Max Baucus

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I ask unanimous consent that we extend the period for debate until 4 p.m. with the time equally divided, with Senators permitted to speak up to 10 minutes each, with no amendments in order during this period of time.

Mr. BAUCUS. Mr. President, here we go again. We keep hearing it, and the other side keeps using scare tactics. All those Democrats say is tax, tax, tax. Scare tactics. They think they can scare people into believing something that is not true. The fact is, not only does this bill not raise taxes on the middle class, this bill is a tax cut for Americans. Look at the chart behind me, which shows that. This is individual taxes. We are talking about taxes on individuals in America. This chart shows that in the year 2015, there will be a net tax cut for Americans of $26.8 billion--a tax cut. The other side says some of those folks are not paying taxes. That is true. It is a refundable tax credit of about $27 billion. In 2017, it is a net tax cut of $40 billion. In 2019, it is a net tax cut of almost $41 billion. Nobody can read the small print on the chart, so I will read it: Combined effects of the high-premium excise tax, health care affordability tax credits, increase in HI tax, increase in HI floor for medical expense deductions. It is the basic provisions. It is very important to point out that this is a net tax cut for most Americans. For some, there is a tax increase. But guess what. According to CBO, that is because those folks will make more money. Their wages and salaries will go up. I don't see a chart-meister behind me to change the charts, but the chart shows almost for every year about a 10-percent increase in taxes for upper income areas and about an 80-percent increase in wages or income. That is basically because, according to the CBO, the high- premium excise tax will result. People will be paying lower premiums, 7 to 12 percent lower premiums as a consequence of the Cadillac tax provision. CBO says that; it is not my prediction. That will be passed on in the form of higher wages and higher income to people. People will be paying higher taxes, but they will be making more money. Let's make it clear. This bill lowers taxes. At least that is what CBO says. It is one thing to make an allegation that it increases taxes, but CBO says there is a net tax cut, which I mentioned. Turning to another subject--small business--one of the goals of health care reform, clearly, is to ensure employees and small businesses have access to quality, affordable health care options. Small businesses have a tough time providing health insurance, that is true. Last year, only 62 percent of small businesses offered health insurance to their employees. Compare that with about 99 percent of companies with 200 or more employees. Big businesses offer health insurance, but small businesses just can't do it. They have a hard time. Among the very small businesses, fewer than half offered their employees health insurance. Small businesses say the main reason they cannot provide health insurance is because premiums are so high. That is probably true; it is expensive. I have talked to many small businesspeople, and I am quite certain the Senator from Vermont, who is in the chair, has run across the same comments from businesses. It is just too expensive. In the past 10 years, premiums have risen 82 percent for single workers and 93 percent for families employed by small businesses. As health care costs rise, small businesses are forced to make workers pay a greater portion of these expensive premiums. Last year, employees in small businesses that provided health insurance paid more than twice what they paid in 1999. So in a period of 8 years, the amount employees paid more than doubled. The low rate offering and higher cost-sharing responsibilities for employees and small businesses often limit the ability of small businesses to attract and retain good employees. That is why the health care bill before us today includes provisions to make quality coverage more affordable for small businesses and their employees. The bill includes $24 billion in tax credits to help small businesses and charitable organizations purchase health insurance for their employees--$24 billion. Starting in a couple of years, eligible small businesses would receive tax credits worth up to 35 percent of the employer's contribution to employee health insurance plans. Then in 2014, eligible small businesses will receive tax credits worth up to 50 percent of the employer's contribution to employee health insurance plans purchased in health insurance exchanges. That is half of the cost to the employer. An employer could take half of that cost as a tax credit against that company's income. To qualify for the tax credits, businesses would have to cover at least half of their employee premium costs. The value of the tax credit is based on the size of the business and the average wage of its employees. The small business tax credit will help make health insurance more affordable for many small businesses. That is clear. In 2011, 4.2 million Americans will be covered by quality, affordable health insurance because of this credit. On average, small businesses across the country will receive a new tax credit of around $5,000 to help them purchase insurance. The CBO has estimated that the small business credit will help lower insurance costs by 8 to 11 percent for employees at small businesses who receive that credit. CBO says, again, that small business credit will help lower insurance costs by 8 to 11 percent for employees of small businesses who receive the credit. One of the reasons many small businesses are currently unable to afford health insurance is because they lack the buying power larger companies have to negotiate group rates. Our bill creates small business insurance exchanges, known as shop exchanges, where small businesses can join together and pool their risks. That will enhance their choice and buying power. These State-based exchanges will be a critical tool to help small businesses with fewer than 100 employees shop for health insurance plans and determine their eligibility for tax credits to buy health insurance. Small businesses that prosper and grow beyond 100 employees will be allowed to continue shopping in the exchanges. The insurance plans sold in these exchanges will be subject to the same transparency requirements and consumer protections, so small businesses can feel confident they are purchasing high-quality plans that will provide quality, affordable coverage for their workers. One more point. We all talk to small businesspeople. Time and time again, they say they like to provide health insurance. But what happens? The insurance company comes along and says: Next year, we are going to raise your premiums 20, 30, 40 percent. Why? The answer is that we found out one of your employees has a preexisting condition, so we are going to raise your premiums by that much. It puts small businessmen in a terrible dilemma: they either have to fire that employee to get the lower increase in premiums or eat that big increase and keep that employee. I remember a businessman in Billings, a small contractor, whose heart sank when he got that notice from the insurance company. He decided to keep the valuable employee, who had worked for him for a good period of time. He will not fire that employee. He shopped around and finally found another insurance company, and the increase was not 30 percent, it was more in the nature of 20 percent. Small businesspeople face this great variety of premiums. They go up this much and that much. It is because of the terrible situation we have where companies can deny coverage based on preexisting conditions, health care status, and so forth. Different States have different rating rules and so on. This will help small businesses get more stability and quality. The insurance plans sold will be subject to the same transparency requirements and consumer protection that other individuals will also find available. The health care reform bill before us also institutes reforms of the insurance market that will protect individuals and small businesses purchasing plans. I already mentioned that. These reforms will stop insurance companies from denying coverage based on preexisting conditions. Passing health care reform is critical to small businesses. Without reform, many small businesses will be forced to drop their health care insurance coverage because they will no longer be able to afford the increasing premiums. That would leave employees to fend for themselves in the individual market. The CBO tells us these reforms will make coverage more affordable for millions of small business employees. The small business tax credit will help reduce health care costs for small businesses and their employees. As a result of the larger health reform proposals in this bill, there will be an increase in the percentage of small firms that offer health insurance coverage. I ask unanimous consent to extend the period for debate only until 4:30, with the time equally divided, with Senators permitted to speak therein for up to 10 minutes each, with no amendments in order during that time.

