the hospitals and the doctors and the providers have to fight back. That 10 to 15 percent of the insurance companies' expenditures casts a cost shadow over the provider community which is probably bigger than the insurance industry spends, because they are less efficient at fighting back than the insurance company is at tormenting them.

It all adds no health care value. None. It is pure administrative costs and cost shifting. Rhode Island providers have told me over and over that half of their personnel are absorbed in this battle and not providing health care. They are at the doctor's office, they work there, but they are not providing health care. They are busy fighting with the insurance company.

Even the insurance industry estimates that $30 billion per year could be saved through simplifications of the process. That relates to a fourth area, the overall inefficiency and waste that plagues the private insurance market.

While administrative costs for Medicare run about 3 to 5 percent, overhead for private insurers is an astounding 20 to 27 percent. A Commonwealth Fund report indicates that private insurer administrative costs have more than doubled in the past 6 years. From 2000 to 2006, they increased 109 percent.

The McKinsey Global Institute estimates that Americans spend roughly

$128 billion annually--$128 billion annually--on excess administrative overhead in the private health insurance market.

A fifth savings area is investments in our infrastructure of health information technology; secure electronic health records, for instance, electronic coordination between your doctor and your specialist and your pharmacy and your hospital and your laboratory. These investments promise big savings as well, $162 billion per year, according to one RAND study, and possibly twice that.

Finally, reform of how we pay for health care will yield enormous dividends. At the moment we mostly pay on a piecework basis. The more you do, the more you are paid. No surprise that we do a lot and pay a lot. Since the best care, the best quality care is so often less intrusive but better designed and better coordinated, this payment reform presents another win-win opportunity: better health care and lower cost, hand in hand.

There is a problem, though. For many of these reforms, CBO cannot fully score the savings they would yield, and thus their importance has been minimized in our debate. CBO can only estimate health care costs and savings that have historic precedent. For example, on the cost side we have the experience of Medicaid, and the Children's Health Insurance Program. So CBO can estimate how much it will cost to expand the coverage to needy families, as we importantly do in this bill.

On the savings side, however, CBO's capability is limited because there is not a lot of information to forecast from. CBO's Director has been refreshingly candid about this. In a recent letter to Senator Conrad, he wrote the following:

. . . changes in government policy have the potential to

yield large reductions in both federal health expenditures

and federal health care spending without harming health.

Moreover, many experts agree on some general directions in

which the government's health policies should move,

typically involving changes in the information and

incentives that doctors and patients have when making

decisions about health care . . . Yet, many of the

specific changes that might ultimately prove most

important cannot be foreseen today and could be developed

only over time through experimentation and learning.

So to summarize: Large reductions in costs are possible. The general direction in which to move to achieve them is agreed. But experimentation and learning are necessary to get there.

Even with those analytical limitations, CBO has recognized some cost savings created by several innovative reforms in the Finance Committee's bill. For example, CBO forecasts that an independent nonpartisan commission of experts with authority to determine provider payment rates under Medicare will save the Treasury $22 billion over a 10-year period.

It also credits Medicare payment reforms that seek to prevent hospital readmissions with $2.1 billion in savings; incentives that encourage physicians to group together in cost savings organizations with $4.9 billion in savings, and payment reforms aimed at preventing health care-acquired infections with $1.5 billion in savings.

But as you have seen, in comparison to the numbers I talked about earlier, those are trivial projections, chump change against the excess cost of our health care system. Americans owe the Congressional Budget Office a particular debt of gratitude for how incredibly hard they have worked these past weeks and months. CBO performs a valuable service.

But its professional discipline requires it to score legislation basing its calculations on what it can chronicle has happened in the past. And we have not yet been where we need to go in health care reform. Moreover, getting there will require leadership, creativity, and perseverance in executive administration, with constant adjustments and improvements along the way to achieve our goal.

Those factors of executive administration are beyond the capability of CBO to predict. The distinguished Presiding Officer was the Governor of the State of New Hampshire. She knows well, having served as Governor, what a difference executive administration can make in areas where there is intelligent and sustained focus. Well, CBO cannot predict whether intelligent and sustained focus will occur, so they cannot predict the answer to that question.

Let me mention one further reform now that we are on the subject of executive administration, a final reform that can bring leadership and creativity toward achieving all of these goals in quality, in prevention, in payment reform, and in information technology. That is the reform that can bring leadership and creativity to pulling all of those reforms together, a public health insurance option, a government- run publicly handled plan that can provide affordable coverage in a market where premiums have increased 128 percent in 8 years.

A public option can bring vigorous competition to a market so monopolistic it would make Andrew Carnegie blush, will force private plans to minimize bloated administrative costs which have increased, as I said, 109 percent over those 6 years. The public option can pass along savings to consumers in the form of reduced premiums, and can end the wasteful practice of fighting with doctors and patients over reimbursement.

