check one two three four five six seven eight nine ten hard story of how their lives have been adversely affected by the insurance policy lack of insurance policy the soaring costs the bankruptcy's the loss of homes and today historically will be the first day that we will have been tackling this very serious problem millions of middle class families in fear that the cost of their policies will jeopardize their quality of life many employees are denied wage increases because of the increase in cost of health care some people are just stuck on their jobs because they have someone in their family that health costs and they can't afford to meetings public meetings and trying to get america ready to recognize that we were prepared to tackle this complex and very expensive problem i say expensive but the truth challenge the sincerity of any member of this committee indeed the congress and recognizing that we have to do something about it we have to bend the curb and wanted to do this is to make certain that all americans have  equal playing field that we don't ask those that have insurance to pay the costs of those who don't have it we don't as a health insurance agency to pick up the cost but the truth of the matter is that even when he was a young of a number he recognized the problems that we had with our nation's health system the congress well the ways and means committee well and he's been an extraordinarily you're quite right today's important you have a chance to provide affordable quality health care to all americans bend the curve on health care costs which are the top priorities for consumers business and government our vote on this bill will be one of the most important votes that any of my colleagues will take in congress that said the bill before us america's affordable health choices act doesn't satisfy everyone for progressives it isn't single payer and it gives the insurance industry too much for my friends on the right it has the audacity to include a public health insurance option and that doesn't move toward their goal of less government involve for those in marginal districts there are tough provisions in this build a vote for we've saved more than five hundred billion dollars out of the medicare program no healthcare provider is going to say thank you reducing their pay we've all heard complaints from nursing homes health foam agencies wheelchair suppliers and the list goes on for those opposed to tax increases they can simply say no because we do have a tax increase on the wealthiest americans in this bill not withstanding all of the perceived flaws it's our duty i believe as members of congress to make the tough decisions presented to us that's why we were elected if i had been given free rein words chairman almost to direct my own health reform bill it would have looked different but i'm proud to be here today as just one of many drafters i think it would be difficult to go home and tell my constituents that i opposed health care reform because it would have caused millionaires to pay a little more taxes because the nursing home industry told me to oppose this bill rises above special interests and supports the best interests of all the american people i look forward to the markup so that we can get t build of the president and signed into law as soon as possible i'd like to take just an extra second if i may to thank our health staff who have been working literally around the clock  the republican staff and their helpers who have been so patient with us and we've been unable to get all the information we'd like to get them in a timely manner are excellent subcom german complimenting staff until i see how this thing works out s problems unfortunately that opportunity is not yet but hope springs eternal this is just the beginning of what's going to be a very long and complicated parliamentary situation now but we were both attempting to improve our nation's health care system and well we're attempting here to improve our nation's health care system much more than our seats on the diocese changed in one thousand nine hundred four as we debated health care reform the full ways and means committee spent seventeen days over six weeks conducting our markup this year the markup will last a day maybe two at the most  importantly in one thousand nine hundred four the ways and means committee held a dozen hearings that subcommittee for its full committee on the bill after its introduction not counting the thirty two additional hearings the full committee in of its subcommittees held before the clinton bill was formally introduced we held one hearing on the bill before us however not one of the witnesses were able to speak knowledgeably about the provisions in the bill because they only given a couple of days to digest it it's also worth pointing out that the committee refused to act on the clinton bill until nearly three months after the congressional budget office released a comprehensive one hundred four page analysis and score i have a copy of that analysis right here and it's still available online we have no such analysis of the bill before us we have a c b a letter it's a rough guess estimate based on specifications as outlined by the majority not an actual legislative tax as director elmendorf wrote to the chairman on july fourteenth of this week and i quote it is important to however the estimates are based on specifications provided by the tri committee group rather than an analysis of the language released this week for that reason and others outlined below those figures do not represent a formal or complete cost estimate for the coverage provisions of the draft legislation and quote we can't afford to guess when it comes to health care this is not some think tank experiment these are people's lives people's jobs we're talking about frankly the speaker's timeline endangers not only the health of all americans but the health of our economy this committee has no business marking up a bill which cannot tell us cost or impact what we do know is that democrat staff told the associated press that this bill will spend about one point five trillion let me repeat that at least one point five trillion and it will create a massive long term unfunded mandate that imperils the future of this nation worse yet this bill contains eight hundred twenty billion dollars in new taxes that we paid that will be paid for by families making as little as twenty thousand dollars small businesses in manufacturing all while we're in the midst of a recession care premiums it taxes jobs and it taxes wages the unemployment rate nationally is reaching ten percent the unemployment rate my home state of michigan is fifteen point two percent and the employer mandate alone will cost millions of jobs making it harder for businesses especially small ones to hire new workers or increase their wages the national retail federation which represents one in five american workers strongly opposes this bill as is the national federation of independent business the u s chamber of commerce and the national association of manufacturers american people also oppose this bill and it should come as no surprise in the past weeks we've seen different public polls showing opposition to the daily as more details including the massive tax increase pay for become public and why because america knows this plan will force them to lose the health insurance they have in like at least two different independent analysis of the tri committee bill estimate that more than one hundred million americans would lose their current health care coverage people are just going to lose their health insurance are going to lose control over their health care decisions under this government take over of health care the new health commission can arbitrarily determine what treatments and medicines are covered by insurance who is too old or too sick to receive treatment and compared to the first draft of the bill makes rationing more likely by the health benefits advisory committee there has to be a better way to reform health care in america mr chairman all of us know health care reform is needed but that recognition doesn't absolve us of our duty to make sure we pass legislation that effectively meet the challenges we face this bill or at least what we know of it so far fails that test and i will needs reform rising health care costs are putting the squeeze on families businesses and government ally while placing quality health coverage completely out of reach for too many americans unfortunately the bill before us today to bring costs under control instead it would raise taxes and force employers to cut jobs at a time when we are in the middle of the most tax will put the top marginal income tax rate in california above fifty five percent we shouldn't have to resurrect the nineteen seventies to remember that when tax rates go too high people lose the incentive the build new businesses and create jobs these massive tax increases are no substitute for a fiscal responsibility today we spend a much higher share of our economy on health care than any other industrialized country the bill before us raises taxes the pump even more money in the health care but is woefully short costs even the president's budget director has expressed concerns that this bill doesn't do enough to move medicare away from the for service system that drives up costs meanwhile it does nothing at all to address the costs associated with out of control medical liability lawsuits finally the bill before the president that if you like to cover you have to be able to keep it as we have heard in previous testimony an independent study has estimated that two out of three americans who have private health care coverage will lose it because of the policies in this bill such as the establishment's of a new government run health plan paying medicare based rates in addition several million government goes through the table of contents get into section and the rest of section one hundred includes a glossary of terms that are out the bill section one hundred one as requirements reforming the health insurance market broadly outlines the standards for reforming section one zero two allows the maintenance of current individual health plans as grandfather plans and provides for a five year grace period for current group health plans to meet specified standards section one eleven prohibits the application of preexisting condition exclusions section one twelve requires guaranteed issue and renewal of insurance policies except in instances of fraud section one thirteen limits age rating to a ratio of two to one and allows variation based on geographic area family size as permitted by the state insurance commissioners and the health choices commissioner that is created in a bill that requires a study and reports by the health choices commissioner describing the difference between insured and self insured plans and providing recommendations as appropriate to insure that the lodge is not create incentives for small and midsize employers to self insure or create adverse selection section one fourteen provides authority health choices commissioner to set nondiscrimination roles and ensures that mental health and substance use disorder parity and genetic nondiscrimination laws applied to qualified health plan section one fifteen provides authority to the health choices commissioner to set network adequacy standards for qualified plans are required to section one sixteen requires qualified plans to meet a specified medical loss ratio as defined by the health choices commissioner if plans exceed that limit plans must provide a rebate to enrollees section one twenty one requires qualified plans to meet that then if it's standards recommended by the benefits advisory committee and adopted by the secretary plans outside the exchange must offer at least the essential benefits and others as they choose plans within the exchange must meet the specified benefit packages which include a tier with offerings of additional benefits allows for the continued offering of separate accepted benefits package as in current law outside of the exchange section one twenty two outlines the broad categories of benefits that are required to be included in the central benefits package prohibits cars sharing for preventive benefits including well child and well baby care and limits the annual out of pocket spending in the essential benefits package to five thousand for an individual and ten thousand indexed to the consumer price index for a family that defines an initial essential benefit package as being actually equivalent to seventy percent of the package as if there were no cost sharing imposed section one twenty three establishes a health benefits advisory committee chaired by the surgeon general with nine private members appointed by the president nine members of the public appointed by the comptroller general and no more than a representative of relevant federal agency the advisory committee makes recommendations to the secretary of health and human services regarding the details of the covered benefits that were outlined in the previous section including the establishment of three tiers of coverage basic and hands and premium section one twenty four establishes the time line for the initial adoption of benefits by the secretary of health and human services and the periodic updating of standards in the future section one thirty one requires the health choices commissioner provides health choices commissioner with the authority to define marketing standards that qualified plans are wired to meet section one thirty two requires each qualified plan to meet standards defined by the commissioner for timely internal grievance an appeals mechanism in establishing extra review process that provides for an impartial independent innova review of denied claims determination is binding section one thirty three requires qualified plans to meet standards established by the commissioner relating to transparency and timely disclosure of plan documents and information section one thirty four provide flexibility to the commissioner to decide which protections of sections one thirty three through one thirty one should apply to qualified plans outside of the exchange section one thirty five applies medicare's timely payment of claims standards to the plans offering coverage in the exchange section one thirty six requires the health choices commissioner to establish standards for the coordination of benefits  reimbursement for payments in cases involving individuals with multiple sources of coverage for example those with workers compensation claims going on section one thirty seven requires insurers and providers to use common standards for transactions such as claims payment eligibility and enrollment building on the administrative simplification standards established in the hipaa act in one thousand nine hundred six section one forty one establishes the health choices administration and independent executive branch agency into the social security administration the commissioner is appointed by the president section one forty two establishes the duties and authority of the commissioner commissioner carries out functions including the establishment of qualified plans standards the establishment and operation of the health affordability credits and additional functions as laid out in the statute the commissioner can also collect data necessary to carry out his or her duties on quality and value and address disparities in health care the commissioner also has the oversight and enforcement authority including the authority to impose sanctions and suspend in roman of a plan this authority requires a commissioner to coordinate with the department of health and human services the department of labor and state insurance regulators section one forty three requires  commissioner to consult with other regulatory bodies and state and federal agencies in carrying out the duties to ensure appropriate oversight and enforcement section one forty four stylish establishes an ombudsman individuals and navigating the new system and report to congress on recommendations for improvements and administration of the new program section one fifty one makes clear that this act does not cobra or hipaa including mental health parity in the genetic nondiscrimination act other measures passed in federal law unless the requirements prevent the application of a requirement under this title section one fifty two discrimination by health insurers with regard to provision of high quality care or services section one fifty three protects employees from retaliation by their employer for the reporting of any violations insurance companies from rescinding coverage except in instances of clear fraud requires an independent review of any rescission determination effective october first two thousand and ten section one sixty three requires secretary of health and human services to adopt standards for typical system section one sixty four stablish is a temporary reinsurance program to provide reimbursement participating plans for part of the cost of providing health benefits to early retirees ages fifty five for in their families the program remembers his participating employer plans for eighty percent of the cost of benefits provided per enroll in excess of fifteen thousand and below ninety thousand these plans are required to use the funds to lower costs going directly by the participants and beneficiary the act appropriate ten billion dollars to this fund and those funds are available until expanded section two one establishes a health insurance exchange under the purview of the health choices administration that will facilitate the offering of health insurance choices the commissioner establishes a process through which to obtain business goshi to enter into contracts of qualified plans and sure the different levels of benefits are offered with appropriate oversight enforcement the commissioner also facilitates outreach and enrollment creates an operates a risk pooling mechanism and ensures consumer protection section two o two defines who is eligible for participation in the health insurance exchange including employers and individuals in year one individuals not enrolled in other coverage under acceptable coverage are allowed into the exchange as well as small employers or few employees  the exchange is open to employers with up to twenty employees in subsequent years the health choices commissioner is granted authority to expand employer participation as appropriate with the goal of allowing all employers access to the exchange  acceptable coverage to include enrollment and other qualified coverage including most other federal health programs medicaid eligible individuals will generally be enrolled in medicaid not the exchange however an exception is made for childless adults with incomes under one hundred contribute at least their required contribution towards such coverage and permit their employees the freedom to choose any plan within the exchange that requires the commissioner to conduct periodic surveys of exchange eligible individuals and employers to measure satisfaction it requires a commissioner to conduct a study regarding access to the exchange to determine if there are significant groups of individuals or employers who are not exchange eligible but who would have improved benefits when affordability is made eligible that report is due in year three and year six of the exchange in continued thereafter will include recommendations as appropriate for changes to the eligibility standards section two zero three is where the health choices commissioner specifies the benefits that must be made available in each year including the requirement that each participating plan o plan in each service area in which they operate it is an optional for them plan to offer one enhanced and one premium plan the differences between the three main plans in other words the basic enhanced and premium level the levels of caution package plans can offer extra benefits like dental or vision coverage for adults or other benefits not in the essential benefits package to ensure consumers know what they are paying for these packages must detail the cost of the extra benefits separately and plans m offer multiple premium plus option states can require the application of state benefit mandates to all exchange participating plans but only if there is an agreement with the commissioner that the state will reimburse the commissioner for additional costs of portability credits in that state  benefit requirement section two a for lays out the responsibility of the commissioner's contracting authority including the solicitation of business plans and entering into contracts with approved plans that will be for at least one year duration and may be automatically renewed requirements include that the plans the life in the state in which they will do business abide by data reporting requirements as outlined by the commissioner provides the implementation of portability for to participate in risk provide for culturally and linguistically appropriate services and communication and with respect to the basic plan contract services with essential community providers the commissioner outlined for that process the term of the contract is for a minimum of one year commissioner and forces network adequacy including an allowance for enrollees to receive services out of network at no greater the provider network does not meet standards for adequacy the commission is required to establish a process to oversee monitor and force requirements on the plans commission has authority to terminate plans that fail to meet the required standards section two a five requires a commissioner to period as well as special enrollment periods for special circumstances that requires a commissioner to create an auto enrolment process for individuals who are exchange eligible but have not selected a plan the commissioner provides for broad dissemination of information on exchange participating  comparative manner and will work with other appropriate entities to ensure transparency and and information in helping people make their choices establishes rules two can ensure continuity of coverage for certain newborns and medicaid for children eligible for  chip requires the commissioners to enter into memorandums of understanding with state medicaid agencies to coordinate enrollment in medicaid in the exchange for medicaid eligible individuals section two zero six coordinates affordability credits and risk pooling in order to prevent waste fraud abuse it institutes a special creates a special inspector general to oversee operation of the program section two zero seven create the health insurance trust fund to provide necessary funding for the health choices administration and section two away from it states to offer their own exchange or did you in a group of states to create an exchange in lieu of the federal health insurance exchange provided that the states perform all the duties of the federal exchanges approved by the commissioner the commissioner has the authority to terminate the state exchanges if they are not meeting their obligations section two twenty one requires the secretary of health and human services to develop a public health insurance option to be offered starting in two thousand and thirteen as a planned choice within the health insurance exchange it's important to note that the secretary of health and human services  responsible for operating the public health insurance option well the new health choices administration a separate agency is responsible for operating the exchange the public health insurance option participates on a level playing field with private plan choices like private sans  must offer the same benefits abide by the same insurance market reforms followed provider network requirements and other consumer protection section two twenty two outlines the premiums for the public option and that they are geographically adjusted and required to be set so as to fully cost to cover the cost of coverage as well as the administrative costs of the plan like any private insurance plan it will have built into its premiums its administrative loads and reserve requirements this includes a requirement that the plan have a contingency margin like private plans in its premium to cover unexpected costs variations there is an initial appropriation of two billion dollars for administrative costs and to provide claims initial claims reserves before the collection of premiums begin however these start up funds are amortize into the premiums for the public option and will be recruit the plan must be self sustaining and will be self sustaining including amortizing that initial funding in the premium section to twenty three the secretary of health and human services establishes geographically adjusted provider payment rates for the public option for the first three years those rates are based on medicare rates with a five percent add on for practitioners who also participate in medicare this increase also kweisi practitioners like pediatricians who do not typically participate in medicare after the first three years the secretary has granted greater flexibility in setting rates but the general rule is the overall spending should remain consistent with the initial levels flexibility substantial flexibilities provided to the secretary to create payment rates for services not covered by medicare and to pursue delivery system reforms make adjustments to offset geographic variations and adjust rates as necessary to assure competitiveness with exchange participating plans or for excessive or deficient payments medicare providers are voluntarily participating in this program they will be seen as participating i must say opt out congressional budget office has advised us that they believe that folks will opt out as the folks who are the only the providers who wish to participate will this is a voluntary participation arrangement there are no penalties for opting out there's no minimum requirement to stay and the secretary also has the authority to negotiate prescription drug prices for the public option because there are no prices in medicare right now for prescription drugs party operates with private plans without a fee schedule there is no way for the public option to know what the price is to set section two twenty four the secretary is empowered to move forward with delivery system reforms to change the way the public option pays for medical services to promote better quality a more efficient use of medical care such payment changes must seek to reduce costs for en es improve health outcomes reduce disparities addressed geographic variation in the provision of medical services prevent or manage chronic illness as well promote integrated patient centered care section to twenty five provides the secretary with  conditions of participation for the providers who are participating in the public health insurance option they must be licensed in the state in which they do business physician participation comes in two types they are preferred physicians are those physicians who agree to accept the public option payment rate without regard to cause sharing payment in full participating non for for it physicians are those who agree not to impose charges in excess of the balance billing imitation and medicare providers are excluded from participating in the public option if they are excluded from participating in other federal health programs section three twenty six applies medicare's anti fraud abuse protections to the public health insurance option section two forty one creates the affordability credits to ensure that people with incomes up to four hundred percent of federal poverty have affordable health coverage these credits credits are phased out according to a schedule defined in the act as individual and family incomes increase in other words the assistance that goes to these families decreases as their income increases at the upper end of the assistance schedule the assistance is nominal affordability credits reduce the costs of both the premium and i knew out of pocket spending as the individuals apply to the commissioner or the health insurance exchange for the credits or three other entities approved by the commissioner the commissioner can enter into memorandums of understanding with state medicaid agencies for such determinations as well and will reimburse such agency for the costs of conducting such determinations in the first two years affordability credits are used to purchase a basic plan after that the commissioner establishes a process to allow them to be used for enhanced in premium plans although the individuals who select those will be responsible for any differences in cost above the basic premiums section two forty two says that in order to receive affordability credits individuals must have individual coverage through an exchange participating health benefits plan family and individual incomes must be below four hundred percent as we discussed in general employees who are offered employer coverage are ineligible for affordability credits within the exchange beginning in year two employees who meet in affordability test showing that coverage under their employer provided plan would cost more than eleven percent of income are eligible to obtain the income based for debility credits in the exchange in addition any person is welcome