Mr. BAUCUS. Madam President, I believe we have to amend the previous order which restricted speakers to 10 minutes. So I ask unanimous consent that the previous order be changed so that Senators may speak for longer than 10 minutes, and I yield 15 minutes to the Senator from New Jersey.

Mr. BAUCUS. Madam President, I ask unanimous consent we extend the period for debate only until 5 o'clock, with the time equally divided with Senators permitted to speak up to 10 minutes each; with no amendment in order during this time.

Mr. BAUCUS. I suggest the absence of a quorum and ask the time be equally charged to both sides.

Mr. BAUCUS. Madam President, I yield the time remaining on our side to the Senator from Maryland. Might I ask, how much time is that?

Mr. BAUCUS. Madam President, not withstanding the prior agreement, I ask unanimous consent that the Senator from Maryland be allowed to speak for 10 minutes.

Mr. BAUCUS. Madam President, I might amend that by asking unanimous consent that the Senator from Kansas also be recognized for 15 minutes following the Senator from Maryland.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I remind all Senators that we have an hour, equally divided, with each Senator able to speak up to 10 minutes each.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I ask unanimous consent that when the Senate completes its business today, it adjourn until 10 a.m., Thursday, December 10; 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 resume consideration of H.R. 3590, the health care reform legislation; that following leader remarks, the time until 1 p.m. be for debate only and equally divided, with the time until 11 a.m. controlled between the two leaders or their designees, with the remaining time until 1 p.m. controlled in alternating 30- minute blocks of time, with the majority controlling the first block and the Republicans controlling the next block.