The public option is our best chance for executive implementation of the delivery system innovations and reforms I have described. Skillful executive administration will be required just as for every other element of reform. But public plans across the country, driven not by private motives but by the public good, set new standards of quality and efficiency in a market that has lost its way.

The point of this reform must be to turn around a health care system that is now spiraling out of control. We spend 18 percent of our GDP on health care. The next highest spending nation in the world is Switzerland at 11 percent. Even if our success is limited to shaving a few percentage points off our national expenditure on health care, that success will be worth hundreds of billions of dollars a year. Yes, there will need to be an initial investment in health care reform, but the potential savings are multiples larger.

CBO's inability to score these savings does not mean they aren't real and achievable. Given the looming threat to America's fiscal security that is now presented by our health care costs, these savings are not only real and achievable, they are essential. They are necessary. We are bound to achieving them, and we must not fail. For that reason, I call on the Obama administration to begin defining a health care savings target from delivery system reform--from health information infrastructure, from quality improvements, from illness prevention, from more transparency and less bureaucracy, from reform of what we pay for in health care and, ideally, all implemented rapidly and fairly by public plans around the country. They need to set a target.

If the administration does not set a savings target, there is no way the vast apparatus of the Federal Government will wheel adequately toward achieving this goal. If we fail to achieve those savings, all our dreams--our dreams of universal coverage, our dreams of affordability, our dreams of a public option--will crumble like castles built on sand.

Let's take the most conservative number from President Obama's own White House, $700 billion a year in annual excess cost. Let's assume the best we can do is to eliminate less than one-third of that excess cost--not all of it, not even half of it, less than one-third. Let's assume it takes a few years to meet that goal; let's say 4 years. That would still permit reform savings of $200 billion a year by 2014. By then, our annual health care expenditures will have climbed well over $3 trillion. So that $200 billion annual savings would be only one- fifteenth, about 7 percent, of the cost, then, of our bloated health care system, a system now costing twice as much as other developed nations' health care systems that cover everyone. That goal, 7 percent off a system that costs twice as much as in other nations, does not seem unreasonable.

I will ask the administration: What is your annual savings target out of that $700 billion to $1 trillion a year in excess cost? What is it, and when will you achieve it? Soon you will have a bill out of this Congress that gives you the tools to achieve these savings.

When you have that bill, I will ask for a number and a date.

I will urge the administration: Be bold. President Kennedy did not know how to get to the Moon when he promised that we would, but he knew we had the talent and the technology to do it, if we had the President's commitment behind it. Sure enough, it happened.

I would also remind the administration of this: We have to achieve these savings anyway. This is not an extra political hurdle the administration would have to clear. This is the bar we must clear if our Nation is to return to fiscal health and if our dreams of universal coverage and affordability and good public health and a humane, efficient health care system are all to be realized. Again, if we don't clear that bar, all those dreams crumble in our hands like dust.

Let's step forward now and make a commitment to some hard, firm measure of savings out of our bloated and inefficient delivery system.

I thank the Chair.

I yield the floor and suggest the absence of a quorum.

I thank the Senator from New Mexico. I am committed to that. I am also delighted to follow the Senator from Maryland. Senator Cardin and Senator Udall have been, for many years before they even came to the Senate, when they were serving with such distinction in the House of Representatives, strong advocates for the elderly, strong advocates for the disabled, and strong advocates for consumers.

That is what a public option is all about. It is helping out people as consumers and providing better health care, the kind that the elderly and disabled get when they are on Medicare. They do not have so many worries that regular families have of whether they are going to get coverage.

The public option makes so much sense that it is very hard to argue against it as it is. So a great number of my friends on the other side of the aisle are arguing against things that actually are not being proposed, such as socialized medicine, or the government taking over health care.

None of that is suggested by our bill, anyway. The first words of the HELP bill are ``voluntary plan.'' It is a voluntary option. As the President said when he was running for election: If you like the plan you have, you get to keep it. But if you do not like the plan you have, you have a public option, an alternative, a choice.

Why does that matter? Well, it matters to people such as Stephanie, a 28-year-old from Warwick, who recently learned that her insurance plan is refusing to cover the most costly and important medication that she has to take for a chronic rheumatic condition. She thought she had insurance. But

when this condition appeared, and she realized the kind of treatment she needed, and her doctor said: This is what you need, Stephanie, the insurance company said: Oh, no, I am sorry. We are not going to cover that.

Our friends like to talk about how this will put the government between you and your doctor. Folks, the private insurance industry is, all over this country, getting between Stephanie and her doctor and millions of others just like them and telling them what kind of care she can and cannot have.

The public option will actually help free that up by providing alternatives where they can provide better service and broader coverage, at lower cost. Why might they be able to do that? Our friends on the other side of the aisle say: Well, it is because they will compete unfairly. Because they will necessarily take over any insurance market that they get into.