to come into the exchange without affordability credits paying for their entire premium by themselves section two forty three the affordable premium amount is calculated on a sliding scale starting at one point five percent of income for those at or below one hundred thirty three percent of poverty and phasing out at eleven percent of income for those at four hundred percent of poverty or above this phase out is specifically detailed in the act the reference premium is the average premium for the three lowest cost basic plans in the area in which the individual resides section two forty four outlines the process for the affordability cost sharing credit which reduces cost sharing for families out of below one hundred thirty three percent of poverty and up forty percent of the poverty limit a specified in the act section two forty five require the health choices commissioner to use income data from the individual's most recent tax return to determine eligibility the federal poverty level  level in effect as the date of the application the commissioner takes such steps as appropriate to ensure accuracy of determination process easier established for individuals with significant changes in income to inform the commission of such change their penalties for misrepresentation of income the commissioners required to conduct a study examine the feasibility and implication of adjusting the application of the federal poverty level for different geographic areas so as to reflect the variations in cost of living in different areas of the country section two forty six prohibits anyone not lawfully present in the united states from obtaining affordability credits section three zero one establishes individual responsibility and cross references to the shared responsibility provisions in the internal revenue code that mr barr told will review when we finish the section section three eleven provides the rules that apply to an employer that elects to provide coverage a quote offering employer in lieu of the payroll tax applies to a quote non offering employer and offering employer generally must offer all of its employees the option of selecting individual or family health coverage section three twelve provides at the minimum employer contribution in the case of an offering employer is seventy two and a half percent of the premium for individual coverage and sixty five percent of the premium for family coverage or proportional amount for non full time employees family coverage for this purpose includes employees spouse and cause and children section three thirteen requires an offering employer to contribute to the exchange for each employee who declines the employers offer of coverage and enters the exchange via the affordability tests previously outlined the contribution is generally eight percent of the average salary for the employer and before that for the employee sections three fourteen authorizes the creation of rules that would prohibit employers from gauging practices that steer employees away from employers offer coverage and into coverage offered to the exchange section three twenty one three twenty two three twenty three and three twenty four  essentially coordination requirements among three different acts that are generally used to enforce hipaa like standards in the event of non compliance at a minimal level from an employer if they find someone who slips through the cracks and there was a problem in the human resources department to avoid having the entire non offering requirement come down and there are three different arrangements through as under current law for mental health parity and the gina act there are requirements under the arista act again not in our jurisdiction the public health service act again not in our jurisdiction and to satisfy cross references to the internal revenue code provisions relating to the employer's election to be an offering employer section three twenty four requires the exchange in the department of h h s labor and treasury to develop coordinated interpretive enforcement measures with respect to offering employers at this point we move to internal revenue is usual the staff has prepared some written summaries of the revenue provisions for the members and staff and i refer you to three documents that you have before you j c x thirty which describes all the underlying revenue provisions of the underlying bill j c x thirty two which describes the modifications made by the chairman's amendment the nature of a substitute and j c x thirty three which is the revenue table for the code provisions that are affected by the bill i will briefly walk through  the initial provisions under the j c x thirty three the revenue table under the heading of reform proposals and section a shared responsibility the the bill would create an additional tax on individuals who do not acquire acceptable health care coverage for themselves and their qualifying children the additional tax would be the lesser of the national average premium for an essential plan or two percent of the tax payers adjusted gross income over the over there the reporting threshold as an example the current reporting threshold for joint filers is eighteen is eighteen thousand seven hundred m so it's two point five percent of the tax rate at two point five percent of adjusted gross income the bill also as previously explained creates an election for employers employers may elect to satisfy coverage participation by providing minimally acceptable coverage plans and making contributions equal to seventy two and a half percent of the cost of the lowest cost essential plan offered by the employer and if not a non electing employer would have an additional payroll tax would pay an additional payroll tax of eight percent of employee wages under this provision there is an exception for small businesses businesses with an total annual payrolls of less than two hundred fifty thousand dollars would be exempt from tax and the eight and for businesses with payrolls up to four hundred thousand dollars there would be a phase in of the tax the tax rate there then  created a tax credit to help encourage small business employers to provide coverage this credit can be up to fifty percent of the cost of the coverage provided qualifying small businesses or businesses who have twenty five or fewer employees and average compensation of those employees of less than forty thousand dollars per year the full credit is available for small business employers with ten employees whose average compensation per employee is twenty thousand dollars per year the credit amount then phases out both as the number of employees increases and the average compensation of those employees increases and lastly in this section of the bill the there is created a new disclosure automatic disclosure under section sixty one three the privacy protections of the internal revenue code that would permit exchange between the secretary of the treasury and the national exchange or those state exchanges that might that might be created for the purpose of income verification so sorry i lost there are two provisions on the first two remaining provisions on the first side the first page j c x thirty three which occur later and later in the bill i will defer on those and will turn to page two under the heading other revenue provisions the bill would impose a surcharge based on tax payers adjusted gross income at  beginning january first two thousand and eleven at a rate of one percent for adjusted gross income between three hundred fifty and five hundred thousand for joint returns a rate  of one and a half percent for adjusted gross income of five hundred thousand to a million dollars again for joint returns and five point four percent of adjusted gross income above four million dollars and above again on joint returns for non joint return for other returns the income thresholds are eighty percent of those of the joint return so that's instead of three hundred fifty thousand two hundred eighty thousand instead of five hundred thousand four hundred thousand and instead of one million eight hundred thousand on january first twenty thirteen the rates in the first two steps so the one percent rate clickable between three hundred fifty thousand and five hundred thousand and the one point five percent rate of likeable between five hundred thousand and one million would increase to two percent and three percent respectively in less certain costs health cost savings targets met the health cost savings target under the bill is a den relative to projections made by the congressional budget office of potential cost savings on her under the bill of five hundred twenty five billion dollars over the budget period the tax rates that i just described for those first steps would not go into effect under today would not go into effect differently under two different circumstances if total cost savings when a re assessment is made in two thousand and twelve by the office of management and budget if total cost savings were projected to exceed seven hundred million dollars then there would be no tax applied on adjusted gross income up to one million dollars only the surtax of five point four percent on adjusted gross income of a million dollars and above would remain if a slightly lower saving target  cost saving target were attained of six hundred seventy five billion dollars then instead of the one percent and one point five percent tax rates increasing to two percent and three percent they would remain at one percent and one point five percent the next provision under this under this subtitle would modify the definition of qualified medical expenses for purposes of health flexible spending accounts health savings accounts medical savings accounts and health reimbursement accounts to conform to the definition of permitted to duck sions under section two thirteen of  itemized deductions basically what this what is possible now is for example under a flexible spending account one may claim as a kuala flying expense to receive distribution from a flexible spending account the purchase of over the counter medications aspirin tylenol for example such as such an out of pocket expense for non prescription over the counter medications is not allowable for purposes of the itemized deduction under section two thirteen this provision would apply the rule the the stricter rule of prescription medications of section two thirteen to  these these other health related spending accounts the next provision would delay the implementation of worldwide interest allocation as the members of this committee are aware the american jobs creation act in two thousand four would provide for a worldwide interest allocation and that was originally to have been affective in two thousand and eight but the housing act of two thousand and seven deferred that to be effective until after two thousand and ten the provision here would further defer the application of worldwide interest allocation till after twenty nineteen the next provision  limits eligibility for reduced treaty withholding rates based on the residency of the foreign parent corporation the rule basically says you look to the residency of the foreign parent corporation rather than to the immediate residency of the entity receiving the payment the payment the house the house has passed this or similar provision twice in two thousand and seven as part of the farm legislation and in two thousand and eight as part of an extension of a t relief the next provision provision provide similar provision passed the house of representatives as part of the bill to extend a m t relief in two thousand and seven and the last provision in this section relates to has as the members know is excludable from the individual's income and this extends to the benefit six extended not just to the employee but to the employees spouse or qualifying child or qualifying  qualifying relative the provision in this section of the bill would extend that to define the exemption from income to eligible beneficiary eligible beneficiaries  far a tax payer to have such an exclusion the the coverage would have to be permitted under the employer's under the employer's plan and i think we're back to the next section so start now with division b which are the improvements program savings and delivery system reforms in medicare and medicaid in subtitle is provisions related to medicare part section eleven  one provides for market basket freeze for skilled nursing facility updates for the second third and fourth quarters of f y twenty ten section eleven o two provides the same thing for in patients rehab facilities section eleven zero three incorporates a productivity adjustment to market basket update for inpatient hospitals sniff inpatient rehab hospital psych hospital and hospital care beginning in a hospice care to begin in two thousand and ten it sets a floor for the in patient hospital market basket updates so that the combination of the productivity adjustment and any adjustments already in law for quality reporting or the meaningful use standard for hillock tonic health records cannot cause a market basket update to go below zero and i stress the are these are reductions in their increases and there will not be net losses within the payment system to improve payment accuracy for non therapy ancillary services and for therapy services direct the secretary to analyze payments for non therapy employer services and proceed to include in a future sniff case mix because the cation system creates an  outlier payment for non tariff the ancillary services section eleven twelve directs the secretary to submit to congress a report by january first twenty sixteen on medicare disproportionate share hospital payments if the uninsured rate drops by certain number of percentage rates between twenty twelve and twenty fourteen after the new reforms come into place it directs the secretary to adjust medicare dish payments starting in two thousand and seventeen to the empirically justified level plus an adjustment reflecting on compensated care costs section eleven sustainable growth rate formula that annually updates reimbursement rates for physician services and medicare the revised formula recognizes the importance of primary care by allowing these services to grow at a higher rate than other services and they will grow g d p plus two other services grow p plus one this does not reduce physician pay rates for and for increases it also protects position pay raise from being reduced for increases in spending on drugs or lab services the policy also encourages physicians to form accountable care organizations by providing these organizations with their own targets outside of the other targets in there and to update and update factors and update payment based by the medicare economic index in two thousand and ten as these reforms are being implemented section eleven twenty two directs the secretary to regularly review the schedule rates for physician services paid by medicare including services that have experienced high growth rates and strengthens the secretary's authority to adjust fee schedule rates that are found to be mis valued or inaccurate section eleven twenty three provides incentive payments to the medicare program to physicians practicing in areas that are identified as being the most cost efficient areas of the country section eleven twenty four extends through two thousand and twelve payments under the physician quality reporting initiative which provides incentives to physicians to report quality data and medicare to create a review process for physicians who choose to have their p q r and submissions reviewed and directs the secretary to integrate the p q r program and the quote meaningful use standards used by the healthy incentive programs section eleven twenty five a days the method used to determine localities and states that have do not have state wide factors utilizing approaches based on metropolitan statistical areas section eleven thirty one incorporates  productivity adjustment into the market basket update for outpatient hospital services beginning in two thousand and ten it sets a floor for the hospital outpatient market basket updates about the combination as was stated for the inpatient hospitals of any productivity adjustment and other adjustments cannot point five with enough to defeat less productivity beginning in two thousand and ten section eleven forty one eliminates the option for medicare to purchase power driven wheelchairs a lump sum payment at the time the chair is supplied medicare will continue to make the same payments for the power driven wheelchairs over thirteen month period and the purchase option for complex rehabilitative rehabilitative power wheelchairs would be maintained section eleven forty two extends payment at cost for breaking therapy for two years through two thousand and eleven section eleven forty three directs the secretary to make recommendations on the most appropriate way for medicare to cover and pay for home and fusion services section eleven forty four directs the secretary to develop a cost report for him to the tory surgical centers within two years of an x man and to require reporting of cost data by ses for cost reporting periods beginning on or after the date when the cross report is developed directs the secretary to require is has to submit quality data beginning in two thousand and twelve section eleven forty five directs the secretary to study whether cancer outfits are exempt from the inpatient perspective payment system have imaging services to reflect presume utilization rate of seventy five percent instead of fifty percent it excludes low tech imaging such as ultrasound x rays and e k g is from this adjustment and it adjusts the technical component discount on single session imaging studies on contiguous probably cards from twenty five percent to fifty percent section eleven forty eight protections for beneficiaries who receive oxygen therapy in the event of an oxygen supply or going out of business and it exempts certain pharmacies from the surety bond requirement and the need to be  credited to sell diabetic testing supplies and certain other items section eleven forty nine instructs men pack to conduct a study on access to screenings for osteoporosis and to evaluate the adequacy of medicare payment rates for bone mass measurement services under the physician fee schedule section eleven fifty one addresses potentially preventable hospital readmissions beginning in fiscal year two thousand and twelve payments for inpatient perspective payment hospitals critical access hospitals and other hospitals are based on the dollar value of each hospital's percentage of attention preventable medicare admissions for three conditions with risk adjusted readmission measures that are endorsed by the national quality forum it directs the secretary to expand the policy to additional conditions in future years and authorizes the secretary to modify the adjustment based on the hospital's performance in readmissions compared to a ranking of hospitals nationally provides assistance to certain hospitals for transitional care act tease designed to address patient compliance issues that may result in high readmission rates creates an interim readmissions policy for post acute providers beginning in f y twenty trials and directs the secretary to develop risk adjusted readmission rates for post acute providers and implemented readmissions payment system for those providers similar to the one of the hospital system and that must be enacted by twenty must must be implemented by two thousand and fifteen this is to ensure that all of the partners who are responsible after discharge  are accountable should there be a preventable readmission it directs the secretary to submit a report to congress no later than one year from after the date of an accent on how physicians can also be corporate it into the re admissions policy and direct the secretary to monitor inappropriate changes in admission practices by hospitals and post acute providers who might be trying to avoid patients who could be a preventable re admission authorized the secretary to penalize those who are engaging in adversely action section eleven fifty two directed metairie to submit to congress no later than three years after the date of an act and a detailed plan on how to implement post acute bundled payments and convince existing acute care payment episode demonstration project into a quick pilot program that can be expanded  the market basket update from home health agencies for two thousand and ten sectional in fifty four accelerates the regulatory just in case makes currently schedule for twenty eleven so that it occurs in two thousand and ten for home health directs the secretary to rebase the home health group p p s for twenty eleven taking into account changes in the average number and types of visit practice so change in intensity of visits and growth and cost per episode section eleven fifty five incorporates a productivity adjustment into the market basket update for home health agencies beginning in two thousand and ten and sets a floor for the home health market basket so the combination of the productivity adjustment and other adjustments cannot cause it to go below zero section eleven fifty six closes a loophole in the physician self referral rules that allow physicians to refer patients to hospitals in which they have a direct financial interest physician ownership in hospitals that are that occur after january first of two thousand and nine are prohibited existing hospitals that are in place before they are grandfathered and it allows for growth of the existing physician and hospitals that again were in place before january first two thousand and nine with and certain parameters section eleven fifty seven requires the institute of medicine to report to c m s within one year of an accident on the validity and effects of the geographic juster is used in the medicare physician and hospital payment system and provide recommendations for improvements to those jesters section eleven fifty eight instructs c m s to respond to the room recommendations under section eleven fifty seven and provides up to four here over two years to effect any needed increase in payment rates section eleven fifty nine in the sheets a study by the institute of medicine and geographic variation in health spending and directs the institute to make recommendations on how to incentivize providers to vanish high value care section eleven sixty one reduces medicare advantage benchmark to fee for service levels over three years reaching the quality of payment rates in two thousand and thirteen section eleven sixty two creates an incentive increase payments to high quality plans phased in over two thousand and eleven to twenty thirteen consistent with the changes in eleven sixty one section eleven sixty three extends c m s authority to adjust risk hours in medicare advantage for the service differences and c patterns relative to fee for service section eleven sixty four provides extra time for c m s and health plans to process enrollment paperwork during the annual enrollment period and eliminate duplicative open enrollment period for medicare advantage plans section eleven sixty five extends the period of time for which cost plans may operate in the medicare advantage program in areas that have other health plan options section eleven sixty six restricts the ability of medicare advantage plans to offer coverage outside their service area and grandfather's current contracts section eleven sixty seven requires a study on the effectiveness of medicare advantage risk adjustment system for low income and chronically ill populations and section eleven sixty eight eliminates the medicare advantage regional plan stabilization fund section eleven seventy one ensures that beneficiaries in medicare advantage plans are not subject to higher cost sharing than they would face in medicare fee for service that ensures that eligibility benefits fisheries are duly old people for medicare and medicaid are not subject to higher cause shane than they were face under medicaid if they were not enrolled in the medicare advantage plan section eleven seventy two allows beneficiaries of medicare advantage plans facing sanctions for failure to meet program rules to opt out of the planet any time for another plan or fee for service medicare section eleven seventy three require publish standardized information on the medical loss ratios and other plan information to beneficiaries in the public lands with medical loss ratios below eighty five percent in other words they're spending more than fifteen percent on administration profit or overhead requires rebates and increasing penalties over time including eventual terminations of contracts to ensure value for beneficiaries and tax payers section eleven seventy four strengthens the ability of c m s to recover over over payments to plans discovered by audit section eleven seventy five clarifies that c m s is not obligated to accept every bid submitted by medicare advantage plan or part d plan section eleven seventy six ensures that chronic conditions special needs plans and real beneficiaries only during the eligibility periods and section eleven seventy seven extends the special needs program through twenty child extends certain fully integrated duos of a step through two thousand and fifteen that median section eleven eighty one eliminates the part d don't hole which is the place in which beneficiaries are currently losing coverage as a result of the medicare modernization act of two thousand and three and the first year twenty eleven jonah hole or be reduced by five hundred dollars in other words people's coverage will extend for five hundred dollars before they move into the place where there has been no coverage today the donut hole will then be decreased over time eventually fully phased out it pays for the element nation of this donut hole  with funds raised by requiring drug manufacturers to provide medicare with rebates for drugs used by full dual eligibles that would have been paid had they been still in the medicaid program section eleven eighty two incorporates the voluntary agreement by the pharmaceutical manufacturers association to provide discounts of fifty percent for brand name drugs used by party enrollees in the party donut hole that remain so until that gap is closed there discount or agent will be  layered on top of the closing gap to give people additional assistance while they are in that remaining coverage gap section eleven eighty three eliminates deadlines for long term care pharmacists to file card declined to allow more time for improve coordination with state medicaid programs for joel's bills those living in long term care facilities section eleven eighty four allows drugs provided to patients by aids drug assistance programs or the indian health service to count toward true out of pocket cost allowing these individuals to receive their party catastrophic benefits section allayed eleven eighty five allows party enrollees to change drug plans during the year if the plan makes a change to the formulary that increases caution or otherwise reduces coverage during the during the year section eleven providers section eleven ninety two extends the existing outpatient hold harmless provisions free twenty eleven section eleven ninety three rate extends requests of acacias under section five zero eight of the medicare modernization act three twenty a lot and section eleven ninety four is an extension of the geographic floor for work this is where medicare adjusts fees paid for the physician services based on geographic variations of cost this extends a floor on the geographic adjustment to the work portion of the schedule through the end of two thousand and eleven which the effect of increasing practitioner fees in rural areas section eleven ninety five extends a provision that directly reimburses qualified rural hospitals for certain clinical laboratory services through the end of two thousand and eleven and such an eleven ninety six extends bonus payments made by medicare for medicare savings programs which will enable more people to qualify for low income assistance such in twelve to eliminate cause sharing for people receiving care under home and community based waiver who would otherwise require institutional care owed retroactive reimbursement from their drug plans receive them section twelve zero five give health and human services the authority to use an enrollment process for subsidy eligible part d individuals to ensure that they are enrolled in a plan that accounts for the quality cost in the formula fisheries and tax payers money in section twelve zero six h h s is given the authority to enroll subsidy eligible individuals into plans using a process that accounts sorry we just went through that one section twelve zero seven removes medicare advantage rebates from the calculation of the low income subsidy benchmark in order to reduce involuntary churning of beneficiaries among the different plans subtitle b reduces health disparities and contains provisions to reduce health disparities section twelve twenty one requires the secretary to conduct a study that examines the extent to which medicare providers use offer or make available language services for beneficiaries who have limited english proficient proficiency and looks for ways that medicare should develop payment