Max Baucus

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I ask unanimous consent that the Subcommittee on Energy be authorized to meet during the session of the Senate in order to conduct a hearing on December 8, at 2:30 p.m., in room SD-366 of the Dirksen Senate Office Building.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, for the benefit of all Senators, I will take a moment to lay out today's program. It has been 2\1/2\ weeks since the majority leader moved to proceed to the health care reform legislation. This is the eighth day of debate. The Senate has considered 16 amendments and motions and conducted 12 rollcall votes. Today, we will debate an amendment by Senator Pryor and, at the same time, an amendment by Senator Gregg to do with spending taking effect. The first 2 hours will be equally divided. The Republicans will control the first 30 minutes and the majority will control the next 30 minutes. There may or may not be a side-by-side amendment to the Gregg amendment. The Senate will conduct votes on or in relation to the Pryor and Gregg amendments this afternoon. We expect at least those votes to begin sometime between 3:15 and 4 p.m. this afternoon. I will take a few moments to discuss the amendment Senator Gregg offered yesterday. The Gregg amendment has been billed as protecting Medicare. That seems to be the new fashion on the other side of the aisle--to say that the bill cuts Medicare. Frankly, that is a misleading statement at best, and it is inaccurate, basically. In reality, the Gregg amendment is a killer amendment. It is designed to prevent health care reform from taking effect. That is the purpose of the Gregg amendment. It is a killer amendment. The amendment has more details to it, but you can get the flavor of it from a few excerpts. Let me quote from the amendment. The first subsection of the amendment is entitled ``Ban on New Spending Taking Effect.'' You really don't have to go much further to get an idea of what the amendment is about. Just focus on that statement in the amendment--a ban on new spending taking effect. Let me quote further from the second subsection: . . . the Secretary of the Treasury and the Secretary of Health and Human Services are prohibited from implementing the provisions of, and amendments made by, sections 1401, 1402, 2001 and 2101. . . . What are those sections? The Gregg amendment will stop this spending from taking effect. Section 1401 is refundable tax credits providing premium assistance for coverage. Those are the tax credits, the tax reductions that help people buy health insurance. The Gregg amendment says we cannot help people buy health insurance, that they can't have those tax credits. The second section is 1402. What is that? It is to reduce cost sharing for individuals. That is the part that would make copays and other out-of-pocket expenses affordable. The Gregg amendment says: No, we can't have reduced cost sharing for individuals. We have to keep those copays in effect and out-of-pocket expenses high. It would help people with copays and other out-of-pocket expenses. The third section the Gregg amendment would stop is section 2001. It is a section that provides Medicaid coverage for the lowest income population. That is the one that provides expanded Medicaid coverage up to 133 percent of poverty. The Gregg amendment says: No, you can't help poor people with health care. The Secretary is prohibited from making those payments to Medicaid if that amendment is adopted. The fourth section the Gregg amendment would stop is section 2101. Section 2101 is a section that provides additional funding for the Children's Health Insurance Program. Can you believe that? A Senator gets up on the floor of the Senate and wants to stop funding to the Children's Health Insurance Program? That is what that section provides. So if you don't like tax reductions to help people buy health insurance, if you don't like making health insurance affordable, if you don't like health care for the lowest income Americans, and if you don't like health care for kids, then the Gregg amendment is for you. The folks on the other side of the aisle have spent a lot of time this year talking about Medicare. That is about all I hear from them. They make it sound as if they want to help Medicare. In effect, they are hurting it. A lot of folks say they want to help Medicare, and I see the big crocodile tears they shed. I will take a few moments to set the record straight about how the trust fund works. That might help them understand, frankly, why the bill before us--the Reid bill--helps Medicare, contrary to protestations of those on the other side. The Medicare trust fund provides hospital insurance for seniors and Americans who are disabled. Working Americans pay