Mr. BAUCUS

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

Mr. BAUCUS

Mr. BAUCUS. Mr. President, for the benefit of all Senators, I would like to take a moment to lay out today's program. It has been more than 2\1/2\ weeks since the majority leader moved to proceed to the health care reform bill, and this is the ninth day of debate. The Senate has considered 18 amendments or motions. We have conducted 14 rollcall votes. Today, the Senate will debate the amendment by the Senator from Nebraska, Mr. Nelson, on a woman's right to choose. At the same time, we will debate the motion by Senator McCain on Medicare Advantage. The time between now and the caucus lunches is for debate only. The majority will control the first hour of debate this morning; the Republicans will control the second hour. We are hopeful the Senate will be able to conduct votes on or in relation to the Nelson amendment, a side-by-side amendment to the McCain motion, and the McCain motion sometime this afternoon. Thereafter, we expect to turn to another Democratic first-degree amendment, which is likely to be the amendment by the Senator from North Dakota, Mr. Dorgan, on drug reimportation, and another Republican first-degree amendment. We are working on lining up those amendments. I note that the pending McCain motion is the third such effort by the Republicans to defend the private insurance companies that run the program called Medicare Advantage. That is the same so-called Medicare Advantage Program that the nonpartisan MedPAC says is overpaid-- overpaid by 14 percent--compared with traditional Medicare, which does the same thing. That is the same so-called Medicare Advantage Program whose overpayments add $90 to the Medicare premiums of a typical retired couple, even though that couple gets nothing in exchange. That is the same so-called Medicare Advantage Program that has been the major source of strong profits for the private insurance companies that receive those overpayments. And that is the same so-called Medicare Advantage Program that helps those private insurance companies to pay their CEOs $8 million a year, $9 million a year, and in one instance more than $20 million a year in compensation. So that is the same so-called Medicare Advantage Program that, in our view, needs a healthy dose of competition. That is all our bill would do. Our bill would move to competitive bidding in the private insurance Medicare market. It is high time we did so. This morning we are going to have a colloquy among many new Senators, the group of Senators who were just elected last year, which is a very active group. I have met with them many times. They are very thoughtful, very active, and they have a lot to say.

Mr. BAUCUS. Madam President, may I ask unanimous consent to speak for a couple of minutes to comment on the freshman package? It will just take a few minutes.

Mr. BAUCUS. Madam President, I join my good friend from Connecticut in thanking--I don't know if calling them freshmen would be wise, because our colleagues act as though they have been here for years and know the subject extremely well. Delivery system reform has always been something I have been pushing for, and I am happy to see it is part of your package, and also with additional emphasis on rural areas and Indian reservations. We clearly need more of that, and more transparency. I firmly believe that will help us get costs down and get quality of care up. Your work on the independent Medicare advisory board is great too. To be honest, these are all the next steps in ideas that are pretty much in the bill, but they are the proper next steps, and the next steps I firmly believe should be taken. So I compliment you and thank you very much, and I thank my friend from Arizona for allowing me this time.

Mr. BAUCUS. Madam President, with respect to the last debate, let's be clear that the underlying bill keeps the three-decades-old agreement that has implemented the Hyde amendment to separate Federal funds from private funds when it comes to reproductive health care. The Nelson-Hatch amendment is unnecessary. It is discriminatory against women. Women are the only group of people who are told how to use their own private money. That is unfair. On another matter, with respect to the McCain motion, let me explain a little bit about Medicare Advantage and how it works. Essentially, the Medicare Advantage Programs are insurance companies. They are insurance companies that have their own officers, directors, their own marketing plans and their own administrative costs and they are concerned about the rate of return on investment for their stockholders. These are simple, garden variety, ordinary insurance companies. In this case, they are insurance companies that get general revenue from payroll taxes and premiums. They are basically insurance companies that give benefits to senior citizens. These insurance companies are overpaid. There is not much disagreement that they are overpaid. How are they paid? Well, believe it or not, these insurance companies-- Medicare Advantage plans--are paid according to the amount Congress sets in statute. That is their payment rate, what Congress sets in statute. The problem is, by doing so, these preset rates overstate the actual cost of providing care by 30 percent. We pay more than it costs to provide care by about 30 percent, in many cases. These overpayments also clearly promote inefficiencies in Medicare. Also, these payments have not been proven to increase the quality of care seniors receive. In the estimate I saw, about half the Medicare Advantage plans have care coordination and half don't. Half are no better than ordinary fee- for-service plans. Because of this broken, irrational payment system, some plans receive more than $200 per enrollee per month and others receive about $36 per enrollee per month. Again, the payment rates are set by statute, relating to fee for service in the area. It is broken. It doesn't make sense. It causes great dislocations and differences in the payment rates. Frankly, under this broken system, all beneficiaries are not receiving the same care. I believe all beneficiaries should be able to have access to the best care, not just those who happen to live in States with high payment rates.

Mr. BAUCUS. Madam President, I ask unanimous consent to continue for an additional 5 minutes.

