americans we are determined in the legislation that we are putting together but we will lower costs improve quality expand coverage and make affordable and accessible for our workers and it is essential for us to have health insurance reform for our budget as president obama has health insurance historic task majority is a nonprofit nonpartisan organization founded and run by small business owners focused on solving the biggest problem facing small business today the skyrocketing cost of health care we speak for the insurance thousand and seven nearly twenty three million were small business owners and behind the statistics there are millions of individuals struggling with medical bills while trying to keep their businesses we hear stories noise over the past month or two we must remember that like the rest of america bipartisan agreement among small business owners on the key elements of reform setting up an exchange to purchase coverage cutting costs reforming insurance rules and covering everyone in a way that's affordable as evidence of this consensus our polling of small business owners this summer found that eighty three percent support the elimination of the insurance companies  majority number one concern this broad consensus is underscored by the fact that our sample as always was overwhelmingly republican and independent we compliment the house committees for working insurance wholesale insurance reform plan to cover everybody accompanied by necessary affordability critical provisions on cost containment including reasonable tort reform measures and a sincere effort we address the unacceptable state of affairs with hard work over the next two months we will pass a bill that will reverse our destructive force and ensure that affordable high quality health care is available to every small business owner every small business  nd every american thank you thank you responsibility shared responsibility and shared risk and thankfully the three pillars of two hundred shared in personal responsibility means employers and individuals should be expected to contribute to the cost of their coverage yet this responsibility creates a countervailing obligation on the part of the government to ensure that workers and firms have good affordable insurance choices that offer security and stability the third pillar of reform shared risk requires a new national insurance exchange that allows workers without secure coverage to join good group health plans with premium assistance to insure affordability for middle class as well as lower income americans and crucially shared risk means that this exchange must include a choice of a public health insurance plan competing on a level playing field with private health insurers indeed the public health insurance plan is a linchpin of this distinctively american response it will provide a stable backup for people without workplace insurance a high benchmark for private plans and a cost control backstop for enroll the nation as a whole can boast of the country a small number of large health plans are the only real choice lacking effective competition and facing consolidated provider groups private plans are passing on costs  and employers rather than improving their own efficiency now new rules for private insurance such as the fine ones contained in h r thirty two hundred will go some way toward encouraging plans to focus on value but what w public plan as a backup and benchmark insurers will still have ways to maximize their profit at the expense of health security driving up premiums and out of pocket costs a competing public plan is a backstop to ensure that this will not happen public insurance has lower administrative costs than private plans it obtains larger volume discounts not have to earn profits and the experience of medicare suggests it has a superior ability to control spending while maintaining broad access over time but for the public plan to work it must have the ability to set up an extensive network of providers and mediately providers who accept medicare patients should be assumed to participate under the new plan with the right to opt out rather than being required to opt in and since participation in the public plan will be voluntary for providers the plan to be able to establish rates based on medicare much like many private insurers  today requiring the secretary of health and human services to figure out how new prices from scratch and consulting with providers is inefficient and gives private plans which already have networks in place an unfair advantage over the public plan it also reduces the federal budget harry benefits of the public plan as a congressional budget office is strongly signal now some of said that we should wait to see if private health insurance private health insurance turns itself around before we create a public plan this would be a grave mistake any reasonable trigger based on the failure private insurance to provide affordable comprehensive coverage should have been told a long time ago triggers have not worked in the past remember the medicare part d trigger and a trigger has no chance of working unless it's based on a single national standard and prompt the immediate creation of a national public plan rather than the introduction of a public plan on a decentralized market by market basis for most to support it a trigger it's just another way of saying no the public plan choice and the same is true of another putative alternative regional private health care cooperatives cooperative and according to a survey just out in the new england journal of medicine a strong majority support public choice is well patients and doctors appear to recognize that such competition is the key to creating greater accountability and increasingly consolidated insurance it is certainly the key to balancing personal responsibility shared responsibility and shared the three pillars of a distinctively american solution to our nation's health care it is my comments are limited to the to the point that it made it it makes sense to start off building on top of the existing or an improved version of the existing medicare reimbursement system rather than have the secretary ne d separate rates for this new public plan there are three reasons for this one is i think it's essential as we've learned from the debate over medicare that taking place right now that we do not focus all of our cost control efforts on the medicare program itself that we see this as a larger effort that's going to involve medicare a new public plan and creating incentives for private insurers which often do things just as efficient or more efficient and efficiently than private plans to do to improve their practices to i think that we could use this new public plan much more effectively to innovate and there are important areas of h r thirty two hundred that encourage moves towards practice guidelines and quality measurements things that karen davis and others have argued for like moving to bundling  payments testing the effectiveness of new technology moving it to pay for performance rather than simply paying for all care delivered and shifting payment methods to better reward