Speeches & Floor Statements

Colloquy of U.S. Sens. Lamar Alexander, Mike Johanns, John Hoeven -- Health Care Law

Posted on March 26, 2012

Mr. ALEXANDER. I thank the Senator. He has a unique perspective himself as a former Cabinet member, Governor, and now Senator. But all three of us here today, including the former Governor of North Dakota, have wrestled with this business of the rising costs of Medicaid, paid for partly by the States, according to rules set in Washington, and how do we deal with public education, especially higher education.

I remember during the debate two years ago, I suggested to our colleagues on the other side of the aisle who were supporting the health care law, which I thought was an historic mistake because it expanded a health care delivery system we already knew was too expensive, instead of taking steps to reduce it. I suggested to them that they go home and run for Governor. They ought to be sentenced to go home and run for Governor if they vote for it and see whether they can implement it over an 8-year-period of time.

Here is what the Senator from Nebraska is suggesting. Let me try to be very specific on the effect of the health care law on higher education in the States. This is not all President Obama's fault. Some 30 years ago, when I was a young Governor, I was still struggling with saying: We get down to the end of the budget process and we have money either to put in higher education or into Medicaid, and the rules from Washington say it has to go to Medicaid.

I remember going to see President Reagan and saying: Why do we not just swap it, Mr. President? You take all of Medicaid. Let the States take elementary and secondary education. I wish we had done that. But we did not do it. Gradually, the increasing Washington-directed costs have distorted State budgets until, as the Senator from Nebraska said, 24 percent of the State budgets go to the Medicaid program.

Now we are in a process where because of the health care law, we are going to add 25.9 million more Americans onto Medicaid, according to the Medicaid Chief Actuary. Employers are going to decide: I would rather pay my $2,000 penalty and allow my employees to go into the exchange or, if they are lower income, into Medicaid. Then the costs to States are going to go up.

The Senator from Nebraska talked about what the current Governor of Nebraska said. Our former Governor, Governor Bredesen, a Democratic Governor, estimated that between 2014 and 2019 it would be $1.1 billion in new costs for the State of Tennessee from the Medicaid expansion.

What most people do not realize is the effect this has on higher education and student tuition. I hear a lot of talk about let's see if we can lower student tuition. One way we can lower it is not take money from student loans and spend it to pay for the health care bill. Most people are not aware we spent $8.7 billion of so-called profits the government makes when it borrows money at 2.8 percent and loans it to students at 6.8 percent. The government took some of that money and spent it to pay for the health care bill.

If it did not do that, it could lower the interest rates on student loans, according to the Congressional Budget Office, to 5.3 percent and save $2,200 per student over 10 years on the basis. So the health care law is costing students who borrow money more on their loans.

In addition, and I will close with this example, it is raising college tuition. You say: How could the health care law cause tuition to go up in California or Tennessee? If in Tennessee, as last year, the increase for Medicaid went up 15.8 percent. That is how much more State tax dollars it had to go up. Spending for the University of Tennessee and community colleges went down 15 percent. Then the result of that was tuition went up in our State by about 8 percent. That was true all across our country.

So the effect -- and I will come back to this later if we have more time -- is that the health care law mandates that the States spend more money on Medicaid, and, as a result, the State cuts the money it is spending for the University of Tennessee or Nebraska or North Dakota. In order to keep the quality of education up, tuition goes up. So students are paying more for tuition and they are paying more for interest rates on their student loans directly because of the health care law.

President Obama should not be blamed for the last 30 years of rising costs of Medicaid. But he should be held responsible and this health care law should be held responsible for making it worse.

Mr. JOHANNS. Senator Alexander has raised some excellent points there. Because Governors only have so much revenue they can deal with; they cannot invent it, if you know what I am saying. So Governors sit down, they have to figure out what the needs of the State are. If the Federal Government is taking that decision away from Governors by forcing them into expanding their Medicaid, there is going to be less money available for programs such as K-12 education, higher education.

Let me, if I might, turn to our colleague Senator Hoeven. He was a Governor for 10 years in the State of North Dakota. Please explain the impact Medicaid expansion would have on your budget decisions as Governor and the impact the health care bill is going to have on your State.

Mr. HOEVEN. I thank Senator Johanns. It is good to be with him. Also, to Senator Lamar Alexander from the great State of Tennessee, great to be with him as well. We share, I guess, the common experience of serving as Governors and certainly bring that perspective to our work in the Senate.

As Senator Alexander just said, there is no question ObamaCare is making the health care challenge in the United States worse, is making it worse. We have to find a way to empower our people. In our roles as Governors, before serving in the Senate, that is what we tried to do. When it came to Medicaid, when it came to health care, it was how do we empower our people, whether it is health care or anything else, in a way that not only makes their lives better but that makes sure we are fulfilling our responsibility as good stewards of the State's treasury on behalf of the citizens of our respective States.

