Jeff Sessions

Mr. SESSIONS

Mr. SESSIONS. I would respond with this question: Isn't it true, if you are setting eligibility at 400 percent of poverty, or 350 percent, or 300 percent of poverty, you are going to crowd out more people with insurance than if you are actually taking care of poor people who are less likely to have insurance?

Mr. SESSIONS. I didn't. But I will respond by asking this question: If we have crowded out prescription drug coverage for seniors, if we crowd out private insurance in Medicaid for low-income people, if we crowd out regardless of income concerns in general Medicare, and if we now crowd out more children and even adults under a children's plan, who is going to be left in private coverage?

Mr. SESSIONS. I am sure some would occur. Of course there was a feeling and observation on that from the beginning that this was a trend in the country.

Mr. SESSIONS. I am not aware of that. I know my mother didn't have any coverage. She was glad to get the prescription drug benefits.

Mr. SESSIONS. I am pretty close to the estimate.

Mr. SESSIONS. That is not so much--

Mr. SESSIONS. I am curious. I don't know.

Mr. SESSIONS. Mr. President, I join with those who assert that working Americans are carrying too difficult a burden when it comes to health insurance, that the governmental supplements and assistance we provide to help people get health insurance are aberrational, unprincipled, counterproductive, bureaucratic, and often just unfair. A person's health care is more dependent on where he or she works than anything else. If you happen to work for the Government, you are in pretty good shape. If you work for some big company, you are in good shape. But people live in fear that they might lose their job, and more than just losing their job, they may lose their health care. They don't like that. Families are worried about it. People sometimes refuse to take better jobs because of fears that they will lose their health insurance. Prices are exceedingly high for people who are not part of big plans, Government programs and policies, and big company plans. That is just a fact. The same person can end up paying twice as much if they run a small business or work for a small business that doesn't provide insurance, and you cannot be guaranteed you will even get it. Sometimes the premiums are more than twice as much. The President talked about this issue in his State of the Union Address when he talked about tax credits and ending the disparity we now have in health care. It is an absolute problem. I was pleased to support the program offered by Senator Enzi, the small business health plans, the so-called associated health plans that would help small businesses to pool their resources and get cheaper rates. This could add 1 million people to our insured rolls without any increases in taxes. We have a problem out there, we really do. So, sure, there is no doubt SCHIP is helping children in need, and there is no doubt our current system is not working fairly and something must be done to fix it. But just adding to this bureaucratic program without any principled fix in the abuses that are contained in it strikes me as very odd. I do not approve of it. I just do not approve of that at all. It is a system that is brutal on the self-employed, brutal on the person who works for a small business that does not provide insurance. It is not legitimate, it is not right, and we absolutely need to do something to fix it. This odd program that came together some years ago was never, in my view, a particularly sound program. It is just maybe an attempt to fix something that won't work. What we really need, if my colleagues want to know the truth, is a program to allow all Americans to have an insurance policy that is not dependent on where they work. We should allow them to pay tax-free dollars just like employers can. If they have lower income, the Government helps them make the premium payments and they keep that policy whether they are working or they are not working. They take it with them, and they are not being terrorized all the time by the fear of losing their health insurance. We can do that. Senator Coburn has talked about this idea, I know, and Senator Corker, Senator DeMint all those who worked on this issue. The Department of Health and Human Services worked on it. We ought to be doing that. That is what we ought to be thinking about and talking about instead of putting new wine in old wine bottles, trying to reinvigorate a program that has some fundamental problems and, as I am going to point out, is unprincipled and counterproductive in a number of ways. I believe we absolutely could have a portable plan of health insurance which would be something that would excite all Americans and make people feel so much more comfortable with their health insurance. That is what I would like to see us move to. It is said that this is not an entitlement, but it is close to an entitlement. If we are not making needed reforms to preserve this benefit for those in need, why isn't it an entitlement? Who is going to cut and eliminate health care for children and those in need? We are missing an opportunity to have real reform now. I know one can argue this case a lot of different ways, but I will just say, when we have my wonderful colleague, Senator Grassley, whom I admire so much and who is personally a very frugal person, saying: Well, this chart which Senator Gregg, the former chairman of the Budget Committee, produced showing that when it is scored out here, there is no money for