into that trust fund when they pay their payroll taxes. When a senior has to go to the hospital or a nursing home--there are lots of areas where seniors get help--the spending to help pay for that hospitalization comes out of the trust fund. The actual sum comes out of Medicaid, but some payments come out of the Medicare trust fund, such as for home health care, et cetera. When payroll tax revenues are greater than the payments for hospitalizations, the assets in the Medicare trust fund grow. That is good. On the other hand, when spending for hospital care is greater than payroll tax revenues and interest payments on the trust fund assets, then assets in the Medicare trust fund diminish. That is not good. The Actuary for Medicare--the person charged with determining the health of the Medicare trust fund over at HHS--tells us that if we don't do anything--if this legislation is not passed--then by about 2017 the Medicare trust fund assets will be exhausted. That is clear. That is definite. That is a fact, and I emphasize the word ``fact.'' I am just being honest, Mr. President. I have to be objective and honest about this stuff. When I hear Senators talk about Medicare, they are not looking at facts. It is one thing to say something and engage in all this rhetoric, but if it is not backed by facts, it is a bit irresponsible. The fact is, the life of the Medicare trust fund will be extended for 5 years under this legislation. I talked to a Senator on that side privately. He said that the Medicare trust fund will not be extended-- the solvency--for 5 years. I asked him privately: How can that be true? Did you read the Actuary's report? By the way, it was not this Senator right here; it was another Senator, and that Senator said: I don't believe it. It is a fact. The Actuary says that will be the result of the legislation before us; namely, that the solvency of the trust fund will last 5 more years. That is a fact. That is what the Actuary's report said. So we can either raise more payroll taxes to continue the solvency of the trust fund so that seniors get their benefits or we can reduce spending out of the trust fund. We can either increase the money or decrease the money coming out. I will say it again. The Medicare Actuary tells us that health care reform will extend the life of the Medicare trust fund by 5 years or, to put it another way, if we do not enact health care reform, we will hurt Medicare's long-term solvency. Let me cite some examples on how that works. Health care reform would discourage hospital readmissions, for example. That is waste. See, here is what the other side doesn't quite understand. You don't hear them talking about it. The goal here is to extend the life of the trust fund, basically by cutting out waste--not hurting seniors but cutting out waste and cutting back on overpayments in some areas where some providers are overpaid, and where seniors are helped, not hurt. Again, here is an example: hospital readmissions. If you can discourage hospital readmissions, that is fewer dollars wasted out of the trust fund, and it is better health care for seniors. The incentive is for hospitals to have more readmissions because that is how they make money. Some hospitals, frankly, don't go out of their way to prevent readmissions because they can make more money that way, although it is not good care for seniors. When a senior is discharged from a hospital, you want to make sure there is a flow, a seamless effort of keeping health care for that patient, whether it is extended care or home health care in a nursing home or whatnot, and there is a physician involved and nurses involved and so forth, making sure the patient is taking his or her medication, and it is just to make sure patients are getting better all the time. We all know--I know because I have experienced it, and I have watched it firsthand, and I have heard many people talk about this--that too often, when a patient is discharged, the care for that patient is not as great, as the hospital is in longer involved, and sometimes the regular doctor is not involved because that doctor is not very much involved with the patient at the hospital. My own view is that it needs improvement. It is not working too well. Again, we are saving dollars in the Medicare trust fund by preventing excessive readmissions. That is wasteful and doesn't help the patient. So that is a way we are saving and extending the solvency of the trust fund. That is one way. There are others. I will cite a second. Health care reform discourages hospital-acquired infections. I think in America, unfortunately--and I don't know the facts, but I have read this somewhere, but I haven't confirmed it--the rate of infections in American hospitals is greater than it is for other