Lamar Smith

Mr. SMITH of Texas

Mr. SMITH of Texas. Mr. Speaker, I reserve the balance of my time.

Mr. SMITH of Texas. Mr. Speaker, I reserve the balance of my time.

Mr. SMITH of Texas. Mr. Speaker, I reserve the balance of my time.

Mr. SMITH of Texas. Mr. Speaker, I yield myself 1 minute. Mr. Speaker, we have heard several speakers in the last few minutes say that there are only two industries exempted from the antitrust laws, insurance and baseball. This, of course, is not true. There are more than 20 such exemptions. If the majority is intent on eliminating simple exemptions, perhaps they would be willing to eliminate the labor union's antitrust exemption as well. I reserve the balance of my time.

Mr. SMITH of Texas. Mr. Speaker, I yield 5 minutes to the gentleman from California, the former Attorney General of that State, Mr. Lungren.

Mr. SMITH of Texas. Mr. Speaker, I have no further requests for time on this side, and I am prepared to close at the appropriate time. I reserve the balance of my time.

Mr. SMITH of Texas. Mr. Speaker, on that I demand the yeas and nays.

Mr. SMITH of Texas. Mr. Speaker, on that I demand the yeas and nays.

Mr. SMITH of Texas. I yield back the balance of my time.

Mr. SMITH of Texas. Mr. Speaker, I support this motion to recommit on H.R. 4626, the Health Insurance Industry Fair Competition Act. As I stated in my earlier comments, this legislation does little, if anything. However, if you are going to do nothing, you might as well do it better. This motion corrects three drafting errors that create problems with the bill. First, it adds a definition for health insurers that was absent from the base bill. If we are going to eliminate McCarran- Ferguson for a limited subset of insurers, then we should clarify who those insurers are. Second, this motion to recommit includes the exchange of data provision that Mr. Lungren added at the Judiciary Committee markup of a similar bill. It is necessary to ensure that small and medium health insurers can in fact compete in the marketplace. Third, the motion to recommit includes language that protects the rate gathering and rate setting activities of State insurance commissions. The majority assumes this will be protected by the State action doctrine. But if Congress is going to repeal a 65-year-old law, shouldn't we make clear that we do not want this to undermine State insurance commissions? Finally, the motion to recommit includes a GAO study on the impact of this legislation on competition in the health insurance market. Specifically, the GAO must report on whether or not this legislation has enhanced competition, resulting in lower prices and new competitors in the market. Let's put political rhetoric aside and see what the bill really does. We shouldn't be afraid of the truth. In short, this motion to recommit includes definitions and clarifications that the majority has already included in earlier versions of this legislation that either were reported favorably by the Judiciary Committee or were passed by the full House. This isn't much of a bill, but let's try to improve what little there is. I yield to the gentleman from California, a senior member of the Judiciary Committee.

