John Garamendi

Mr. GARAMENDI

Mr. GARAMENDI. Mr. Andrews, I believe that every one of the 433 Members, or 432 who are still here in the House, know the exact same experience. All of us, and virtually every family in America has that experience where they have found one of their friends or one of their family without health insurance and facing the reality of bankruptcy, the reality of losing their life because they were unable to get the care that they need. I will never forget a visit that I made to a carpenter who had worked his entire life and had come down with lung cancer. He was about 63 at the time. I visited him in his home, a trailer home out in the back part of the district. His wife was there. She had emphysema. And she was about 62. He told me, ``I have to hang on. I have to hang on. I cannot die because she will be left without insurance. And then she too will die.'' That doesn't have to happen in America. What we are doing today, as we prepare for this historic vote on Sunday, is to lay out before the American people why this is so important. It is important to the individual, it is important to that family, that person lying in their sick bed trying to hang on for another year-and-a-half so that the wife would qualify for Medicare. Now, that's the reality of life. But the reality of this bill is it deals with that problem. Because if that gentleman lived next week, after the President signs this bill, he would have the confidence of knowing that there is a special program created specifically for he and his wife. The gentlemen and the women between the age of 55 and 65 who have lost their job, who are unemployed without insurance, there is a special high risk program specifically for them so that if he is to die, he can die with the confidence of knowing that his wife will have health insurance. Now, that is really important because so many Americans and so many in my district have lost their job, they fall into that age group. That is a tough place to get a job because of the discrimination that the insurance industry now puts upon people in that age group.

Mr. GARAMENDI. Thank you very much, Mr. Speaker. I would like to enter into a colloquy with my colleague from New Jersey who earlier spoke of the truth, what is actually in the bill. One of the things that is not in the bill but is actually a fact is that in America about 45,000 people a year die because they lack health insurance. They don't have the opportunity to see a doctor on a regular basis, and they wind up in the emergency room very, very sick. The truth is that under this legislation, 32 million Americans will be able to get health insurance, and poor people will see an expansion of the Medicaid program so that they get in under that program. That is in the legislation, is it not?

Mr. GARAMENDI. And that was the Medicare Part D. Thank you very much, Mr. Andrews.

Mr. GARAMENDI. And you cited the specific code sections, and you also cited the fact that this will reduce the deficit of America over the next 10 years by some $300 billion.

Mr. GARAMENDI. I want to take up another subject that you broached earlier in the conversation, and that is of seniors. The senior population spent the good part of the summer being totally scared, frightened, purposely so, with a pack of incorrect, or shall I just call them lies. Death panels, Medicare is going to be cut, other things were put out there to scare seniors into opposing this. When in fact--and you went through some of this; I want you to drive this home--when in fact, this piece of legislation that we will vote on Sunday strengthens the Medicare program and provides significant benefits and increases. So, please.

Mr. GARAMENDI. That is one of the wonderful things about life. You can come back and do it a second time. In this case we're looking at a situation where in the Clinton balanced budget plan, it led to the longest sustained economic growth in America's history. And we created--I forget the number of jobs----

Mr. GARAMENDI. What happened, if I recall in the 1990s after he said that, the Balanced Budget Act did pass. You were here. I think you were here at the time.

Mr. GARAMENDI. I'm relatively new here, and I don't know everything about the health systems here. But when I signed up, I was given an array of options. I could go to Blue Cross-Blue Shield, or I can get Aetna, or Kaiser. It turns out that Federal Government employees, including every Member of Congress, have access to an exchange. And if you happen to be in California and you're a public employee at the State or county, many of the counties and cities, you are already in an exchange called CalPers, California Public Employees Retirement System. Those are exchanges. This is nothing new. What we're doing is making that exchange available to everybody. Mr. Andrews, you have been here some time, and I know you're very familiar and indeed an expert on the American economy. Let us talk a little bit about the American economy and why this legislation is extremely important to the American economy. Right now we rank 19th in our health, in how healthy we are. And we're actually ranking below Colombia. The fact of the matter is we also spend nearly 17 percent of our total wealth, our GDP, on health care. Our competitors in Europe, Japan, Korea, spend no more than 11 percent--most of them are 10 percent and below. So you know in your economy, we have an enormous disadvantage. I remember actually it was President Clinton talking about this, and it's as though we took a check every year for about $800 billion and gave it to our competitors. We're giving that advantage to our competitors because our health care system is so expensive and consumes so much of our economy and leaves us not at the top of the heap, but at the bottom.