industrialized countries. That is clearly a problem. People die from infections in hospitals, and it seems to me that the more we can encourage fewer infections--one way is through health care reform. Maybe we can lower payments to hospitals that have too many infections. I know it is hard to do. It is a judgment call. You have to do the best you can. That, too, will help the solvency of the trust fund and help care for patients. That is another way we are extending solvency of the trust fund. I see my good friend from Wyoming on the floor, Senator Barrasso, who talks about home health care. I am sure he wants to eliminate fraud in home health care. I am sure he does. We all want to. So we cut back on areas where there is fraud. Where is there fraud? In outliers. Too many hospitals bill too much for outlier payments, additional payments, because they say they have a special patient who is an outlier. One county in Florida billed for 60 percent of the outlier payments in America even though they had 1 percent of seniors in America. There are other examples like that. The GAO came to us and said we have to do something about this. There is fraud in the home health care program. I am a big fan of home health care--a big, big fan. They do very good work. But we want to take out the fraud--excessive payments that are fraudulent. Isn't that a good thing? Doesn't that extend the solvency of the trust fund? Isn't that helping patients instead of hurting them? There are examples. The home health folks came to us and said: Make some of these changes because it is more efficient and we can give better care. As a result, fewer dollars are going to home health care. We also had a provision for rural health care. We add an extra bonus for rural health care. My point is simply that when Senators stand up on the floor and say we are cutting Medicare--sometimes they use the words ``cutting benefits'' or ``hurting beneficiaries''--that is patently false. It is not true. It is true that in some cases we are taking some of the fraud out. It is also true that in some cases we are taking excessive payments--not by our judgment but by the judgment of MedPAC and other organizations and experts who study this. One Senator from Florida stood up and told me he agreed that payments to Medicare Advantage are excessive. Doesn't it make sense to take out the excess, the waste, and the fraud in order to extend the solvency of the trust fund? That is what this bill does. It doesn't hurt seniors by ``cutting'' Medicare, leaving the implication that we are cutting Medicare benefits. It is an old saying in life: If you say something loud enough, maybe people will start to believe it. That is what the other side is engaging in. If you look at the actual facts, the actuary says it does extend the life and solvency of the trust fund. The actual fact is we are cutting out waste. The actual fact is the industry has come to us and said: Help us with this, help us with that so we can be more efficient, much of what is going on here. I have countless examples. Let me give a third one. This legislation would encourage hospitals and doctors to work together by bundling payments. If doctors and hospitals work together, guess what happens. They are less likely to order duplicate tests. They are working together. Payments based on fee for service, payments based today on volume, on quantity are, in some cases, wasteful. It is wasteful. All of us who go to a hospital, a doctor's office, we kind of wonder: My gosh, some things seem wasteful here. We have to get new tests, new this; the doctor doesn't know what happened when I was here previously; we have to start all over again; new x rays, new imaging, so forth. They are waste. We are trying to cut out a lot of this waste, and bundling payments is definitely going to help. We have other techniques--accountable care organizations, medical home concepts. These could take 1 year, 2, 3, or 4 to kick in. But if they do work, it is the model of integrated care systems we all talked about which cut out waste and improve quality at the same time, and that is going to help Medicare. These integrated systems are going to also help extend the solvency of the trust fund and improve quality of care--not reduce it but improve it. The main point I am making is these reforms will extend the life of the trust fund. And guess what. They improve the quality of care, not decrease the quality of care but improve it. We also add some additional benefits for seniors that they will not receive if this legislation does not go into effect. I note we only have a half hour on our side. I probably used more time than I should. The chairman of the HELP Committee is on the floor. Mr. President, how much time remains on the majority side?

