Health Insurance Marketplace Modernization and Affordability Act of 2006

HEALTH INSURANCE MARKETPLACE MODERNIZATION AND AFFORDABILITY ACT OF 2006--Resumed -- (Senate - May 11, 2006)

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Mr. REED. Mr. President, I would like to comment on the legislation the majority has brought forward during what it has dubbed Health Week and on health care more broadly.

While I do not support this legislation as drafted, I commend Senator Enzi for attempting to address the important issue of health insurance for small businesses.

As of 2004, over 45 million Americans were uninsured. Unfortunately, these numbers continue to rise with each passing year as more and more employers cease offering coverage to their employees. In Rhode Island, the percentage of companies offering health insurance coverage declined from 80 percent in 1999 to 68 percent in 2005. In my State, a small business is more likely to drop coverage because of the prohibitive cost.

While some employers have stopped offering coverage altogether, others have struggled to keep up with escalating costs. Since 2000, premiums for family coverage have increased by 73 percent compared to an inflation growth of 14 percent and a wage growth of 15 percent over the same period.

Health insurance affordability not only affects employee satisfaction, it also has a direct impact on a company's competitiveness.

We need to address these issues, but S. 1955 is not the answer. It decreases cost by changing rating structures, allowing cherry-picking of healthy individuals, and offering plans with very few benefits.

S. 1955 would amend the Employee Retirement Income Security Act of 1974 (ERISA) to allow for the creation of small business health plans, SBHPs, sponsored by business or trade associations that would, like self-insured plans, be exempt from State laws. As was the case with legislation proposing the creation of association health plans, AHPs, a considerable number of health care experts have expressed concerns that this legislation would exempt SBHPs from important State regulations that protect consumers, guarantee access to coverage and treatment, and ensure financial solvency. Millions of Americans could lose coverage for such important care as screening for breast, cervical, colorectal, and prostate cancer; well-child care and immunizations; emergency services; mental health; and diabetes supplies and education.

I have serious concerns that this legislation could weaken the already fragile insurance market we currently have in the United States. States have worked diligently to craft insurance regulations that reflect their individual needs. They have developed rating systems and mandated benefits to best protect their citizens.

This bill will affect not only health insurance for small businesses but also health insurance for all markets. In a letter to the chairman and ranking member of the Health, Education, Labor, and Pensions HELP Committee, the Rhode Island health insurance commissioner expressed his strong concerns about how S. 1955 would affect the State's health insurance regulatory system, its ability to hold health plans accountable, and develop solutions particular to our Sate. I will ask that the text of this letter be printed in the RECORD.

I have serious concerns about the health insurance that would be offered under this legislation. If insurance does not offer adequate coverage, it is insurance in name only. It is of little use if you can't afford it or access it when you need it.

A recent program on PBS' NOW focused on what it termed ``junk insurance plans'' and profiled two particular cases where the insurance was really no insurance at all, leaving couples who had faithfully paid premiums with astronomical medical bills. In one case, the insurance plan sold was marketed through an association for the self-employed.

It is important to try to address the problem of the uninsured, but we need to be sure that it is being done in a sensible and thoughtful manner.

While Senator Enzi has taken a great deal of time to meet with a variety of stakeholders in drafting this legislation, there have been no hearings on the bill, even though my colleagues and I on the HELP Committee requested such hearings. Moreover, 41 attorneys general have signed a letter in opposition to S. 1955; 19 State insurance commissioners and State departments responsible for insurance regulation have written letters opposing this legislation.

There are better options. The Lincoln-Durbin proposal would be more effective in curbing health care costs and expanding coverage, as well as help small businesses and their employees. It would create the Small Employers Health Benefits Program SEHBP and provide tax breaks for employers that offer financial assistance for insurance premiums to low-income employees. SEHBP is based on the Federal Employee Health Benefits Program and would extend the purchasing power of the Federal Government to small businesses that choose to participate. In addition, SEHBP enrollees in local plans would enjoy an array of coverage options, while at the same time benefiting from State consumer protections.