Mr. GARAMENDI. Now, back to the point I was making is that insurance companies discriminate against individuals. We all, if we think about it, know the examples here. I am going to give one. Twenty-three-year- old girl had been insured by the same insurance company for 23 years, from her conception, birth, all the way through teenage years, all the way to 23. She becomes 23. She is no longer on her parents' insurance. She goes back to the very same company and says, I'd like to carry on insurance. No. Not available to you. Why? Well, you had acne when you were 16. The fact of the matter is she also happens to be a woman and in those child-bearing years. So the company says, well, you know, you might get pregnant, might get married; might get pregnant and not be married. In any case, you're going to cost us a lot of money, and, therefore, no insurance. That kind of discrimination is over when the President signs this bill, be it discrimination against people who have a preexisting condition--and who doesn't? Who didn't have acne when they were a kid? Who didn't have asthma? Who didn't have a broken arm? Who in our society does not have a preexisting condition? Very few of us. Under the current situation, the insurance companies are able to pick and choose. Only the healthy or likely to be healthy do they want. Those who might be expensive they push aside. The message to the insurance industry is this: The President signs this bill, your discrimination is over. No longer will you discriminate against women, young or old, whether they are in their fifties or sixties. You will not discriminate against a person who has a preexisting condition. And you will not be able any longer to cancel a policy when somebody becomes sick. Now, I have got to tell you, I went after Blue Cross of California and a couple other companies out there with a vengeance because what they did, people had been buying insurance from them for years and years, they get an illness, maybe they have a cancer, and suddenly the company goes back and says, oh, you didn't tell us when you were 3 years old that you had a tonsillectomy and had to take antibiotics. Therefore, we're going to cancel your policy because you didn't tell us. That is finished the day the President signs this bill. So in the insurance field, the era of discrimination on all of these methods is over and the insurance companies will take all comers.

Mr. GARAMENDI

Mr. GARAMENDI. So for my Republican friends, this is the best deal they have to offer, the do nothing deal?

Mr. GARAMENDI. But before we go there, the statistics just came out from the Labor Department that the majority of workers in America are now women. If we keep women healthy, then the productivity of America is substantially increased. And in order to stay healthy, women or men, you really need that health insurance that provides for the preventative care. And that is in this legislation that there is an expansion of the preventative care services. For seniors, they will be free. For the rest of the public, the insurance policies will have to offer that preventative care. So if we keep women healthy, the productivity of the Nation is going to increase. So for many, many reasons. We'll come back and deal with the issue of the overall economy in a few moments, but I really would like you to pick up the issue that you raised about rate regulation as a result of the extraordinary announcements that the insurance companies made about their rate increases. Tell us about what you have introduced.

Mr. GARAMENDI. That's California.

Mr. GARAMENDI. Thank you.

