Speeches & Floor Statements

Hearing Statement: Lower Health Care Costs Markup

Posted on June 26, 2019

First, I’d like to outline the process today. 

For senators' convenience, I am going to aimtoward noon for roll call votes on amendments and the bills, if that is all right.

After Senator Murray and I make our opening statements, senators may speak on the bills before us today and those senators who have amendments may begin to discuss them. 
Then, when we have a sufficient quorum, at about noon, we will pause, vote, and then we will continue the discussion, if that is all right.
Today we are voting on three bills:
First, the Poison Center Network Enhancement Act, offered by Senators Murray and Burr, to reauthorize and update the national network of poison control centers.
Second, the Emergency Medical Services for Children Program Reauthorization Act, offered by Senator Casey and me, to ensure that, from the ambulance to the emergency room, emergency health care providers are fully prepared to treat children, who typically require smaller equipment and different doses of medicine.
Third, the Lower Health Care Costs Act – a package of 54 proposals from 65 senators – 29 Republican and 36 Democrat, including nearly every member of this Committee – that will reduce what Americans pay out of their own pockets for health care.
The Lower Health Care Costs Act:
The Lower Health Care Costs Act will reduce what Americans pay out of their pockets for health care in three major ways:
First, it ends surprise billing.
Second, it creates more transparency – there are twelve bipartisan provisions that will: eliminate gag clauses and anti-competitive terms in insurance contracts, designate a non-profit entity to unlock insurance claims for employers, ban Pharmacy Benefit Managers from charging more for a drug than the PBM paid for the drug, and require that patients receive more information on the cost and quality of their health care. You can’t lower your health care costs until you know what your health care actually costs.
And third, it increases prescription drug competition – there are fourteen bipartisan provisions to help more lower-cost generic and biosimilar drugs reach patients.
This legislation also extends mandatory funding for community health centers, and four additional public health programs, to ensure the 27 million Americans who rely on these centers for primary care and other health care can continue to access care close to home, offered by Senator Murray and me, along with Senators Casey, Cramer, Klobuchar, and Murkowski. 
We have paid for this extension for five years with savings from other parts of the larger bill, which will prevent the uncertainty and anxiety of short-term extensions.
The Managers Amendment we are voting on today includes two additional, significant provisions:
First, a bill from Senators McConnell and Kaine that will raise the minimum age for purchasing any tobacco product from 18 to 21.
This has also been a priority of Senators Young, Romney, Roberts, Murkowski, Collins, Schatz, and others.
And two, from Senators Grassley and Leahy, and many others, the CREATES Act, which will help bring more lower cost generic drugs to patients by eliminating anti-competitive practices by brand drug makers.
Altogether, this legislation will help to lower the cost of health care, which has become a tax on family budgets and on businesses, on federal and state governments.
A recent Gallup poll found that the cost of health care was the biggest financial problem facing American families.
And last July, this Committee heard from Dr. Brent James, from the National Academies, who testified that up to half of what the American people spend on health care may be unnecessary.
Over the last two years, this Committee has held 16 hearings on a wide range of topics related to reducing the cost of health care – specifically, how do we reduce what the American people pay out of their own pockets for health care.
Last December, I sent a letter to experts at the American Enterprise Institute and the Brookings Institution, and to doctors, economists, governors, insurers, employers, and other health care innovators, asking for specific steps Congress could take to lower the cost of health care.
We received over 400 recommendations, some as many as 50 pages long.
In May, Senator Murray and I released for discussion the Lower Health Care Costs Act.
Since then, we’ve received over 400 additional comments on our draft legislation, and last Tuesday, we held a hearing to hear additional feedback.
Last Wednesday, Senator Murray and I formally introduced the Lower Health Care Costs Act – a bipartisan package of 54 proposals from 65 senators that will reduce what Americans pay out of their own pockets for health care.
At our hearing on this legislation last week, Ben Ippolito, an economics and health fellow at the American Enterprise Institute, said:
“Together, the provisions in this bill would meaningfully increase competition and transparency in health care markets. If enacted, this legislation would lower insurance premiums and drug prices for consumers, and would ensure patients are no longer exposed to surprise medical bills. By lowering costs, this bill would also improve access to health care.”
We also heard from Fredrick Isasi, Executive Director of Families USA, at our hearing, who said:
“The Reducing Lower Health Care Costs Act is an ambitious piece of legislation – particularly so as a bipartisan bill in these most contentious of times.”
And Avik Roy recently wrote in Forbes:
“Overall, its provisions could be thought of as incremental in scope. But some – especially those around transparency – could have a significant impact.”
Here are a few of the ways this legislation will lower health care costs:
Ensures that patients do not receive a surprise medical bill – which is when you unexpectedly receive a $300 bill, or even a $3,000 bill, two months after your surgery, because one of your doctors was outside of your insurance network.
Senators Cassidy, Hassan, and Murkowski have done valuable work to solve surprise medical billing by proposing a solution last fall and again this spring, and lighting a fire under Congress to end this harmful practice.
I thank them for their dedication to this issue, and for working with Senator Murray and me to reach a result that protects patients.
Senator Murray and I have agreed on a recommendation to our colleagues that the best solution to protect patients from surprise medical bills is to pay doctors and hospitals that are out-of-network the median contracted rate that in-network doctors and hospitals receive for the same services in their local geographic area, known as the benchmark solution.
This is a change for me because I was inclined to support an in-network guarantee since I believe it is the simplest solution. 
Some of my colleagues are inclined to support a new independent system of dispute resolution, known as arbitration. 
The Congressional Budget Office has indicated that the benchmark solution is the most effective at lowering health care costs and Chairman Pallone and Ranking Member Walden have recommended this proposal to the House of Representatives.