it after the fifth year, as if it is going to drop to virtually zero--we know that is not going to happen, and, in fact, Senator Grassley said we will have to find the money 5 years from now. But they wrote the bill in that way so it wouldn't score as costing as much as it is really going to cost. It is a gimmick. It is a classic gimmick, that is exactly what it is. It is a bit discouraging, I have to tell my colleagues, when I have a colleague I admire as much as Senator Grassley taking that position on the bill. Let me ask a few questions about this legislation that point out some of the failures in principle and good policy. If this is a children's health insurance program, why does it cover adults? There is no ``A'' in it; it is SCHIP; it doesn't say adults. Clearly, SCHIP has been abused by some States that have expanded the program to cover adults when the goal of the program from the beginning was to cover children. That is what people talk about. In fact, there are 670,000 adults participating in SCHIP. Some States are spending over half of their SCHIP money on adults, including adults without children. One-third of covered adults are not even parents. One might say: Why do you care that the State has this program? Because the Federal taxpayers are paying 65, 70, 80 percent of it. It is a federally conceived program and substantially federally funded program. Fourteen States provide health insurance through SCHIP, the State Children's Health Insurance Program, for adults. The Government Accountability Office--that is our watchdog analysis group--reports that nearly 10 percent of SCHIP enrollees nationwide are adults. In Wisconsin, 66 percent of enrollees are adults. Seventy-five percent of the SCHIP funds are spent on adults, and we pay the bulk of that money. Sixty-one percent of the funds are spent on adults in Minnesota, where 87 percent of enrollees are adults, according to the Heritage Foundation. Illinois spends 60 percent of their money on adults; Rhode Island, 57 percent; and New Jersey, 43 percent. This year, 13 percent of all SCHIP funds will go to adults who are not expectant mothers. About 30 percent of these adults are not even parents. Of the 14 States projected to spend more than they were given, allocated in 2007, 5 cover children not considered low income, and 5 cover adults other than expectant mothers. The CMS goal and HHS goal was to end the adult waivers by 2009, but this bill basically blocks the ability for that to happen. No. 2, I ask this question: If this program was created to help lower income children, why are some States covering middle- and high-income children and adults? Isn't this an indication that the program has gone far beyond what its original concept was? Isn't this typical of big Government programs, how they grow and take over more and more, and pretty soon become a Government-dominated system? I don't think that is the way for us to go. Rich States are getting richer under this program. States are not stupid; they have figured out how to make the program work to their advantage. If they have the money, they make it work to their advantage, if they can make their match. The definition of low income, therefore, has been manipulated. The SCHIP statute defines a low-income child--this is what it says: A child whose family income is at or below 200 percent of the poverty line for a family of the size involved. So it is supposed to be for, and was created in the fundamental statute to be for, those at or below 200 percent of poverty. I will talk about what that means in a minute. That is a pretty decent income, but we are going way above that. However, States are allowed to disregard parts of a family's income. They can just disregard it. These income disregards can mean, for example, that $50,000 of a family's income simply doesn't count, making many more children and adults eligible who are not low-income people. New Jersey disregards all income between 200 and 350 percent of the poverty level. How do they do that? I am not sure. They got a waiver, apparently. Senator Allard presented an amendment to fix the problem of income disregards. It was defeated, of course. New Jersey just disregards the income between 200 and 350 percent of the poverty level. Ten States and the District of Columbia now cover children in families with incomes of up to 300 percent of the Federal poverty level. In those States, SCHIP provides health insurance for children in a family of four earning up to $61,950. That is a pretty good income. The program, in its current form, provides health insurance for children in those families. New Jersey has extended eligibility to $72,000 for a family of four--350 percent of poverty level. New York recently voted to extend eligibility to families of four earning up to $82,000--400 percent of poverty level. This is supposed to be a program for the poor. It basically is a program for the poor in most States--it is in my State. Some legislative proposals on SCHIP would allow all States to expand SCHIP. Some of these proposals we are floating around here would allow all States to go to 400 percent of poverty level, which would make 71 percent of all American children eligible for public assistance through Medicaid or SCHIP. This bill will allow New York to cover people at 400 percent of the poverty level. Now, the bill says 300 percent, and that is what they will say here on the floor, that it is 300 percent, but the grandfathered-in program covers New York, and they are at 400 percent, which means we will be subsidizing that.