systems for language services section twelve twenty two instructs the secretary to carry out a demonstration program to reimburse medicare providers in multiple providers settings for the provision of language services requires the secretary to evaluate the demonstration demonstration program and make recommendations on the expansion of such services to the entire medicare program section twelve twenty three requires the secretary to contract with the institute of medicine to conduct a study that examines the impact on the quality of care access to care and reduction in medical errors or cost savings associated with the provision of language actual services to ensure that beneficiaries understand the care and instructions of their providers action twelve twenty four defines certain terms such as constant interpreter services language services and limited english prof subtitle c includes miscellaneous improvements section twelve thirty one extends the process allowing exceptions to the limitations on medically necessary medically necessary necessary therapy three to two thousand and eleven section twelve thirty t lifts the current thirty six month limitation on medicare coverage of immunosuppressive drugs for kidney transplant patients who would otherwise lose this coverage on or after january first twenty twelve and makes technical changes to the bundled payment system for end stage renal disease section twelve thirty three provides coverage for consultation between enrollees and practitioners to discuss orders for life sustaining treatment and instruct c m s to modify medicare a new handbook to incorporate information on end of life planning resources and to incorporate measures on advance care planning into the physician's quality reporting initiatives section twelve thirty four provides a twelve month part b special enrollment period for disabled tri care beneficiaries and waive the increased premiums and all fees if the beneficiaries sign up during such a period this is respond a serious problem that's occurred with the returning veterans from the iraq and afghanistan and there's been a coordination of benefits issues between the department of defense c m s and the v a that's resulted in confusion and veterans losing their benefits so we are taking steps to address that that were not taken before section twelve thirty five allows capital gains from the sale of a primary residence to count as a life changing event for purposes of using a more recent tax year for determination of the part b income related premium section twelve thirty six creates a demonstration program that uses decision aids and other technologies to help patients improve their understanding of the risks and benefits of their treatment options and make informed decisions about their medical care title three is about promoting primary care mental health services and coordinated care section thirteen zero one creates an alternative payment model within the fee for service medicare system the reward physician led organizations that take responsibility for the cost and quality of care received by their patient panels over time this is the accountable care organization model and it can include groups of physicians organized around a common delivery system including a hospital can be an independent practice association a group practice or other common practice organizations o s as they're called can include nurse practitioners and physician assistants and other progs providers as designated by the a c l a c o s that reduce the cost of their patients relative to spending benchmarks are rewarded with a share of the program atic savings conditional on meeting quality targets as demonstration in medicare it establishes a medical home pilot program which can be expanded to assess the suitability of reimbursing for qualified patient centered medical homes there are two models that are explored in the legislation first the independent patient centered medical home structured around a provider is targeted to the top half of high need medicare beneficiaries with multiple chronic diseases and second the community based medical home model is targeted to a broader population of medicare beneficiaries of chronic disease and allows for a state based or nonprofit entities to provide care management supervised by a beneficiary designated primary care provider this provision provides approximately one point six billion from the trust fund for the five year program the secretary is authorized to expand the program at the end of that duration if quality measures have been met and budget neutrality is demonstrated section thirteen three increase creases the medicare payment rate by five percent for primary care services a physician specializing in primary care physicians specializing primary care are defined both by specialty in terms of family practitioners internists and others and by share of practice in primary care and other words at least fifty percent of allowed charges are for primary care services able practitioners practicing in health professions shortage areas receive an additional five percent section thirteen zero four increases the payment rate for nurse midwives to cover services for covered services from sixty five percent of the rate that would be paid if a physician were performing the service the following section thirteen o five ways all medicare the test or tissue was removed during the procedure sections thirteen zero seven room is a clinical social worker services from coverage under the sniff p p s which allows clinical social workers to bill separately for their services in the snow settings section thirteen zero eight add state licensed or certified marriage and family therapist mental health counselors as medicare providers and pays them as the same rate as social workers section thirteen zero nine increases the payment rate for psychiatric services by five percent for two years section thirteen ten transfers coverage from medicare part d to medicare part b for all medicare covered vaccines what has currently happened is some vaccines are covered under part d and beneficiaries have to shuttle between the pharmacy in the physician office to get their vaccines and are not getting the prevent a vaccine that are needed vaccines but for influenza will be kate according to the average sales price methodology section thirteen eleven expands the number of preventive services reimbursed by medicare and federally qualified health centers title four addresses quality issues section fourteen zero one establishes a center for comparative effectiveness research within the agency for health care research and quality to conduct support and since size research relevant to the comparative effectiveness of the full spectrum of health care items services and systems establishes a public and private stakeholder commission known as the comparative effectiveness research commission to oversee the center determine national priorities for research my research methods and standards of evidence support forms to increase stakeholder feedback appoint panel on specific national priorities to advise the center on research questions and methods and make recommendations for the dissemination of findings the seventeen member commission is appointed by the secretary with input from the comptroller general in the institute of medicine and will include the director of arc the chief medical officer of c m s and stakeholders including clinicians patients researchers third party payers and consumers clinical perspective advisory panels will provide advice on specific research questions methods and gaps in evidence in terms of clinical outcomes in order to ensure that the research is clinically relevant and targeted the commission and the advisory panels that appoints will be subject to strict conflict of interest requirements the center and the commission are prohibited from mandating coverage reimbursement or other policies to any public or private payer the center and the research it conducts are funded out of the comparative effectiveness research trust fund which will receive contributions from medicare and private health insurance plans subtitle b relate to nursing home transparency section fourteen eleven requires sniffs and nursing facilities and medicaid to disclose information on ownership and facility organizational destructive structure and requires the secretary to develop a standardized format for such information within two years section four hundred twelve requires sniff the nursing facilities to operate compliance and ethics programs on or after the date that is three years after enactment and it directs the secretary to develop a quality assurance improvement program no later than december thirty first two thousand and eleven section fourteen thirteen directs the secretary to include additional information on the nursing home compare website including staffing data based on information collected under section fourteen sixteen and summary information on complaints filed against the sniffs and there see section four hundred fourteen require sniff to separately report expenditures for direct care services in direct care capital assets and administrative costs on cars reports for cross reporting period beginning on or after two years after data nachman section four thousand nine hundred fifteen direct the secretary to create a standardized complaint form and require states to establish common complaint resolution process these provides whistleblower protection for employees who complain in good faith about the quality of care or services at a facility section fourteen sixteen requires the secretary to develop a program for facilities to report the staffing information in a uniform format based on payroll data including information on agency or contract staff section four hundred twenty one authorizes the secretary to impose civil monetary penalties for deficiency that results in the direct proximate cause of death of a resident provides additional authority to the secretary to raise or adjust the m p s under certain circumstances section four hundred twenty two directs the secretary to establish in consultation with the inspector general a pilot program to develop test and implement the use of an independent monitor to oversee interstate and large intrastate chains a sniff and nursing facilities section four hundred twenty three because the administrator of the cillit he that is preparing to close to provide written notification to residents and other parties and prepare a plan for closing that ensures the safe transfer of residents to new facilities section four hundred thirty one requires the facilities to conduct dementia management and abuse prevention training prior to employment and if the secretary determines appropriate as part of ongoing training to help nursing facility employees meet the needs of patients with dementia section fourteen thirty two requires the secretary to study the content of training requirements for certified nurses and supervisory staff of sniffs and nursing facilities and submit a report with recommendations section four hundred forty one directs the secretary to establish national priorities for performance improvement for the sniff the nursing homes incorporating recommendations from outside  these priorities should reflect areas that contribute to a large burden of disease these are these excuse me go beyond the facilities these are national quality was moved into this section that is dealing with national quality improvement for medicare and and other entities these priorities will reflect areas that contribute to a large burden of disease have high potential to decrease morbidity and mortality and improve performance address health disparities and have potential to produce the most rapid change based on current evidence section fourteen twenty two based on national priorities for performance improvement established in this part the secretary shall developed as an update new patient centered on population based quality measures to the assessment of health care services twenty five million dollars provided for the section it instructs the g a o to periodically evaluate the program to determine the effectiveness of the quality measures and the extent to which these measures result in quality improvement cost savings and report to the congress about these measures section four hundred forty three provides for a stakeholder input from multiple experts into the use of quality measures for purposes of payment each year the secretary shall make a public a list of measures being considered for usage in the payment system under a transparent process a consensus based entity shall convene a multi stakeholder group to provide recommendations for the usage of measures in a timely fashion and the secretary shall consider these recommendations section four hundred forty four ensures that the quality measures selected by the secretary  endorsed by the consensus based entity with a contract with the secretary under section eight hundred ninety except in certain circumstances for example if the measure is not been evaluated no comparable interests measure exists at the secretary chooses to use a measure that the entity considers but does not endorse the secretary showing through the rationale for continued use and rulemaking applies the standard to inpatient hospitals physician services and renal dialysis services section four hundred forty five permits funding for the consensus based entity with a contract under section eight hundred ninety one contract amount is increased to twelve million for the years two thousand and ten through two thousand and twelve subtitle d relates to physicians raymond sunshine these are sections that  require reports on the financial relationships between manufacturers and distributors of cover drug devices biologicals of medical supplies under medicare medicaid or as chip and physicians and other health care entities and between physicians and other health care entities that requires manufacturers are distributed to electronically reports the oh i g any payments or other transfers of value above a five dollars to minimum made to be covered recipient she's defined as the physicians and other providers and requires hospitals or entities that bill medicare to report any ownership share by a physician failure to report is subject to civil monetary penalties and the penalties are increased for annoying failure to report section four hundred sixty one requires public reporting by hospitals and ambulatory surgical centers on health care associated infections section fifteen zero one directs the secretary to redistribute residency positions that have been unfilled for the prior three cost reports and directs those thoughts for training of primary physicians special preference will be given to programs that see a reduction in their slots under the section have formal arrangements to train residents in the ambulatory settings or shortage areas operate three your primary care residency programs currently operate a residency program over their cap or located in states with low position residents general population ratio section fifteen zero two modified rules governing when hospitals can receive indirect medical education payments and direct credits graduate medical education payments funding for residents who trained in on provider settings so that conferences toward i am a cost in the hospital setting and toward the jimmy in the nonce non hospital setting such in fifteen zero four directs the secretary to redistribute medical residency spots from a hospital that closes on or after the date that is two years after an accident to other hospitals in the same state taking into account recommendations by the senior health official in the state section fifteen zero five sets goals for approved medical residency programs by setting standards and include training to work in non acute traditional settings coordination of care within an across settings understanding cost and value of diagnostic and treatment options working in multiple multi disciplinary teams participate in a quality improvement project and demonstrating meaningful use of health i t this is an effort to ensure that residency programs are are training people to meet the evolving needs of the nation's population title six relates to program integrity and reducing waste fraud abuse section sixteen zero one provides an additional hundred million annually in funding for the factor on enrollment applications for any federal health care program sixteen twelve establish a c m p s for the nine submission of false statements or misrepresentations of material fact information submitted to support a claim for facility that jeopardize the health and safety of patients it allows an immediate sanctions as well section six hundred fifteen establishes c m p's for any person who orders or prescribe an item or service while excluded from a federal health program if that person knows or should have known the misrepresentation or false information section six hundred seventeen establishes new criteria for determining marking violations and provides greater discretion to the secretary to enforce those sections sixteen eighteen allows for permissive exclusion of individuals or entities found to ha directed an investigation into an auditor fraud section six six hundred one thousand clarifies the definition of exclusion of medicare medicaid entities under section eleven twenty eight to mean exclusion from all federal health care programs section six clarifies that any person may bring an action on behalf of medicare to enforce the medicare secondary payer statute and contains associated details on that provision section six hundred thirty one allows the secretary to designate program areas of significant risk in which enhanced oversight can be applied to prohibit waste fraud and abuse calls for the secretary to establish screening procedures for new providers which may include licensing board checks screening most of those excluded from other federal or state health programs background checks section six hundred thirty two requires new suppliers or providers of services to close the facility disclose affiliations within the past ten years with any provider supplier those been suspended from medicare medicaid or s chip sextant section sixteen thirty three establishes a payment modifier in order to assist efforts to identify fraud section six hundred thirty four quires medicare and triggered a program contractors to conduct periodic evaluations and report on the effectiveness activities section six hundred thirty five requires all providers seven requires physicians ordering d m your home health services that they must be medicare and rolled physicians this allows the secretary discretion to expand this requirement to other areas if it would help reduce waste fraud abuse section six hundred thirty eight requires physician or supplier to maintain and provide upon request to the secretary documentation related to the ordering of durable medical equipment home health or other areas of high risk section six hundred thirty nine requires a face to face or telehealth encounter with a patient before a physician a sort of high home health services or one clarified that when a provider supplier or private plan becomes aware that a medicare or medicaid overpayment must be reported within sixty days section six hundred forty two clarifies the hardship waiver provision applies to beneficiaries as defined elsewhere in the title section six hundred forty three provides the authority for i g to access ownership or compensation agreements between renal dialysis physicians and the facilities section six hundred forty four requires billing agents clearing houses or other alternative alternate pays to be required to be registered in a formal manner specified by the secretary section six hundred forty five conforms key definitions regarding t m p authority under the social security act to match those contained in the false claims act amendments subtitle d  additional access to information needed to prevent waste from abuse section six hundred fifty one clarifies the department of justice working with the i g m c m s has access to medicare medicaid claims and payment databases in a manner that complies with privacy and security laws section six hundred fifty two directs secretary to reduce to procreation between the health care integrity and protection databank and the national practitioner databank it allows the v a to have access to the national practitioner section sixteen internal revenue code relating to disclosures of tax return information this is to facilitate the department of health and human services in a den a filing possibly eligible individuals for low income subsidies under the medicare prescription drug program and in addition as was previously described to you there's a comparative effectiveness research trust fund stablished and that trust twelve there will be a excise tax imposed on insurance health insurance policies on a per person covered under the policy basis at a rate of two dollars per person with the net funds from that tax being transferred into this new comparative effectiveness research trust fund up to an dollars we're almost done i'm happy to report title nine other miscellaneous provisions section one thousand one repeal subtitle of title eight of the medicare prescription drug improvement modernization act commonly referred to as the forty five percent trigger s health well being and development of children section one thousand five week wire c m s to establish a dedicated office to improve coordination of benefits and other policies for beneficiaries duly eligible for medicare medicaid and section one thousand and six directly administrator  s to conduct an assessment of the diseases and conditions that are most constant cost intensive for the medicare program and directs the administrative review an update that assessment it creates a fine subject to appropriations for research into such  diseases and conditions that concludes the walk through of the provisions under our jurisdiction there is a division c a public health and workforce development provisions but those are in the jurisdiction of the energy and co mr chairman pursuant to clause four of rule sixteen of the rules of the house i move that further consideration of this measure be postponed until thursday july twenty third and would ask to be heard on my motion thank you mr chairman less than forty eight hours ago the majority released a thousand plus page bill that will make final changes to our health care system in our economy one thousand one hundred eighteen pages to be exact and that's about the same gutenberg bible now i know many in this room have been studying the bible for a long time and i think we'd all say we're still far from expert on it but i'm not sure how any of us are supposed to read something just as long and as nearly complex in less than forty eight hours and become experts on it so frankly it's impossible and i doubt anyone in this room perhaps other than one or two staff people have read the bill from cover to cover it seems to me someone should certainly the people  rely on the experts the analysts at the congressional budget office should have time to read it and i suppose they might have read it but they certainly don't understand it yet and as i mentioned in my opening statement cvo zone preliminary estimates contained this amazing disclaimer quote it's important to note however that those estimates are based on specifications provided by the tri committee group rather than an analysis of the language released today for that reason and others outlined below those figures do not represent a formal or complete cost estimate for the coverage provisions of the draft legislation and quote moreover the initial score provided by cvo did not include any of the information about the impact of medicare and the medicaid program changes which are expected to total more than half a trillion dollars and at least as of late last night as our staffs were in contact cvo was saying that they still weren't sure if they'd be ready with these numbers by today i gather because the legislative language we're seeing is substantially different from the initial draft i'm offering a simple motion this morning to give all members more time to better understand this bill and to get additional information from the joint tax committee and the congressional budget congressional budget office my motion is supposed to postpone this markup by just one week it won't throw the majority off their schedule but it will let us better still our responsibilities to the american people the energy and co committee has already notified their members that their markup could last through next wednesday even if we start our markup next thursday there will still be time to get the bill through the house before the recess which despite being a completely arbitrary and political deadline is the speaker's goal and while everyone in this room is committed to an acting health care reform we should be committed to an acting the right kind of health care reform we should do our due diligence to ensure the prescription is not worse than the disease thus i ask the members to support my motion to postpone this debate by just one week let us better understand the bill that c b l have time to actually give us the data we need to do our job and let the american people know we're told you described an individual tax of up to two and a half percent in employer taxes up to eight percent and a small business surtax of about up to five point four percent  at what income level is the individual tax imposed fine the filing threshold for two thousand and nine for a joint return is eighteen thousand seven hundred dollars how about an individual single individual taking a moment to look it up i don't i what is the effective date of those taxes the effective date of the surtax the tax on adjusted gross income is january first twenty eleven all right effective january first two thousand after the congressional election how about the individuals and employers the the let's see what it's twenty twenty the reforms the reforms on health care generally effective the beginning of two thousand and thirteen mr camp all right so the after the presidential election you also note that  they deny the ability to use health spending accounts for over the counter medicines that that's correct and so mr elmendorf how many people have health spending accounts i don't know the answer that congress  maybe my colleagues does my understanding it's on the order of about seven or eight million i might be a little bit off on that well if i told you that thirty five million people have f s a f s a i'm sorry i thought you're speaking about a no no to all all all spending accounts that could use over the counter medicines to pay at a lower cost for their health care how many total people a's a little less than h s a's but in that neighborhood so if i said you had those all up between forty seven and fifty million people would be affected by that provision would that the your understanding and i'm least certain about the e the eight percent employer tax is is that correct mr barr told that if an employer doesn't offer a health plan that is a qualified health benefit plan even though they offer health care so if they don't meet these new requirements it may be imposed by after a grace period with the employer still have to pay the eight percent tax that's the that's the principle of the reform proposal is the employer employers have an election to satisfy health coverage with a minimum with a minimum plan and a minimum contribution to the  funding of that plan for the employee so that in order to pay or that it's a they have would have to do that and and if they offer is this what there is the small business exception also as i explained and that's that is total business payroll of two hundred fifty thousand dollars that's correct mr camp what is the average small business income in america mr elmendorf do you know i think depends how one defines small business of course are small and very small and i don't but i don't have to go to hand about the distribution of sizes of small businesses i'm afraid is there anything in this legislation on liability reform that you have scored i'm not aware of anything congressman but we are as you understand working our way through the legislative language and we have a large team of people so maybe there are things i'm not aware of but so you haven't completed your review of the legislative language that's correct largest states senate and our evaluation of research on the effects of medical liability reform we found that that research does not suggest there would be large savings from that sort of reform this doesn't mean that defensive medicine isn't very important our interpretation in fact is just that the reforms that have been tried in various states have not been very effective at altering the practice of medicine of or reducing defensive medicine there are savings from the reduced judgments alone of the spill over to other medical practice or not so clear i think i've seen a c b l score that was in the neighborhood of five and a half billion dollars if it was a similar provision to what california in texas have is that if if the employer offers government approved coverage but the employee decided to roll and roll in the exchange