That is, frankly, a bunch of baloney. In my home State of Rhode Island, just two insurance companies dominate the market now. In fact, one of our health insurers reported $37 million of profits, excess profits, that it wanted to take out of Rhode Island and repatriate to its home State outside of Rhode Island; $37 million. Rhode Island has only 1 million people in it. We are a small State. This was a company with 16 percent market share in Rhode Island. So out of 16 percent of the Rhode Island market, in 1 year, they were going to pull $37 million and send it out of State.

You do not have to do that if you are a not-for-profit company. That is $37 million that can serve those 16 percent of folks with better coverage, with better quality service. The profit and huge executive compensation is money that could go instead into health care.

I also heard from Charles from Pawtucket. For 20 years he and his wife have worked. They are freelance musicians. They have not had anybody providing them coverage through the business. But they have scrupulously and faithfully paid for health insurance and coverage. Recently his wife was in an accident. They are both in their late 50s. The insurance company took a look at them and said: You are out. They tossed them out; threw them off the insurance plan.

That is not the kind of choice people need. They need a public plan they can go to that will be reliable, and that will be there for them once they get sick. It is said about our private health insurance industry that they give you all the coverage you need until you need it. Suddenly it is loophole city. There is a better alternative and a better way.

Another way the public plan can help to fund that and to make up that difference is with less administrative cost. We have heard that on the private insurance side, 15 to 30 percent of the health care insurance dollar gets burned in administrative costs; Medicare, maybe 3 to 5 percent. So they are running probably five times as expensive as Medicare in their administration.

And what do you get for that? Well, you get told that you cannot have the care you need when you actually get sick. You get your doctors hassled so badly by the private insurance industry that they have staff to fight with the insurance companies. As I travel around Rhode Island, doctors tell me that very often 50 percent of their personnel is devoted to fighting with the insurance industry, fighting about prior approvals, fighting about getting paid.

So the 15 to 30-percent costs that the private insurance companies have for administration creates what I call a ``cost shadow'' in the health insurance provider community, because they have got to pay all of those people to fight back. You add the two together and it is big dollars. A public plan will work more effectively, will try to figure out the better way to provide care that does not invest its dollars in trying to fight with providers and figuring out how to deny you care. There is a huge amount of money that can go back into better quality care.

Another story is Tim from Warwick. He is a husband and he is a father. Right now his family health insurance has a $3,500 deductible. Tim and his wife are not high-earning people. The $3,500 deductible is a real risk. Because of it, they actually avoid care, miss appointments and do not take as good care of their health as they should, because they simply cannot afford the out of pocket. They save it for the big catastrophe.

They have tried. They looked around to try to find other things. They cannot find anything better because the costs are so high. So right now Tim sees his family as tethered to that job, tethered to that insurance plan. If there were a public option and he did not have to get it through his job, then they could look and they could find an alternative and they would not feel as tied down.

How many people in America feel trapped in their jobs because they do not have an alternative for health care? And to protect their family's health care, they continue to slug away at a job, they defer the innovation and entrepreneurship they could do. They do not open their own business. They feel they have no choice.

The public option could give them a choice. Another way that could help save money is by providing a new model of service.

Over and over again, we find in health care that if you improve the quality of care, you can actually lower the cost. The waste in the health care system is phenomenal. The Lewin Group says there is $1 trillion in excess health care costs--$1 trillion in excess health care costs--every year in America; $1 trillion every year.

The New England Health Care Institute has looked at this, and they say there is $850 billion in excess health care costs in America every year.

President Obama's Council of Economic Advisers looked at how much excess costs there are in health care. They looked at it by comparing our share of gross domestic product to other countries' shares of gross domestic product that gets burned by their health care systems. We are the highest in the world. We are far ahead of everybody else. We are a complete outlier. We are at 18 percent of GDP. The next worse country is Switzerland at 11 percent, and the EU average is half of ours, and they get better health care results. We spend a fortune on health care. They looked at that comparison.

They also looked at the comparison of regional outcomes and how in some States you can get very high-quality health care with great outcomes and results, and it is a lot cheaper than in other States where you get very expensive health care and lousy results. They crunched all those numbers, and they looked from both sides, and they came up with the number of $700 billion a year in excess health care costs. It is there.

We have a terrible model of service in this country. Anybody who has ever had a sick family member, who has had a chronic condition, who has been sick themselves--you have seen it. You know the inefficiencies in this system: the electronic health record that is not there, so your tests cannot be located and you have to carry your own file around; the insurance companies being just brutal to your doctors and arguing with them about your care, and you cannot get the care while that fight goes on, while they sort it out; the doctors who cannot talk to each other. You have five specialists, and you are the one in the middle, and you are the one who is sick, and nobody is sorting it out for you, and nobody knows what the other person is doing. One person prescribes a prescription and another person prescribes a prescription, and those two interact in a way that makes you sick, and nobody saw that coming because it is disorganized.

All that stuff does not need to be there. It is excess cost. When you get rid of it, you improve the quality of care. A public option can go after that, and it will because it is not bound to try to make a profit every minute, it is bound to try to do the right thing. So there are innumerable reasons why a public option makes sense.

