Urges the president and congressional Democrats to work with Republicans on proposals to take health care “step by step in a different direction — one that emphasizes more freedom, more choices, and lower costs”
Posted on December 1, 2015
WASHINGTON, December 1 – Five and a half years after the White House health care summit at Blair House, Senate health committee Chairman Lamar Alexander (R-Tenn.) today spoke on the Senate floor to discuss what Republicans warned the president would happen if Obamacare became law – and to outline what this “historic mistake” of a law looks like for millions of Americans today.
Alexander was asked by both then-Minority Leader Boehner and then-Minority Leader McConnell to lead in speaking on behalf of Republicans at the summit in 2010. Alexander said, “I warned the president that day about the unfortunate consequences of Obamacare for millions of Americans. I told the president that Obamacare would send an unfunded Medicaid mandate to states. I said, ‘It will cut Medicare by about half a trillion dollars and spend most of that on new programs ... It means there will be about a half trillion dollars of new taxes in it. It means that for millions of Americans, premiums will go up, because when people pay those new taxes, premiums will go up, and they will also go up because of the government mandates.’
“I said directly to the President that instead of this partisan plan—passed without the support of a single Republican in the Senate—that we Republicans were prepared to work with him to reform health care. I said to the president, ‘We need to start over and go step by step toward the goal of reducing health care costs.’”
Speaking today on the Senate floor as the Senate begins debate on Obamacare repeal legislation, Alexander said that “the president and congressional Democrats did not take my advice that day at Blair House – and hardly any of the advice of my Republican colleagues, for that matter – about what the disastrous outcomes of Obamacare would be.”
He continued, “Unfortunately, Republicans were right when we said that Obamacare would force spikes in state Medicaid spending, increase premiums and taxes, and hurt jobs.”
After outlining the disastrous impact Obamacare has had on state budgets, for business, and for millions of America families, Alexander again called on the president to work with Republicans on step by step proposals that emphasize “more freedom, more choices, and lower costs.”
Some of the Republicans proposals Alexander mentioned include:
· Allowing individuals to buy a health plan in any state that meets their needs;
· Reducing junk lawsuits against doctors that only increase costs;
· Expanding Health Savings Accounts and other mechanisms that allow individuals to control how they spend their health care dollars;
· Returning power to the states to regulate their markets and lower costs;
· Allowing small businesses to assist employees in purchasing insurance and look at other ways to support employers offering health care benefits to their employees;
· Lowering barriers at the Food and Drug Administration so that innovative drugs and devices can get to patients faster;
· Putting the private sector in charge of health information technology to deliver better data and greater transparency;
· And ensuring that Americans with pre-existing conditions have access to affordable coverage through high-risk pools or other insurance incentives.
Alexander concluded, “I renew our invitation to the president, and if he doesn’t accept our invitation, I extend it to our next president: Forget about party, forget about this side or that side, and side with the American people whose premiums went up, who lost plans they liked, whose Medicare has been raided, whose state budgets have been destroyed, and whose jobs have been lost. Work with Republicans in Congress to fix the damage Obamacare has done to health care in America. Work with us to replace Obamacare with real reforms that lower costs so more Americans can afford to buy insurance.”
The full text of Alexander’s prepared remarks is below:
Let me take you back five and a half years ago to February 25, 2010, and the White House health care summit at Blair House. This is the same scene where Arthur Vandenburg met privately with George Marshall to discuss the reconstruction plan for Europe that became the Marshall plan – and the perfect setting to have a serious, bipartisan discussion about how to improve health care for millions of Americans.
Thirty-six members of members of Congress attended the summit to discuss the health care bill passed by Democrats – what’s now known as Obamacare. We stayed there all day. It was televised continuously. Both then-Minority Leader Boehner and then-Minority Leader McConnell asked me to lead in speaking on behalf of Republicans.