primary care providers those are all things that i strongly support and belie that new public plan that is treating non elderly americans would actually be well ways to implement and the last thing i would say is that this is an area where i think that we should see that as as karen davis mentioned before as a stepwise process this new public plan will not come on line immediately in any reform bill and therefore we should first get the legislation in place to build on top of the medicare payment system and simultaneously be thinking about as we have to think about with regard to the s r d and other aspects of medicare payment how we can improve medicare payment formula but i agree with you completely that it requires substantial reform to move toward a system that is better and encouraging the kind of efficient practices that we see in some parts of the country but not others  population has to have access to affordable coverage in certain regions of the country and the public plan would only come on line in those regions as is being talked about would be completely unworkable and would not i am certain be triggered at all and that's like growth formula to medicare excess general revenue that have not worked this is a decision that should be made by elected officials in today's context based on the overwhelming evidence that it's time to have a competitor in these highly system obviously electronic medical records reducing waste fraud and abuse changing the way doctors and hospitals are paid programs simplifying the paperwork these are all things that we need to keep focused on because while competition thank you and i just want to add that it's often stated that the public plan and regulations are somehow mutually exclusive alternatives in fact they both have to be there i think of the public plan in a sense as a check and balance in the same way that our system countries and there are other countries that have relied heavily on private insurance coverage is that our private insurers are quite different they're much more likely to be for profit they've developed over time very aggressive underwriting practices and practices of shifting costs on to consumers so we need we don't have a bunch of kittens in the room that we need to discipline we have why and we'd better have not just a good set of rules but also perhaps in the form of a public option in our hands as we confront the thank you so much we talked a little bit already about what will happen to medicare if we don't do anything but i know that there are many people in the country and in my district as well that are worried about when they hear that a lot of the coming out of medicare that somehow that is going to mean that medicare will be automatically roaded so i wonder if you could talk about how improvement and what that really means is slowing the increases to hospitals and other providers by one year the hospital industry has to live with lower rates by one percentage without damaging access without damaging the quality of here so we're really talking about spending that's going up six and a half percent if you're having it go up but five five and a half percent a year that can be done while continuing to make improvements  two hundred billion dollars worth of savings over ten years we're going to be spending forty trillion dollars over that period of time are modest changes that they are within the capacity to accommodate i think any other o slightly smaller sets of players it should be should be recognized if you look at the different versions of the legislation even on the house side that it ranges from twenty to fifty employees if you look at work twenty to fifty estimates of this and shown that overall health care costs could be brought down substantially with relatively little spillover effect in the sense of the need to match the premiums that can be found inside in the fact that insurers in this market are being pressed to have transfer from agriculture to health i'm afraid is more the latter than the former we have very little evidence that this strategy would work and fact quite a bit of evidence to the contrary health care cooperative have been tried in the past the most expensive initiative to support them was done during the one nine hundred forty s by the farm security administration this effort resulted in about a half a million mostly agriculture and rural who actually engaged in a sense a study of this issue and he said everything that i have learned from people who are in cooperatives today that this is not something that would be able to stand up to the large insurance companies i think that the cooperative even if you put aside health insurance coverage and their own care while preserving and improving the patient we strongly agree with the president that it's essential that health care decisions are made by patients and their physicians decisions about a patient's care should be based on what is best for the patient you have taken and you have taken a major step toward ensuring that these decisions are not based on financial and we're also appreciative that the legislation to successful reform and we applaud the house leadership for addressing my written statement has more details but i would like to point out that we do have about some other proposals we continue to have concerns about time the public option advisory commission which hospitals will have a negative six point nine percent medicare margin in two thousand and nine down from a positive point two percent margin in one thousand nine hundred that's the lowest level in more than efforts of an industry i worked in for many years to shape or form and in ways that will benefit it at the expense of taxpayers and policyholders in the weeks since my june twenty fourth testimony before the senate committee on commerce science and transportation have expressed hope at every opportunity that this indeed might be the year the congress will enact legislation to reform our health care system in ways that will truly benefit americans for generations to come but i've also expressed concern to the congress goes along with  so called solution insurance industry says it is bringing to the table and acquiesces to the demands of lawmakers and if it fails to create a public insurance option to compete with private insurers the bill it sends to the president might as well be called the insurance industry profit protection and enhancement h r thirty two hundred encompasses a comprehensive set of reforms that address the critical need for expanded coverage lower health care costs and greater choice in quality of the legislative proposals including the baucus framework would benefit health insurance companies far more than average american the practices of the insurance industry over the past several years have contributed directly to the growing number of americans who are uninsured and to the even more rapidly growing number of people who are under insured h r thirty two hundred will go a long way toward making many of the standard practices of the insurance industry illegal while providing much needed to low and moderate income americans who cannot afford  overpriced premiums