We have also extended this protection to air ambulances, because according to the Government Accountability Office, nearly 70 percent of air ambulance transports were out-of-network in 2017 and the median price charged by air ambulance providers was about $36,400 for a helicopter transport and $40,600 for a fixed-wing transport.
It is time to stop studying the issue of exorbitant air ambulance charges and take action.
Our legislation will treat air ambulances the same as health care providers – by using the local, commercial market-based rate for in-network health care.
This legislation will bring more generic and biosimilar drugs to market faster and lower the cost of prescription drugs by:
Helping biosimilar companies speed drug development through a transparent, modernized, and searchable patent database. Senators Collins, Kaine, Braun, Hawley, Murkowski, Paul, Portman, Shaheen, and Stabenow worked on this provision.
Improves the Food and Drug Administration’s drug patent database by keeping it more up to date – to help generic drug companies speed product development, a proposal offered by Senators Cassidy and Durbin.
Prevents the abuse of citizens’ petitions that can unnecessarily delay drug approvals, from Senators Gardner, Shaheen, Cassidy, Bennet, Cramer, and Braun.
Clarifies that the makers of brand biological products, such as insulin, are not gaming the system to delay new, lower cost biosimilars from coming to market, from Senators Smith, Cassidy, and Cramer; and
Eliminates a loophole that allows drug companies to get exclusivity – and delay less costly alternatives from coming to market – just by making small tweaks to an old drug, a proposal from Senators Roberts, Cassidy, and Smith.
Modernizes outdated labeling of certain generic drugs, offered by Senators Bennet and Enzi.
This legislation creates more transparency by:
Banning gag clauses that prevent employers and patients from knowing the true price and quality of health care services. This proposal from Senators Cassidy and Bennet would allow an employer to know that a knee replacement might cost $15,000 in one hospital and $35,000 at another hospital;
Requiring health care facilities to provide a summary of services when a patient is discharged from a hospital to make it easier to track bills, and requires hospitals to send all bills within 45 calendar days to protect patients from receiving unexpected bills many months after care, a provision worked on by Senators Enzi and Casey; and
Requiring doctors and insurers to provide patients with price quotes on their expected  out-of-pocket costs for care, so patients are able to shop around, a proposal from Senators Cassidy, Young, Murkowski, Ernst, Kennedy, Sullivan, Cramer, Braun, Hassan, Carper, Bennet, Brown, Cardin, Casey, Whitehouse, and Rosen.
It will support state and local efforts to increase vaccination rates, and will help prevent disease outbreaks, through two proposals worked on by Senators Roberts, Peters, and Duckworth.
There is a provision to help communities prevent and reduce obesity, offered by Senators Scott and Jones.
A provision from Senators Schatz, Capito, Cassidy, Collins, Heinrich, Hyde-Smith, Kaine, King, Murkowski, and Udall will expand the use of technology-based health care models to help patients in rural and underserved areas access specialized health care.
And there is a proposal to improve access to mental health care led by Senators Cassidy and Murphy, building on their work in the HELP Committee that became law as part of the response to the opioid crisis.
There are other proposals:
For example, banning anti-competitive terms in health insurance contracts that prevent patients from seeing other, lower-cost, higher-quality providers. The Wall Street Journal identified dozens of cases where anti-competitive terms in contracts between health insurers and hospital systems increase premiums and reduce patient choice.
Banning Pharmacy Benefit Managers, or PBMs, from charging employers, health insurance plans, and patients more for a drug than the PBM paid to acquire the drug, which is known as “spread pricing.”
Eliminating a loophole allowing the first generic drug to submit an application to the FDA and block other generic drugs from being approved.
Provisions to improve care for expectant and new moms and their babies.
Provisions to make it as easy to get your personal medical records as it is to book an airplane flight.
And provisions to incentivize health care organizations to use the best cybersecurity practices to protect your privacy and health information.
I hope we will today vote to approve this legislative package  so we can present it to Majority Leader McConnell and Minority Leader Schumer for the full Senate to consider next month and would expect that other committees will have their own contributions.
Since January, Senator Murray and I have been working in parallel with Senator Grassley and Senator Wyden, who lead the Finance Committee.
They are working on their own bipartisan bill, which they plan to markup this summer.
The Senate Judiciary Committee is marking up bipartisan legislation on prescription drug costs tomorrow.
And in the House, the Energy and Commerce, Ways and Means, and Judiciary Committees have all reported out bipartisan bills to lower the cost of prescription drugs.
Secretary Azar and the Department of Health and Human Services have been extremely helpful in reviewing and providing technical advice on the various proposals to reduce health care costs.
And the president has called for ending surprise billing and reducing the cost of prescription drugs.
The Administration has also taken steps to increase transparency so families and employers can better understand their health care costs. 
The Lower Health Care Costs Act is just one example of this Committee reaching a result on a difficult issue.
We did that with fixing No Child Left Behind, with the 21st Century Cures Act, with user fee funding for the Food and Drug Administration, and most recently, with our response to the opioid crisis that included input from 72 senators of both political parties.
We reached those results in the midst of the argument Congress has been locked in for the last decade about where six percent of Americans get their health insurance.
Especially for Americans without subsidies, the cost of health insurance remains way too expensive.
But the reality is we will never have lower cost health insurance until we have lower cost health care.
That is why I am especially glad that 65 Senators, including nearly every member of this Committee, have worked together on the Lower Health Care Costs Act which takes needed steps to actually bring down the cost of health care that Americans pay for out of their own pockets.
Because of that, I hope members will save controversial amendments and some good ideas that we have not had time to fully think through, until we move to the floor.
Senator Murray will now have an opening statement.