Last week was the second anniversary of the Obama health care legislation -- the second anniversary. The fact is, since that law was passed -- and just 1 minute ago, Senator Alexander expressed some of the things he talked about when that debate was had in the Congress. But since that law was passed, over the past 2 years, Americans have become more unhappy with the legislation. The Obama health care legislation has actually become more unpopular over the last few years as time has gone by because, quite simply, Americans do not want government-run health care. Americans do not want government-run health care. That is what ObamaCare is.

Americans want to be free to choose their own health care provider, their own doctors, their own hospitals. They also want to be able to be free to choose their own health care insurance. Frankly, they are going to do a lot better job than having the Federal Government do it for them. That is just a fact. Of course, that is very much at issue now with the Supreme Court deliberations, the judicial review they are undertaking now on the constitutionality of the individual mandates in the Obama health care legislation.

Of course, the question is, Is that individual mandate constitutional? If it is, if they find that individual mandate is constitutional, then is there any limit to the government's ability to intrude into the lives of our citizens? This is a huge question. If so, what happened to the concept of limited government, which was so carefully developed by our Founding Fathers in our Constitution?

It seems to me that concept of limited government is gone. That is an incredible problem for all of us that extends far beyond health care. As former Governors, we understand the need to limit government, whether it is the local level -- and the Senator was a mayor. Senator Johanns was a mayor in Lincoln, NE, before he was the Governor of Nebraska, now a Senator from Nebraska, and he understands that one of the fundamental responsibilities of a mayor, of a Governor, of a Senator is to make sure we honor the Constitution and we limit the power of government, at the local, the State, and the Federal level, to intrude into the lives of our citizens. That is exactly what our Founding Fathers were striving to do in the Constitution, the whole concept of checks and balances.

We have a legislative branch and a judicial branch and an executive branch because that creates checks and balances on the respective powers of each branch. Why? To protect our citizens, to limit the reach of government. We have a bicameral Congress, the House and the Senate, to make it harder to pass laws, not easier -- to make it harder to pass laws. Again, to protect the people of this country.

We have the 10th amendment that reserves powers to the State not expressly provided to the Federal Government; again, to limit the power of government and protect the people of this great country. Of course, that is what we have in our Bill of Rights. That is what it is all about.

So we have ObamaCare; it raises taxes by $1/2 trillion. It raises taxes $500 billion. It cuts Medicare $1/2 trillion, $500 billion. Yet, at the same time, it places huge costs, a huge burden on the States. The CBO now estimates that over the next 10 years it will cost the States $118 billion. That is $118 billion in costs to the States who are trying to balance their budgets. They are already facing challenges in doing that, and we will put that kind of huge cost on them.

At the same time, think of what it does to our small businesses. Again, as a Governor, I know how it was in my State. I think it was true when the Senator from Nebraska was Governor and when Senator Alexander was Governor of Tennessee. We understood that job creation was job one. We had to make sure businesses were able to work effectively, to compete, and to employ people. That is the engine that drives our economy, the small businesses.

When we look at ObamaCare, we look at what it does to the States -- the $118 billion over 10 years -- and look at the costs it creates for small businesses and look at the confusion it creates in trying to comply with all of this. What do small businesses do? The Senator from Nebraska talked a minute ago about, OK, what does the small business do?

Well, either, A, they try to comply, and that drives up their costs or, B, they cancel their insurance and default to the government-run insurance. But it not only creates a problem for them in determining whether they are going to continue health care for their employees -- and our citizens have shown they want the employer to continue doing that, and it goes to whether they hire more people.

Here we are with 8.3 percent unemployment, 13 million people looking for work, and we are going to make it harder for small businesses to put them to work because they don't know if they can comply with ObamaCare, let alone withstand the cost. That affects every single American.

We need to change the approach. That is what we are talking about today. We are talking about an approach where we can empower people to choose their own health insurance and provider, an approach that encourages competition, which will help bring costs down, giving our consumers more choice. We are here to talk about how we work with States and small businesses to reduce costs, reduce fraud, waste, and abuse.

The President of AARP, Barry Rand, estimates that $100 billion is lost annually in waste, fraud, and abuse under Medicaid. Think what our States could do on behalf of their citizens in all 50 States if we in the Congress, working with an administration that will work with us, would empower the States to go after that waste, fraud, and abuse by giving their citizens more say over their health care and by encouraging competition among insurance companies to provide more choice, access, and to go after that waste, fraud, and abuse.

There are so many things we can do, but it is not through a big, monolithic, government-run insurance program that puts costs on the States and costs on its citizens. That is what we need to change. We need to change it now. Again, I thank Senator Alexander for being here and for his work to empower our people when it comes to health care. Also, I particularly thank Senator Johanns for calling us together to discuss this very important issue on behalf of the people of America.