Mr. SESSIONS. Yes, I would be delighted. I hope I am wrong.

Mr. SESSIONS. That do what?

Mr. SESSIONS. I understand New York has passed a law that would do that.

Mr. SESSIONS. It hasn't taken effect yet, but I understand they have passed it.

Mr. SESSIONS. My understanding is that under the current law, the Department of Health and Human Services believes it may have to grant that waiver, and nothing in this bill would prevent it; is that not correct?

Mr. SESSIONS. Well, I will say this without doubt, Mr. President. Amendments have been offered, I believe already and will be offered, to make sure New York would not be able to get the 400 percent. Because the Federal taxpayers in my State of Alabama, where we provide SCHIP to children under 200 percent of poverty, we are going to be subsidizing that, and I don't see any reason for us to do that. But under this bill it can continue, if Health and Human Services is correct, and their lawyers tell them they can't deny this request. I will agree they probably should have been more aggressive in denying some of these things and litigating, if need be.

Mr. SESSIONS. I will do my best to answer the Senator's question.

Mr. SESSIONS. I thank the distinguished chairman for his insights. It has been a good dialog. I would go back, fundamentally, to the remarks I made at the beginning. Our present health care system is not working well. I believe a simpler system, if taken as part of the idea of equalizing tax deductions and tax credits for all Americans--and it would require spending from the Government to do that--if we did that in an effective way, every person could then choose their own insurance policy covering themselves as they wish. I think it would be a far more preferable way than taking a children's program and expanding it in a significant way. There is no doubt. CBO has scored that for every child who is in this bill who would be enrolled in SCHIP, 50 percent of those children would come from private insurance coverage. That is a conservative estimate. It is a big deal. Fifty percent of the people who would be picked up under this plan would come from families where they are already covered. The National Bureau of Economic Research, an independent group, estimates the crowd-out rate for SCHIP to be as high as 60 percent. Of 10 million children, about 50 percent of the children in families with incomes below 200 percent of the poverty line have insurance. This is the number for the lowest income group. We would normally expect and do expect that higher income levels would have higher crowd-out effects. In fact, CBO--our own Congressional Budget Office--the one we have to rely on for information, estimates that 77 percent of the children in families at 200 percent to 300 percent of the poverty level already have private coverage. How about that? And 89 percent of children in families with incomes between 300 percent and 400 percent of poverty have private coverage, as do 95 percent of children in families above 400 percent of the Federal poverty level, according to our own Congressional Budget Office, which I assume our distinguished chairman does not disagree with. I mean he doesn't dispute those numbers. Our goal should not be to take insurance away. I will conclude. I know others are here prepared to speak. I have enjoyed the dialog. I am not comfortable with the some of the ways we are proposing to take care of children and the way we are taking care of adults in a children's program and the way we are dealing with a broken Federal tax policy with regard to the uninsured. I was on a task force appointed by former majority leader Bill Frist, Dr. Bill Frist, to deal with the uninsured. We wrestled with it a number of ways. One of the ways we could have gotten a million people covered was through the association health plans, the small business health plans that my colleagues on the other side of the aisle managed to block. Now we are moving more money, more, I guess, new wine in old wine bottles here. I think we need to break out of this mentality and create a system where you own your health insurance policy and you take it with you if you change jobs. I would note that the average American worker has had nine jobs by the time he or she is 35. Likewise, we ought to have savings accounts that people can take with them whenever they move from job to job and provide as much security and stability and assurance as we can possibly provide the working American families today. Middle-class families are getting hit at both ends here. They are required to pay more taxes. They are not getting the benefits. They are working hard. If they are not working for a big company or the Government, they are paying a very high price for their health insurance. We ought to work on these things, and if we did so, we might be surprised how many people might come on the insured rolls. I yield the floor.

Mr. SESSIONS. I believe that is correct.

Mr. SESSIONS. I believe so.

Mr. SESSIONS. I know the distinguished committee chairman probably knows that pretty well.

Mr. SESSIONS. That is correct.

Mr. SESSIONS. Although as the days and years go by, less and less perhaps.

Mr. SESSIONS. My understanding is the Senator is correct; that is, at least in Medicaid those rates, as you cover certain extras, you get a lower percentage rate. I am unsure of the exact details about how that is applied in SCHIP, but I understand there is a differential. I would suggest to my colleague, though, that what we have done is created a system that incentivizes States to spend because they are getting a very substantial--65 to over 80 percent--match to cover things they wouldn't otherwise cover because it is money given gratis from the Federal Government; is that not correct?