instead with the employer still have to pay the eight percent tax on the salary of the employee yes yes yourself wrote that quote it is important to note however that those estimates are based on specifications provided by the tri committee group rather than analysis of the language released today for that reason the other outlines and others outlined below those figures do not represent a formal or complete cost close quote in addition your l r did not provide any information about the impact the medicare medicaid program changes which are expected to total more than half a trillion dollars with those facts in mind how can we really know what we are being active vote on today well congressman the operation the committee is out of my jurisdiction but you have correctly quoted from our from our report of several days ago about the limitations that he now says we've been able to complete so far we're working as hard and fast as we can to complete our analysis of the other provisions of the bill and to complete our reading of the legislative language so in this legislation that is affects our nation so dramatically we're voting today on something we really don't know what we're voting on again i can't speak to that broader question congressman another question according to rough staff estimates the total outlays under the bill increase by an average of twenty three percent per year from two thousand and thirteen to two thousand and nineteen twenty three percent per year although that rise slow slightly to just nine percent in the last three years while the revenue from higher taxes grows much more slowly and at least in the case of one revenue ra cuts off entirely at the end of the current ten year budget window it is true this table does not include the changes of medicare but when we see that table where we find that the medicare spending cuts grow so fast that we can expect this bill will be fully offset in future years congressman i can't speculate about the part of the bill we haven't scored and i don't know the year the average growth rate in our numbers but you are correct at the end of the ten year window the cost of the coverage expansion is increasing about eight or nine percent a year and my reading of the revenue table from the joint committee on taxation is that revenue raisers are increasing about five percent per year and that leaves a substantial hole that would need to be filled by the other provisions if the bill overall legislation were to be revenue neutral to be deficit neutral at the end of the ten year window and into the following decade but we have not done the analysis yet of those pieces so i can't speak directly to that thank you mrs aylmer mr barr holt president obama's proposed budget includes a highly controversial proposal to limit deductions including for charitable contributions for families in the top two tax brackets many americans and charitable organizations criticized the proposal because of the drastic impact on charitable contributions is it true that the tax base for the proposed surtax so called modified a g i is not reduced by charitable contributions affectively exposing charitable donations to the surtax congressman that's correct adjusted gross income is above the line so before any itemized deductions that the tax payer may claim so the tax base before those itemized deductions including charitable deduction which could very dramatically affect charities from receiving future durable contributions again is it true that dividends and capital gains are subject to the surtax mr herder as you know under under present law the taxation dividends and capital gains received a separate maximum rate treatment but in terms of calculating a tax payers adjusted gross income the full amount of net capital gains the full amount of dividends is included in the tax payers adjusted gross income so the surtax applies to the full amount of net capital and in this bill it states in order for a hospital that has a physician ownership to be able to continue to bill medicare that hospital needs to have a medicare provider number by january the first two thousand and that was six months ago is that right that's correct what does it mean for a facility like one in my district one of the founding physicians of this facial specialist who was discouraged when the hospital he was currently working at cut their charity care involvement which limited is ability to perform cleft palate surgeries on a pro bono basis this ospital opened their doors in march of this year and has started seeing patients and has plied for their medicare provider number under section eleven fifty six of this bill would this facility ever be able to bill medicare for any services it provides my belief but if i'm wrong will clarify it for you is that they would be able to bill medicare they would have to reconfigure their ownership arrangements they would they would need to reconfigure their ownership arrangements they could continue operating as they are but they don't have a provider number right now are they going to do that they can get a provider number and they will have to reconfigure their ownership arrangements and they can continue to provide me to give them a provider number of the fascist dictator that run this system or leave it be the administrator of the centers for medicare and medicaid services who is an elected person how about medica confirm i'm wrong ok what about the baylor heart hospital in my district that said their method medicare provider number for years would this section allow them to add an additional ospital bed in the future if they needed more rooms to care for their patients i think they're subject to growth requirements in the bill and i another staff person handles the details of this and we'd be happy to have her answer all of your questions ok so you don't and there's a lot of criteria there do you know of any hospital in our district that would meet i don't actually know the qualifications of every hospital in every person's district so i don't think i could speak to the specific ownership arrangements of every hospital in your district much less the chairman's district well let me ask you about these gentlemen will yield particular problems in the member has with the hospital in their district we will be glad to look into it to see what the situation is thank mr jermyn well i'd like to talk to the southeast michigan surgical ospital in warren michigan this hospital that was on the verge of i will say mr johnson we clarified this is only a medicare provision which is what i had reported that it was but it applies only and not ok does this bill list any specific procedures like knee replacements or heart surgeries that must be included in a minimum standard benefit it does not include specific procedures are you moving to the reform section now the bill yes no it does not include specific procedures it includes broad categories of services and then the benefits advisory committee what happens after the federal health board recommends a minimum standard benefit back after the benefits advisory committee comes up with recommendations on it is chaired by the surgeon general reports to the secretary and the secretary has a process for approving those benefits to determine the benefits standards that will be used by the health choices commission and the plans that are operating in the exchange well if the secretary done like a particular benefit package can she come up with their own there's a process for comment to make you know believe that runs through what will happen with that is there anything in the bill that would statutorily prevent the secretary from requiring i'm not positive that there's anything that would prohibit her from requiring it except that the benefits packages i'm not positive are of the opinion that does not preclude her from doing it which means that abortion on demand would be prevalent it is turned out that she in fact would make that step to requir security commissioners appointed today is that subject confirmation by the senate yes or are there any qualifications on a person like do they have to have experience in health care to be a doctor  i'd have to double check on the qualifications but i assume they would assume that it's somebody who is qualified to run an agency dealing with these issues the agency has responsibility for our federal health insurance oversight for coordinating working is it true that section one forty two stablish is a commissioner's administrator of the individual of ford ability credits credits that c b l scores of over seven hundred billion dollars  health choices commissioner is responsible for operating the exchange in the exchanges where the affordability credit determinations are made in conjunction with state medicaid offices and other agencies  does this section also give the commissioner the authority to determine an individual's all of debility for those credits that are worth over seven hundred billion yes yes they are and how many other unilateral decisions does this legislation give to the commission or a single unelected individual i think it gives controversial authority that's given today to the executive branch agencies that run multi hundred billion dollars health dollars of investment in twenty thousand american jobs spread across twenty one states that would be wiped out by this provision to them we have in texas in our montgomery county very fast growing area one of them is  reliant rehab hospital it was built with investment twenty million dollars it provides a hundred fifty jobs to our community as a payroll of over seven million dollars they would they missed a deadline arbitrary deadline by twenty three days to get their medicare provider number in fact we started working with them months before that to get that number and because of government bureaucracy it happen to fall afterwards so we risk closing down a major investment one hundred fifty jobs in our community we have another nonprofit hospital that's got a full service nonprofit hospital that has a thirty bed expansion again would be stopped completely halted in its tracks by this provision in what's frustrating is these hospitals didn't do anything wrong if they follow the law and there is a need in the community and i think this is an example of when people say a government run plan won't be making bad decisions in health care i think this is a perfect example of it so i'm anxious to have this provision changed i think it's important to meet health care needs we ought not be rationing  care hospitals and services across the country mr elmendorf just to double check this one of the major cost drivers health care is in america and then the federal government at this point when this bill today for the committee which will be the last chance we get to waive this bill you're telling in this we don't know the price tag yes congressman we have not completed our analysis of the dilla provided an overall cost estimate how many folks you have working on that estimate would you guess quite a few we have an agency about two hundred fifty people about a quarter of whom have been working on health care of the last several months we have a number of people who are working through this legislation but i don't have an exact count so we have hundreds of experts working on legislation who still today can't tell us what the price tag is but this committee is supposed to make a final decision on this bill later today in concert i can't speak to the schedule the committee what is you know most public just want us to pay for a plan before we approve it we know you know the price thing do we know we don't know the ten year price tag do we know what the ten years once it's fully implemented is going to be we don't have that number either you mean no we don't congressman we've said c b l has said that although we cannot do  quantitative estimates on the level of detail but beyond the first ten year or so we will try to provide some of the rougher more qualitative assessment of the longer term budgetary effects but to do that thoroughly of course we need to have completed the analysis of the line for the future time to look at the bill and study it and come up just a price that not just the policy involved in the price thing and we don't will you be telling us what the full cost of this bill is because this is like one those adjustable in with a low price for the few first few years but truthfully we have to pay for this for decades to come will we have a seventy five year long term price bill no congressman we will not be producing a seventy five year estimate we don't have the capacity in a little capacity to do estimates of complicated legislation of this sort at anything like that time horizon i understand that horizon is very important in some ways and important for health care and we do i was just testifying this morning on the senate side about our long term budget outlook but those are the procedures we used to do that are much r long term some would say bankrupt path fiscal path and i think the worry is we're going to add a third one on top of that so as you develop the price tanks for these bills i think it's important as far out as you can  we provide information to the congress well know that congressman thank you mrs johnson and mr brady seems to be a lot of focus in on dr own hospitals in texas and i would be a famous article that has been given much circulation in the new yorker about macallan texas being sort of the poster child for high cost  i do note that this attempt to provide some controls and some framework is grounded in some concerns about high utilization expansion could you comment a bout the extent to which macallan texas is at the top nationally do they have any physician don't hospitals there my recollection is that was mentioned in the in the article yes yes are in the new yorker article by a to go on day that that has generated a lot of discussion nationally on health policy issues there was a discussion about the situation in macallan versus the neighboring community that they looked at and one of the distinctions that dr gawande highlighted in the article was the presence of when i believe he described as a fairly aggressive physician and hospital not district i i  can't speak to this but c b l could and they have estimated savings from the provision that closes the whole hospital loophole and and i can't speak to what went into those savings but the ownership loophole that has been  talked about now and in material forms actually since the medicare modernization act in two thousand and three the then majority put study and registered concerns and the bush administration to look at they put a mor place and they began to study it so the notion that the congress has been very interested in addressing this issue has been on the table publicly in a very visible way in repeated legislative attempts since two thousand and three but again cvo could speak to the savings associated with the provision mr chairman i i appreciate that and i'm i guess the only point my friend from texas talked about a five billion dollar investment this is this is not cost free this is had a significant impact in terms of our long term cost requirements and closing this loophole appears to have some significant cost benefits and i hope that this is kept in focus as we move forward it's in the bill for a reason and i think it's good when you care to comment on what the number is far friends from cvo about this you know we have not yet completed our estimates of the provider package but we'll be happy to provide that number once we have that would be great thank you so very much thank you mr  reform must be deficit neutral using c b l scored hard scorable offsets over ten years and in the tenth year question knowing what you now know because we're going to vote on this today does the bill meet the administration's test under o scoring and is it deficit neutral over ten years in the tenth year i don't know congressman or it could you bring up chart number one please what we have seen we have basically three scores we have a combination of joint tax and c d o scores based on what we now know and what we see is the medicare provisions net out at about one hundred sixty billion dollars the insurance coverage costs about one point four three trillion dollars and the revenue increases are scoring i think the latest joint tax table i've seen is about five eighty three billion dollars which means we're still down three hundred billion dollars so what we now know based on the scores we've seen are three hundred in dollars if you've got a chart to please and i say as you realize that hundred sixty was our estimate weeks ago its rights question those provisions of discussion draft those provisions have changed to some extent that we're trying to on cover right now and there are other provisions we didn't wait for medicaid we didn't score at all at that point that we're working on those provisions are medicaid or are provisions that save money or cost we don't know until we complete the analysis so based on what you've given us the letter the spreadsheets from joint tax we add it up it's three hundred billion but we don't know because we don't have a cost estimate on the bill before us and i would say this bill is the one you're scoring this one we got less than forty eight hours ago this bill is the you mentioned the substitute we got at eleven fifty seven p m last evening  don't know what it costs no one has been able to read this thing yet we're voting on it today if you take a look at taking what we do know from both sebille and joint tax this shows you the cost curve that we've got it shows you the offsets which are the combination of revenue increases and spending reductions net spending reductions and so we have a three hundred billion dollars gap based on what we know right now more troubling i would say is the trajectory of these things and this is what i would like you to give me your observation and i know you can't quantify this but looking at the offsets and how they grow in the first ten years and then extrapolate that out to the second ten years and looking at the cost and how they grow i'll find it i think it's interesting when she be a release their long term score a few weeks ago i think you said that we're going to hit one hundred percent of g d p the debt to g d p ratio how much debt we have in america will equal the size of our economy i believe in the year two thousand and twenty two my question is basically this knowing what you know now do you believe that this kind of trend continues whereby even if the aust at match the cost which is what everybody and the other side of the aisle saying will happen is that should generally sustainable to maintain absolute deficit neutrality in each and every year going forward after the ten year window i don't want to about the trajectory of the parts we haven't yet estimated but the part of the picture you show as i mentioned the cost of the coverage expansion looks to us to be about two hundred billion dollars in two thousand and nineteen and growing about eight percent per year the revenue table provided by the joint committee on taxation shows revenues about eighty six billion dollars in twenty nineteen look to be growing about five percent per year so for the package to be deficit neutral in that year and beyond the savings from the other provisions would need to be about one hundred sixteen billion dollars in twenty nineteen and we need to be growing about ten percent per year so the pieces add up ok so so the savings the pay for is are growing at five percent but need to grow at ten percent so the reigning remaining the parts may not estimated that right that's going to be growing at about be a little over one hundred billion dollars in twenty nineteen and growing about ten percent per year ok thank you miss miss what the corresponding section is on the and then in nature substitute section one to prohibit individual market plans from enrolling new beneficiaries so let me i want to see if i understand this provision correctly you're grandfathering and tell me if i'm wrong your grandfathering individual market plans for those who currently are enroll in individual market plan is it crute true that once the bill passes individual market plans cannot enroll new people in the individual market plan which means no new people can come in and the current participants in these individual market plans can only keep it if they keep it exactly as it is if they change jobs if they want to change plans they can't do that as the agent gets sicker the pool obviously ages and gets sicker and if somebody wants to get health insurance prospected lee they can no longer get it in the individual market it is as it is designed today they must go into the exchange to get health insurance is that the case no that is not the  individual market continues as it is in twenty thirteen when the exchange and the other insurance market reforms kick in and they kick in on all the markets inside and outside the exchange that when the exchange starts they will no longer live the disregard represent assurance a big individual market insurer after two thousand and thirteen assurance can no longer enroll people in their individual market plans is that correct and they can enroll family members of the people who are already in and they can choose to participate in the exchange where they will have a large ready market many of whom many of the people who will have subsidy behind their backs and they can operate in there they so just ask the question again outside of the exchange which is where they are right now they can no longer enroll people in the individual market plans they have after twenty thirteen if they want to continue the insurance they have outside of the exchange they can continue to enroll people in the policies that they have operating they cannot create new policies outside of that window outside of the exchange but they can choose to operate in the exchange but i guess i'm gaveled i had more of an escalator thank need for this provision and what exactly are we trying to accomplish it seems to me that what we're doing here is allowing any third party to step in the shoes of medicare and go ahead and sue on behalf of medicare at the same time what we're doing is reducing the standard of proof in state tort law and then third what we're saying is we're going to allow c m s to disclose patient information to anybody who decides they want to go ahead represent medicare and if anybody could give me some some answers to those turning over on its head state tort law preemption a federal standard of proof the ability now to allow a class action attorneys to assume the representation of medicare and to allow for this type of rampant litigation and as well particularly concerned about the reduction of the standard of proof basically now you're going to allow a standard to be the relevant statistical or epidemiological glad to talk with you in the hour we have invited to respond now i think the first thing they should be pointed out is whatever information you've been provided that this changes state tort law is wrong there is and i'm glad for the provision to make that even more explicit than i think it currently is there is no attempt to impose any new liability on anyone or to change any legal responsibilities that exist under current law just to remind you of what the medicare a secondary payment statute is all about it's actually a reagan era law signed by president reagan in the last to ensure that medicare was not at a disadvantage to any private insurance carriers if a private insurance carrier pays out monies on behalf of its insured it is entitled if it determines someone else should be responsible for that payment to initiate an action to get their money back and this medicare secondary secondary payment statute signed into law by president reagan proposes to do exactly the same thing for medicare you may have some problem with the reagan statute but this does not alter anything that it said about that it does deal with the procedure and the process and the it was the law that president reagan signed that contemplated that both private individuals and medicare could enforce those rights much as private individuals and force right is under the false in i don't know i don't allow them president reagan allowed them i'm just trying to to clarify the statute now you may disagree with president reagan about this statute you may think that the tax payers ought to have to bear all the cost when someone who calls  president reagan because i'm highness chairman mr chairman require my time it seems to me very clear here that you're going to allow a class action attorneys to step in and decide that they now have standing third parties third parties not medicare beneficiaries but third parties to step in and begin to determine where he or she has seen medicare disadvantage and then to pursue that i think you know the intent of what president reagan and his actions were were as you suggest to allow the taxpayers to recover monies owed but this is a incredible expansion of that very simple principle and i and the way i read the language and be glad to talk to gentlemen farther the standard of proof required under state law now is going to be altered and along with the extreme expansion now to third parties of the right to sue and to stand in the shoes of medicare so ms jarrett with the gentleman yield recently it's my understanding that this medicare secondary program under the reagan era it was given to the government what your change in the bill which came at midnight last night would give this to third parties is a gentleman from virginia says i believe a very troubling provision i believe they already have that right and in fact well i'm glad discuss it more with you later and then i thought you had would recommend sense obviously that was a lot of support for this and maybe some misunderstanding but we will have an hour and i would encourage members to discuss this and then we  trouble with credit default swaps not too long ago by allowing anyone with not no insurable interest to buy the insurance with it i could bet money that you couldn't pay your mortgage and recover money on that this  is giving people standing with they have no business being involved i'd like to talk to mr el mundo for just a moment and you said that you have no way to know yet whether the medicaid changes are going to increase or decrease costs yes or well isn't it true that we're going to increase of medicaid reimbursed rates to medicare reimbursement rates over a period of years yes i'm sorry let me clarify that increase for me embarrassment rates that i believe is captured in the table that we presented to you several days ago the features which i was referring were other changes in medicaid not related to the expansion of coverage and the part about paying the providers more  we're going to increase the number of users of health care services by about sixteen percent is that correct forty seven million are trying to cover sixty percent i think we got some eighty three percent ninety seven percent coverage in about eighty three percent are covered now pardon me you say eighty three percent of americans are covered now i believe that's so i estimate is that eighty three percent of the non elderly population excluding unauthorized immigrants  covered by insurance today and we estimate that number would rise from eighty three percent to ninety seven percent if the bill were enacted over the next ten years for fourteen percent against a three so it's about twelve percent increase in number of users medicaid does seventy six billion because what other people are paying we get abuse of the system yes come here so we had in our report last december in fact that expanding insurance coverage for the uninsured population would raise national health spending on the order of two to five percent was the number that we gave here's what letters my question that was going to treat these people with had no increase in the doctor no net increase in number of doctors in this country then but five or six years we've had zero increase in number nurses in this country and but we're six years who's going to treat these people there are a number of provisions in this bill that many of which are outside of our committee's jurisdiction so i'm not well suited to walk through all of them with you but we have investments and in primary care for a high need areas where we're increasing funding for the national health service corps that encourages people to serve in under served areas there's a increase in the loan repayment benefits which has been extremely successful i mean health professional shortage areas there's a long term s g r fixing here which you're probably aware of to correct the severely flawed formula that we've inherited and primary care provider rates and encourages medical students to choose primary care we've also got provisions in here to create a diverse health care workforce we've got a lot of provisions in here to help community health centers who are out there serving a lot of these people absent more absent forcing people to go into this business where people are leaving in droves you're not going to increase the number of users i'm curious to know mr elmendorf how you how you can tell us is going from eighty three to ninety seven percent coverage and you can