But, finally, I think the strongest one is that by not having to extract all this profit out of the system--by not having to pay CEOs tens of millions of dollars a year, by not having to maintain that huge administrative war with doctors and hospitals and war with their customers as soon as they get sick, trying to deny their coverage--by actually trying to find that newer, better model of care that provides better health care cheaper, they can actually drive down costs--and a lot.

I do not know if the right target number is $700 billion a year or $850 billion a year or $1 trillion a year, but there is a big target number to find, and what a difference that would make for Lisa in Providence, who turned 55 this year. Her birthday present from her insurance company was a 30-percent premium increase--a 30-percent premium increase. She was at the point where she was just able to afford what she had. Madam President, 30 percent more is more than she could afford, so Lisa has now become yet another uninsured American. A public option will help because it will make health care affordable for people who want to have insurance, can be insured, but are not always insured. Lisa is a good example.

Our friends on other side often talk about the people who are uninsured as if they are some like alien species; that it is actually less than we think and we do not really need to worry about it; it is only just a few million here and there. The fact is, in the last year and the year before, 87 million Americans like Lisa had a period in which they were uninsured. They went without health insurance. You know how scary that is. Somebody is not just uninsured; they are a mom, they are a worker, they are part of a family, and something goes wrong and suddenly they cannot afford their insurance, and for a while they are uninsured, and then maybe they try to come back again. They get lucky; somebody in the family gets a job who gets coverage; they find a way to afford it. But there were 87 million Americans who, in those 2 years, went without health insurance.

Do you want to know what 87 million Americans is? That is why this chart I have in the Chamber is colored yellow and red. If you go west of the Mississippi River and take the population of every single State, including the State of New Mexico, which is Senator Udall's home State--and you just take out California--if you take every single one of those States and add them all up, that is 87 million people. That is the population of every single one of those red-marked States, from Minnesota, Iowa, Missouri, Arkansas, and Louisiana, and go all the way west--except for California--all of those States, if you add them all up, the population of every single one of those States, that is the number of people who in those 2 years at some point were without insurance. So it is important that we take that burden off these nearly 90 million American families.

Even for those who have insurance, this is a big deal because folks who have insurance find they go bankrupt very often. Right now in America, 62 percent of all bankruptcies are health care related. That is why American families go to bankruptcy more than any other reason-- because of health care. I tell you, you can make fun of systems like Canada's or England's or France's; you do not see families going into bankruptcy because of health care in those countries.

This is a national tragedy that is happening to those families, which is totally unnecessary. Of that 62 percent of bankruptcies--where the family was doing fine, and a health care emergency put them over the edge and forced them to go into bankruptcy, where they lose their home, they lose their credit--78 percent of those bankruptcies--four out of every five of those bankruptcies happened to families who had health insurance.

So if you are listening to this and you are wondering why it is important we get this reform, because you think: I am insured, I am all set, I am not part of the problem, well, you are very lucky you have not yet had the experience of finding all those holes in your insurance coverage, because I will tell you what, for these families--four out of every five of the health care bankruptcies in this country--they thought they were covered too. It was a rude and sad awakening when their insurance companies started calling them up and saying: Sorry, we are not actually going to be able to cover you. We found an exception. We are rescinding the policy. We are throwing you off. We do not cover that. And they had to pay and pay and pay until everything they set aside, everything they worked for, everything they tried to build up for a secure future for themselves and their families was down the spout, lost in a bankruptcy because their health insurance was not there when they needed it. That is another reason we need a solid public option, so there is an alternative to that kind of behavior, because it does not just keep people out of the insurance market, it clobbers people who think they are safely insured.

Madam President, I yield to Senator Udall.

Madam President, I will speak briefly so the distinguished Senator from Illinois can follow up. I thank the Senator from New Mexico for the question.

In 2007, 2008--2 recent years--nearly 90 million Americans went without health insurance at one point or another. That is close to one in every three Americans, which means as you go around your neighborhood, the fellow with the truck delivering oil to heat your home; the lady in the corner at the bookstore; the guy who owns the gas station down the road--innumerable people whom you know in your real, regular life are in those nearly one in three Americans who are going through a period being without health insurance coverage. Some of them are going to be young people who choose not to do it. Some are between jobs, and they rely on an employer to provide coverage because good luck buying coverage on your own in this country if you do not have an employer to argue the price down for you.

But I think it is really important that we press back against the notion that some of our colleagues are pushing forward: that there is this little group of uninsured who just kind of are not regular people and are different and are a problem, that they are not part of the American fabric. It is one in nearly three Americans who goes in and out of health insurance coverage.

As a parent, I have to tell you, if I had to go home at night and tuck my kids in and then go to bed myself and talk to my wife and be thinking about what might happen the next day if they got sick because we did not have health insurance for them--what an agony for a family to go through that period, when everything is at risk, when you are one illness away from losing everything you have. We put 90 million people through that in the last 2 years. It is real people, working people, real families, and they feel a lot of pain. That is one of the reasons we have to act. We have to get the reform bill done. It is for them, not for the special interests.

