Press Releases

Current Status

The Finance Committee has approved its version of a health care reform bill.  However, there is still no one bill.  Senate leadership is working to merge the Health Education Labor and Pensions (HELP) Committee’s bill with the legislation recently approved by the Finance Committee.  This process has involved many meetings and discussions of the Democratic caucus, but final decisions will be made by the Majority Leader.  We expect this combined bill to be released soon, and come to the floor shortly thereafter.

Just this week, the Senate voted against consideration of legislation to fix the flawed Medicare formula that is used to reimburse physicians.  Every year, physicians face increasingly large Medicare cuts, and each year, Congress steps in to block these cuts from taking effect.  This bill would have provided a permanent fix to the problem, holding Medicare physician payments steady.  This fix would have cost $247 billion over the next 10 years, and no offset was provided.

I believe the rejection of this legislation is significant.  It shows that members of the Senate are increasingly concerned about debt and deficit, and will remain focused on ensuring that any health reform legislation is fully offset.

Lessons From Around the World

I recently read The Healing of America by T. R. Reid, which I recommend to anyone with an interest in health care reform.  This book examines other nations’ health care systems for information on how we can improve our system.  The major lesson from the book is the following:  The United States is the only developed country with a for-profit medical insurance industry.  Other countries have private insurance companies, but they function on a non-profit basis, under strict government control.  In the United States, only 80% of premium costs of medical insurance are spent on health care—the rest is devoted to administration, advertising, and profits.  

Many other countries require employers to help fund health care coverage for their employees.  Additionally, other countries have developed systems in which everyone is covered.  There is no discrimination against those with pre-existing conditions, and no fear that an illness will financially devastate your family.  These are lessons that the United States must bear in mind as we move forward with reforms.

What I Support   

The top priority of any health reform bill should be to expand coverage and keep health care premiums low.  My greatest fear is that we pass health reform legislation and premiums continue to increase.  I am concerned that without a public option, this will be difficult to accomplish.  Private, for-profit insurance companies have no moral compass, and will look for ways to avoid any regulations included in the bill.  In order to prevent this, I believe that any health reform bill must do the following:

  • Provide a strong, national public option.  Private insurance companies must face more competition, and individuals should have more options.  I believe that a public option, without pressure to make profits, will be able to offer Americans high quality coverage at a lower price.  This is best accomplished with a strong, national public plan; I do not believe state by state options or co-operatives will provide sufficient competition or control costs.  States could have the option to opt out of this plan, but any state that wants the ability to offer this plan should have the opportunity to do so. 

  • Remove the private health insurance industry’s anti-trust exemption.  I think we need all the regulation we can of this industry.  The “Health Insurance Industry Antitrust Enforcement Act of 2009” would repeal a decades-old antitrust exemption and allow the federal government to prosecute health insurance companies anytime they engage in price-fixing, bid-rigging, or market allocation. 

Last week, the Senate Judiciary Committee held a hearing on the “Health Insurance Industry Antitrust Enforcement Act of 2009.”  I hope people tuned in.  I am an original co-sponsor of this bill because I see no reason that health insurance companies should be exempt from federal anti-trust laws. 

Over the past decade, these companies have been making more, while Americans have been paying more.  In California, the average employer-based family premium rose 55% between 1997 and 2006 alone.  That’s three times the rate of wage growth over the same period.  At the same time, profits at two of the largest health insurance companies – United and Well Point – were rising by double digits year after year.  In the last eight years, publicly traded health insurance companies have increased their profits by 428%. Instead of focusing on regulating people, we need strict regulation of insurance companies.

  • Require employers to provide health coverage.  The HELP Committee and Finance Committee have taken different positions on employer responsibility, which must be reconciled.  The HELP Committee would require most employers to provide coverage, with a $750 per year per employee fine if they do not.  The Finance Committee bill does not require employers to provide coverage.  Instead, it has a “free rider” requirement, which would assess a penalty to help recover some of the government’s cost for subsidies provided to employees to help them purchase coverage. 

I believe the final bill should include a requirement that employers with 50 or more employees provide coverage.  Without a sufficient penalty, many large employers will drop the coverage that they currently provide in order to save on the cost of administering benefits.  Employees with good coverage should not lose what they have as a result of health reform.

  • Strictly regulate premium increases.  Private insurance companies should not be trusted to contain premium growth.  I am developing a proposal to create a Medical Insurance Rate Authority for every state.  It would regulate premium increases in the state’s market.  Companies would not be permitted to increase premiums more than the rate of medical inflation unless they received permission (by majority vote) of the Rate Authority.
I also believe we must restrict a plan’s medical loss ratio, which measures how much is spent on health care, and how much is spent on profit and overhead.  According to Health Care for America Now, insurance companies, on average, spend only 81% of premium dollars on medical care.  This number has decreased from 95% in 1993.  There is no reason for a plan’s administrative expenses to exceed 10%, and this cap should be included in any legislation.
As the final health care reform legislation is assembled, I believe it should focus on these simple, straightforward options to make medical insurance more affordable.

Thank you for reading my update.