I said to the President that day that I was there not only to represent the views of all Republicans—but as a former governor that I would like to try to represent the views of governors as well – because they had a big stake in this. I said too that I was at the summit to “represent the views of a great number of the American people who have tried to say in every way they know how – through town meetings, through surveys, through elections in Virginia and New Jersey and Massachusetts, that they oppose the health care bill that passed the Senate on Christmas Eve.”
I warned the president that day about the unfortunate consequences of Obamacare for millions of Americans. I told the president that Obamacare would send an unfunded Medicaid mandate to states. I said, “It will cut Medicare by about half a trillion dollars and spend most of that on new programs ... It means there will be about a half trillion dollars of new taxes in it. It means that for millions of Americans, premiums will go up, because when people pay those new taxes, premiums will go up, and they will also go up because of the government mandates.”
I said directly to the President that instead of this partisan plan—passed without the support of a single Republican in the Senate—that we Republicans were prepared to work with him to reform health care. I said to the president, “We need to start over and go step by step” toward the goal of reducing health care costs. I said this “means working together the way General Marshall and Senator Vandenberg did. ... And it means going step by step together to re-earn the trust of the American people.”
The President and congressional Democrats did not take my advice that day at Blair House – and hardly any of the advice of my Republican colleagues, for that matter – about what the disastrous outcomes of Obamacare would be – and more than five years after the law was passed and nearly two years into its implementation, we can say one thing without question: The unfortunate reality for the American people struggling with Obamacare is that Republicans were right. Obamacare was an historic mistake.
Republicans agreed with the president and his party that our health care system was broken and needed to be fixed. But we argued the president was moving in exactly the wrong direction to fix it.
What Obamacare did was expand a broken system everybody already knew was too expensive. Republicans said so at that February 2010 summit, and the facts today show we were right.
Let’s take a closer look at what Republicans predicted six years ago – and what unfortunately came true.
Let’s also take a look at what Democrats predicted back then—or better put: what they promised—and which of their predictions and promises came true.
Let’s go through them one by one.
During my opening speech at Blair House, I said, “Nothing used to make me madder as a governor than when Washington politicians would get together, pass a bill, take credit for it, and send me the bill to pay. That’s exactly what this does, with the expansion of Medicaid. In addition, it dumps 15 to 18 million low-income Americans into a Medicaid program that none of us want to be a part of, because 50 percent of doctors won't see new patients. So it’s like giving someone a ticket to a bus line where the buses only run half the time.”
Medicaid had already always been one of the federal government’s biggest unfunded mandates on states—and expanding that mandate would only wreak more havoc on state budgets that, especially at the time, during the height of the recession, were already struggling. Former Tennessee Governor Phil Bredesen—a Democrat—said the proposed Medicaid expansion under Obamacare would represent “the mother of all unfunded mandates.”
When I was governor, Medicaid only made up about 8 percent of Tennessee’s state budget. By last year, it was 30.6 percent. States paying more and more to expand Medicaid means less to spend on other priorities like higher education, roads, and law enforcement. In 2012, I said that over the prior ten years, Tennessee’s Medicaid costs had gone up 43 percent, forcing the state to decrease its funding to colleges and universities by 11 percent. As a result, tuition went up 120 percent over those ten years.
According to the Congressional Budget Office, the law adds 14 million new beneficiaries to struggling state Medicaid programs by 2025—at an extra cost of $46 billion to states and $847 billion to federal taxpayers by 2025.
And why is that so bad? I said at the time and it’s still true today—Medicaid’s reimbursement rates are so low that only about half of doctors will even see Medicaid patients and many of those aren’t accepting new ones. It’s not hard to see why expanding a failed program isn’t good for Americans.
And another thing to consider is that states still haven't yet had to pay for covering new Medicaid enrollees under the expansion. The federal government promised to pay 100 percent for the first few years. But starting in 2017, states will have to start paying 5 percent, and eventually up to ten percent by 2020.