Mr. President, would the Senator yield for a question?

As a former attorney general who had antitrust and consumer responsibilities, how many industries can the Senator think of that would get to announce to the world, if this bill passes: We are going to raise our prices! If you are in a competitive marketplace and you are not colluding with each other, how on Earth do you know as an industry that you are going to get to raise your prices, you are going to be able to decide to raise your prices? Isn't the market supposed to do that?

We have heard a lot about how, if we let a public option go forward, it will give terrible customer service, horrible customer service. Senators have said it will be the worst combination of the IRS and the local Department of Motor Vehicles. But we can go to a State such as Wyoming, which is the home State, for instance, of the very distinguished ranking member on the HELP Committee who is also on the Finance Committee and, indeed, was one of the negotiators with Senator Baucus. When he goes home, he goes home to a workers' compensation system that is a single-payer, government-run system. The Wyoming business community doesn't seem to complain about it. So obviously, the customer service can't be that terrible because they would be thrown out if they were that terrible.

The other thing we hear about the public option is that if we let it in the door, it will take over the system because a public insurance plan can't compete fairly with private plans. There are predators who will be let loose in the system, we have heard people say. Well, half the States in the country have public plans that sell insurance in the workers' compensation market which provides--about half of it is health insurance. Some of it is paid back wages that were lost, but the rest of it is health insurance. It is little things such as carpal tunnel, it is terrible wrecks that occur, chronic conditions. All the different aspects of health care that get provided by health insurance also get provided by workmen's compensation insurance.

If we go to Arizona, for instance, which is the home State of the very distinguished Senator McCain who ran for President on the Republican ticket, and Senator Kyl who is the assistant Republican leader of the Republican Party--they go home to a State where there is an Arizona public workers' compensation plan that has been competing with the private sector in that market, I believe, since 1925. I don't have my notes in front of me, but my recollection is that it was from 1925. So for 80 years, they have been running in competition with the private sector.

That doesn't sound to me as though once we let the government in, competition is doomed.

The distinguished minority leader, Senator McConnell, goes home to Kentucky. In the Kentucky workers' compensation system there is a private plan. The Kentucky workers' compensation plan, run by the State, is a public plan. It goes out and competes day to day with the private plans. It adds to the healthy marketplace. It adds to the choices that Kentucky business owners have. I have never heard Leader McConnell or Senator McCain come to the floor to criticize the workers' compensation public plans that operate at home.

So I think there are at least some examples that disprove some of the worst arguments that have been made about the public option: that it will give us terrible public service--well, the single-payer, all- government plan in Wyoming seems to disprove that--and that half of the States in which there is a competitive plan, including Arizona and Kentucky, would seem to disprove the notion that as soon as we let a public plan in to compete, it will take over. It just hasn't, it just doesn't, and the actual facts--what the military calls the facts on the ground--are different than the rhetoric in the air.

Would the distinguished Senator from Illinois yield because he has made such an important point.

He made the point about the lack of competition out there right now. I know that in Illinois, the lead company has nearly 50 percent market share, and the second company, a 22-percent market share, for a grand total of 70 percent market share, just in those two companies.

But it is not just a problem in Illinois. There are 39 States--39 States--in which the top two insurers--just the top two insurers--have the majority of the market; more than 50 percent of the market, just between two companies. In nine States, one insurance company--one insurance company--has more than 70 percent market share, one company.

So the notion that there is a lot of competition going on out there isn't supported by the facts. If you are in one of those nine States where there is one insurer that has more than 70 percent of the market, you don't have a lot of choice. That insurer has extraordinary market power, particularly since they are immune to the antitrust laws.

Extraordinary market power, and in the 39 States where more than 50 percent of the market is captured by only two insurance companies, they have extraordinary room to raise prices and fix prices and work with each other to make sure they maximize profits instead of taking care of regular folks, the folks I talked about earlier, real people who suffer real consequences. The result of it is that our health care expenditures are going through the roof.

I was born in 1955. In 1955, we spent $12 billion a year on health care. In 1979, I just got out of college. It grew nearly 20 times, to $219 billion that we spent on health care as a country. In 1987, I was just about to have my first child, my daughter, half a trillion dollars, $500 billion. In 1992, we spent $850 billion. Here we are in 2009, $2.5 trillion. Look at the direction on the chart--the direction of that spending curve. We have to turn that around. Everybody in America, the insured, uninsured, doctors, nurses, hospitals, everybody has an interest in us getting this right and getting this bill passed so we can turn it around. I don't want to make a joke out of this, but do you remember the last time we had tried for health insurance reform, the insurance industry, which has turned on us now, turned on us then with Harry and Louise, who were that nice couple who raised all these worries and fears. They always worked with fear. I said the other day that Harry and Louise are not the problems; now it looks like Thelma and Louise. With those health care costs climbing, we are headed for the cliff, and we are all in the car together. It will be Democrats who have to work together to solve that problem before we go off that cliff.