tell us this increases the health care cost by two and a half percent if our gracious witnesses would reclaim their seats we can continue to inquire and i believe that mr nunez would like to inquire at this point thank you mr chairman i think with the current members on this committee now we should probably move to final passage of this bill great i think without objection i don't think you have enough your democrats here yet mr stark might fail  thank you mr chairman mr elmendorf you've already heard the questioning this question several times so i won't restate it by real i will state it's hard for me to believe that you know how many people this bill will cover but you don't know what the bill will cost i just find that hard to believe my little and i'm a little disappointed with wood cvo not being able to tell us what this bill cost of this point  complicated bill and it takes time for us to work on well that and that leads me to another frustration that i have with this committee is that there are amendments filed in the middle of the night no one's had a chance really to read this bill at this point and i would hope that that we would it's unfortunate that we could postpone this for another week before marcus philip because maybe we would have more accurate information from cvo is it correct to say that this bill expands medicaid yes has anyone on this panel ever been on medicaid before i have not congressman i can't speak for others i'm just trying to figure out i've asked this question before this committee i just can't understand why we're not trying to fix medicaid and fix the long term liability problems that we have in medicare before we go into this huge new expansion of basically government mandated and funded health care coverage in this country mr i wonder what are the estimated unfunded liabilities of medicaid today i don't have a dollar figure that in my head congressman but i was testifying this morning about our long term budget outlook and certainly we highlight one of the key elements of unsustainability in the u s fiscal outlook the rising costs for medicaid medicaid and medicare together are a very large share of the long run problem then as i said this morning my testimony the central fiscal challenge facing the country but and it's probably safe to say though that the unfunded liabilities of medicaid and medicare are are well into the trillions oh yes probably two ins of trillions the let me answer the question the liabilities are very large the unfunded this is a complicated business as you know part of medicare has a trust fund as the social security part of medicare is not funded to a trust fund medicaid is not funded through a trust fund so what's funded and unfunded is much less clear but the perspective liabilities under current law very large are very large and i guess you can tell by frustration that we're moving forward with a big health care package i think we all agree that health care has to be fixed but by taking money from medicare this point when it's when it has a whole host of problems not just solvency has problems with delivery of good services under medicare and then pushing more people to medicaid at a time at least in my district the people who are on medicaid don't like being on medicaid would prefer to have other alternatives we spend about eleven thousand dollars a person on medicaid right now is that accurate in this country i don't know the answer that question has a concert not sure you mean by pushing people on to medicaid design or center legislation people on medicaid yes and you know my my problem with that is that i would rather see the people on that are on medicaid now and not have second class health care i would rather see them have an option like a voucher of some kind to where they could take us right now i think it's about eleven thousand dollars we spend on medicaid it seems like that would be a heck of a lot more efficient way to deliver health care to let people choose their own health care at some point in fact and let me  take my time is getting short so i want to ask another question if we're going to have this eight percent payroll tax on to employers that do not provide health care what happens to the business today that perhaps is standing up to fifteen percent on health care that then decides to drop that health care can go to eight percent they'd rather pay eight percent said a fifteen percent so thi gets a that's an important question congressman all my colleagues tell us talk about the way we've modeled the incentives for employers and workers to take up different health care options so let me let me just try to illustrate that with a relatively straightforward example so t ake a worker or single worker who makes fifty thousand dollars a year if you look at and let's say their policy costs you know five five thousand dollars that's ten percent of their income they that's all but on the lower end so if you look at the if the worker if the employer offers coverage they get the subsidy from the tax exclusion from that and right not treated as taxable income which is about thirty percent of the premium so on a five thousand dollars premium there's about a fifteen hundred dollars subsidy if you add to that the cost of the penalty they'd have to pay if they if the employer decides not to offer coverage eighty percent of fifty thousand dollars is about four thousand dollars so it's really sort of between the two of those it's it would be you know they'd be giving up a subsidy that they're getting from the tax exclusion and paying a big penalty and still having to go get insurance so it's on i mean sort of the combination of the four thousand and the fifteen hundred is really more than the policy would cost and then even if they go into the exchange they're not going to get one hundred percent premium subsidy there so obviously in the situation w employers with lower wage workers the penalty would be small the advantage in the exchange would be bigger and we try to take that all into account and we do think some employers who would be offering coverage under current law would not do so under the proposal because their employees could benefit from going into this change but that but it's a it is a substantial penalty and we do think that plays an important role in keeping people in there and poor plan but that we will have more people that are going to go on to this into this government plan of some kind which which i think is very scary at this point dealing with if we just look at how medicaid and medicare are today and how inefficient they are it seems like we would deal with those problems first mr chairman thank you for give me a little extended time i congratulate you on the boldness of your approach you never cease to amaze me but i'm very troubled by this legislation and i would hope we take more time before we pass this bill today  you'll be glad to train with recommendations you may have to this very serious national problem energy and commerce committee yesterday but enough said he got to say earlier here we're hopeful to release further information tomorrow we are on the remaining pieces the proposal if we had actually had just delayed till next week you're pretty sure that we would have the final cost estimates i am we would certainly have more information than we have now thank you you testified in the senate earlier today with respect to the cost of the i believe the senate plan and i have a transcript in front of me from c b from a b c news where senator conrad asked q a a direct question with respect to the cost of this and bending the long term cost curve which obviously is something that we have concern with because one of the revenue figures that's being used or the revenue raisers is being used in this piece of legislation as you know sunsets in ten years but yet costs continue to go up based upon what used said this morning you said no mr chairman the legislation that has been reported we do not see the sort of fundamental changes that would be necessary to reduce the trajectory of federal health spending by a significant amount that's what a b c news is reporting if you have a revenue raiser in this legislate piece of legislation that sunsets that goes away and yet you have costs in the outyears going up that i know you can't comment on the specifics but wouldn't that concern that scenario concern you congressman we the coverage the cost of the college provisions is rising about eight percent a year at the end of the ten year window the revenue provisions as i understand them are rising the revenues rising about five percent at the end of the ten year window that means that in order for the overall bill to be deficit neutral in twenty nineteen and beyond the remaining provisions would need to be substantial in size and increasing at a rapid pace and i can't judge whether that spangler not at this  following up on mr ryan's comments on page sixteen of the bill section one hundred two let me ask you this if my understanding is correct if i am not in congress and i walk out to a health care provider in t and fourteen and want to insure myself into the in the individual marketplace my only opportunity the way i understand it will be to go to the public plan or go to the government exchange and your your opportunity in the non group market lead purchase through the exchange of which the public option is one in our choice for you the new reform market where you will not have discriminatory practices so th is the equivalent of the non group market today ok so if i'm an imp if i work for an employer whether it's a union plan or a nonunion plan that i am happy with today but in two thousand and thirteen that union plan that employer plan does not comply with the exchange will that play and have to change now that there's not a requirement that employer plans or union plans that do not comply with the exchange the requirements of the exchange those plans do not have to change and comply the plans that participate in their market forms that apply inside and outside of the exchange employer sponsored plans whether from a business or a union perspective have a grace period that they are coming into compliance to meet the essential do they do have to change if they're not in compliance with the new rules they have to come into compliance over period of time with the essential benefit minimum so what the president said is incorrect then because if i have a plan that i like that everybody likes that the employer likes the union members likes it's not in compliance over the five year period with the new exchange the rules of the new exchanges it's not a compliance it has five years to become compliant which means it has to change again the group plans that are not offered as part of the exchange are not subject to the exchanges i'm not talking about them i'm talking about a current plan a current plan that i like that i am on on if it doesn't if it's employer plan that does not comply with the new regulations instruction want to the way i read it it means if it doesn't comply it has to go in to it ceases to exist essentially the sections and one or two are set at a level that's all the information we received today says that the employer plans meets these levels today but they are not required to meet them until five years out so if they don't meet them in five years they have to change or they have title one of the exchange twenty eighteen if they have not come into full compliance even if they like to get even if everyone likes the plan they have to change the change that's being talked about here in terms of people liking the plan is having some basic essential benefits covered that all i think the gentleman i would like to ask unanimous consent to enter into the record a an editorial from investors business daily that says about fixing medicare first the i won't read the whole article but it says president obama says a new public insurance plan is needed to keep private companies honest well to be honest there's already a public plan and it's hurling toward insolvency i would like to request to put enter this into the together cost estimates other than that which you were forced to do because i'm constrained based on discussions with staff is that correct yes w thirty this morning we released two days ago correct so it was based on the other version but was based on the specifications as described to us by the staff whether those have changed in fact from two days ago to last night i can't judge ok you know i'm sure let me ask you a pointed question if you were sitting up here would you be comfortable voting for something you had no real clue how much it was going to cost congressman and it's not my role to to  to picture myself in your chair well i can only tell you it's a very uncomfortable chair sir and i think that members on both sides of the aisle would like to know the real costs of this bill and i realize time constraints prohibit you from being able to accomplish that if the bill reaches the floor say monday or tuesday of next week will you have those estimates we hope that we can release tomorrow estimates of  medicare and non coverage medicaid portions of the legislation but i'm not sure we'll make that i'm not sure that best will be complete is there are some complicated pieces we're still working on moreover you know for the coverage estimates we need to go back through the legislative language and finish some of the pieces that we noted in this release are not complete i don't know when we'll have that done by i'm afraid we're working on it it's fast as we can i'm sorry that you've been put in this position in the members here are put in the position of being forced to vote on something without knowing how much is going to cost let me ask another question is it possible for you to also compute the cost to medicare beneficiaries when section eleven sixty one which would cut medicare advantage plans by approximately one hundred sixty billion dollars when they go out of existence because then the medicare beneficiary is going to have to in many areas pick up the cost of part b i glasses dental and wellness programs can you compute how much is going to mean to seniors who are on medicare when those benefits in not sure whether  estimates like that naturally from our from our estimates as you know we focus on the federal cost estimates we try to provide and salary information wherever we can i'm not sure that is something that we're that we're able to do but i mean i think you are correct in the view that there are beneficiaries in medicare advantage plans who receive additional benefits not provided to those people enrolled in the regular medicare fee for service plan and that some of the higher cost the federal government pays to the medicare advantage plans goes to benefits for that subset of beneficiaries in traditionally it's the sicker and poor seniors who are in these programs so obviously i think we do need to be very concerned about that i would ask this bork when are there any prohibitions in this bill i looked in could not find the my staff looked and couldn't find them and he prohibitions against any further cuts in medicare because if the reimbursement is medicare in between now and twenty thirteen medicare is cut they're going to be some very very substantially damaged people who are on medicare because facilities will close and let's face it we're under reimbursing in many areas right now so it is there anything in here to prohibit medicare cuts further cuts today as i walked over here from my apartment i was approached by somebody who reminded me that right now there's a proposal to cut by forty five percent  freestanding radiation facilities so a lot of the providers have been lured into compliance because i think i will get medicare plus five but if medicare in the meantime is cut that is a substantial problem is there anything in here that would prohibit medicare from further cuts this this legislation contains what provisions that you would vote on today not today when the committee i suppose sometime in the near  raiding the medicare trust fund part a in this legislation is that correct no in fact we're improving the medicare trust fund through this legislation i believe there's three hundred million taken in for  the comparative effectiveness research of in the hospital trust there are hundreds of billions dollars going into it not being spent out of it that extended solv thank you mr chairman i just wondered if we could close the loop with our friends from cvo about the medicaid discussion we a little bit of an exchange to average cost of a private health insurance program we have a sense of what that the cost implications of that might be so congressman as you know medicaid providers are paid less than providers are paid on average by private insurers providing the same set of official benefits to medicaid providers going through private medicare paid medicaid patients going through providers pay to private rates will be more expensive than they are being in the medicaid program and actually have the facts now in front of me the average spending for medicaid this year by our estimate is in the ten or eleven thousand dollars range for the aged blind and is able to medicaid beneficiaries but for children and adults it is one or two two thousand dollar range that's the federal share to be clear the state share of course beyond that and the typical state share is less than is less than the federal funds of yes that's correct so in round numbers we're talking about i can't do that  the younger recipients if you add on for on a per capita basis the average cost average federal cost per child involved medicaid is one thousand five hundred forty three dollars this year and the average federal cost for benefits for non aged blind or disabled adults is two thousand two hundred fifteen dollars this year and in both instances the average total cost would be less than four thousand dollars i think that's correct yes i think it's i think it's important to just for us to be focused so how the notion that there's a fantasy world where these people who now are in a very difficult to get many of them are not poor are not don't have access to other resources there isn't it doesn't appear to me to  be feasible for the same amount of spending for them to get anything remotely comparable to what would be provided under this program and it seems to me that that is the more appropriate test just marching these folks off in the private sector giving them anything remotely comparable would increase the cost the program not decrease and it's very unlikely that people would be able to get anything remotely approaching the benefits that are here i do note i believe the benefits were provided it would raise the cost as a constant news noted those beneficiaries will have access to a wider range of providers than under the present system but the costs would be substantially higher yes and we are making some improvements into medicaid are we not to try and speak to some of the concerns people have about acceptability i think was discussed earlier included in the estimate for the medicaid expansion as part of reform our improvements to primary care providers under medicaid to remedy throughout the country in a concern about access mr chairman i appreciate your courtesy we've had we've gone down this path before before the committee where somebody actually asked a witness you know do you want to be on medicaid well i would suppose  have actually had some witnesses who said there are some pretty good looking medicaid programs but the choice is if you are poor and don't have health care would you rather have medicaid or be off on your own sort of charging into emergency rooms going without as opposed to having the system that is set in place i think most people would rather have medicaid and with all due respect lots of the problems that we are attributed to it are because of some bizarre ways that states have budgeted and allocated it i think i just appreciate mr chairman an opportunity to clarify it would cost more and for many thank you mr chairman one of the things as we walked into this we saw about thirteen years ago in kentucky a lighter version of something similar to this that were rolled out and the thing that we saw was a dramatic increase in health care costs my own company businesses increased their health care premiums by nearly four hundred percent many businesses closed that couldn't afford the state mandates people were pushed off of insurance and the question i've got is we as we walk through this and i think we all agree there are real systemic reforms that need to be attributed i'm trying to understand if you calculated dr elmendorf mr on the door in the your cost estimates the amount of economic ripple effect that's going to go into a down economy now as this additional burden gets placed upon employers and many of whom already provide health care so congressman we have not evaluated the broad economic effects of this proposal we did release an issue brief several days ago about the labor market effects of health care reform for a variety of the sorts of reforms being discussed now we are in response to questions from some members of this committee and others writing some analysis of the labor market effects that might arise from this particular piece of legislation that would still not get i think to as broad a set of topics that you're interested in of course this proposal would have its principal effect in two thousand and thirteen and beyond which point l and most private forecasters expect that we will be out of the current recession but there can still be economic effects to be sure and they're not something that we incorporate and have incorporated or will incorporate what we drill this into a little bit better level  i like to look at things in terms of processes of said many times and hearings that you know the one thing i see missing in the legislative debate is no real effort to reengineer the internal this is a dr the overhead cost inside of our health care system that begins first in the center for medicare services and then out into the insurance industry these are very boring economic kinds of processes that could save tens of billions of dollars to the american people and fund many initiatives in health care but i guess i'd like to ask a question i think that's of top priority or respected national figure in this area and we've got to get it right people are throwing around a lot of emotion and ideas don't necessarily have a process but as you've looked at this limited aspects you've been able to assess everybody across the board says we've got to reduce cost in this and over time because if we don't it's going to have failed from what you've seen of all of the legislative material through your various experience with the committees in both sides of the chamber or both sides of the capitol what and what's been reported you see any effort mounted that will actually reduce long term health care cost so i think there are there are substantial efforts in this bill congressman to explore ways of changing medicare payment policies the challenges c b s has said for some time is that he experts although widely united in i think in their views about the directions in which health policy should proceed are much less clear about the specifics and makes it much more difficult to write down specific proposals that would that would reliably save  hing amounts of money well perhaps perhaps we could back off again and come back to the original question you know i go back to my my concern simply from a perspective of provision of health care benefits at an equitable level without creating a rationing system  the question is do you in fact see over the long term that there will be a reduction in health care costs that seems like a pretty much a yes or no kind well that's a complicated business well this morning this morning in the senate you told senator conrad the legislation it's been reported we don't see the sort of fundamental changes that would necessarily reduce the trajectory of federal health spending by a significant amount on the contrary the legislation significantly expands a federal responsibility for health care  you said that this morning correct yes i did so let me explain further for you the coverage proposals in this legislation would expand federal spending on health care to a significant degree and in our analysis so far we don't see other provisions in this legislation reducing federal health spending by a corresponding degree that's a different question whether there are efforts as you said in this legislation to change medicare payment policy and way that would over time reduce federal health spending relative that part rolls what would otherwise occur so there are policies and legislation about accountable care organizations about readmissions about bundling about rewarding primary care physicians and so on the cover a range of the areas but experts think should be investigated if i could just if i these are close i would say at effect if i could just a close eye on it since i see that my time has expired i guess i would say that on the on the senate side  the truth is that spending is going to continue to grow in and over here that we're creating dozens of new agencies that in the plumbing of it all will create more overhead in the long run we are going to get a precise answer on that i  midnight chairman that may i for a moment i think that's a bit unfair characterization of my answer what i'm saying here is completely consistent with what i said this morning when you try one more time congressman the this legislation like legislation we can sit on the senate side add substantially to federal health spending through the subsidies and expansion of medicaid broaden health insurance coverage i've been very clear about that that amount of money is difficult to offset that was the basis of my statement that on balance this legislation is being considered looks to us at this point to be raising federal health spending that's not contradicted by any other statement that there are provisions of this legislation that are pushing on the lever's in medicare that experts think would over time reduce medicare spending well i'll obey both sides i'm not challenging the veracity of your intent but the question the context was very clear on reducing health care spending and with senator conrad ask you that and all i'm asking you is to validate in fact that statement i think the context was very clear that we're about to embark on something that is beyond the ability of the average american even contemplate in the amount of numbers on spending we don't have that i think we need to time from an actuarial perspective to discuss it as a just as a business an economic discussion among members among experts like you to really see ways to fix the process rather than rush in it again with a few hundred more pages of legislation that came in late last night it's very difficult to provide  if i heard you correctly your answer was yes that eventually at some point a plan that didn't conform to the standards set by the commission or within the exchange would have to either enter the exchange or or would disappear so the thing is that people are very concerned about choice we're also very concerned and we're hearing it all the time about the rationing question whether or not government rationing will take place we've already heard a little testimony that there their choice may be taken away  also the cost but spars are rationing goes in in the previous draft of the bill there was some language that related to the health benefits advisory committee in section one twenty three b one and it read that in developing such recommendations the committee shall take into account innovation and health care and ensure that essential benefits coverage does not lead to rationing of health care this provision was deleted in the draft this week that was released this week why why did you delete this prohibition on rationing language and again i just want to reinstate my concern and my constituents concern that this is an implicit green light for the federal health board to make decisions knowing that it will result in the rationing of health care i think that there is nothing in this legislation that would lead to rationing and can fact there are explicit why was this language removed can you answer that question you know i was going through it and i think the privacy there is nothing in here that we believe would lead to rationing yet this so the new language though from the want from the sense that i just quoted you that was put in place of the original language is  developing such recommendations the committee shall take into account innovation health care and considering consider how such standards could be read could reduce health disparities that's that's the language that was put in that people can't misread you understand the concern though of the american people when we talk about government health care rationing and again we take away choices when that happens and this legislation improves people's choices and the c b o t tables show th language on rationing was taken out it was replaces language more precisely talking about the fact that they would have access to clinically appropriate time and i ask you another question that that actually concerns me along the lines of fann  and i quote an individual