being charged by the cartel of large for profit insurance companies that now dominate the industry thirty two hundred would provide premium and cost sharing assistance through the health insurance exchange it would create would require the secretary of health and human services to establish a package of essential health services that all plans would have to cover it would also insurance companies from denying coverage based on preexisting conditions gender or occupation eliminate deductibles co pays for preventive care as well as the lifetime limit currently common in health insurance policies the bill also would set an annual cap on out of pocket expenses that is more reasonable than other proposals and insurance companies ability but investors are those consumers members must realize that provisions of some proposals would actually drive millions more americans including many currently have access to comprehensive coverage into the ranks of the under insured estimated twenty five million americans are now under insured for two principal reasons first the high deductible plans many of them have been forced into by their employers and insurance companies require them to pay more out of their own pocket for medical care whether they can afford it employers to saddle their workers with the entire amount of the premium in addition to the out of pocket expenses escalating the already ravaged shift financial burden of health care from insurers and employers to working men and women  would do little to increase affordable coverage for those currently insured or stop the rise in medical bankruptcy they would however insure that huge news stream of revenue much of it from from taxpayers who would finance the needed subsidies legislation being considered by congress and many others that it will help solve their problems with health care we believe that health care is not a democratic issue it's not a republican issue use their as an excuse to charge exorbitant rates that they cannot afford leaving them without coverage are members mind that comes with knowing that health care reform will ensure that they can no longer be denied members and their support of their proposal under consideration that would allow insurers to charge older americans or more times higher premiums than others simply because of age discrimination medicare and getting better value for both medicare beneficiaries and the federal government we have to our members that we will not support any health care reform proposal that does not protect medicare or continue to get the benefits  and their children and grandchildren have the health coverage they need when they retire any health care reform plan must from removing waste fraud and inefficiency in the medicare program to close the party donut hole to doctors more fairly so that our members can continue to have access to the doctors they need to improve care by covering more preventive services not just cancer screening and  s out of pocket call third health care reform must protect consumers and by making sure that no one will get between you and your doctor not an insurance company and not the government and that no one will tell way a lot of our providers out there i'd like to ask a question mr potter excellent job of trying to set the landscape out there for us what we currently have and why it's so important to reform our system let me ask you this no mom and pop starts up a business to go bankrupt just as no retailer tries to market a product that people who can afford it will stop for  an insurance industry company get into business to offer insurance the way you make money with insurance reduce your risk try to reduce your risk by customers who offer the least amount of risk if you're going to be a health insurer that means you're going to try to insure people who are healthy wealthy or young because if you try to insure someone who's sick so you can't blame an insurance company for wanting to seek out the healthy the wealthiest and the youngest we can try to make it to try to compete for the business of every american whether you're healthy or not whether you're rich or not or whether you're young or not and so when you mentioned the public option choice i'm wondering if perhaps what the public option does in a system where we live where we rely on be hard pressed to find a word on the websites of these companies they call themselves health benefits companies or something like that and a public option would go a long way toward providing some balance to the demands of wall street and if they are required to would you like to address certainly from the physician standpoint i think you highlighted two of our concerns number one is right now it's difficult for many physicians offices to keep track of the different policies in the different forms far less than that one of the reasons for that decline is the consolidation in the industry the move to for profit status and the pressure of relentless pressure from wall street ratcheting down that medical loss ratio and the way that the different kinds of plan hear from doctors hospitals and nurses that the legislation in front of can result in a better patient without increased cost thank you very much and thank you for having for all of you being here and for having this hearing i want to just ask miss kramer first i think we were all little surprised by some of the comments where people told us to not let government get their do you think that was such a rallying call well i have to tell you that i think we were surprised as well and and we think that with the amount of education that has occurred during the month of august that we are making a dent in having people understand that my own view about that and you know throughout the country people are concerned about the economy job loss is a tremendous concern as you know for our members who are not yet medicare eligible that is we simply think that there are of course there is a lot of misinformation that people have repeated but we on medicare beneficiaries they are very concerned that thirty percent of their income goes to out of pocket costs this is not a wealthy group of people on average on average more than half of medicare beneficiaries have annual incomes below twenty five thousand dollars a year so it's a tremendous security within the country economically that i think is driving so much  inability of people to get below the basic all good we do think we're making progress on that certainly for a member but we do know that those individuals who are medicare beneficiaries who are not a member we have not reached the threshold of support for health care reform thank you i appreciate that in your statement you make a fairly strong statement i think that  do just that there are some ways that we might be able to address that and i would just hope is that we move forward that we can find a way because as i understand it a lot of the plans are not terribly transparent about what benefit  how how do we best do that you address dealing with med pac and finding making sure that access is there well we do as you said we do not support across the board because we think that access and quality