Mr. SMITH of Texas. Madam Speaker, I yield myself such time as I may consume. Madam Speaker, H.R. 4626, the Health Insurance Industry Fair Competition Act, unfortunately doesn't do much. In fact, it has all the substance of a soup made by boiling the shadow of a chicken. In his State of the Union address on January 27, President Obama challenged Congress to create a plan that ``will bring down premiums, bring down the deficit, cover the uninsured, strengthen Medicare for seniors, and stop insurance company abuses.'' The administration's health care plan does just the opposite. It increases premiums, increases taxes, and reduces Medicare benefits for seniors. Will today's McCarran-Ferguson repeal bring down insurance premiums? No. The Congressional Budget Office says that ``whether premiums would increase or decrease as a result of this legislation is difficult to determine, but in either case the magnitude of the effects is likely to be quite small.'' So what's the point of the bill? The CBO goes on to say that premium reductions from this bill are likely to be small because ``State laws already bar the activities that would be prohibited under Federal law if this bill was enacted.'' So what's the point of the bill? The National Association of Insurance Commissioners pointed out that bid-rigging, price-fixing, and market allocation ``are not permitted under the McCarran-Ferguson Act, and are not tolerated under State law. Indeed, State insurance regulators actively enforce prohibitions in these areas.'' So, again, what's the point of the bill? The McCarran-Ferguson Act's Federal antitrust exemption simply allows small and medium-sized insurers to aggregate information for underwriting purposes so they can compete effectively against larger companies. In other words, McCarran-Ferguson helps to promote competition by making small and medium-sized underwriters viable. Eliminating the exchange of data provision that was included in earlier versions of this bill likely will impede new entry into the health insurance markets. This means that there could be less competition among health insurers. That said, I believe, as does the Antitrust Modernization Commission, that antitrust exemptions should be rarely granted or created. Yet, if they are necessary, they should be written in as limited a way as necessary to meet a compelling public policy goal. I can understand why some of my colleagues may want to support this bill, and given that it will have no meaningful impact, I don't oppose it. However, when repealing an existing antitrust exemption, we should be careful of the unintended consequences of our actions. The majority has avoided one unintended consequence of this legislation by limiting its application solely to health insurers. Eliminating malpractice insurers goes a long way toward making this bill more reasonable. However, the majority should adopt further changes to this bill to demonstrate that they are more interested in legislating than in targeting an unpopular industry for no real policy reason. Specifically, this legislation should be amended to define the term ``business of health insurance.'' Second, we should reinsert the exchange of data provision that was added to the bill in committee. Finally, we should clarify that this bill will not impinge upon State insurance regulations. None of these concepts are revolutionary. They were all included in earlier versions of this legislation that were passed by the House. That said, if the majority really wants to help consumers, we should consider a measure that could actually achieve savings for patients: medical malpractice tort reform. According to a study by the Harvard School of Public Health, 40 percent of all medical malpractice suits against doctors and hospitals are ``without merit.'' So every doctor must purchase malpractice insurance at great expense to protect themselves from frivolous lawsuits. A Department of Health and Human Services study found that unlimited excessive damages add $70 billion to $126 billion annually to health care costs. Doctors are so concerned about frivolous lawsuits that they have to practice defensive medicine and order unnecessary tests and procedures. HHS estimates the national cost of defensive medicine is now more than $60 billion. All of these expenses are then passed on to patients in the costs of health care. That is why some States, including my home State of Texas, have enacted tort reform, which limits the amount of excessive damages awarded in frivolous lawsuits. The result? Insurance premiums have fallen, and the availability of medical care has expanded. But this bill will do nothing to reduce the costs of health care. Congress should set aside this bill, and it should take up lawsuit abuse reform, which could reduce health care costs for our constituents. Madam Speaker, I reluctantly support this, unfortunately, ineffective bill. I reserve the balance of my time.

Mr. SMITH of Texas. I yield myself 1 minute. Madam Speaker, let me say that I always appreciate what my colleagues state on the House floor, and I appreciate their good comments during debate. To the extent that they want to increase competition among insurance companies and want to reduce insurance premiums, I completely agree with them, but we should not think that any of those comments or any of those desires or any of those goals have anything to do with the bill that we are considering here today. Once again, in case some of my colleagues missed it, let me read what the Congressional Budget Office said about this legislation. They said, ``Whether premiums would increase or decrease as a result (of this legislation) is difficult to determine, but in either case, the magnitude of the effects is likely to be quite small.'' So this bill has no point. Madam Speaker, I yield 3 minutes to the gentleman from Wisconsin, the former chairman of the Judiciary Committee, Mr. Sensenbrenner.

Mr. SMITH of Texas. I yield the gentleman an additional 2 minutes.

Mr. SMITH of Texas. Madam Speaker, I yield 5 minutes to the gentleman from California (Mr. Daniel E. Lungren), a senior member of the Judiciary Committee.

Mr. SMITH of Texas. Madam Speaker, I yield the gentleman 2 additional minutes.

Mr. SMITH of Texas. Madam Speaker, first of all, I just want to say that I appreciated what the chairman of the Judiciary Committee just said a minute ago to Mr. Lungren. I understood him to make very positive comments about the so-called Brooks-Lungren amendment. And I hope that that augurs well for the majority's accepting our motion to recommit at the end of this debate. At least I would expect that. At this point, Madam Speaker, I will yield 3 minutes to the gentleman from New Jersey (Mr. Garrett), a member of the Budget Committee and the Financial Services Committee.

Mr. SMITH of Texas. Madam Speaker, I yield the gentleman 2 additional minutes.

Mr. SMITH of Texas. Madam Speaker, I yield 2 minutes to the gentleman from California (Mr. Daniel E. Lungren). Parliamentary Inquiry

Mr. SMITH of Texas. Madam Speaker, I yield the gentleman an additional 2 minutes.

Mr. SMITH of Texas. Madam Speaker, I yield 2 minutes to the gentleman from California (Mr. Daniel E. Lungren).