That may not seem like very much in Washington terms, but it can mean a lot to states. States may have to start raising income taxes or gas taxes—or find some other way to find the money—but regardless of how it’s paid for, expanding Medicaid puts a huge dent in state budgets. Does that mean less money for teachers’ salaries? Does that mean tuition is going to have to be higher at community colleges and state universities?
Tennessee hasn’t expanded Medicaid, but in its proposal to expand the program called Insure Tennessee, Governor Haslam anticipated an additional $35.6 million in costs to the state in 2017.
In Illinois, Medicaid expansion will cost the state $208.6 million in 2020 – according to projections from Gov. Bruce Rauner’s administration.
Another example is Kentucky. Under Kentucky’s expansion, the state will have to pay $74 million in 2017 and an estimated $363 million in 2021. Governor-elect Bevin hasn’t started looking for ways to pay for that huge increase because he plans to repeal the state’s expansion, and if you look at the figures, you may begin to understand why he may be considering a repeal—rather than raising taxes on Kentuckians.
So we were right about Obamacare’s enormous impact on Medicaid and in turn Medicaid’s huge, negative effect on state budgets.
Second: higher premiums.
When my turn came at the White House summit, I said directly the president that “the Congressional Budget office report says that premiums will rise in the individual market” as a result of Obamacare.
The president said I was wrong about that.
A little bit later that day, I gave the president a letter showing that the nonpartisan Congressional Budget Office had, in fact, said in a letter to then-Senator Bayh, also a Democrat, that “CBO and [the Joint Committee on Taxation] estimate that the average premium per person covered (including dependents) for new nongroup policies would be about 10 percent to 13 percent higher in 2016 than the average for nongroup coverage in that same year under current law.”
In that same letter, I reminded the president that his own chief actuary for the Centers for Medicaid and Medicare Services agreed with the CBO, saying that the fees in the president’s proposed law “would generally be passed through to health consumers in the form of higher drug and device prices and higher insurance premiums.”
You might be thinking the law turned out better than the Congressional Budget Office, the Joint Committee on Taxation, and the chief actuary for CMS predicted, and that health insurance premiums went down, not up.
But sadly, that’s not the case. We were right about Obamacare’s higher premiums for Americans with individual health care plans:
We’re talking about 15.6 million Americans who purchase these plans. These are policies that individual Americans buy for themselves. Again, 15.6 million Americans – and the cost of these plans is going through the roof.
On June 1 of this year, the U.S. Department of Health and Human Services announced that “nearly 700 individual and small group health plans in 41 states plus the District of Columbia requested double-digit premium increases for 2016.” In my home state, after already seeing some of the largest premium increases in the country in 2015, Tennesseans will now face a rate hike in 2016 of more than 36 percent for the state’s most popular health insurance plan.
In Maryland, the largest insurance provider in the state will increase premium rates by up to 26 percent for Preferred Provider Organization (PPO) subscribers, and nearly 20 percent for Health Maintenance Organization (HMO) subscribers.
On average, 2016 premium increases for Oregon’s biggest insurer on the state’s health exchange will be over 25 percent, and for some smaller providers the increase will be over 30 percent.
In 2016, South Dakotans will pay as much as 63 percent more for health insurance through the exchange.
The list of states experiencing health premium spikes goes on.
A recent report by the National Bureau of Economic Research found that in 2014, individual health insurance market premiums grew by 24.4 percent on average compared to what they would have been without Obamacare.
And going back to the nonpartisan Congressional Budget Office that predicted back in 2010 that the proposed law would increase premiums: The CBO recently predicted that the premiums on the Obamacare exchange will increase by 6 percent, on average, every year between 2016 and 2024.
And yet, five and a half years ago, the president and congressional Democrats told Republicans time and time again during the debate that we were wrong, that their law would decrease premiums – when in fact, our predictions, the administration’s own estimates, estimates from the National Bureau of Economic Research and the nonpartisan CBO all confirm premiums are going through the roof.