Mr. GARAMENDI. I think in the testimony that you talked about here in Congress--and I know in California that when Blue Cross Anthem raised their rates about 39 percent on the average, or 39 percent maximum, about 25 percent on the average, and then had done that previously just in the previous year, so it's actually--the 2-year period is actually 12 months over 2 years, 2 calendar years. What happened, the profits of the company went from about $300 million to over $2.2 billion profit. And that's probably why this CEO came before--and correctly, because I suspect she was under oath; you don't lie to Congress--told that she now has a $2 million salary plus an $8 million bonus because she was able, by raising the rates, to obtain a higher bonus for herself and obviously an extraordinary increase in the profitability of the company. Now, if this bill passes, there will be a national standard for rate increases. It also says that if the State governments--and many State governments already do this--that they will be able to continue their rate regulation process. Now, in California, as insurance commissioner in 1991, there was a proposition passed that set up a rate regulation system for the property, casualty. This is auto and homeowner and business insurance. It didn't cover health insurance. But the effect of that rate regulation over a 20-year period as described by the Consumers Union is over a $30 billion savings to consumers. Now, I was able to do that because I became insurance regulator. I set up the rate regulator system. The insurance companies are allowed a profit. They have a steady 10 percent profit. The extraordinary swings in the system, eliminated. The extraordinary increases and then some decreases were eliminated. A steady state was put in place so that the market actually became more competitive. There were more insurers. The policy costs were held down for consumers. We were unable to get that for the health insurance industry. We were unable to overcome the political strength, the contributions, the advertising of the health insurance industry. California remains today a State where consumers in the private individual market in California faced this rate increase because there was no rate regulation. I am so thankful that you have introduced the legislation. This has been the heart and soul of my work for more than 8 years over a 20-year span of time, and if this comes into place, I know from my experience as insurance commissioner, it will be a substantial improvement to the cost of insurance. It will bring rates down, not just over time, but immediately, because the insurance companies no way, no how can they justify the kind of increases that they're imposing upon the public. And that's now in this legislation.

Mr. GARAMENDI. Which side are you on? Okay. I prepared a chart. I have got my donkey up here. This is the Democratic proposal, and, yes, this is a very partisan thing. There is not one Republican vote for our reform, but here's what our proposal will do: 31 million Americans will have access to insurance, and if you already have an insurance policy that you like, keep it. Nobody is going to take it away from you. Keep your insurance policy. If you happen to be of low or moderate income, there will be a substantial--the single largest personal tax cut ever is in this legislation. You mentioned it earlier. It is the tax credit. We're not talking about a deduction for medical care. We're talking about a tax credit. It is taken right off your bottom line taxes, and its up to $53,000--or excuse me, $5,300 for a family of four with a $50,000 income. This is a substantial tax cut going right to the middle class, middle America. Secondly, denial of coverage. We have talked about this over and over again. Those days are over. Hey, insurance industry, it's done. The day the President signs this bill, you will end your discrimination. It's over. Millions of seniors will see the prescription drug--we've talked about that--and millions of Americans will have access to coverage. We haven't talked about the insurance exchange. But before we go there, you mentioned the Republicans. Okay. Here we are. Let's talk about the Republican program. What's the Republican program? And this is in the next 10 years. If the Republicans have their way, 67 million Americans will remain uninsured. That's an increase. Some 40 million, in that range, today are uninsured. But if Republicans have their way, we're talking 67 million Americans. Single and family health care policies will double over that period of time. We're already paying more than can be afforded today, and if they have their way, the Republicans have their way, you will see a doubling. Employer premiums, the cost to employers will double. And you want to talk about the American economy being uncompetitive; this is where you will find it, right here, out-of-pocket expenses. We'll go from $315 billion today to over $564 billion in the year 2020. And insurance availability from small businesses' employers will be cut in half. That's the Republican program.

Mr. GARAMENDI. I hope to be 65. Well, I actually am 65.

Mr. GARAMENDI. Yes.

Mr. GARAMENDI. Let me give a personal example. My son is married with two children. He worked for the University of California for almost 19 years. In the last 5 years, he wanted to start his own business. He and his wife wanted to start their own business--actually it has been about 10 years. They hesitated, hesitated year after year and didn't start their own business until finally he just said, I'm going to do it. I'm going to run the risk. Why did he wait all that time? One very important factor: Two young children. Obviously there were some pregnancies and deliveries involved in that, during that period of time. He could not afford, and he could not get, his personal health insurance, so he stayed with the university for an extra 5, 7 years. And the entrepreneurial spirit, his entrepreneurial spirit, was dampened because of his inability to get health insurance in the private individual market because of a preexisting condition that his wife had. He knew that if he left the university, they would be uninsurable. That is repeated a million times across America, the great entrepreneurial society stifled by this health insurance industry that we have. We are going to change that. And if the Republicans want to join us in changing and freeing the American entrepreneurial spirit, then come and join us. Join us on this bill. Join us on a bill that eliminates the discrimination against women, join us on a bill that eliminates the ability of the insurance companies to discriminate against individuals of all kinds. Free the American entrepreneurial spirit. Give people health care. Make it affordable. We haven't talked about the subsidies that are in this. There are extraordinary subsidies for individuals, for small businesses, so that it becomes affordable, available, and honest insurance. That's our promise. That's in this bill. And we are going to pass it, because it is the right thing for America. Thank you for joining us. Thank you so very, very much for the leadership and all you have brought to us. And to the American people, pay attention. This is important. America for more than a century has tried to get to the point that we are going to be voting on in the days ahead.