Mr. SMITH of Texas. Madam Speaker, I yield myself such time as I may consume. Madam Speaker, the bipartisan and very credible Congressional Budget Office has said that this bill will have little or no effect on insurance premiums. It further says that if there is any effect, it will be ``quite small.'' So I do appreciate all the comments that Members are making today, and I agree with a lot of them. But we should not think that any of them pertain to this bill, or that this bill is going to have any kind of a major impact on premiums. However, I would like to discuss one subject that will have a major impact on insurance premiums, and that is health care tort reform. The American medical liability system, quite frankly, is broken. According to one study, 40 percent of claims are meritless; either no injury or no error occurred. Attorneys' fees and administrative costs amount to 54 percent of the compensation paid to plaintiffs. The study found that completely meritless claims account for nearly a quarter of total administrative costs. The American civil litigation system is the most expensive in the world, more than twice as expensive as nearly any other country. Defensive medicine is widely practiced and it is very costly. Skyrocketing medical liability insurance rates have distorted the practice of medicine. Costly but unnecessary tests have become routine as doctors try to protect themselves from lawsuits. According to a 2008 survey conducted by the Massachusetts Medical Society, 83 percent of Massachusetts physicians reported that they practiced defensive medicine. Another study in Pennsylvania put that figure at an astounding 93 percent. While estimates vary, the Pacific Research Institute has put the cost of defensive medicine at $124 billion. Others have arrived at even higher figures. A new study by the Pacific Research Institute estimates that defensive medicine costs $191 billion a year, while a separate study by PricewaterhouseCoopers puts the number even higher, $239 billion every year. Lawsuit abuse drives doctors out of practice. There is a well- documented record of doctors leaving the practice of medicine and hospitals shutting down, particularly practices that have high liability exposure. This problem has been particularly acute in several fields as well as in the rural areas of our country. The absence of doctors in vital practice areas is, at best, an inconvenience; at worst, it can have deadly consequences. Hundreds or even thousands of patients may die annually due to a lack of doctors. According to the Massachusetts study, 38 percent of physicians have reduced the number of higher risk procedures they provide, and 28 percent have reduced the number of higher risk patients they serve out of fear of liability. The American College of Obstetricians and Gynecologists have concluded that the ``current medico-legal environment continues to deprive women of all ages, especially pregnant women, of their most educated and experienced women's health care providers.'' Excessive litigation damages the doctor-patient relationship and impairs care. Beyond the dollars and cents, when doctors begin to see their clients as potential litigants, the quality of care patients receive is seriously compromised. In a recent survey, 76 percent of doctors said that their concern about being sued has hurt their ability to provide quality patient care. Nearly half of nurses say they are prohibited or discouraged from providing needed care by rules set up to avoid lawsuits. The States have proven that legal reform works. While some in Washington talk about the need to study the problem, States have actually acted to address it. Several States have limited noneconomic damages such as those for pain and suffering and dramatically lessened the burden of lawsuits. In States with such limits, premiums are 17 percent lower than they are in States without them. Madam Speaker, I'll reserve the balance of my time.

Mr. SMITH of Texas. Madam Speaker, may I ask how much time remains on each side?