I wouldn't be surprised if it were more.

If the Senator will yield for a question.

Not to belabor the obvious, but could he comment on why it is that a for-profit private insurance company might pursue things such as rescission, which is when they throw you off a policy when you get sick because they found an error in your form, and you have been counting on the policy for years, but suddenly you are sick and they throw you out the door? What might the difference be between a for-profit insurance company and a public option when they are looking at that circumstance?

I mentioned earlier that in Rhode Island a for-profit insurer with only 16 percent market share, in a State of only a million people--you are all from bigger States; Rhode Island is a million people. It had 16 percent market share. It extracted in 1 year $37 million in profit to repatriate to its headquarters out of State--$37 million. Imagine how much care you could provide to 16 percent of a market of a million people with $37 million, if you put that back into health care instead of taking it out in profit.

Yes, as the public option would do.

Mr. President, I rise today to introduce the Federal Judiciary Administrative Improvements Act of 2009 on behalf of myself and the Chairman and Ranking Member of the Judiciary Committee, Senators Leahy and Sessions. I thank them for their support. It has been a pleasure to work with them on this important bipartisan effort.

The Federal Courts decide crucial issues of criminal and civil law every day, providing justice and protecting our constitutional rights. It is our responsibility in Congress to ensure that our governing technical issues of judicial administration will help them in this effort.

The Federal Judiciary Administrative Improvements Act of 2009 takes up that responsibility by making nine technical fixes necessary for the better administration of the Federal courts. The bill will clarify the role of Senior Judges in the selection of Magistrate Judges, enable better workload distribution among the judges of the District of North Dakota, align the benefits received by territorial judges in Guam, the U.S. Virgin Islands and the Northern Mariana Islands with those of other term judges, equalize leave limits and pay scales for judicial executives with those for senior executive branch officials, protect individual privacy in connection with judges' role in the sentencing process, clarify the authority of pretrial service officers over juvenile offenders, amend requirements for the reporting of wiretap information to the Administrative Office of the Courts, and add an inflation adjustment for the case expenses that must be reviewed by the chief judge of a district court. The Administrative Office of the Courts supports each provision.

I urge my colleagues to act promptly on this bipartisan legislation. I again thank Chairman Leahy and Ranking Member Sessions for their support.

Mr. President, I rise today to introduce the Federal Judiciary Administrative Improvements Act of 2009 on behalf of myself and the Chairman and Ranking Member of the Judiciary Committee, Senators Leahy and Sessions. I thank them for their support. It has been a pleasure to work with them on this important bipartisan effort.

The Federal Courts decide crucial issues of criminal and civil law every day, providing justice and protecting our constitutional rights. It is our responsibility in Congress to ensure that our governing technical issues of judicial administration will help them in this effort.

The Federal Judiciary Administrative Improvements Act of 2009 takes up that responsibility by making nine technical fixes necessary for the better administration of the Federal courts. The bill will clarify the role of Senior Judges in the selection of Magistrate Judges, enable better workload distribution among the judges of the District of North Dakota, align the benefits received by territorial judges in Guam, the U.S. Virgin Islands and the Northern Mariana Islands with those of other term judges, equalize leave limits and pay scales for judicial executives with those for senior executive branch officials, protect individual privacy in connection with judges' role in the sentencing process, clarify the authority of pretrial service officers over juvenile offenders, amend requirements for the reporting of wiretap information to the Administrative Office of the Courts, and add an inflation adjustment for the case expenses that must be reviewed by the chief judge of a district court. The Administrative Office of the Courts supports each provision.

I urge my colleagues to act promptly on this bipartisan legislation. I again thank Chairman Leahy and Ranking Member Sessions for their support.

I thank the Senator. I had the real pleasure and honor, along with Senator Brown, of being among the principal draftsmen of the public option in the HELP Committee. When I think back on the effort we put into it, and the plan we came up with, it is astonishing to me that it is now the public option that appears to be the most contentious part of the American health care debate right now, because the bill we passed out of the HELP Committee in July was very thoughtful. It includes a community health insurance option--a national plan, administered by the Secretary of the Department of Health and Human Services. It will be available in every State and territory. It would offer benefits that are as good as those available through the private insurance plans, or better. The Secretary would negotiate provider payment rates to encourage doctors and hospitals to participate. Americans who need financial help to participate in the public option would get it. And local advisory councils would assure that the public option was sensitive to local conditions and local needs.

To be clear, this plan includes no mandate for doctors to participate, no rate setting by the Secretary, no requirement that any American buy a public option policy, and absolutely no direct link to the Federal Treasury. Other than the initial capitalization, this plan would operate solely on premium revenue--a completely self-sufficient financial model. It would have absolutely no baseline advantage over private insurance companies. The HELP Committee got here by approving a number of amendments by our friend from North Carolina, Senator Burr, to make sure of this.

