Speeches & Floor Statements

Floor Remarks of U.S. Senator Lamar Alexander (R-Tenn.) - The Public Option

Posted on October 26, 2009

Mr. President, I will let the majority leader make his own announcements, but there are a lot of discussions in the news media today that in a short period of time he intends to hold a press conference announcing that he will push ahead with the so-called public option in the health care legislation -- one that currently includes an opt-out provision for States. I don't know whether he intends to do that or whether he doesn't. He is entitled to make his own announcement, as I said. But it provides a good opportunity to talk about what we mean by a public option in health care, or a government-run health care plan, putting government in the health care business, and how it already works, and how it might work if States were allowed to opt out. The reason it is easy to talk about this is -- and the former Governor of Virginia, who is presiding, knows this as well as I do, and maybe better because he has been Governor more recently -- we already have in existence in the United States today a public option health insurance program which States may opt out of. It is called Medicaid. Medicaid is the largest government-run program we have in health care -- even larger than Medicare. Medicare, for older people, has about 40 million persons who depend on it. Medicaid, which sometimes offers confusion, is a different program. It is a program for low-income Americans. It started out for women and children, but it gradually expanded, and today it has nearly 60 million Americans who depend on it. The health care legislation, which is coming forward in the Baucus bill out of the Finance Committee and the HELP Committee, on which I serve, and the bills in the House of Representatives -- all those pieces of legislation would expand the Medicaid Program -- not Medicare for seniors but the Medicaid Program -- and send part of the bill for that expansion to the State. So let's talk about that a little bit, particularly if it is true that the majority leader is about to propose that we have yet another government-run insurance program, giving the States the right to opt out, which sounds pretty good. Let's see how this one works that we already have, especially since the health reform bill that is headed our way would expand Medicaid, and according to the Congressional Budget Office, cost States an additional $33 billion in State dollars and add 14 million people to Medicaid. I guess the first thing to know about a government-run health insurance program which States can opt out of is that they can't. I mean, in the real world, they can't. Not one has. Every State in America has Medicaid. The Federal Government pays roughly 60 percent of it; State taxpayers pay the rest. Most of the rules are written in Washington. States can ask for exemptions from the rules, but it is a long and burdensome process. It is not realistic to say the States can opt out of the Medicaid Program for low-income Americans. I suppose it might not be realistic, therefore, to say the States would be able to opt out of a new government-run program -- a government-run, public-option program -- that may be suggested by the majority leader. We should wait and see what he proposes, but I think we would be wise to pay attention to the fact that in the current government-run program we have today, no State finds it realistic to opt out. Expanding Medicaid, which is what the health reform bill coming toward us on the floor proposes to do, is not just an expensive item for the Federal Government and for States, it is a terrible vehicle for health care reform. The current Governor of Tennessee -- Governor Bredesen -- a Democrat -- has said putting more low-income Americans into Medicaid is not health care reform. Why would he say that? Because it makes it worse for those Americans as they seek to get access to care from doctors and hospitals and as they seek to get good, quality care. Plus, the program is riddled with so much fraud and abuse that, according to the Congressional Budget Office, $1 out of every $10 is stolen or wasted. Most Governors who have struggled with Medicaid -- and I am one of them -- agree that its expansion is a bad idea. They unanimously have said to us in Congress that if you in Washington want to expand Medicaid, then you in Washington need to pay for Medicaid. That is the theory of no more unfunded mandates that every Governor whom I know about has agreed with for years. In fact, there was nothing that used to make me angrier as a Governor than for a distinguished politician in Washington to stand, make a speech, come up with a good idea, hold a press conference declaring a problem solved, and then send the bill to the States. So what does the Governor and the legislature and the mayor and the city council have to do? They have to cut services, they have to raise taxes, they have to run up tuition, they have to cut out some classes because somebody in Washington thought it was a good idea to do this. Well, that is what we are proposing to do with Medicaid. We are saying to the States: We have a great idea. We want to expand Medicaid by dumping another 14 million