Mr. SMITH of Texas. Madam Speaker, I yield myself such time as I may consume. Madam Speaker, on October 9, the Congressional Budget Office pronounced that a tort reform or civil justice reform package would reduce the Federal budget deficit by an estimated $54 billion over 10 years. CBO recognizes that civil justice reforms also have an impact on the practice of defensive medicine. Defensive medicine is when doctors order more tests or procedures than are necessary just to protect themselves from frivolous lawsuits. Studies show that defensive medicine does not advance patients' care or enhance a physician's capabilities, that billions of dollars in savings from tort reform could be used to provide health insurance for the uninsured without raising taxes on those who already have insurance policies. As the administration rushes to enact a massive government takeover of health care, Congress must remember that there is the option of saving between $54 billion and more than $200 billion by embracing tort reform, but it will take the leadership to stand up to personal injury lawyers instead of taxing Americans and cutting Medicare benefits. According to CBO, under the HEALTH Act, which includes tort reform, premiums for medical malpractice insurance ultimately would be an average of 25 percent to 30 percent below what they would be under current law. Also, the Government Accountability Office, GAO, found that rising litigation awards are responsible for skyrocketing medical professional liability premiums. The report stated that GAO found that losses on medical malpractice claims--which make up the largest part of insurers' costs--appear to be the primary driver of rate increases in the long run. The GAO also concluded that insurer profits are not increasing, indicating that insurers are not charging and profiting from excessively high premium rates, and that in most States insurance regulators have the authority to deny premium rate increases they deem excessive. The reason the administration continues to refuse to add serious medical lawsuit reform to their health care legislation remains purely political, as was recently revealed by former Democratic National Committee Chair Howard Dean. At a recent health care town hall meeting, Mr. Dean responded to an angry constituent who wondered why a supposedly comprehensive reform of the health care system doesn't include tort reform to lower costs of malpractice insurance and reduce defensive medicine. Mr. Dean responded, being remarkably candid, as follows: ``This is the answer from a doctor and a politician. Here is why tort reform is not in the bill. When you go to pass a really enormous bill like that, the more stuff you put in, the more enemies you make, right? And the reason why tort reform is not in the bill is because the people who wrote it did not want to take on the trial lawyers in addition to everybody else they were taking on, and that is the plain and simple truth.'' Medical malpractice premiums have risen more than 80 percent each year in some parts of the country and can cost almost half a million dollars a year in some specialties. Regarding the offer of HHS demonstration projects--and this is what the administration has proposed--that offer rings hollow given that the Cabinet Secretary tasked with implementing this proposal for demonstration projects is Kathleen Sebelius. Before she was Governor of Kansas and the Insurance Commissioner of Kansas, she spent 8 years as the head of the Kansas Trial Lawyers Association, now the Kansas Association for Justice. And she is also the State executive who, according to The New York Times, ``failed to make significant improvement in health coverage or costs during her two terms as Governor.'' The top contributor to President Obama's Presidential campaign was the legal industry, whose donations came to more than $43 million. More than 80 percent of the money given to Congress by lawyers, mostly from the plaintiff's bar, went to the Democrats--almost $22 million. More recently, when President Obama spoke to the American Medical Association in June of this year, he told the audience, ``I'm not advocating caps on malpractice awards.'' But the American people are demanding legal reform. A recent survey found that 83 percent of Americans believe that reforming the legal system needs to be part of any health care reform plan. As the Associated Press recently reported, most Americans want Congress to deal with malpractice lawsuits driving up the costs of medical care. Yet, Democrats are reluctant to press forward on an issue that would upset a valuable political constituency, trial lawyers, even if President Barack Obama says he's open to changes. The AP poll found that 54 percent of Americans favor making it harder to sue doctors and hospitals for mistakes made while taking care of patients. Support for limits on malpractice lawsuits cuts across political lines, with 58 percent of Independents and 61 percent of Republicans in favor. Democrats are more divided. Still, 47 percent said they favor making it harder to sue. The survey was conducted by Stanford University with the nonprofit Robert Wood Johnson Foundation. In the poll, 59 percent said they thought at least half the tests doctors order are unnecessary and ordered only because of fear of lawsuits. That is the end of the AP story. Madam Speaker, the USA Today editorial board also came out in support of tort reform, and USA Today wrote, A study last month by the Massachusetts Medical Society found that 83 percent of its doctors practice defensive medicine at a cost of at least $1.4 billion a year. Nationally, the cost is $60 billion-plus every year, according to the Health and Human Services Department--and that's the HHS of this administration. And a 2005 study in The Journal of the American Medical Association found that 93 percent of Pennsylvania doctors practice defensive medicine. The liability system is too often a lottery; excessive compensation is awarded to some patients and little or none to others. As much as 60 percent of awards are spent on attorneys, expert witnesses, and administrative expenses. The current system is arbitrary, inefficient, and results in years of delay. Madam Speaker, discussing the need for tort reform, the president of the American Medical Association said, If the health care bill doesn't have medical liability reform in it, then we don't see how it is going to be successful in controlling costs. Madam Speaker, I reserve the balance of my time.

Mr. SMITH of Texas

Mr. SMITH of Texas. Mr. Speaker, the administration's health care bill fails to include a Republican solution that could actually achieve savings for patients--lawsuit abuse reform. Forty percent of medical malpractice suits against doctors and hospitals are without merit, according to a study by the Harvard School of Public Health. And excess damages add $70 billion to $126 billion annually to health care costs, the Department of Health and Human Services has found. These costs, of course, are passed on to patients. The administration has only suggested a pilot program for tort reform. But some States, including my home State of Texas, have already enacted tort reform. These States have seen insurance premiums fall and access to medical care expand. We don't need a pilot program. We need to enact medical malpractice lawsuit abuse reform.

Mr. SMITH of Texas

Mr. SMITH of Texas. Mr. Speaker, network news coverage of the administration's so-called stimulus package has been overwhelmingly one-sided, according to a recent analysis by the Business and Media Institute. Since the President signed it into law a year ago, ABC, CBS, and NBC have featured supporters of the stimulus over those who oppose it by a margin of 2 to 1. Incredibly, about half of the network news reports have shown no opposing opinions about the stimulus bill. Americans are not buying the media's spin. Three out of four say the stimulus money has been wasted, and only 6 percent think it has created jobs, according to a CBS/New York Times poll. In fact, 3.3 million jobs have been lost since the stimulus was signed. The national media should give Americans the facts about jobs; not tell them what to think.