Mr. BAUCUS. I yield 10 minutes to the Senator from Iowa.

Mr. BAUCUS. Will the Senator yield for a question?

Mr. BAUCUS. If my colleagues will allow, I ask unanimous consent for 3 minutes.

Mr. BAUCUS. I understand what the Senator is saying, and like everything around here, there is a kernel of truth in almost everything. I read that Samuelson article, and what I took away from it is the guy is kind of pessimistic. There is not a lot you can do. People love health care, they want to get all the health care they want, and that is going to drive up spending. But the main point is this. You mentioned how Intermountain and the quality of care is so good at Intermountain and the costs are down.

Mr. BAUCUS. I was going to say, it is Intermountain, and there are many other great integrated systems. There is one in Billings, MT--the Billings Clinic. There are lots of integrated systems, and generally in these areas, in these integrated systems--which I think work quite well--a lot of the doctors are salaried, a lot of the incentives are there to focus on health care of the patient, and it is coordinated care in contrast with some other parts of the country. In this bill, in addition to wellness and prevention, I would ask if the Senator agrees the delivery system reforms will help move health care, as it is in Intermountain and other integrated systems, to encourage coordinated care, encourage bundling, encourage these accountable care organizations and so forth. I was wondering if the Senator thinks that will help systems--clinics, doctors, hospitals, nursing homes and health care providers generally--to work better together, where there may be more salaried physicians than there are currently, but the salaried physicians I talked to at the Mayo Clinic, for example, and Kaiser and other similar places, kind of like that because they get decent salaries and they can spend their time not on paperwork but can focus on the patients. I am sure the Senator knows all the delivery reforms that are in this that help move toward the Intermountain direction, and I would ask if he thinks that will help.

Mr. BAUCUS. One more moment, if I might, Mr. President. I understand the bill that the Senator and Senator Wyden cosponsored is basically to move us away from the employer-based system. Currently, our tax law encourages employers providing tax free health insurance and so forth. I understand the theoretical and actual problems with the current system. In fact, I earlier advocated moving in that direction, all the way to your legislation. But as you know, this town, this city, this country, this White House was not moving there, and major business was not moving in that direction. Therefore, we had to find something else. My main point is, if we can't go in that direction--you might say keep trying, but read the tea leaves. If we can't do that, at least now, isn't it better to start moving toward the integrated delivery system reforms in this bill?

Mr. BAUCUS. I hope so, too.

Mr. BAUCUS. I like your answer, too. Thank you.

Mr. BAUCUS. Mr. President, I am going to yield 10 minutes--this is a jump ball, so why don't you go ahead. I yield to the Senator from Vermont.

Mr. BAUCUS. Will the Senator yield on that point?

Mr. BAUCUS. Do we have any time remaining on our side, Mr. President?

Mr. BAUCUS. I will take 2 minutes from our side to ask a question.

Mr. BAUCUS. Correct.

Mr. BAUCUS. May I ask the Senator from Wyoming a question? To, from, for--isn't the result the same? If we take a program--let's take home health care. We are all for home health care. But if there is fraud, if the GAO says there is fraud in home health--maybe others too--doesn't the Senator think it is a good idea that we eliminate some of the fraud that might exist in the Medicare Program? Does the Senator agree with that?

Mr. BAUCUS. Does the Senator also agree that when that happens, that means that program--say, home health care, for example--is spending fewer dollars not on less care but fewer dollars because it is not making fraudulent payments?

Mr. BAUCUS. Does the Senator further agree that would extend the life of the trust fund because that program--in this case, home health-- would be spending fewer dollars even though the quality of health care is not diminished? Doesn't that have the effect of extending the quality of health care, and isn't that reduction for Medicare, for seniors, not to take it away but to give it to seniors because it extends the life of the trust fund?

Mr. BAUCUS. No, no, no. There is less spending; therefore, by definition, the solvency of the trust fund is extended, so there are more dollars for seniors in future years. That is the basic point here. That is not a dead end. That is a big wide avenue to help extend the solvency of the Medicare trust fund.

Mr. BAUCUS. Madam President, I ask unanimous consent that the time until 1 p.m. today be under the same conditions and limitations as previously ordered; further, that the prohibition on amendments and motions also be extended until 1 p.m.

Mr. BAUCUS. Madam President, I yield 25 minutes to the Senator from North Dakota.