Mr. GARAMENDI. Let's take a moment, and we can go back and forth with the dialogue here for a moment about the American economy. This debate has been focused principally on individuals and families and the effect of this, of our program, and how it will help families. Prior to, oh, the last month or so, there was a debate in America, at least there was a discussion in America about the effect of health care and the cost of health care on the American economy. I don't have a diagram here. I thought I would bring it, but it didn't get over here. And it's the fact that the American economy, we're now spending somewhere close to 17 percent of all of our wealth, our GDP, on health care. It's an extraordinary number, particularly when you consider what other economies are doing around the world. Our competitors, Japan, Korea, the European countries, all of the European Union countries, have universal health care. All of the people in their societies, including visitors, have access to health care. Their health statistics are better. They live longer. They don't have as many diseases. Their children don't die as often as our children die. So yet the most any of those countries spend is 11 percent. Most of them are 10 percent or 9 percent of their total wealth. So we are at an extraordinary disadvantage. One of the numbers I heard is like it's writing a check to our competitors for about $800 billion a year, an advantage that we're giving them in our economy because we're spending so much more on a health care system that is so grossly inefficient in so many, many ways. Part of what is taking place with the reforms we are putting forth here is an effort to hold down the costs in many, many ways, including making sure that people have access to health care in the most efficient, effective way; not waiting until they are very, very sick, uninsured, very sick, going to the emergency room, which is the most expensive place, and being extraordinarily sick when they arrive but, rather, getting preventative care, getting the early care. I will never forget a young man about 35. We were doing this debate about 4 years ago in California and he was a speaker at this thing, and he said, I want you to know that I am a glazer. I put glass up in buildings. That's my business. I put glass up in buildings, and I worked for a company for 12 years. We had good health insurance. And the company hit upon a hard time and so they cut the health insurance, and they then decided that they would reduce our health program. I said, I'm a healthy young guy and I've got good health, but I will get my children covered. So he covered his children, and he eliminated his own coverage. He came down with a cold, simple cold. The cold got worse. He didn't have coverage so he didn't go to get care. He wound up with pneumonia, and he wound up then with a collapsed lung; wound up in the hospital for 3 or 4 weeks, became bankrupt. It could have been taken care of with a very simple antibiotic that would have cost $50. It became a $50,000 event. This is happening across America. Those 45,000 people that die every year, this is the young man that didn't get care. This is the extraordinary cost in our system because we don't cover everybody. We intend to deal with that and over time bring down the percentage of our economy that we are spending on health care as we make it more rational, more universal and more efficient.

Mr. GARAMENDI. Let's take this just for a little more, and then I really want to come back to something that you talked about, and that is the bill that you introduced having to do with the rate regulation process.

Mr. GARAMENDI. So what you're saying is this is the do nothing, the best case Republican scenario. But if they actually were able to pass a bill, they're going to take men and women that are 54 now, that in 10 years will be 65 going for Medicare, they're going to take those men and women and toss them into the shark pool with the insurance companies?

Mr. GARAMENDI

Mr. GARAMENDI. Madam Speaker, I'm going to fly home hopefully later this weekend, and it is surely important to me that the FAA continues to do what it must do to keep the air safe. And I want to commend the minority as well as the Chair for this extension. But beyond the extension, there is another extremely important element in this bill, and that is straightening out the funding for transportation. Mr. Oberstar worked a miracle and actually managed to give California less of more, which took a while for me to understand. But the reality is that by being able to work out a compromise with the Senate, we are going to be able to move the transportation programs forward. It's a great example of what can be done with some good leadership working both sides of the aisle. I want to commend the bill to all of us and move this thing along so that we can fly home safely when we get the health care bill done and go home and tell our constituents about a good highway transportation program that's been put together.