Third, Republicans said Obamacare would increase taxes.
Obamacare added 21 tax increases to the tax code, totaling over a trillion dollars over ten years, according to the Congressional Budget Office—a dozen of which target middle-income Americans, in clear violation of the President’s pledge to avoid tax hikes on these individuals and families.
Our fourth prediction also came true: We said Obamacare would cost jobs.
Some time ago I met with a large group of chief executive officers of restaurant companies in America. The service and hospitality industries are the largest employers in America. Restaurant companies are the largest employer of low-income, young, usually minority people.
In that meeting, the chief executive officer of Ruby Tuesday, Incorporated, which has about 800 restaurants, said to me -- and he didn't mind being quoted -- that the cost to his company of implementing the new health care law would equal his entire profit for the company last year and that he wouldn't build anymore new restaurants in the United States as a result of that.
Another, even larger restaurant company, said because of their analysis of the law, instead of operating their stores with 90 employees, they would try to offer it through stores with 70 employees. So that means fewer employees, and it means fewer employees receiving employer health care.
More recently, another family franchise business – which employs 550 people and operates under the name of a well-known brand—told me “we have already begun cutting the hours of our employees to get well below the 30 hour thresh hold, and all of our new job postings are for part time positions only. Adjusting the hours of our current employees has had a dramatic impact on the employee employer relationship, causing the loss of other fringe benefits such as loss [or] reduction of vacation eligibility, reduction [or] elimination of discretionary bonus programs, and an increase in the loss of eligibility [and] participation in 401(k) retirement programs. These are all unintended consequences of the decisions employers have had to make due to the mandate. … Without a change in the law, the costs of health care will exceed our net profit, regardless of whether we cover our employees or pay the penalty, and small businesses cannot absorb these costs.”
These are just a few examples of what’s basic economics.
If you heap costs on employers, they have less money to expand, less money to hire more American workers. You heap even higher costs on employers, employers might need to cut employees’ hours to pay those costs. You heap still higher costs on employers, they might need to lay off employees.
We’ve seen all three as a result of the employer mandate that says employers with more than 50 full-time employees need to provide health insurance. What’s more: Obamacare went a step further and for the first time in our history defined “full time” as more than 30 hours a week, increasing the number of employees subject to Obamacare’s employer mandate.
What followed, anyone could have predicted—and Republicans did so all throughout the debate.
Because providing health care costs a lot of money, employers started to decrease their employees’ hours from 35 or 40 to 29 or fewer in order to decrease their number of full-time employees subject to Obamacare.
They didn’t do this for ideological or political reasons. These employers are running businesses, not trying to make a political point.
If what an employer takes in doesn’t exceed what the employer expends, the businesses won’t last long. And in what’s been a struggling economy since the 2008 crash in no small part because of the president’s failed economic policies, many employers have struggled to deal with the added costs Obamacare imposed on their businesses.
The Congressional Budget Office has projected that Obamacare will result in 2 million fewer full-time jobs in 2017 and 2.5 million fewer full-time jobs by 2024. At least 450 employers across the nation, including 100 school districts, have said Obamacare forced them to cut positions or reduce worker hours. The National Federation of Independent Business estimates that Obamacare’s $100 billion tax on health insurance will eliminate between 152,000 and 286,000 private sector jobs between 2014 and 2023.
Now, we’ve been over what Republicans said would happen years ago—that Medicaid would destroy state budgets, that premiums and taxes would go up, and that jobs would be lost.
This has all, unfortunately, come true.
Let’s now look at what the president and congressional Democrats promised about their own law. Were they right or wrong?
The most famous, or infamous, promise, which Politifact named the 2013 “Lie of the Year,” was the president’s: “If you like your plan, you can keep it.”
Millions of Americans learned very quickly when Obamacare was fully implemented in 2014 that they wouldn’t be able to keep the plans they liked.