I filed three straightforward, commonsense amendments to guarantee more comprehensive coverage, to preserve State authority, and to make sure SBHPs actually reduce costs. I first proposed these amendments during the HELP Committee consideration of this bill. The first amendment would create a commission to establish a Federal floor of benefit mandates in accordance with the laws adopted in a plurality of the States, which would preserve some of the critical benefits currently mandated by Rhode Island and other States. The second amendment would limit the preemption of State laws by clarifying that unless specifically provided for, nothing in S. 1955 would override any State or local law related to health insurance. The third amendment requires the Government Accountability Office GAO to evaluate the program 24 months after its implementation, and if there is no evidence of a decrease in cost or increase in access to health care, the program would be terminated.

I am disappointed that the majority is not allowing us to engage in a full and fair debate on these and other amendments in the absence of a broad agreement on the bill.

Earlier this year, we saw the implementation of another program that was not well thought out and was fraught with problems as a result. Many of the problems with the Medicare Part D prescription drug benefit could have been averted. This crisis was anticipated for some time by independent researchers and advocates for Medicare beneficiaries, yet the Republican-controlled Congress repeatedly blocked remedies and continues to do so. Working to improve the Medicare drug plan is not even on the agenda for Health Week.

I did not support the Medicare Modernization Act because I felt the benefit was insufficient and the emphasis on a privately administered program made it excessively complex for beneficiaries. This plan imposes penalties for those enrolled to change plans

but allows the plans to change the prescriptions they cover at will. Millions of retirees faced with choosing among a large number of private drug plans struggled with different rules, lists of covered drugs, and premiums. Many who are eligible to sign up have avoided doing so all together.

The problems have been so widespread that more than 20 States, including Rhode Island, had to step in to pay drug claims that should have been paid by the Federal Medicare Program. At least two dozen States have taken emergency action to help low-income individuals who could not get their medications under the program, and States spent many millions of dollars on this assistance.

Since its launch on January 1, doctors and pharmacists have complained that many drugs theoretically covered by the new Medicare drug benefit are not readily available due to the insurers' restrictions and requirements. Many pharmacists can't keep track of the plans' myriad policies and procedures and doctors say the diverse requirements are onerous and can delay or deny access to needed medications.

The May 15 deadline for enrollment in Part D is looming. We should be taking action to extend the deadline and improve Part D during this sole week the majority has dedicated to so-called health care reform. Let's put America's Medicare beneficiaries first.

Another issue that is imperative for us to address is stem cell research. Last May, the House passed the Stem Cell Research Enhancement Act, H.R. 810, by a wide margin. We heard Senator Frist last summer announce that he agrees with lifting the stem cell ban, but we have not seen any movement on this issue.

President Bush's policy limits Federal funding of embryonic stem cell research in practice to 22 stem cell lines that have been in existence since 2001, and these lines are unsuitable for research. In recent years, we have seen amazing medical breakthroughs thanks to a dedication to research. HIV disease, which was a virtual death sentence just over a decade ago, has become for many a chronic disease. The 5-year survival rate for childhood acute lymphoblastic leukemia is approximately 85 percent, a dramatic increase because of new lifesaving treatments.

I hope to be able to stand on this Senate floor a few years from now asking for support for new research and highlighting the advancements that have been made in the treatment of spinal cord victims, children with diabetes, and those with Parkinson's because of embryonic stem cell research. The Senate should be marking the 1-year anniversary of the House passage of H.R. 810 by having a vote on the bill. We have an obligation not only to those stricken with these devastating conditions but to the family and friends who care for them. H.R. 810 opens the door to medical research that could unlock the mystery behind many of these devastating diseases while ensuring strong ethical and scientific oversight.