Mr. BAUCUS. Madam President, I have said these Medicare Advantage plans are overpaid. Nobody disagrees with that. They are overpaid. The Senator from Oklahoma, Mr. Coburn, when I asked him a few days ago if he thought they were overpaid, said: Yes, they are overpaid. The MedPAC advisory board tells us: Yes, they are overpaid. Here is a statement made by Tom Scully, former Administrator of the Center for Medicare and Medicaid Services: I think Congress should take some of it away. There's been huge over-funding. There are lots of other citations from Wall Street analysts and others in the industry saying clearly the Medicare Advantage plans are overpaid. Frankly, we, in Congress, put a statutory provision in law that has caused this overpayment. Clearly, we should fix it. In addition, something that is pretty alarming is, according to a study I saw, only about 14 cents on the dollar of extra payments to Medicare Advantage plans goes to beneficiaries--only 14 cents--which means 86 cents on the dollar goes to the company, not to the beneficiaries, not to the enrollees but to the companies--``the companies'' meaning the officers, directors, administrative costs, marketing costs, rate of return. It is to the company, any ordinary, garden variety company. Therefore, it behooves us to find a better way to pay Medicare Advantage companies so it is efficient, there is not waste, and payments go primarily to enrollees, to beneficiaries. How do we do that? This legislation moves away from the current archaic system which sets statutory amounts in effect. Rather, we say, OK, why not have these companies bid? Let them compete based on costs in their regions. One region of the country is different from another region of the country. We are going to say what is fair here to get rid of a lot of waste and overpayments is provide that Medicare Advantage plans can compete in their area based on cost. The plan will be paid the average bids that are based on competition in the area. We, the authors of this bill, think that is a far better way of paying for Medicare Advantage. Will that reduce payments to beneficiaries? Certainly no. All guaranteed benefits are guaranteed in this legislation. In fact, I am going to check up on another statistic. I heard somewhere under this legislation there will be an increase of enrollees--not a decrease, an increase of enrollees. I am going to track that down because I want to be sure I am accurate. I will conclude. I want to talk more about this issue later. There may be a separate amendment on this subject offered on our side. By and large, it is wrong to continue a current system that dramatically overpays and where 86 percent of the overpayment goes to the company and only 14 cents goes to the beneficiaries. We have to come up with a fair way of paying Medicare Advantage. I think a fair way is to have the companies competitively bid based on cost in their areas. That way they are going to get reimbursed at a level that is relevant to their area, and it is also relative to the cost they incur when they run their plans. I will have more to say about that later. I yield the floor.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I ask unanimous consent that the Senator from Nebraska be allowed to speak for up to 10 minutes.

Mr. BAUCUS. Mr. President, I yield to the Senator from California. At least indirectly it is our understanding that Senator Reid will soon come to the floor to speak.

Mr. BAUCUS. That would be my request.

Mr. BAUCUS. Mr. President, the McCain motion to commit on Medicare Advantage would keep overpayments in the Medicare Advantage program, even though the Medicare Payment Advisory Commission recommends that they be eliminated. The McCain motion to commit is a tax on all seniors. It would maintain the overpayments to private insurers and require beneficiaries to pay higher Part B premiums. The average couple pays $90 per year just so insurers can reap greater profits under Medicare. The McCain amendment is a raid on the Medicare trust fund. MA overpayments take 18 months off the life of the Part A trust fund. And according to MedPAC, there is no evidence of greater quality of care. In fact, MedPAC told Congress this year that ``only some'' MA plans are of high quality. MedPAC finds that ``only half of beneficiaries nationwide have access to a plan that Medicare rates above average on overall plan quality.'' The more than 45 million seniors with Medicare deserve better. They do not deserve to subsidize high profits of private insurers. And the more than 11 million Medicare beneficiaries who choose to enroll in private plans also deserve better. They deserve plans that coordinate care. Most plans today do not. They deserve plans that are of high quality. Many plans today do not. If Senators want to help beneficiaries, they will vote to eliminate overpayments under Medicare Advantage. And they should vote against the McCain motion.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I ask unanimous consent that the Committee on Armed Services be authorized to meet during the session of the Senate on December 8, 2009, at 1:30 p.m.

Mr. BAUCUS. Mr. President, I ask unanimous consent that the Committee on Environment and Public Works be authorized to meet during the session of the Senate on December 8, 2009 at 10 a.m. in room 406 of the Dirksen Senate Office Building.

Mr. BAUCUS. Mr. President, I ask unanimous consent that the Committee on Foreign Relations be authorized to meet during the session of the Senate on December 8, 2009, at 2:15 p.m.

Mr. BAUCUS. Mr. President, I ask unanimous consent that the Select Committee on Intelligence be authorized to meet during the session of the Senate on December 8, 2009, at 2:30 p.m.