In October 2013, I received a letter from a woman, Emilie, who lives in Middle Tennessee who was one of 16,000 Tennesseans who is part of another plan called CoverTN. She is losing her policy.
The letter reads:
“I am 39 year old single woman with a chronic illness, Lupus. I worked my way through college.
“As a person with a chronic illness that was deemed ‘uninsurable,’ the only way I was able to obtain health insurance was through an employer based program called CoverTN...Although some call it a minimal coverage plan, it has been stellar AND affordable...I was excited to hear about the Affordable Health Care Act. I was glad to hear that "uninsurables" could no longer be denied coverage...unfortunately [that] is NOT TRUE.
“I cannot keep my current plan because it does not meet the standards of coverage. This alone is a travesty. CoverTN has been a lifeline.
“With the discontinuation of CoverTN, I am being forced to purchase a plan...that will increase [my costs] by a staggering 410%. My out of pocket expense will increase by more than $6,000.00 a year. Please help me understand how this is ‘affordable.’
“I beg of you to continue the fight for those, like me, who would only ask to be allowed to continue to have what we already enjoy. A fair health insurance plan at a fair price.”
That is from Emilie, and we could spend all day telling stories of Americans who liked their health care plans but weren’t able to keep them under Obamacare. In November 2013, it looked as if nearly 5 million Americans in 32 states were going to lose their coverage beginning in January 2014. The administration then made a series of last-minute, regulatory fixes in 2013 and 2014 – but many Americans – like Emilie – still lost their plans and were forced to go shopping for something else.
The president also said: “Medicare is a government program. But don’t worry: I’m not going to touch it.”
The problem with that statement is: He touched Medicare in a big, big way. His health care law raids $700 billion from Medicare in order to finance Obamacare.
During debate over Obamacare in 2009, I said Obamacare would cut “grandma's Medicare to spend on somebody other than grandma -- a new entitlement program.” Obamacare, I said, would do “that at a time when the Medicare Program … is going broke. ... The Medicare trustees -- it is their job to watch out for these things -- said: We need timely and effective action to address Medicare financial challenges. I think what they are saying to us is if you are going to cut grandma's Medicare, you ought to at least spend it on grandma instead of spending it on somebody else.” End quote.
Again, the president went against the promise he repeated over and over again and raided a program that serves more than 55 million older Americans.
In summary, unfortunately, Republicans were right when we said that Obamacare would force spikes in state Medicaid spending, increase premiums and taxes, and hurt jobs.
And as right as Republicans were about how bad Obamacare would be for the American people, Democrats were equally as wrong about what they said throughout the debate that their law would allow Americans to keep the health plans they liked and that Medicare wouldn’t be affected.
And finally, an important point about how none of this had to happen. We all agreed the health care system needed to be fixed. So how did we end up with a law that has only made things worse?
Well, one big reason is: the debate over Obamacare in the Senate wasn’t really a debate. If it had been, we might not find ourselves in this mess today.
Then-Majority Leader Harry Reid had a filibuster-proof majority in the Senate and seemed to think that meant Republicans didn’t have any ideas worth considering. Rather than to listen to Republicans, or to the majority of Americans who opposed the direction President Obama and the Democratic majority were planning to take our health care system, they wrote their bill behind closed doors and on Christmas Eve unveiled a bill filled to the brim with items from each Democratic member’s wish list.
Along with our warnings throughout the Obamacare debate, we offered plenty of thoughtful ideas to fix our health care system in a way that would lower costs and expand access while making sure patients didn’t lose control over their own health care.
But Democrats also had a majority in the House, as well as a president in the White House who also didn’t think he had to listen to, let alone work with, Republicans in Congress who were also elected to represent their constituents.
Our predictions, which turned out to be true, and our ideas, which would have worked, unfortunately for the American people all fell on deaf ears.
Now I’ve spent enough time saying “We told you so.”
What next? What do Republicans offer the American people?