Because this version of the public option was so sensitive to these concerns from across the ideological spectrum, the House Blue Dogs, moderates in the House, used a number of our provisions in the House bill to gain moderate support. In fact, the community health insurance option makes so much sense that Republicans have had to resort to illogical arguments to justify their opposition.

For example, they argue that the government should not be in the business of providing health insurance, that it is a slippery slope to socialized medicine. Well, hello, government-sponsored health insurance serves nearly half of Americans--78 million Americans--who are enrolled in Medicare, Medicaid, TRICARE, VA, and they get benefits from the Federal Employee Health Benefits Program, and so forth. We don't hear our colleagues on the other side talking about ending Medicare, closing up the trust fund, throwing our parents and grandparents out to the tender mercies of the private insurance companies. We don't hear that. I have not heard one Republican say they want to deny our Iraq and Afghanistan veterans all the Federal medical care they need when they come home. I don't see Republican Members of Congress opting out in droves or criticizing the Federal Employee Health Benefits Program.

Why? Because these programs work, because Americans rely on them, because they provide dignity and stability in the lives of millions of American families and they have not led to a government takeover of our entire health care system. Indeed, ironically, the very best program is probably the VA program where the level of government involvement is the highest, where they own the hospitals and where they employ the doctors.

Republicans have also been arguing that government involvement in the

private health insurance market will be uncompetitive and will push private companies out of business. We see the government competing competitively in a variety of markets in this country--private versus public universities, private versus government student loans, workers' compensation insurance, the Postal Service versus UPS and FedEx. The existence of public options in these markets has not swallowed up private industry. What it has done is broadened the market and enhanced the variety of competition consumers enjoy. Think how many people in America right now have a higher education because a State university was there as an affordable option, an alternative to private colleges.

Similarly, a public insurance option adds choice for consumers and adds competition in the market, and it gives private insurers a strong incentive to behave fairly and to keep their costs down. In fact, if one thinks about it, there is hardly an industry in this country where the big players are so far from being pushed out of the market. In fact, if you ask me, the for-profit health insurance industry has been doing the pushing--pushing the American people around--for far too long.

Let me give one example from my home State of Rhode Island. Two years ago, United Health Care of Rhode Island proposed to send $37 million in excess profits to its parent company, United Health Group, hundreds of miles away instead of investing that $37 million back into the system. That is $37 million in 1 year out of a State of only 1 million people in which this company only had a 16-percent market share. With a public option, that $37 million would have gone back into improving the health care infrastructure in Rhode Island, into lowering premiums, into increasing provider payments, into investing in our health information and chronic care sustainability projects and helping doctors buy electronic health records and supporting our Rhode Island Quality Institute. But no. And this after United had already sent $16.5 million out of our State in 2004, $13.4 million out of our State in 2005, and $17.1 million out of our State in 2006.

Competition is supposed to lower prices for consumers, create demand for a better product, and push bad actors out of the marketplace. I don't see that in the health insurance market. I see 10 States with the two largest health insurance companies controlling over 80 percent of the market. I see a 120-percent increase in premiums from 1999 to 2007, while wages only went up 29 percent. I see a 109-percent increase in administrative costs from 2000 to 2006--a 109-percent increase--as insurers increasingly game the system rather than competing on better quality of care, better health, and lower cost.

As I have traveled around Rhode Island, I have seen how these circumstances work out for individual Rhode Islanders.

David, a self-employed resident in Central Falls, described the astronomical rise in the cost of health insurance for him and his wife. Years ago, he paid $85 a month for his plan. Today, it is $19,000 for their annual health insurance. Despite the dramatic jump in price, the health insurance does not cover as much as it used to. David has been forced to drop dental coverage and increase the out-of-pocket expenses he and his wife pay on their plan.

He wrote to me:

I'm almost afraid to get sick because today's health plans

have so many holes in them they can nickel and dime you to

death.

Charlotte is a self-employed consultant from Providence. She wrote to share the difficulties she has faced as health insurance became the single largest expense for her company. She buys one of the least expensive plans she can through a small business alliance, but the premium for her current coverage increased by 35.6 percent--more than a third--just this past year, it is covering fewer and fewer tests and procedures, and she has to pay more out of pocket for needed medical treatments. She wrote to me that we needed to move forward on health care reform because `the cost of health care is pulling the plug on my livelihood.'

For these Rhode Islanders and for millions more, there has to be a better way. There has to be a new challenge in this marketplace, a new business model, a new entrant to change the landscape of competition. Instead of competing to lure the healthiest patients, plans should have to compete on quality. Instead of developing a better claims denial procedure, plans should have to develop a better customer service department. Instead of paying executives tens of millions of dollars per year, they should make sure working-class Americans can afford safe and secure health coverage.