Mr. JOHANNS. Mr. President, I thank Senator Hoeven for his comments. He mentioned that job one for every Governor is job creation. Before I turn to Senator Alexander, let me congratulate Senator Hoeven. Whatever he did in that capacity worked. He has the lowest unemployment rate of any State. I am proud to say Nebraska is No. 2 in that regard. I will guarantee one thing you learn: You don't create jobs by putting a big wet blanket of more regulations on the job creators. I worry that all these rules and regulations are going to have a very damaging impact on job creation.

I would like Senator Alexander to talk about that, what he sees as the impact of this health care bill on job creation in our States.

Mr. ALEXANDER. I thank the Senator. I listened with interest to the former Governor of North Dakota and the former Governor of Nebraska. Let me give a specific example. in response to the question, after the passage of the health care law, I met with a number of representatives from chain restaurants. Chain restaurants are the kind at which we go out to dinner for a modest cost. They are among the largest employers in America. They employ largely low-income and young people -- people who are the waiters and waitresses we see when we go into Ruby Tuesday or O'Charley's or one of these other places, and usually it is someone with a part-time job or somebody who is working his or her way up.

Many of those companies offer some health insurance to their employees. At one of the companies, Ruby Tuesday, headquartered in Tennessee, the chief executive officer told me the cost of the health care law to his company would equal the profit of the company that year. This is a company with several billion dollars in revenue.

One of the companies that is even more successful than Ruby Tuesday in terms of profit, and is larger, told me their goal was to have 90 employees per store. But after the health care law, they said they would have 70 employees per store in order to comply with the cost of the health care law. This not only raises the cost of business, but it reduces employment in the United States.

Unfortunately, I am afraid what we may find is these restaurant companies, after 2014 -- we are about 1 year away from a ticking time bomb for State budgets and businesses and also for people with employer health insurance. I am afraid these companies will look at the penalty and say they would rather pay $2,000 per employee and let them find their way into one of these State exchanges or into the Medicaid Program.

Millions of Americans, because of the health care law, are going to lose their employer-sponsored insurance, and millions of Americans will not have as many jobs because of the costs imposed on businesses such as these restaurants. Mr. JOHANNS. The Senator raises a good point. I am mindful of our time limit. I am going to take a minute or two to wrap up. I do think Senator Alexander and Senator Hoeven both raised very good points.

I look at the health care law and I often think whoever wrote this law -- who were they talking to? They certainly were not talking to our small- and medium-size businesses across this country. Why? Because just as Senator Alexander points out, there is going to be a point where that business owner, large or small, and in each and every spot in between, will look at the penalty of $2,000 per employee and say it is vastly cheaper for them to drop coverage and pay the penalty. In fact, we figured out what that savings would be for a large retailer in the United States. It was over $1 billion a year.

Does anybody believe for a moment that they are not going to do what is right by their shareholders and pay that penalty and save $1 billion a year by dropping health care coverage? Once that dam breaks, the dam breaks.

Then do you remember that promise so often made -- 47 times? The President said, "If you like your plan, you are going to be able to keep it." Well, people are not going to be able to keep it. They will lose their plans.

They certainly were not talking to Governors when they wrote this bill. Any Governor would tell us that Medicaid is a broken system. It is literally bankrupting State budgets under current circumstances. Then when we add 26 million more people to Medicaid, we begin to realize they are going to have a serious access problem.

Forty percent of doctors do not take Medicaid patients. Where are they going to find their health care? As many of us pointed out, it is like saying to someone: Here is your bus ticket, travel anywhere you want -- oh, by the way, there are not enough buses to haul all the people we have given tickets to.

That is what we are going to be facing -- a growing access problem. Then, with the cuts to Medicare, they sure could not have been talking to Medicare providers because when they start cutting reimbursement rates, which is exactly what they are doing with $1/2 trillion cut out of Medicare, they are going to have access problems there too. All of a sudden, senior citizens cannot find a doctor. Don't believe my statement on that. Read the reports from Richard Foster, the Chief Actuary at CMS, who studied this and said these are the consequences of this legislation.

At the end of the day, it is pretty clear to all of us that this is a failed policy that was quickly put together, rammed through to roll over the minority and get this done. We ended up with a very failed piece of legislation.

The American people do not like this legislation any better than the day it was passed. In fact, they like it less. The more they learn about this legislation, the less they like it.

I will wrap up with one thought. We all know the Supreme Court is hearing arguments on this case these days. It is my hope the Supreme Court will intervene and decide that this law is in fact unconstitutional, and then we can build a health care law the way it should be done -- a step at a time, consulting with medical providers and Governors all across this country to build a policy that makes sense for the health care system and our citizens. That is what should have been done in the first place. That is what we need to do.

With that, I yield the floor and suggest the absence of a quorum.