If Republicans were right about Obamacare being an historic mistake, I’d like to say we were also right about what we should have done instead to fix our broken health care system. And we should be trusted to fix the mess Obamacare has left us.
Throughout the Obamacare debate, Leader McConnell, who was the minority leader at the time, was criticized for not coming up with a comprehensive plan of his own. We told the president and congressional Democrats not to hold their breath for Leader McConnell to roll a wheelbarrow onto the Senate floor with a twenty-seven-hundred-page bill of his own, because that’s not how Republicans believed we could best fix the problems with our health care system.
We suggested a step-by-step approach to address each of the problems our health care system faced.
Those waiting for Leader McConnell to do so now, to roll onto the Senate floor a wheelbarrow with a bill thousands of pages long to replace Obamacare, are again advised not to hold their breath.
If Democrats are saying that Republicans don’t have a twenty-seven-hundred-page plan that increases premiums, decreases choice of doctors, hurts jobs, and raids Medicare to pay for a new entitlement, they’re exactly right.
That’s because Americans have been loud and clear that they don’t want that.
The wisest course is to repeal Obamacare and replace it step by step with solutions that lower health care costs.
This approach to health reform is not something that Republicans cooked up yesterday or the day before. In fact, if you will examine the Congressional Record you will find Republican senators proposed a step-by-step approach to confronting our nation’s health care and other challenges 173 different times on the floor of the Senate during 2009.
I hope the president will listen to us and work with us on some of the ideas we presented to the American people at Blair House six years ago and the ideas that we continue to offer to take us step by step in a different direction -- one that emphasizes more freedom, more choices, and lower costs:
We should allow individuals to buy a health plan in any state that meets their needs. There is no reason to force Americans to purchase federally mandated plans with benefits they don’t want and can’t afford. Health reform should be about expanding access to lower-cost plans, not increasing the cost of insurance.
We should reduce junk lawsuits against doctors that only increase costs.
We should expand Health Savings Accounts and other mechanisms that allow individuals to control how they spend their health care dollars.
We should return power to the states to regulate their markets and lower costs. States are the laboratories of democracy and need to be given the freedom to develop systems to drive competition, not be subject to one-size-fits-all rules.
We should allow small businesses to assist employees in purchasing insurance and look at other ways to support employers offering health care benefits to their employees
We should lower barriers at the Food and Drug Administration (FDA) so that innovative drugs and devices can get to patients faster.
We should put the private sector in charge of health information technology to deliver better data and greater transparency.
We should ensure that Americans with pre-existing conditions have access to affordable coverage through high-risk pools or other insurance incentives.
And there certainly are other ideas we can work on in a bipartisan way to lower costs, increase access, and put patients back in charge of their own health care.
This week, we’re talking about repealing Obamacare. But for the last six years we’ve been talking about a completely different path of providing health care at a lower cost to more Americans. Those steps that Republicans outlined in 2009 and 2010 and 2011 are the same kinds of steps that we should be taking today.
I’ve been saying since 2009 that the problem with Obamacare was that we deliberately expanded a health care delivery system that already cost too much – instead of moving step by step to create a system where millions more Americans had choices of plans that fit their needs and fit their budgets.
And the way we should accomplish this is the same way we passed Medicare, passed Social Security, passed the Civil Rights Act – and in the way we hopefully will pass a broad reauthorization to fix No Child Left Behind. None of this is done by cramming a bill down the throats of the American people with 60 votes in the middle of a snowstorm on Christmas Eve.
I renew our invitation to the president, and if he doesn’t accept our invitation, I extend it to our next president: Forget about party, forget about this side or that side, and side with the American people whose premiums went up, who lost plans they liked, whose Medicare has been raided, whose state budgets have been destroyed, and whose jobs have been lost. Work with Republicans in Congress to fix the damage Obamacare has done to health care in America. Work with us to replace Obamacare with real reforms that lower costs so more Americans can afford to buy insurance.
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For access to this release and the senator’s other statements, click here.