Need I remind us that our health care system is teetering on the edge of collapse and the status quo is not sustainable. Over 80 million Americans were uninsured at some point during 2007 and 2008. As many as 100,000 Americans are killed every year by unnecessary and preventable medical errors. Life expectancy, obesity rates, and infant mortality rates are embarrassing by most international measures. The annual cost of our system is closing in on $3 trillion and is expected soon to double. We spend more of our GDP on health care than any other industrialized country, double the European Union average. More American families are bankrupted by health care costs than any other cause. There is more health care than steel in Ford cars. There is more health care than coffee in Starbucks coffee. It is out of control.

We have two choices: We can derail and delay this debate until unpalatable solutions, such as throwing people off Medicare, drastically cutting coverage, or paying doctors much less, are our only remaining options or we can do what Americans have always done when faced with a tremendous challenge, and that is to innovate our way out.

Government is not the enemy in this undertaking. Americans, with a helping hand from their government, have done great things time and time again. We put a man on the Moon and an explorer on Mars. We built a Peace Corps and the Marine Corps. We virtually eliminated polio and smallpox. We built the National Institutes of Health and the Federal Highway System. We have mapped the human genome. Government helped then, and it can help now through an innovative public plan.

Let me make one last point. My Republican colleagues have argued that a public option would drown out private competition and amount to a government takeover. In many places from which they made that argument, the facts at home disprove that contention. Twenty-five States actually provide health insurance benefits through public plans. They actually provide health insurance benefits through public plans in their workers' compensation systems.

For example, Kentucky, represented so ably by our distinguished minority leader, is home to Kentucky Employers Mutual Insurance, a State-run public fund which has operated in the State since 1995 and now provides health insurance benefits to 24 percent of the workers' compensation market in a competitive market.

In Wyoming, the home State of the ranking member of the HELP Committee, Wyoming's Worker Safety and Compensation Division delivers all the health care in the workers' compensation system. They have a single-payer public plan. There has been concern expressed that a government plan will give terrible customer service. I doubt that the Wyoming plan would last very long if it gave terrible customer service.

In Arizona, so ably represented in this Chamber by Senators McCain and Kyl, since 1925 SCF Arizona has provided health insurance benefits through the workers' compensation system, and it now has a 56-percent market share in a competitive market environment. To those who have said you cannot have a government plan because it will necessarily crowd out private insurance by virtue of an unfair competitive advantage, Arizona belies that argument. It has been that way for 80 years, since 1925.

To my knowledge, those who criticize the idea of a Federal public option for health insurance have not criticized the role--often a decades-old one--of public insurance plans in their own States' workers' compensation insurance markets.

We have in front of us an opportunity for a new day in the American health care system where affordable, quality health care is available for everyone; where doctors and hospitals are paid for value, not volume; where you cannot lose coverage because of an illness

or preexisting condition; where insurance company bureaucrats do not come between you and your doctor; where care is not rationed by your family's ability to pay; where every American gets the best health care the country's medical system has to offer.

I support the public option because I see that vision for the future, and I think a public option can get us there. I also see this lesson of the past: that an industry--the private insurance industry--that has put its own financial welfare in front of the physical and mental health of its customers for years, over and over again, cannot now be trusted on its own to lead us into that future, not without a push in the marketplace, not without the kind of push in the marketplace a public option will give.

We actually pretty much had a complete meltdown in the private insurance market, so we had to put in a public option to provide any workers' compensation insurance. But the private insurance companies had written off our marketplace because their business model was impossible to maintain for any reasonable cost. We knew that with good reform in the system and with a public option to implement that reform, we could reduce those costs.

What has happened is two things. It used to cost $3.93 for 100 hours of payroll for workers' compensation, the year after this went through and got stood up. Today, it is $1.74. It is more than 50 percent cheaper in Rhode Island. The model that was set by the public option, a new business model that focused on prevention, on getting people back to work, on better quality medical care, has actually attracted the private industry back into the market.

They are back in and making more with the leadership of the public option.

And they improved their business model, so they are now delivering better quality care, getting people back to work sooner, reducing medical costs by getting people back to work, and providing better quality care. It has been a very successful story from a cost point of view.

It used to be the worst issue for the Rhode Island business community. They were nuts about workers' compensation. We literally had torch-lit parades, and nobody has heard about the issue in a decade because the public option has led the way.

If you think the business community is scared about a public option, go to a State where there is a workers' compensation public option. I think you will find they support it.

Will the Senator yield for a question?

With respect to your observation that we don't see a lot of outcry about ending Medicare, about ending VA health care, and other government programs, Senator Brown has been remarkable about coming to the floor regularly to read the true-life horror stories that our present health care system inflicts on Americans and American families across the board. I have brought a great many Rhode Island stories to the floor. We all have this experience.

I am interested in the evaluation the Senator from Pennsylvania might make in terms of his own experience and his own constituent contacts in terms of those heartbreaking stories you get. Do you hear a lot of heartbreaking stories from people in Medicare; people being thrown off for preexisting conditions? Where in your experience have the real heartbreaking stories come from in Pennsylvania?