shall be permitted to apply on the basis of self certification of income and resources self a certification of income and resources that to me means no no byrne approve no documentation just  come in and say this is this is my income and this is my resources this provision goes on to state that the commissioner cannot require individuals to provide additional documentation such in common asset information it sounds very much like what we did in fa freddie except in extraordinary circumstances this provision appears to invite additional fraud in medicare is there any provision in this bill that requires upfront verification in order to receive to receive the generous low income subsidies yes this provision if you will is trying to address something in the law that is intended and was created by the then majority in the medicare modernization act where purported to help low income seniors have access to help for their prescription drug coverage it's been shown in the several years that benefit but but th fiscal health of the country it's a good report it sets the stage for this discussion given that medicare and medicaid spending or going to be the real drivers of cost and the fiscal nightmare that we're facing in our country so with that having been said i want to refer to section two twenty two of the bill which addresses start up funding for the government option in the exchange and this is one of the center e features of this bill and there are some troubling things in the language in section two twenty two first of all it provides for two billion dollars in startup costs now my understanding is that c b l will probably treat this in the ten year window as being being deficit neutral in that it will be paid back over ten years through amortization of premiums now in the second second sentence after that the bill language goes on to say in order to provide for initial claims reserves before the collection of premiums there is hereby appropriated to the secretary out of any funds in the treasury not otherwise appropriated such sums as necessary to cover ninety days worth of claims reserves based on projected enrollment  reserves but i read this as meaning ninety days and not any requirement to maintain reserves in this government option is that how cvo addresses this congressman  understanding was that essentially the financing of the public option would in some ways resemble part b of medicare which has a sort of a trust fund but which is a largely a paper concept in part b does not have a trust b comes out of the general funds that's that's true but at the same time and i think this is the i think this is the issue you're getting at is on on paper it has a trust there is a trust fund but there isn't really any money in it in a kind of a the way you would think about a regular insurer having sort of money set aside it's really kind of obama been given the dire circumstances that we're seeing now with medicare both part a and part b spending we're basically modeling this in an identical fashion and i guess the question i have about the language is or are we looking at an open ended liability here because what happens if ninety days of reserves is depleted or falls below a certain requirement which is there's no requirement here stated just as ninety days to cover the initial enroll that we setting up a program that's going to be an open ended liability to the taxpayer my understanding sir is that the way it was set up is there to centrally like i say a b this paper transaction at first will to give the print planned funds on which you could draw to pay claims but that over time it it would have to build into its premium an amount that that enrollees would have to pay that would essentially offset the start up fund but as you as as you say i mean in principle the public plan is are saying of the intent was that you know its revenues its premium collections from various its costs but issues could arise if those are out of balance and in principle the premiums would have to be adjusted over time to keep those payments and outlays in revenue so if we're not controlling cost we're going to see an escalation in premiums in effect is that true essentially and i think that it's our in standing of the intent was that the public plan would at least be treated in the same way as private plans in terms of having to float their own boat if you will but it's not explicitly stated here in the bill language because private plans have to maintain certain reserves based on law and that's not explicitly stated in the bill and in haste to write a bill and pass legislation premium rates under paragraph one the secretary show include an appropriate amount for a contingency margin the start up funding that you're referring to on the following reflecting the fact that when they open their doors on day one they haven't collected premiums to have that margin in place so they need to have an initial loan which is then built into the premiums going forward the premiums also have to carry going forward just as private plans do a contingency margin to have reserves overtime for the intention is to have the reserves over time and as your exchange indicated if in fact they haven't planned appropriately why risk adjustment doesn't work properly in the public option which has to live off its premium to attract higher costs and it's expected that it's premiums will rise just as private premiums rise when they don't plan properly but the contingency margin is not specified there's nothing to specify it and to put it on even par with would insure normal insurance companies do and of course they have to do this with after tax dollars and of course supported through premiums my question is are we still looking at an unfunded liability you are not you're looking at a plan that has to float its own boat through the premiums i don't think it's clear in the bill language thank you mr chairman thank you very much mr chairman and i appreciate your attention to the physician owned hospitals and some of the concerns i've heard from our doctors if you put  fair when they said that you know previous question i was asking that you like to let sure this body on the limited long term liability unfunded liability of both medicare and  medicaid so no i don't like to lecture this or any other body we provide information and one piece information that we provide every few years is a long term projection analogous to that done by the social security medicare trustees and we find in his latest report nobody is surprised that federal spending under current law will outpace federal revenue and thus that deficits and public debt we continue to mount could i give you the green light to lecture us on the unfunded liability of this program so i know i won't lecture but i thank you anyway i think unfunded liability has a very particular meaning i'm trying to use a different set of language public programs are not a stablished on insurance basis in all cases there are some elements of public programs that are on an insurance basis but most federal outlays for a whole variety of of items and most federal revenues are coming in and out of the treasury according to the legislation that you passed and there aren't pieces that are funded or unfunded it is just the flows of money let me ask you another question this comes from the washington post and this came out within the hour let me quote the first paragraph says instead of saving the federal government from fiscal catastrophe the health reform measures being drafted by congressional democrats would worsen an already bleak budget outlook increasing deficit projections driving the nation more deeply into debt the director of the non an congressional budget office said this morning is the definition of an unfunded liability so the congress and i don't think that's definition unfunded liability and that's not the way that is not a i was explaining to congressman davis before that's different from saying let's nation is not doing some things to reduce federal help out why is he just saying that on balance the legislation we've seen increases federal help outlays all right something called the access to health care network and i'm concerned about complete community based programs such as the switch in my district provides medical discount plan for three thousand uninsured patients in the reno area and they're growing they're expanding what we have as an entire community hospitals providers clinics insurance industry employers in the banking community and also the uninsured themselves that have pooled their resources and ideas to create a program that provides everything from preventive care to open heart surgery my concern is that we will lose programs like this that are working that have actually enhance the ability for us to get the uninsured the i guess my question for you is what impact will this legislation have on these type of community based programs i think not mean two million with the program other than how you just described it it depends on the program so there are some communities that in which the providers have sort of rallied around do free clinics and have agreements with each other to provide heart surgery and other things that people need not in a clinic environment but other ways to ensure that people without insurance have a way to get care programs like that could continue although the nice thing about bringing more people into insurance is that they would then have dollars at their back end and that they wouldn't have to be donations from the providers but they can actually pay for services and i think what you're describing is a community program they aren't doing insurance in that program are they just making sure people get care just making sure people get good at and i think i can tell you that there'd be money now for those providers wouldn't have to donate their time but there would be money to reimburse them for the time that they're spending taking care people right now it is a state license program and my concern is if the secretary determines that the coverage provided by this organization is not acceptable coverage would with this particular community based program have a future again i think it depends whether it's insurance you i thought you were saying it was not insurance it was sort of care provision i mean i think it depends what it is but you know i would  assume this administration and the president has asked for this bill it reflects his priorities and they really have made it clear that they want to build on what works out there today and in fact are taken steps in this legislation to keep employers quarter of a million dollars you're exempt is that indexed by inflation i think i believe it's six nominal dollars or zero dollars all that or my colleagues to double check that the incorrect i'll get back to you thank you i think the answer is i think you are correct so in other words that's two hundred fifty thousand dollars today but over a period of time that actually the value of that exemption erodes and i find it ironic that that same logic doesn't animate how political contributions are dealt with under the federal election code those are indexed and the thousand dollars from years ago is now a much higher number and i would just suggest that this bill treats the political class with a greater accommodation than it does small business i want to ask you to comment on that because i've lost eye contact with you i think it's easy is gorkhaland could i ask you to turn with me to page twenty one in the bill and it has to do with the ability to make ratings in the government run plan and assume for the sake of argument that we have two individuals this is section one hundred thirteen same age same amount of family same zip code one is very health conscious she's in a poll adi's class she goes regularly to her physician and she is a model of of hell the other is a complete slob who eats potato chips watches infomercials and does absolutely nothing and is grossly overweight based on his own decisions under this bill those two people are going to pay the same premium isn't that right that is correct let me turn your attention then to follow up on a lie of inquiry that came from mr right or mr  french pronunciation from the chairman and sort of following up this is on on this whole notion of cost of fast effectiveness research and how it can be manipulated i  just for the record i wasn't persuaded by the merits of the argument that removing the plain language of the use rationing somehow creates an ambiguity or for that the use of the word rationing creates the ambiguity i think would be far more wise to leave it in and let me ask you can you turn between pages five hundred one and five twenty four is the section that really goes through in a great deal of detail about comparative effectiveness can you point to one area in that bill in those pages that you drafted that have any restraining influence whatsoever on rationing on page five thirty three because that provision goes through page five   permit the commission or the center to mandate coverage reimbursement or other policies for any public or private payer ok but but here's the point there's nothing in this bill that says that you can't deny coverage based on cost and that by definition is rationing and that i think is the weakness of the bill i mean you and i our time is limited i would welcome the chance to talk to you and other members of the majority on this because i think it's it's a real weakness of the bill let me turn your attention then to another part and that has to do with page one forty three section two forty six and it says in just a few short words that not in this bill is going to benefit anybody who is here illegally the hope in you that a simple declaration in the law like declarations that we have in the law that it's illegal to enter this country are going to have any restraining influence whatsoever on people benefiting at taxpayer expense who shouldn't i am the law exists and it has to be enforced but the says nothing in the subtitle federal payments for  affordability credits on behalf of individuals who are not lawfully present in the united states but i'm i'm not missing anything there's somebody can simply come in and make a declaration and say i'm here legally i'm demanding that you have nothing in this bill that would prohibit that isn't that mr neil thank you very much mr chairman i want to thank you and the staff for the hard and good work that you've done in putting together this comprehensive health care bill that's going to provide coverage to ninety seven percent of all  americans that we learned in massachusetts that already ninety seven percent of the people are covered under the similar proposal but the reform isn't easy we're still a work in progress but in massachusetts we've successfully expanded what works into our health care system and we're attempting to do the same here today it hasn't been easy to get to this point but the key ingredient in this bill success is that it asks everyone to share in the responsibility of achieving health care reform i also want to thank the chairman for continuing to work with made to refine and examine a handful of issues that are important to me and to my constituents specifically i am interested in continuing to work with staff as we move forward to pursue the issue of insuring a one year open read roman program and chronic special needs plans for individuals with stage renal disease specifically also we are examining the development of demonstration projects that will look into consultation clinicians related to diagnostic test selection and therapy management finally the chairman knows of my concern about the inclusion of certain oral drugs in the e s r defunding while i applaud the goal of using the savings from that initiative to immunosuppressive drugs for transplant patients comprehensively i would like to go on record to suggest that the inclusion of these types of drugs into the bundle is not without controversy or concern from several members of the comm would like to continue to work with the chairman on this issue as the process before us continues and i would like to yield to mr basara at thank the gentleman i'm pleased that he brought up this point i know we've done a lot work in the committee working with staff and working with the stakeholders to try to come up with legislation that will address our needs to reform the way we reimburse and provide services to our seniors under medicare to all americans who are modest income under medica and certainly try to reform the private sector market as well and we are going to back a lot of folks one of those areas that we will probably find an impact and we want to make sure we do it right is for people who have chronic conditions whether  it's kidney problems where they're undergoing dialysis on a daily basis or any number of other conditions or diseases we want to make sure we do this right this concept of bundling i think most of us agree is a good one and something we need to move towards but i share the concerns that mr neil has expressed that we want to make sure that we do this right and i hope that we continue to examine how we make it possible for americans who need some of these life saving treatments and medicines that they can continue to do so in a way that doesn't means that it's a beginning of trying to reform the system and i want to thank you both the before you outstanding contributions to bring is to where we are now but i fully recognize there are things that we are going to have to consistently do along the line and i just value the leadership that you have demonstrated and will be depending on that working with republicans as well to move forward i would like to email to the chairman of the health committee window then it does not increase the deficit or harm the economy in the ten year period is that correct if it's neutral in the ten year window that means it does not increase the deficit in that window yes that's correct and i did not speak at a press have morning i have not tried to make stars i answered a question i have one other interaction that has troubled me as we talk about these seventy five year projections i won't be around to find out if you are right or wrong but in the time that mr rangle and i have been here never once has the defense budget not increased right never once how would you compare the defense budget of six hundred billion as opposed to the medicare budget around four hundred wouldn't you say then that the defense budget also if you projected it under the same circumstances would harm the economy and increase deficits well if they come to paris and i guess it's a difficult experiment to think through if the comparison is having no defense spending and apart from the effects on our national security that coming out that spending would reduce the deficit that's sort of true for all the categories of spending in the budget and you were colleagues make decisions about how it was somewhat or any somewhat disingenuous to just pick medicare and not talk about the agriculture budget or the defense budget and i know you somebody could say well they don't happen to be entitlements but i doubt anybody really like to argue with me that they would have the bending is set annually to appropriations but what i'm telling you is for as long before you were here a long time ago defense spending has never done anything but increase and i'd be surprised if it didn't continue that way thank you very much i emailed to the gentleman from the state of washington dr mcdermott the shoes mr chairman when i went to medical school and graduated one hundred sixty three american medical association railed against the institution of medicare today we have a letter dated june sixteenth two thousand and nine in which the a m a says on behalf of the board of trustees and writing to express our appreciation and support for h r thirty two hundred america's affordable health choices act of two thousand and nine i would ask unanimous consent to have entered into the record this absolutely historic letter from the medical association supporting the work of this committee and the others in the u s congress outage actually objection legitimate my brother from the coast right brought it up the rationing of health care i would suggest mr chairman that we already why we are here today is because we have been rationing health care we've been rationing health care for kids that is why we had a debate and discussion about us should without health care insurance chronically ill adults are much more likely to delay or forego needed health care and medication we are rationing health care as we talk today without health health insurance adults are less likely to receive effective clinical prevented services without insurance without health insurance adults are more likely to be diagnosed with later stage breast or other cancers that are detectable by screening or by symptom assessment by a clinician clinician as a consequence when uninsured adults are diagnosed with such cancers they are more likely to die or suffer poor outcomes without health insurance adults with serious conditions such as cardiovascular disease or trauma i think one of the major reasons why we are here to reform the system to try to cut costs to make the delivery system more efficient and more effective because we know that higher courts do not necessarily mean the best of care we know that lower cost does not necessarily mean the worst of care in fact in the article that was referred to in new york or i thought that was brought out we are rationing health care and the american people deserve better and on the five hundred thousand dollar number someone who was arming five hundred thousand dollars a year which is a very nice for frankly the overwhelming majority of people who are paying attention to this davis assuming a joint return an adjusted gross income of five hundred thousand dollars is currently one of the thresholds so that means that you'd be looking at the end of the first step of the surtax the surtax begins for just a gross income in excess of three hundred fifty thousand so there would be one hundred fifty thousand dollars of adjusted gross income in excess of in excess of the three hundred fifty hundred three hundred fifty thousand dollars for taxed at one percent in the beginning and twenty eleven and so that would be one thousand five hundred dollars in twenty thirteen slow you down for one second as i want to give our here i'm a centrist moving this math quickly on that ok that's what it's all about one hundred seventy five dollars a month about one hundred seventy five dollars a month all right and for someone who is at one hundred twenty five a month and again by my math someone who's at three hundred fifty thousand dollars a year is five hundred dollars well here which is roughly forty two dollars a month at three hundred fifty thousand dollars  there is no tax liability on a joint on a joint return all right so what we're talking about is frankly there are a very small amounts for the overwhelming majority of people who  and i recognize that in and ideal world or an idiot logical world depending on your perspective nobody would ever pay another tax for anything but given that the trade off is contributing to our deficit it also doesn't strike me as most onerous thing i've ever heard once question for you before i yield back there's a hardship exemption that's contemplated for individuals am i correct that at present there is no hardship exemption for small businesses  there is an exemption a small business exemption recognizing if you use payroll to gauge the small business size that business with a lower level of payroll may have less income to pay toward their employees health i understand than america will cut off but both of i think there is a specific statutory reference to a hardship exemption that's to be crafted friend of vigils that's correct am i correct that there is no comparable language businesses i don't believe there's an analog instead there just is the clear dollars threshold exemptions which that individuals don't have missed chairman one of the things that i would like to do and i would seek to do it today we're still working to see if we can if not today i'd like to do it have a ploy a mandate individual mandate we have employer mandate some relief we have a hardship exemption for individuals it seems reasonable to me to have a hardship exemption for small businesses and i'll yield back my time i'd like to ask a question but before i do that i think it's just important note that as you describe this this legislation to us while it may not make a lot of sense to someone watching this presentation because they don't have the legislation before them or haven't had a chance to isolate and analyze each provision that you're describing i think at the end of the day what we're saying is for a country that has people that have learned to live sicker guy younger and pay twice as much as people around the world are as compared to other people around the world who live in an industrialized country like ours we've said enough is enough and we're going to try to get there by being fiscally responsible as we reform the system and try to contain costs for americans who try to access their doctors and get give them quality at same time so i appreciate the work that you're doing to give us the detail and the devil in that detail and w most people may not understand precisely what's gone on over the last several hours soon we're going to get two amendments which i think most people will understand a little bit more and so i have only one question i  direct to you and it has to do with the fact that we're trying to figure out a way to cut costs not just in medicare but generally speaking in the health care system and one of these we found is that too often providers whether doctors or hospitals or others find that the best way to make their money is to get reimbursed as much as possible for a procedure or treatment they've provided and if it's a low reimbursement you're not going to make a lot of money unless you do it a lot and what we found over a course of years is that too many providers are repeating the service more and more and way beyond what we need to have it repeated to the point where it's that providing any good outcome to the patient or any better outcome but we still reimburse and so our costs have gone up so we're trying to control utilization one of the ways that we want to do that is to bundle what we call bundling services talking about a medical home and so therefore a doctor or a hospital is no longer responsible  for that one episode that one visit by that patient who cares what happens to the patient they're after know now here for here on forward with this reform you will have to know what the outcomes will be for that american patient because you're responsible to make sure his or her health is improving after coming through your door and exiting your door and so we're going to try to bundle services much more so just that one visit with one doctor visit with a hospital visit with a specialist it's bundled we're also talking about bundling the providers having them grouped together more so we try to get them to be more coordinate in their care i'd like to focus for a moment we spoke mr neal and i spoke briefly about the bundling of services and how we want to make sure that that is done well now the bundling of providers there are all sorts of patients some are very very healthy probably will need to see a doctor for quite some time or they say don't think they will others need to see a doctor virtually every week if you have  kidney disease and you have to undergo dialysis you have no choice if you have heart problems you have no choice if you are a cancer patient you have no choice and there is some concern out there that for chronically ill patients  america that if we're bundling services will they immediately have access to the providers they need because they're not like the young healthy twenty five year old who is going in just for the physical and therefore access to a primary care physician would be fine they actually need to go directly to that provider that's been providing the dialysis for example and how do we make sure that for those folks who have a chronic condition that once these reforms go in place that they will not find a letdown in service that they need for something that's existed for a while is chronic and therefore needs some good specialized attention i think  i think you're talking about are the provisions that we have to encourage better care coordination and accountability for the providers and especially with a focus on taking care of people who have chronic conditions like someone w heart failure or the other kinds of conditions that that drive spending and really make it difficult for providers to coordinate their care and we have a number of things and in the bill to get out that from promoting the medical home in the two different ways that we discussed in the walk through to these accountable care organizations which enable groups of providers to get together and sort of share their responsibilities the risks and rewards around taking care of patients there are separate initiatives in here that also get and i think the important thing to be looking at from the patient perspective is that the these groups will form out of