low-income Americans into this program, but congratulations, we are going to send you the bill to help pay for it. The Washington Post quoted my home State Governor, Governor Bredesen, to whom I just referred, this way in regard to health care reform: I can't think of a worse time for this bill to be coming. I would love to see it but nobody is going to put their State into bankruptcy or their education system into the tank for it. One of the most painful letters I have ever read was from Governor Bredesen, which he sent on October 5, when he wrote about Tennessee's fiscal situation -- similar to the condition in most States. He said: By 2013 we expect to return to our 2008 levels of revenue and will have already cut programs dramatically -- over $1 billion. At that point we will have to start digging out - we will not have given raises to State employees or teachers for 5 years. Our pension plans will need shoring up. Our rainy day fund will be depleted...we will not have made any substantial investments for years...There will be major cuts to areas such as children's services. On top of these, there are the usual obligations that need to be met - Medicaid, for example, will continue to grow at rates in excess of the economy and our tax revenues. Our idea of health care reform is to expand Medicaid and send Governor Bredesen a bill for $735 million over the next 5 years, which we can't afford. The other legislation, from the HELP Committee, would cost the States even more. According to an actuarial report from the Centers for Medicare and Medicaid Services, Medicaid represented 40 percent of the Federal Government's cost expenditures for health care; 41 percent of State health care costs. It is the largest source of general revenue-based spending in health services -- larger than Medicare. I can vividly remember, 25 years ago, 30 years ago, as Governor, every time I made up a budget, I would start with roads. That comes from the gas tax. I would go to prisons. The court said to fund that. I would go to K-12 grades. Our Presiding Officer, the former Governor of Virginia, has had this experience. That is pretty much a set thing. Then you get down to the end and what are you choosing between? You are choosing between higher education -- the University of Tennessee or the University of Virginia -- and Medicaid. What is happening? Medicaid is going up like a rocket and State spending for higher education is flat. Our great higher educations systems across this country are under great stresses because of poor State funding because we have allowed Medicaid to grow out of control. Not only do we do that, we are now about to expand it -- about to expand it and send more of the bill to the States. The Governors are saying: Don't do that. Their revenues are down 17, 18, 20, 35 percent in some States. If you are going to pass it, they say: Pay for it. That is a question Governors should have a chance to ask and get an answer to. According to the Texas Medicaid office, the current proposal to expand Medicaid will cost the State $20 billion over the next 10 years. We are passing it, they are paying for that much of it. According to the South Carolina Governor's office, $1.1 billion over 10 years. Governor Schwarzenegger has said for California it could be as high as $8 billion a year. A New York Times article, in late September, said this: The recession is driving up enrollment in Medicaid at higher than expected rates, threatening gargantuan State budget gaps even as Congress and the White House seek to expand the government health insurance program for the poor and disabled... The New York Times went on to say: ...enrollment in state Medicaid programs grew by an average of 5.4 percent in the previous fiscal year, the highest rate in 6 years....In eight states, the growth exceeded 10 percent. So States have headlines such as this: "State Looks at $1 Billion in Cuts." Their Medicaid is already growing at a rate faster than they can pay for, and we are sending them more bills than they can pay for. Mr. DURBIN. Will the Senator yield for a question? Mr. ALEXANDER. I will be happy to yield. Mr. DURBIN. We had a bill considered earlier this year -- a stimulus bill -- that sent $80 billion to the States so they could deal with the expenses of Medicaid during the recession and also, obviously, their State's declining revenue, an attempt for us to help Governors facing the horrible decisions which the Senator described. If I recall correctly, only three Republicans voted for President Obama's stimulus package to help these States with $80 billion in aid. Would the Senator like to factor that into his conversation about sensitivity to what the States are facing? Mr. ALEXANDER. I thank the distinguished assistant Democratic leader for raising the point. It is a point I would be delighted to address. I voted against that proposal. That proposal was a backdoor effort in what was a so-called jobs bill to spend $85 billion over 2 years for Medicaid. That is one reason why we have 10 percent unemployment today, because the money that was supposed to be for the stimulus was borrowed from the biggest deficits we have ever run up in history and spent on something other than jobs. What it also