Mr. BAUCUS. Madam President, before we continue, I ask unanimous consent that the time be extended for debate only until 2 p.m., with the limitations of the previous order remaining in effect.

Mr. BAUCUS. Madam President, I think everybody who is interested in the subject ought to read the CBO letter. Different people make different claims about the CBO letter, but I think it is only fair to read the entire letter, refer to the entire letter, not bits and pieces and parts of the CBO letter. For example, it has been stated that CBO claims the average premiums--we are talking about the nongroup market. That is the individual market now. In fact, that is page 6 of their letter which said average premiums would be 27 percent to 30 percent higher because of greater coverage. That is the statement we just heard. The CBO letter does say that. But I think it is also important to say that those people would be getting much higher quality insurance because of all the insurance market reforms we provide for in this legislation. Even more important, CBO goes on to say on that same page in that same letter: The majority of these enrollees, about 57 percent, would receive subsidies via the new insurance exchanges, and those subsidies on average would cover two-thirds of the total premium. It is true that some in the so-called nongroup market in the year 2016 would find their premiums go up without subsidies. I think that figure nets out to about 7 percent. But they are getting better insurance, much better insurance than they currently have because the insurance they buy in the exchange--we are talking about 2016-- will be much better insurance than they now have. According to everybody else, a fair reading of the CBO letter leads one to conclude that premiums will basically go down by a little bit-- not a lot, a little bit--or be about the same. For example, I have heard on this floor the assertion, but no reference, no authority for this assertion--I heard this morning the assertion that for employees who work for larger companies, their premiums would go up. The fact is the CBO letter said just the opposite. One can make the assertion premiums go up, but I think it is unfair to the American people to make rhetorical claims that are not backed up with authority. The CBO letter is probably the best authority we have for us to work with, and that letter says flatly that premiums for those persons--that is about five-sixths of Americans--would go down, not up, as has been asserted without the authority on the floor. I am making the opposite assertion they will go down by about 3 percent. Not a lot but 3 percent. But my authority is the Congressional Budget Office. That is what they say. Basically, 93 percent of premiums will either go down or be about the same. I mentioned a 3-percent reduction for the employees. Five-sixths of persons work for big companies and in the so-called small group market, CBO says--this is all the year 2016--premiums will be up 1 percent or down by 2 percentage points. It depends on who gets the credit. Some will, some will not. Let's not forget small business gets credit under this legislation, too. I am not sure whether CBO calculated that in. A fair reading is the small group market, that is about 13 percent of Americans, it is, say, a net minus 1 because some go up 1 percent and some down by 2 percent. Basically, if we compare apples to apples, that is what insurance will be in 2016--premiums will go down for those in the nongroup market, down by 14 or 20 percent. Because those with better benefits will find their premiums might go up by 10 to 13 percent and add in the tax credits which one has to do because that is the legislation, on a net basis, for two-thirds of those folks, their premiums will be lower by a large amount. By ``large,'' I mean by about 56 to 59 percent. Who knows what is going to happen in 2016. CBO is giving their best shot based on this legislation. That is what their letter says. I have the letter right in front of me. I might also say that CBO says--I don't know if it is in this letter or another letter--the bill is deficit neutral, and basically over 10 years--I think a 20-year period--the net effect is not much more government or less government, it is about the same as today. There are wild assertions: Oh, it is bigger government. CBO said government's involvement in people's lives will be basically no more or less than today, and that is partly because of a lot more choice people will have. They will have a lot more choice in the exchanges, a lot of choice under the exchanges. It is that choice which will encourage greater competition, and greater competition will encourage lower prices. At least that is the theory. Most of us tend to think competition lowers prices, and that is what the legislation does. Unless the Senator from Wyoming wishes to speak, Senator Kerry, on our side, wishes to speak for at least 15 minutes.

Mr. BAUCUS. Mr. President, I yield an additional 5 minutes to the Senator from Massachusetts.

Mr. BAUCUS. Mr. President, how much time is remaining in this hour?