the alliances of the providers we do not in vision a situation in which a beneficiary no longer has access to their providers so if you take a stylus of patients for example there's nothing in this that precludes a dialysis organization that's been part of an a with the other kinds of providers that would be if they wanted to deeds sort of specialize on taking care of people with end stage renal disease you know likewise you envision cardiologists getting together with the internist and and other folks there there's a tremendous amount of flexibility and encouragement in the provisions here to really try to transform the delivery system that we have in medicare today using payment system reforms in the delivery system reforms to get  he spoke of who does everything right is very healthy and so forth if that person had epilepsy or if he or she had a child with juvenile diabetes this law would also prevent that person from are you planning to also include projection as to what the effect of employment would be if family policy doubled in cost over the next period of time as  somewhat of a comparison as to what the cost of doing nothing would be congressman that we noted in our brief on issue brief on this topic that the widespread view among economists that the cost of benefits provided by employers to their employees come out of other compensation cash compensation as employees would otherwise perceive so the rising cost of health care the health insurance or the last several decades is viewed as a principal reason why cash compensation has increased so slowly and that's important thinking about effects of health reform and health costs enough future system that again much of the costs are borne of health insurance that employers pay but we think of as employers paying actually come out of employees pockets and we speak to that in this commentary that we're that we're preparing the way i understand the kind of conceptual underpinnings of the bill is that one of the great insecurities hanging over the people of our country today is access to health care they don't have coverage or worried about if they do have coverage they may be under sure and if they're not under insured there still may be worried that job loss could could leave them in a situation where because of a preexisting health condition they could not get insurance if they fell out of the president's journey policy that they have so the bill at vance's access to insurance through insurance reform and them deals with what would be unacceptable premium increase by making certain that you have universal coverage which brings them into the risk pool the younger uninsured that are a great great great component of a spreading of risk across the entire population but to the extent then you bring in universal coverage you need to make some subsidy available so people can afford the premiums that couldn't otherwise afford the premiums and if you do that then you need to find a way of paying for it hence cost savings and revenue increases so within that conceptual framework of the bill i think the bill advances in a very substantive way extraordinary health reform where i fault the bills and a couple of places final portion of my question mr elmendorf i'm worried about system delivery reform that in my opinion is insufficiently attended to in this bill i believe this bill  today is not a true system care coordination is where specialist care is favored over primary care quality of care is often poor and costs are high and increasing at an unsustainable rate and quote no even looking at the reforms advanced in this bill well first of all do you agree with hackbarth assessment of things and is that assessment changed substantially by the bill before you so congressman  latest quotation but also over time that the health care system simply the medicare part that they study most closely are beset by inefficiencies is correct and shared by a wide range of health experts i think the challenge that is faced by the drafters of this bill and all people who are trying to improve the efficiency of health care system is that the date of understanding among experts is not sufficient to prescribe the precise changes exactly who should be paid more for what under what circumstances are paid less for what under what circumstances not sufficiently well i'm saying is not sufficiently well developed to prescribe that with great confidence that will be prescribe correctly in my view one of the strengths of this bill as it's drafted is that it establishes demonstration projects and pilot projects in a variety of ways variety of areas cannibal care organizations primary care physicians medical the countable care organization component but do you think that perhaps ultimate universal adoption of some of those reforms would be more likely the executive branch was giving a little more authority relative to studying innovations and then applying those innovations that advance quality care but it worked more in a more cost effective way yes i saw i was as i was i was saying that but i think there are ways that more  risks actions could could be could be taken in the legislation one is to grant greater flexibility for the h h s secretary or the c m s administrator to move payment policies in new directions as evidence comes in i think it's again a lot of health experts would agree that micromanagement of the medicare program by the congress slows the process of learning and adopting what has been learned there are also other possible changes that could be made that would have i think tend to reduce health spending one would be changes in the cost sharing in medicare another would be changes in the tax exclusion for employment based health insurance and as you know we've written on a variety of places about a menu of options of course the choices are yours we don't make a contest amend back we don't make recommendations but there are other options i think that are on the table but the challenge is very acute and i don't want to as i try to explain to congressman davis before i don't want to downplay the effort that is made here that's a different question from asking whether the effects of the things that are in this bil agreed that members who have not had a chance to inquire that he he would do it and so i just want to go over the list of one kind you haven't  walk through with this sort of piece of legislation and it's an exciting time because i think all of us whether you're democrat or republican share the goal that the key to reform is how do we make health care and the axis of health care more affordable to all americans those who don't have coverage families who do businesses that are trying to provide coverage and the tremendous cost impact that rising health care costs are having on public budgets at the federal state and local level so one of the keys to reform is how do we start containing those costs w still improving the quality of care that's given and i think there are significant measures included in this draft legislation on delivery system reform that shows examples of successful models of care that can be applied on more national basis i mean the work that mr pomeroy and others have done on the cannibal care organizations a classic example medical homes bundling those type of issues but i think what ultimately is going to drive a lot of the in lot of the creative thinking by our providers is figuring out a way to reward the quality of care that's given as opposed to the volume of care that's given and that's really the rub of this issue and mr elmendorf you were just talking briefly about some additional steps that we can take that encourage system to lose very reform so its value base is oppose the volume base and i think if we can figure out a way to peg medicare reimbursement rates that flows to the quality of care that's given and tell the providers you figure it out you figure out how you're going to practice medicine to be more efficient more cost effective yet still produce good results that would probably do more than any a c e o or medical model or any other pilot program that we can do because let's face it we're all capitalists and people are going to say show me the money where's the money going to flow and that's going to encourage certain behaviors in and so the settlement of in your opinion is a way of better structuring the reimbursement system that does reward the outcome or the value of care that's given and starts weaning us off from this outdated fee for service where the dollars are flowing to the quantity or the volume of care as it does today congressman i think you're just right to emphasize the importance of quality and i would that play into that the importance of measuring quality and there's a lot of practical on the ground work under way around the country at developing measures of the quality of medical care and as greater confidence is gained in how to do that will be easier to make payments dependent on the cheating certain quality benchmarks i think the crucial aspect of this is  other people have mentioned not paying per service provided but paying in a more holistic way and i think the accountable care organizations are are  leaving approach to do that if it makes a set of doctors responsible for trying to keep somebody healthy and to keep their costs within bounds and the bill is taking steps to learn more about how to do that thinking and that's the challenge here which is that put the congress or if he has secretary you ever had with already a much better position let me ask you that clarify one point i think you mentioned that there has been a lot of ground work a lot of work done already as far as quality measurements affect the institute of medicine you know just published reports and all six or seven  into this very issue there's been agency within c m s to look at quality measurements in fact the provider community themselves and a lot of specialists are developing these metrics on quality already so i just gotta believe that  of the work that's been done already that we're closer to a quality based measurement system today than once and then when we have then i also i mean the other example i think in the legislation is and i'm not sure of this how this is been and i think it is such a crucial aspect of what we're trying to accomplish because without those type of system reforms signing greater cost savings while increasing quality the affordability of the coverage issue is going to be that much more difficult and perhaps even unsustainable in the end would you that's uncompensated care but those costs are usually shifted others in the system would you agree with that we think that some of those costs are shifted in fact as the evidence on cost shifting as we read it suggests that much less has shifted than number of uninsured people under this legislation would reduce that aspect of cost shifting that's what so has his c d o been able to do any analysis for example on how much the caution if for example the private pain insurance  folks would would do the challenge here is that there are also that that part of it means less cost shifting to extend it occurs to other private payers but there are other piece of legislation that would move cost shifting the other  cost shifting from medicare patients there'll be more of that for them so there are different flows of pressures in the system and we have not been able to  up quantitatively our but there are pushes in both directions and so we don't think that this is going to have a substantial impact on private insurance premiums on balance because the right then there are these different flows in different directions and in our view the evidence i call shifting suggests that a less of that happens there are also other factors i should say that affect private insurance premiums in this proposal insurance market reforms and but that's my view but the question in part let me ask you about a much quoted lou a study that was out there before the house bill was introduced and they were projecting that literally over one hundred million people would be thrown out of their private health insurance is i looked at your in the way we did the analysis and in our sort of underlying view of how things would happen compared to the lewin group and i think an important difference was they seem to be assuming a very a much larger difference in the premiums between the public plan and a private plan than we have estimated and although we seem to start with some of the same data differences in payment rates we ended up in a different place and i have to admit we haven't discussed with them the basis for that but i will tell you where where we come out is in particular in this bill a difference in the premium of between the public plan and so the average private plan available in the exchange is something on the order of ten percent and this is more consistent with the data that we were relying on also that we see in medicare and in particular the medicare advantage plan which is actually sort of you know real world data which we can examine to see how the cost of a public plan that is you know using medicare rates a rate similar to medicare would compare in its premiums to private plans so that was one that's one factor that that would affect the difference in our  and i think another important factor was the lewin analysis assumed anybody could buy into the public plan who wanted to as you know in this proposal there's the so called fire wall into the exchange  we've talked about a lot of good ideas here mr elmendorf if you could just name one sort of significant system delivery reform idea that's out there right now that you would score that you would give us credit for through your scoring so  i mentioned a few several possible directions you might go and congressman one of the one that i said would be greater flexibility for the h h s secretary to cut you off because the time that would that were in order for you to score with her up to be a trigger provision was seaquest ration or would you allow that score to take place if we just directed the secretary to take those kind of actions leave the secretary were directed yes one sector were directed to explore new payment methods and were given the authority to make changes in payment methods we would score that as a saving would not need to be a trigger if there were some trigger that would create perhaps greater pressure and might under our analysis independently take effect so the savings might be larger in that case but it is not necessary just the flexibility for the secretary to proceed in this way would generate some savings mister thank you i just wanted to did make it to reinforce a couple of questions and issues have been brought up before i also think that this legislation is potentially transformative both in changing the way we structure our delivery system and encourage innovation and efficiency and greater quality and reduce costs for all of us both in medicare and of course in the private system as well and in fact they all talk about extending coverage to literally i think c b s numbers are thirty seven million americans reaching ninety six ninety seven percent and americans being insured i think we haven't said that enough i feel like we should all just keep repeating this what you know we're really here on a very dual track which is to contain costs while improving quality and extend coverage to essential all americans it's quite transformative and i think potentially very exciting i did want to and i'm very pleased about the work that's being done in primary care and the efforts that are done in this bill to incentivize coordinated care and less fragmented care just falling on the i was surprised michel matter of that you didn't in answer to mr van holland when he asked you just give us one example  i guess i would have i have two questions if i may want is that there are actually scored savings from delivery system reform so it was like to see us continue to encourage the secretary maybe do more create different kind of benchmarks but would you agree that there are savings that you have scored from delivery system reform in the legislation as i think that's right again right now we're working our way through all of the medicare professions i can't yes there might be additional one yet but i but you that yes there are in could be more specific the other issue that's been brought up frequently because by the owners of the aisle that the public option in this exchange is going to in some way on do private insurance in this country could you give us some numbers this is directed to meet you mr l's or mr elmendorf that we are keeping private insurer and for most americans because they're going to be employer based coverage and that is by and large private insurance by private employers by private insurance correct that's correct and that can be true for you going to give us a percentage of how many americans that is well so a number of us to make that will actually be a slight increase and employment based insurance under this proposal well there are some employers who might stop offering and have their employees go to the exchange other employers who would offer who would add offers because of demand from their employees so there are a lot of different gross flows underlie the net changes but the net change has shown as an increased employment base for i because your chart that you gave us so yesterday shows that there's actually an increase in employer based insurance secondly in the exchange your estimations are that in the exchange which will be a level playing field of private insurers offering options to americans these forty or fifty million americans and maybe more who don't now have insurance options will now be able to buy private insurance and then in the exchange right in our judgment we estimate that about thirty million americans would end up in the exchange write home about two thirds would be buying private insurance coverage and about a third would be joining the public plan so that's about ten million americans might join the public plan that's our estimate yes and twenty million more will buy private insurance in addition to all the others that will continue to buy private insurance some of the twenty million buying private insurance the exchange will have come from current private policies got a individual or non group market but then when you say that in fact we're going to continue to have a very strong private insurance market yes that is our judgment and so that we're adding a public option to make sure that there are options for americans to buy insurance but not the exchange and through employer based insurance interest ok i think that's all i wanted to ask and there is so much in this bill and i think much of it to be really applaud the committee and i applaud the chairman for the incredible work on a very complicated  this walkthrough and all of your efforts i would have liked that we could have met in a week when there would have been a full review of the analysis i realize it's not any fault of the c b s office but this schedule that we're on but i want to thank all of you for patiently answering questions today and shedding some light at least on this very important legitimate thank you can i do like to join with my colleague from michigan thanking the panel for their patience and their diligent this debate is a profound one and that this vote may possibly be the most important vote we take in our service here and cons i agree it's a big issue it's a big debate i have a number regrets let me list a few bill today as read this bill i also regret the fact that the congressional budget office has just told us they don't know what it costs so we're about to vote on a bill that we haven't read and we have no idea what it costs and what's also been quite amazing in this debate as this year's proceeded is the rhetoric has been so sweet the words work really well the things that are said about this bill sounds so good but i don't think i've ever seen an issue where the rhetoric so clearly contradicts the substance of this legislation no one under two hundred fifty thousand dollars of income will get taxed at all there's a bunch of taxes in here that taxes everybody if you like what you want if you like the insurance you have you can keep it well that's what this amendment is all about this amendment is very simple it strikes the public plan it says no government run pla now i enjoyed the questioning by mr van hanlon holland and miss wards of c b l and i wish they were still here let me explain why it's a stacked deck let me explain why the public plan is really a case where they are the player in the referee in the same game let me explain why it's really virtually impossible for a public plan to compete fairly in a level playing field with the private insurance market for big advantages the public plan has number one public plan does not pay taxes the private do number two the public plan doesn't have to have large capital reserves the private's do number three the public plan does not have to account for its payroll and benefit costs of its employees the private sector does number for the public plan gets to dictate the prices it will pay for services and so clearly the private plans do not now there is a debate about actuarial firms what they say what c b s says let me just tell you what a couple of actuarial firms who are reputed often cited by both sides of the aisle who do it for a living one group tells us in three years one hundred twenty two million people will get pushed off of their private health insurance two out of every three americans will lose what they have and get pushed on the public plan because of all of these factors because of the cost  cost shifting is that big of a deal they don't think it really occurs if we're underpaying hospitals by thirty percent with medicare and under paying doctors by twenty percent of america or where are they going to make up that difference you know studies show that a combined family of four will have higher premiums of three thousand six hundred twenty eight dollars right now because of medicare and medicaid under payment and so we're going to exacerbate that underpayment let me read a quick line from an editorial today in vespers business daily i think it probably pretty much gets this right well the public option won't be an option for many but rather a mandate for buying government care a free people should be outraged at this advanced of soft tyranny pretty harsh words these are words that i think are appropriate for this moment why don't we say let's make private health insurance work why don't we work together to make it affordable for everybody why don't we pass legislation to address the problems we have people that don't have health insurance people that have preexisting conditions who can't get it and the fact that it's costs are rising so much we could do that together if our but genda was not to have a government takeover of health care with the public plan no matter what actuarial model you look at it goes in that direction in this debate direction is destiny and the destination of this bill is to have the public plan crowd out the private sector i am looking forward to a vibrant debate on this point but i urge my colleagues to think twice about this moment think twice about the moment when you're going to vote for this bill and think about what your constituents going to say to you in three or four years when they have lost the health insurance that they have eighty percent of americans like what they've got already let's address those americans who don't like what they've got and not take these things away from those who like what they have this is a start mr chairman i would  posed the amendment would like to correct for the point that my friend from wisconsin brought up had merely the public plan would be tax free but there will be many private plans that are not for profit companies they will not be the only tax free as far as capital reserves they will be built in to the premiums charged by the public plan and will establish whatever reserves are required by the various insurance commissioners as to payroll and benefits they will be fully paid for by the premiums paid into the public plan and there will not be any government subsidy they should to the plan there will be perhaps the participants but they could get the same subsidization for going into plans and as to dictating prices in so far as i'm aware  plans that have closed panels are limited panels also dictate or negotiate prices so the public plan will be no different except that it will create a new choice many areas of our country are dominated by just one or two private insurance jurors today it will operate on a level playing field it will be subject to all the market reforms and consumer protections as the private plans it will be self sustaining and there is one other thing that it has been a driver as the people who operate for innovative delivery reforms that we have had just go through the delivery reforms providers accountable for productivity improvements physician payment reform payment incentives for in the for efficient areas improve physician quality reporting incentivize hospitals for preventable readmissions that go down the list increased reimbursement for primary care providers eliminate cost sharing for preventive services these are the results of a creative flexible quick moving plan which should give the public plan the emphasis that will be followed i think by the private plans to make good changes for the delivery of medical services so i would urge by colleagues to vote against the amendment and allow a plan to create the kind of competition that does not now exist in the private market so that all americans will have the right to participate in a plan of their choice but that there will be a choice that will drive innovation creativity chairman i strongly support the amendment offered by my good friend mr ryan this amendment goes to the heart of what we believe is one of the most serious problems with the bill before us the so called public option which is really a new government run plan that what threaten the health coverage of more than a hundred million americans and put our country on a path to a government single payer system i recognize that this is a controversial statement many supporters that a government run plan insists that they're not really trying to have the government take over the entire system but you don't have to take my word for it jacob hacker is a political scientist who is credited with developing the idea for the government run option here's what he sa about it in a speech last year quote someone once said to me this is a trojan horse for single payer and i said well it's not a trojan horse right it's just right there i'm telling you we're going to get there over time close quote common fan should tell us the same thing the majority says that the government run plan will compete with private insurance companies well how do you compete with the federal government when the government is also setting the rules for the competition there will never be a level playing field there are any number of ways for the government plan to get an unfair advantage the bill before says provide it won't be mandated to participate yet the government can make it very unpleasant for those who walked out the bill says consumers won't be forced to enroll in the government plan yet the commissioner of the exchange can auto enroll them and that's what they're not even talking about all of this he hadn't subsidies that come in apply whenever the government gets involved in private business make no mistake about it this government run plan will be the camel  nose under the tent for a complete government takeover of our health care system it will mean government set prices for physicians and hospitals while government bureaucrats take the place of doctors and deciding what medical treatment patients will receive and it will mean sacrificing much of the man or go innovations in which america is so proud to lead the world i urge my colleagues to reject this dangerous course and pass the ryan amendment th and this proposal simply will not do that it is not a trojan horse for anything except to provide care for all americans and also to provide innovation a major reason for a public option is to drive innovation to drive a change in the way we deliver systems you all say you want that and yet when it comes to actually supporting something that will help bring it about you oppose it that there will be about nine million people in this plan it will be a small percentage less than four percent of the insured population at the time that's what she has estimated carefully so when you bring up this imagery to try to scare people it simply won't work and the public is already on to that tactic if you ask the public do they want this kind of a public option they decisively say yes and so there is such an urgent need for health care reform in this country and so much of a need for competition with the insurance carriers i can't believe anybody seriously no finish says that the public option dictates whether private companies don't that's simply not true and ash providers if insurance companies don't dictate what they'll receive and if they're polite they won't last so you can't scare us away from taking steps it will truly let's be clear what the