Mr. SESSIONS. Well, reclaiming the floor, the GAO did a study that criticized this aspect of Medicaid some time ago, and it made some news; that the net effect of all this is that, on a percapita basis, people in higher income States are getting more out of Medicaid than they are in poorer States, on a fairly substantial basis. They have criticized that policy. Some of those same policies based on that unprincipled approach to health care are at work in this bill. Again, the Federal Government would pick up a substantial percentage of what New York may get if they go to 400 percent. But 350 and 300 percent is, I think, a bit much anyway. For example, about 70,000 upper-middle-class-income families who pay the alternative minimum tax would also qualify for SCHIP under this bill. The program, I think, as a matter of policy, encourages irresponsible spending. Think about this: States who use up all their allotment, many of which obviously are those giving out their richest benefits, profit from States such as Alabama, who are very careful with their spending and stay within their allotments. In years past, if Alabama didn't use all the allotment given to them--and they have to match a portion of it to get that money--that money was redistributed to States who spent more. This is, I think, unfair and not good, sound policy. It has encouraged States to overspend while punishing States who have been conscientious about controlling spending. Of the States which exceeded their allotment and that have asked for bailouts, adults accounted for 55 percent of those States' enrollees, according to the Government Accountability Office. Those States that have exceeded their allotment, that have reached back into the pool and have gotten more money, the GAO has found that about 55 percent of what they pay out goes to adults. Not to children--adults. This bill does not stop that in an effective way. It had an opportunity to, and it did not. Of the 18 States projected to have shortfalls for 2007, 7 have SCHIP eligibility that is above 200 percent of the poverty level. So the 18 States who were projecting they were going to spend above their eligible amount, they are the ones that have the highest eligibility rate. Four of those States--Maryland, Massachusetts, Missouri, and New Jersey--are at or above 300 percent of the poverty level, so you are talking about subsidizing health care for a family of four earning $60,000 per year. In addition to taking leftover money from fiscally responsible States such as Alabama, some States that have expanded their programs beyond the scope of the original program have asked the Government to bail them out with new money. In other words, there is not enough leftover money. Not enough leftover money now that they can scoop up from frugal States such as Alabama to take care of their spending, so now they are asking and demanding more money from the Federal Government to match whatever they want to do. It is a classic example of an out-of-control Federal program running amok. I have to tell you that is not good policy. Five States have taken 83 percent of Government bailout funding for 2006 and 2007, and 14 States received part of this funding. This is the extra money Congress has appropriated to fill their deficits. Only 5 States have gobbled up 83 percent of these funds, with 14 States receiving part of this funding. But out of $720 million, Illinois received $237 million, New Jersey $164, Rhode Island--small Rhode Island--$84 million--high-income State, that is--Maryland $31 million, and Massachusetts $77 million. So it is the high-benefit, high-tax States that are sucking up money out of the fund, and they want more and more. This bill does not deal with that. The bill only worsens the problem of States who are overspending as it creates a contingency fund. Now, the contingency fund is specifically designed to provide this additional funding to States that run out of money because they have covered too much and there is not enough Federal matching money for them. I think we better name this contingency fund the ``Federal Fund to Encourage SCHIP Overspending.'' Maybe that would be the right title for it. As Secretary Leavitt has said, this section indicates that either the allocation formulas that determine how much money States get are wildly inaccurate or we do want States to overspend. It seems like that is our goal. That is why people are suggesting this is a subtle way to have the Federal Government take over a larger and larger portion of health care in America. A further example of bad SCHIP policy is federally subsidizing infrastructure for States to develop government-sponsored universal health care. Many States, such as Pennsylvania and Vermont, have already begun the process of instituting a universal health care program. I think it is unfair to tax people in the frugal States to pay for rich health care plans for the wealthy in other States. That is not a good policy. About 45 percent of American children are currently enrolled in Medicaid or SCHIP, though only 37 percent are in families earning less than 200 percent of the Federal poverty level. This is the third question I would ask. CBO estimates that about half of new SCHIP enrollees from this legislation now have private insurance. So my question is: Why would we spend taxpayers' money to insure people who are already insured? This bill would decrease private health insurance coverage. It would encourage people to leave their plans. It seeks to take kids away from private coverage and move them to government-run health care. Parents would be financially motivated to take their children off private, usually employer-sponsored plans, and put them on a taxpayer-supported plan. Those children would then have to be supported by the taxpayers; whereas, before they were covered by their own private insurance plan. A recent report by CBO estimates that SCHIP has reduced the uninsured in the target population--those we wanted to reach who are uninsured, low-income children--by only 25 percent. That is the CBO saying that. The target group that was uninsured--low- income children--we have reduced those uninsured by only 25 percent. I think this is because a lot of children now in SCHIP, and in many States adults, are people who used to be on private health plans. Between 50 percent and 75 percent of Medicaid expansion funds in the 1990s were spent on people who would have been privately insured, according to the economist Jonathan Gruber. That is a big number. I don't know if it is accurate, but that is what he concluded--between 50 percent and 75 percent of Medicaid expansion funds--were spent on people who would have been privately insured. One study found that 60 percent of the children who became eligible for SCHIP had private coverage in the year before the SCHIP plan began. That is a stunning number; 60 percent of the children who became eligible for SCHIP had private insurance the year before. CBO found that among newly eligible populations--the higher income families who would be covered by this bill--one child will drop private coverage for every new uninsured child who is enrolled in the public program. That is a stunning number. Overall, for every 100 children whom this bill would enroll in SCHIP, 50 of those children would come from private insurers. So half of the children we are going to be covering would be coming from private insurance plans. I don't think that is good policy, unless it is your goal to diminish private insurance and further take over the private sector with Federal plans. These are conservative estimates, since the studies failed to calculate the crowd-out effect for adults who switched to Government plans. A recent study----

Mr. SESSIONS. I did vote for that.

Mr. SESSIONS

Mr. SESSIONS. Mr. President, this second-degree amendment is a modest but important amendment. It would ensure that $2.5 million of the $51 million in this bill that is set aside for 287(g) training--and I will explain 287(g) training, but it is basically training of State and local law enforcement officers by Federal officials so that they can be of assistance to Federal officials----