Mr. GARAMENDI

Mr. GARAMENDI. I thank you very much, Congresswoman Schakowsky, and thank you for that terrific description of the history of Medicare. This has been a Democratic program for more than 43 years now. As Representative Schakowsky just said, I get the same thing: if I can just live long enough to get the Medicare. And I remember as you were saying that an experience I had. I had visited a carpenter who had become ill with cancer and he wanted me to stop by and see him. This was maybe 10 years ago. He was bedridden, very, very sick. He was about 60, no longer able to work, and his wife was about the same age. And he said, I have just got to hang on long enough so that my wife can get to Medicare. Otherwise, she will have nothing, and she is a diabetic. We have got about 45,000 Americans that are dying every year because they don't have health care and because they haven't been able to live long enough to get to Medicare. Medicare is a program that the Democrats have fought for, have fought very vigorous battles in this Chamber against the Republican Party. You mentioned Newt Gingrich, who was right out front about the Republican goals in the 1990s to destroy Medicare. Well, we are here to protect Medicare. And in this legislation that will be before us for a vote very, very shortly, there is an explicit understanding written into it that Medicare will be protected, that benefits will not be cut, and that cost savings, wherever they may be found in all of the Medicare system, that those cost savings will be plowed back into the Medicare program. So where are the cost savings going to come from? How correct you are with your chart when you talked about where the cost savings are: well- care, preventing illnesses, taking care of people in the continuity of care rather than episodic care. There is also a lot of fraud in Medicare. We know that. We also know that it was the Bush-Cheney budget that reduced the appropriations to fight fraud in Medicare. They basically wiped out the Department of Health Services and the Medicare program's ability to fight fraud, and it blossomed. But in the budget that you passed this last year, now that we have a Democratic President and a Democratic budget, he put money back in to fight Medicare fraud. That will save money. We have seen ``60 Minutes''; we have seen the kind of fraud that is out there. But what really, really makes me upset is the misinformation that is out there, in many cases the downright lies that you see on television, most of them paid for by the insurance industry that doesn't want to lose their 16 percent additional payment over and above the average cost of Medicare that is given to the insurance companies so that they can have this Advantage program. What do the seniors get for it? Not much.

Mr. GARAMENDI. The insurance companies? You bet they do.

Mr. GARAMENDI. The key point here is that in this legislation there is a specific effort to eliminate the fraud that goes on in the system. The unnecessary payments, the stealing of the Social Security cards, all those kinds of things that are out there, we know we need to deal with that. And we are dealing with it. Even before this piece of legislation, we put money into the budget to deal with that; and then this legislation strengthens that. And, in addition to that, we now will have better medical record technology which will also assist us in keeping track of what is going on. It is a small piece of a much, much larger piece of legislation that does help seniors in very, very specific ways. Why should the insurance companies get an unnecessary boost in their profits at the expense of the Medicare program? No reason that I know of. They should be competing and they should be helping seniors, but not get that additional bump. Those savings are also plowed back into the benefits for seniors so that they can have those programs that you talked about, those programs of prevention, of wellness, of being able to stay in their home. All of those things are important. If I could just take a personal moment for a moment. My mother phoned me; she is 87. She is going to have her 88th birthday. If it is 89, I am in deep trouble back home. But she is going to have her birthday soon. She phoned about 3 weeks ago and she said, John, why are you cutting the Medicare programs? What are you talking about, Mom? Well, the TV advertisement just said you guys are going to cut the Medicare program. And I am going, No, we are not. But tell me about the ad. It was an advertisement run by the U.S. Chamber of Commerce in the Sacramento region of California. She saw it and became concerned. So why are these ads out there that are on their face not truthful? One reason: and that is to upset the seniors and to somehow give the seniors false information about what this legislation does. I got her straightened away. She is okay. Although when she sees this red tie, the good Mary Jane McSorley is not going to be happy. But, Mom, I have got a green carnation here.