did was it unrealistically lifted the level of Medicaid spending in Tennessee and every other State, forcing an expansion of that program, which I will go on to show in a minute is nearly cruel to the people who are dumped into the program because doctors and hospitals will not serve them. So I was glad to vote against that program. I was sorry it passed because it borrowed money we don't have to spend on programs that didn't create jobs, and it artificially lifted and expanded Medicaid, which is already bankrupting the States. Medicaid expansion is not real health care reform. One reason is because 40 percent -- according to a 2002 Medicare Payment Advisory Committee survey -- of the physicians restrict access for Medicaid patients; meaning they will not take new Medicaid patients because reimbursement rates are so low. Only about half of U.S. physicians accept new Medicaid patients compared with more than 70 percent who accept new Medicare -- those are the seniors -- patients. According to a 2002 study in the Journal of American Academy of Pediatrics, the national rate for pediatricians who accept all Medicaid patients was 55 percent. In Tennessee, it was lower than that. Why is that? It is because reimbursement rates are so low. Today, doctors who see patients who are on Medicare get paid about 80 percent of what private insurers pay. Doctors who see patients who are on Medicaid get paid about 61 or 62 percent of what private insurers pay. For doctors who see children, it is sometimes lower than that. So doctors don't see those patients. What is going to happen if we dump 14 more million low-income Americans into a system such as that? Those patients -- especially those children -- are going to have a harder time finding doctors and hospitals to taking care of them. It would be akin to giving somebody a ticket and a pat on the back to a bus line that only operated 50 percent of the time. Further, the quality of care for Medicaid patients is significantly lower than those with private insurance and even those with no insurance. According to a survey by the National Hospital Ambulatory Medical Care, Medicaid patients visit the emergency room at nearly twice the rate of uninsured patients. A 2007 study by the Journal of the American Medical Association found that patients enrolled in Medicaid were less likely to achieve good blood pressure control, receive breast cancer screening, have timely prenatal care than similar parents in private plans, and they had lower survival rates. I mentioned this a little earlier. According to the Government Accountability Office, Medicaid -- the program we are seeking to expand, the government-run insurance program that sounds so good, the so-called largest public option plan we have to date, the plan where about half the doctors will not take new patients who are on the program -- had $32.7 billion in improper payments in 2007 alone; 10 percent of the program's total spending is wasted. So as we consider a so-called public option, I hope we will look at the public option we already have -- called Medicaid -- one which already has an opt-out provision for States, one which already has 60 million low-income Americans in it, one into which we plan to put 14 million more Americans, so that 50 percent of the doctors will say to new patients: I can't see you because the reimbursement rates are so low. Medicaid is the public option we have right now. States could opt out of it, but quality is low, fraud is high, costs are up, and Governors of States on both sides of the aisle are saying: We are headed toward bankruptcy at the present rate. If you are sending us more bills, if you want to expand it, pay for it. And doctors are turning away patients. The American people deserve better than that. I am a cosponsor of a bipartisan bill that would actually reduce the number of patients on Medicaid. It is called the Wyden-Bennett bill. It adds no cost to the government. That bill is not being seriously considered. The other approach that we Republicans believe we should take is focusing on reducing costs to the government, focus on reducing the cost of premiums; take four or five steps in the right direction and expand services to uninsured patients as we go. One way to do that, of course, would be the Small Business Health Insurance bill, which has broad support in both Houses, which would permit small businesses to come together and pool their resources. The estimates are that at least 1 million more Americans would be covered by employer insurance if that were to happen. Some estimates say many more millions. But especially on a day when the press has it rumored that the majority leader may offer a new government-run insurance program with the States having the opportunity to opt out, I hope Americans will look carefully at the current government-run insurance program which States have the option to opt out of, but none do, and note that it has 60 million Americans -- it is soon to have 74 million; half the doctors won't see new patients because of reimbursement rates; and $1 out of $10 is wasted. It is not a solution to health care and neither is a new public option. I yield the floor and thank the Senator from Illinois for his question.