I share Senator Enzi's desire to stem the rising costs of health insurance, which pose a challenge to many, including our Nation's small businesses and self-employed individuals. While Congress should certainly do more to address this matter and expand coverage to those who currently lack it, S. 1955 would have little impact on these crucial needs.

There are other equally critical health issues facing millions of Americans. In addition to Medicare and stem cell research, we should be considering legislation to expand health insurance coverage to every child in this country, legislation to strengthen our public health system, and legislation to ensure an adequate number of nurses and other health professionals to care for our aging Nation. While the majority is stunting this week's debate, it is my hope that the Senate will actually take the time and find a way to work together to have a serious debate on important health care issues this year.

I ask unanimous consent that the before-mentioned letter be printed in the RECORD.

There being no objection, the material was ordered to be printed in the Record, as follows:

March 13, 2006.
Hon. Michael B. Enzi,
Chair, Committee on Health, Education, Labor, and Pensions, U.S. Senate, Washington, DC.
Hon. Edward Kennedy,
U.S. Senate, Washington, DC.

DEAR CHAIRMAN Enzi and Senator Kennedy: I am writing to express my strong concerns Senate Bill 1955, and to ask that it not be passed.

Context: Rhode Island has a strong history of active health insurance regulation. In 1996, the state passed broad managed care regulations regarding utilization review, member rights and appeals and health plan oversight. These provided protections which were later duplicated in other states. In 2000, the state overhauled its small group rating laws to bring more equity between large group and small group rates. In 2004, the legislature created a first-in-the-nation cabinet-level health insurance commissioner role, to (in part) ``direct health plans towards policies that promote the public good through increased access, and improved efficiency and quality''.

The results speak for themselves, Rhode Island has one of the lowest rates of uninsurance in the country, lower medical costs than its neighbors, high health plan satisfaction measures, excellent scores in HEDIS and public health performance measures, and nationally recognized innovations in health care quality measurement and health care information technology innovation. Studies by my office indicate that rating forms have closed the health insurance price gap between large and small employers.

Effect: In spite of recent amendments, the proposed bill would put all this in jeopardy by eliminating the ability of states to bring together stakeholders to develop local solutions to the problems of affordable health insurances for small businesses.

Specifically: Imposing national underwriting rules and coverage standards for small businesses creates 1 local instability in pricing and hinders innovation. States should be allowed to develop programs for affordable health insurance products and pricing, and then learn from one another. Just this year, small business health insurance reform bills have been introduced by both Democrats and Republicans in the RI legislature that call for crafting new affordable health plans, subsidizing their purchase through reinsurance mechanisms and promoting price transparency. These innovative programs would not be possible under this bill.

The bill weakens health plan accountability. Health care is delivered locally. It is intrinsically tied to public health and important community institutions. Health insurers need to be held accountable by local entities for their actions in states--for the incentives created by their payment mechanisms, for their support of local community health activities and state-wide health policy. Bill 1955, in spite of recent clarifications regarding the role of insurance commissioners, would make it harder for national health plans to be answerable to their local stake holders. It would usurp public authority and place it with large national insurers, who would be accountable to no one.

The bill does not address the real problem. The fundamental health policy challenge facing the U.S. is the effect of rising medical costs on the number of uninsured. As both of you have noted, we need to move beyond underwriting and cost shifting solutions to addressing the underlying utilization drivers. This is best accomplished through local experimentation and accountable insurers--both of which are weakened by this measure. Mass group purchasing--which this attempts to create--will not result in informed purchasers driving system change, but a one-size-fits-all approach which cedes power to national insurers.

As witnessed by the efforts of the sponsors with the National Association of Insurance Commissioners, much good work has gone into amending this bill. Unfortunately, major concerns remain. The bill in its current form fails to address the critical issues states and communities face in developing an affordable, sustainable health care system that works for employees in small businesses. To accomplish this, we need accountable health plans, not association health plans.

Sincerely,
CHRISTOPHER F. KOLLER,

Health Insurance Commissioner,
State of Rhode Island.

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