legislation is trying to accomplish and we're trying to accomplish for the very first time a true national purchasing pool or exchange with a menu of health plan options for people to choose from and whether we like it or not there are a large number of people in this country who would like the option or the choice of a public option in this exchange and we've been trying to do our best under this legislation to make sure that if there is a public option it moves forward that it competes on a level playing field with private plans same reserve requirements has to be self sustaining same actuarial requirements no dual referees well would be running the public option can also be the one in charge of running the national exchange and level that playing field now an area where i think my friend from wisconsin may have a legitimate concern and one that i share is whether it makes sense that the peg the reimbursement under the public option with current medicare rates this is especially tough in those high quality lower cost region where there's been chronic under reimbursement in medicare rates for a very long time and why would we lock in a system and i think there's more work under this bill that has to be done in regards to the adequacy of pigging public option reimbursement the current medicare rates those voices are being heard right now and i think before this is ultimately we're ready for primetime it's an issue that's going to have to be addressed but as far as competition is concerned let's not fool ourselves one of the reasons people want  public option is because been tremendous consolidation with health insurance the delivery of health insurance in this country and then in too many areas there isn't true competition right now but people would like that choice because some of them may not want to choose a public or a plan in the exchange that's run by a private insurance company who have different motivations different business plans profit motives that drive a lot of the decisions too so ultimately this is all about consumer choice and whether you like it or not there is that recognition in the country today that there are a lot of people who would like the choice of a public option at the end of the day instead of having to be forced to choose a private plan as their t the organizations that are involved that they can be anybody they can make it work i believe reforms needed in our health care system some americans don't have access to affordable quality health care families are struggling to pay for the rising cost of health care and to many small businesses are deciding between hiring workers or paying health benefits we need to find real solutions to these problems that hit every household every business on main street across the country however i'm convinced a government takeover of health care is not the solution our country wants needs or deserves i've hosted numerous health care listening sessions in my district hear what the constituents think and you know what i heard no matter what health care problems are facing our what health care crisis are struggling with i heard over and over and over again they do not believe more governments the answer and you know they are right the problem our current health care system is that we don't spend enough money it's that we don't spend it wisely we don't need more government and interference look at that chart that thing is a mess i mean there must be one two three four five six seven eight nine people that tell us what kind of health care you're going to have so what is a public plan nobody knows i can't think of one instance in recent memory where the federal government getting involved in a problem made things better once bureaucrats get involved in a situation everything always gets worse mr chairman i'd like to ask unanimous consent insert in a record chart you're looking at that shows how much government bureaucracy is economic committee and they painted this we say there was a paintbrush that you can recognize the colors are red white and blue that's america and it was is a whole lot of essentially i'm going to oppose this amendment even though i have very serious problems with the public plan as tain't in the bill the reason i do is because it does not pay fairly pays on medicare rates and there are portions of the country that are underpaid by medicare presently so you don't move forward constructive health reform by building on a flawed foundation that needs to be changed and i am completely confident that this bill tying to medicare rights is not going to be the bill that ultimately goes to the president at the end of the enactment process inconceivable to think in my own opinion that we would ultimately pass  reform the line on medicare rates for a public plan option it will be enough to keep me from being able to support the bill today but that is not to say that public plan option doesn't have a role if one is constructed that competes fairly and effectively  suggest that the american people are absolutely locked into the existing health insurance structure we have would be completely at odds with any reading of the constituents i represent they think that insurance short changes them at every turn and more of a competitive presence would be a good thing i just said the competitive presence created in a new public plan option or a cooperative or whatever ends up in the final legislation needs to play fairly and that means it cannot be based on an insufficient medicare rate formula but this amendment goes differently than that this amendment takes it out and tyrolean leaves us just with the same all health insurance companies we now know so w and that's why it should be defeated thank you mr  davis from kentucky is recognized thank you mr chairman mr ryan's amendment would strike the government run plan from the underlying bill a government run plan is simply unworkable it doesn't get to the root problem affordability nor cost the bill in front of us today it's called america's affordable her choices act i don't know who came up with the name or how they define affordable but well over a trillion dollars and i consider affordable in flatwoods kentucky bring kentucky or since the end of kentucky tens of millions of people if they're moved to a government plan as studies predict you might as well have a card that says you're covered but in my district if you can't find a provider will see you it's worthless that's not coverage and the reason is this bill does nothing to address the core system reform issues that some of us have been talking about literally for years indeed by not fixing the process at the core which this does not we're going to increase cost of the process and overhead we're going to limit reimbursements and reduce them and ultimately you can't end up with anything but a ration care system in order to have true reform you have to do three of the following things number one reform and reengineer medicare in the center for medicare services which is not in this bill second true reform of the private insurance system to allow improved competitiveness reduce costs and increase access for small business and individuals and finally the thing that is outrageous that has not been addressed here is meaningful medical liability reform which is necessary to free our providers so that they can function and do their job i would ask you this is one doctor in my district said jeff who's going to sue mean hours of government going to get sued or is it going to be the doctors still liable when their mate when we're mandated and how we can diagnose and how we can treat without all three of the things that i mentioned we fail in our shared goal this is no game this is not about politics and partisanship it's serious it's about human lives we're talking about spending well over a trillion dollars just to get the bill and the public plan started we don't know even specifically what we're going to get in return or what the long term cost will be as evidenced by the head of the congressional budget office earlier we don't have the details we don't have the facts in front of us today because the process is being hurried along by artificially imposed timetables by people who have never worked in the professional health care world in their lives this legislation will have generational impact so we've got to slow down and take the time to consider the bill and ask the real experts the ones that give the health care to our citizens not think that professionals who are subsidized by wealthy people don't take the three o'clock in the morning call to go to the e r we need to slow it down and get these practitioners in the field in here i want to close with a quote from an email i received from the c e o of an extraordinarily well run rural hospital in my district we absolutely cannot reform health care in this country if we don't get a better grasp of what drives the health care cost i am so frustrated because too many of the decision makers have little real knowledge of what needs to be addressed it's not a simple with cutting payments to hospitals and doctors who's going to peel away the layers that find so much of the costs i have been operating the hospital come from things like the rules regulation unfunded mandates hidden energy costs malpractise costs that do create defensive medicine and on and on i could go i greatly fear for the medicare patient as more and more doctors speak of closing their practice to the aging and complicated patients other than war in my lifetime i don't believe there's been such an important task at hand and it's imperative that the voices of many are heard close quote a government run health care plan will not live up to the promises made by its proponents that her health care providers reduce quality all of a gargantuan cost to our children i encourage my colleagues to support the ryan amendment and embark on an approach that will yield true reform improve thank you mr chairman and i share your enthusiasm for putting the chart in the official record that chart by the way that was it wasn't from the joint economic committee it is joint economic committee republican staff and i do think that this is kind of a modest glimpse of what some of the elements are to try and rationalize a system that if we locked this committee in this room with some of the smartest bill drafters and experts of our choosing in a week we couldn't come up with a  chart that would reflect the byzantine non's system that faces american consumers today a hodgepodge of cost confusion and gaps and inequality what we done here as i think make a an initial critical first step to try and provide choices to people who don't have meaningful choice i don't think this bill's done by any stretch of the imagination i don't think any of us do it is i think an important step moving forward but to pretend that somehow throwing a lot of boxes and colors on a piece of paper  somehow significant and confusing and determinative of whether or not we should have a public option particularly for the one half of american states that have no meaningful insurance competition where one company has fifty percent or more of the market is laughable i am pleased that the staff walk through the elements and i hope everybody has does go ahead and correlate the pieces that are in there because it gives you a sense of what's going to have to happen to achieve actually much of what there is a consensus amongst people on the committee on both sides of the aisle i think the bill we have before us is a start in that direction but it would be unfortunately handicapped if we were to adopt this amendment and i strongly urge its rejection misjudgment and i support the ryan amendment to strike the government run plan i'm intrigued by all the conversations were heard over the last several months about choices and options for the american people the american people will make the choices their employer does and let me tell you as some of these employers are going to do this government run plan was priced at eight percent of your payroll if you're not providing your coverage for your employees you pay eight percent your payroll the typical small business pays eleven to fourteen percent of the payroll about four weeks ago i had two friends of office both had been c e o s of fortune one hundred companies between those two companies employ about five hundred thousand people what percentage of their payroll went to their health care costs and they've all said between fifteen and sixteen percent i said if you could pay the government eight percent and they would pick it up would you end your program and turn them over to the government plan they said in a heartbeat that is what this is designed for to drive business owners employers into making economic decisions for their shareholders that wind up with their employees in this government run plan and it will succeed  linda why would the government possibly have a conspiracy to remove the obligation of employers to assure the employees why would they want to but let me also say that i oppose this amendment strongly as a matter of fact i think public eye is the most important part of the the legislation that we are considering i want to protect all of the individuals who are currently in but i also want to bring in those individuals who currently out and i don't think that we can have the balance that we need unless we thank you mr chairman i support the ryan amendment for reasons i outlined in my questioning that i think the government option is really poorly conceived in this is a recipe for financial disaster with that i will yield the remainder i wish my friend from wisconsin are still here he said he's concerned with the concentration of health and health insurance options in america wow does anybody believe that after this bill passes becomes law we will have more options in addition to the public plan yes we're federalizing the regulation of health insurance we're ok that's one person ok all right i don't want to see a show of hands let me make my  we're federalizing the regulation of health insurance we're adding new costly mandates like guaranteed you should community rating making health insurance more expensive you think the thirteen hundred i'm sure is that are out there going to be other can in this kind of environment let me walk us through what decisions will be faced by employers employers are going to be looking at a situation where the insurance they have will becoming more and more expensive one study says that right now with medicare medicaid costs should think it's eight point eight  billion dollars a year another study says that at this passes the quash if thing will increase private insurance for a family plan by an average of three thousand six hundred twenty eight dollars so employers will be faced with a situation where more people go on the public plan the public plan underpays providers they make it up by overcharging private payers c b o t isn't think there's much cause shifting everybody else you talk to does just think about it ask any doctor or any hospital in your district and they'll tell you because shooting occurs and so is this cause shipping occurs employers see their insurance going up and up and up at unpredictable rates they make a choice i can keep paying this high expensive high increase cost insurance that the government tells me exactly what i have to buy or i can just pay an eight percent payroll tax index that inflation predictable and don't my employees in the same kind of health insurance that i have to buy them anyway but this one's for eight percent you don't think are going to make that decision some people say well in a tight labor market they're going to be competing for workers and so they want to offer this we don't have a tight labor market ten percent unemployment what employer is not going to dump their employees on the public plan as soon as the price of their insurance exceeds eight percent of payroll where it already does the problem is this mr chairman it is impossible for the private sector to be able to compete fairly with the government with all of its muscle and all of its tools and the end of that process we will see a situation where people will have lost their choices employers will not be offering insurance for their employees they'll be saying i'm paying the payroll tax you're going into the public plan and you know the payroll tax rate at the end of the day in america will be will be twenty three percent we will have a twenty three percent payroll tax in this country twenty three percent of wages going to payroll taxes to put to pay for this public plan this is not a good idea and if you come from places like where i come from where medicare underpays hospitals and doctors substantially who is going to want to continue offering these services so i would just urge my colleagues get rid of the public plan and let's work at fixing the private health insurance market so that it works better and let's not take away all these insurance products that people currently enjoy as close as augment and you know i have the deepest amount of respect for you but only clear what you are against and you're one of the few people that have a plan on the other side but i do hope that before we conclude this markup you might be able to share with a super you persuaded your side that you have a better way because i don't care what legislation we have it's so easy to take a shot saying this doesn't work this is going to happen and twenty twenty three and at my age you know i'm concerned what's going to happen at the end this week but it just seems to me that somewhere between now and the conclusion of this legislation which is open to any positive thoughts that collectively you might come together to talk about it it's a long way between here and the president's asked what the chairman yields for i'm afraid that i'd like to get a vote on no miss short chairman let me as it's been passed out let me start with a description and a few words i think it's no secret that the ruling class excuse me congress has a track record of exempting itself from the very laws it writes for decades congress exempted itself from laws ranging from occupational safety and health and labor laws labor standards that labor fair labor standards  to some civil rights laws that recently i think we just exempted ourselves from cap and trade having said that former senator john glenn said that such exemptions are the rankest form of hypocrisy laws that are good enough for everybody else ought to be good enough for us our late colleague from illinois henry hyde predecessor to the gentleman to my right once quipped that congress would exempt itself from the laws of gravity if it could thankfully this practice slowed down after passage of the congressional accountability act and other reforms in the mid ninety's what i fear is that this legislation takes us back to the days when congress routinely exempted itself from the laws it passed like congressman ryan i'm troubled that independent out analysis predicts that two out of three americans with private health coverage w lose what they have be forced into a government run plan so much for promises that you can keep your doctors and insurance if you would like regardless of whether you support this or oppose a government run plan i think we should agree on this principle if the public plan is good enough for millions of our constituents it should be good enough for members of congress my memory requires that members of congress and our dependents who enroll in health coverage to do so through the government run plan what better way to analyze how the public plan works than for members to participate themselves mr chairman in recent months i've heard from many nevadans say and again and again that congress refuses to play by the rules we oppose that we impose on the american people fact i recently had a town hall meeting in las vegas asked literally hundreds of individuals how they feel about congress being having to live within the restraints of the restrictions of this piece of legislation more than seventy five percent thought that congress should be in the government run plan i believe our constituents deserve better  there are two parts to this amendment one would be attractive the proponent of the amendment has not yet had the opportunity to vote for his own pay raise and then not take it i think there may be two or three of our colleagues in that position and this is part of that nature i'd like to also point out that the way it's draft did where it says a member of congress or a dependent of such member would be that many of our colleagues who have retired and subsequently pass people long serving members on both sides of the aisle whose spouses are entitled to some of their retirement benefits it would dock those out and i just say i'm not sure but the name of the bill clarifies choice and no one is forced into the public option and members are eligible for the public option  if they choose to pay full freight and take it to suggest that we should in fact pass an amendment which says that is the only option open to us and our families seems to me to do away with the idea that we have insisted that people have choice or if they like the plan that they have they may keep it  it's my understanding that the blue cross option which to start family has is similar to what the public plan would be so i can't tell you whether that would cost me more or less but there are people who may be in the postal plan or one other plan where there is a major difference it's to me if we believe that people should have a choice of plans both private and public that this amendment would frustrate that so i as i say both from the standpoint of trying to punish ourselves any one of us who chooses voluntarily could go in to the public place just like any one of us could refuse to pay raise if we faked it had has ethical advantage to us but i just suggest to you that we should got begin to limit choice because i think that's one of the underpinnings of this bill that people will have a wide and full choice and none of us would qualify for the income subsidy so that's not the issue here it's available to us if we choose to go into it it seems to me that would should be our personal choice and if we choose to make that public it might give us some political support or opposition i don't know but i am concerned about the harm we would do to people who came before us who used their retirement benefits as part of their planning i think that's terribly unfair and for each of us as individuals i would like to preserve the choice so i'd ask that we defeat the amendment we debate the best way to reform our health care system and ensure all americans have access to quality health care some in congress insist that government run health care plans is must be included out ever there are several studies and sources say including a government run health care will have some real consequences one study says a government plan like the one included in the bill we are debating will force one hundred fourteen million americans out of their current health coverage and into this new government program other state the only way a government run health plan survives the long haul is if the government starts rationing health care in two th seven in ontario canada want to have million residents could not find a primary care doctor that would treat them small towns and canada have town lotteries where residents can win access to family physician in england five year cancer survival rates are far beyond behind those here in the us i strongly believe there are better less expensive ways to make health insurance more affordable accessible and available than turning it over to the federal government and washington bureaucrats i know not everyone in this committee or in this congress for that matter agree with me on this point i know there are others who are convinced a government run healthcare won't sacrifice quality and won't lead to rationing that's why i support this amendment if a member of congress votes to support the government run option and that members should be automatically enrolled in it if members of congress are convinced it's a government run option will deliver the same quality of care as their congressional health plans and they should be the first in line to enroll we here in congress must stop asking the american people to make sacrifices that we ourselves are not willing to make and that is why i believe my colleagues should join with me in supporting this and  if it's good enough for constituents or not be good enough for us if we're asking all these people in the country to get into this gov run plan if people are going to go into this government plan c b s says six million people are going to lose their private health insurance and go into it even c b s says that then we ought to go into it my point is we ought to have the same experiences that our constituents are having so we can be better representatives let me just mention the comment the gentleman made who thinks it's going to hit former members spouses the text reads this in the case of an individual who is a member of congress or a dependent of such member beginning in year one notwithstanding any provision of law and it's on and so forth why don't we pass a moment and then just add the word currently when we go to rules committee i think it's clear that this applies occur members of congress but if there's any ambiguity to that let's clean that up the question before us now is this should we live under the same rules we're passing for our constituents should we as members of congress have the same experiences they have so that we can be better representatives i think we ought to go to the same kind of health care system that we're imposing on the country so that we can understand it better and be better represented as with that i yield gentlemen is we do have the same requirements that our situations have and i don't know how you and i could live in poverty way that most of our constituents live and still be welcome at home but i recognize mr blitzer for the comment you might like to make thank you mr chairman my only comment with regard to this minute would be that i think we should allow the american public to know that we want to show them that we want to treat ourselves the same way we would treat them but i don't think this amendment does it this amendment simply says you have no choice you will take one thing our bill doesn't say you only have one choice you will take only one thing art our bill a distillation is a reform that gives american consumers a choice of plans unless the gentleman from wisconsin is saying that there will only be one plan offered this marketplace that will be created his amendment is stating something that is not the case will the gentleman yield just for clarification once i finish my remarks  be happy to yield and so there is nothing that says that an american consumer who goes into this exchange because he or she doesn't have insurance because the employer doesn't offer it or for whatever reason is a single intrapreneur or sole proprietor and doesn't have the money to pay for insurance out there in the marketplace and goes into this exchange there is nothing that requires that individuals to go into the public health insurance option not a not a thing and if there is if i if i do you go to the gentleman i'd like him to point out to me where it says that you must you are compelled to go into the public option and so if the germans a minute were accurate and simply said you must do what you're telling all the american public that would be in this exchange must do that be fine because then we would have any number of options private insurance and public insurance to choose from and that would be a fair representation of what the bill does but this amendment is simply a game is to try to scare once again the american public into believing that changing a broken health care system isn't worth it and i would say that what we should do is be honest and accurate with the american public and say to them you know what if this is good enough for you should be good enough for us and i'd be willing to do that are you willing to say i'm willing to go to the exchange but don't play a game don't give only part of the story is that you only have one choice you have many choices and the choice is the consumer's not mr ryan's not mine not a private for profit insurance companies not the federal government is that consumers choice and should be played that way so with that i will use this to get on the well tell me where in the bill for all bill if the jumma can point out to me where in the bill we require an american consumer to choose to select participate in this exchange go only to the public insurance option that is not my assertion the gentleman is missing my point my point is if we're creating a government run plan we ought to go into it ourselves rob it  it's if you're in it we're going we're asking folks to so that they get insurance if they go into an exchange we're not saying to them you have to go into party just as we were not telling him that somebody you must go into the you must accept the plan of private for profit insurance insurer x the charge is high rates and gives poor service we're not telling them to do that we're telling them you're going to have the choice this will be up to you to decide as a consumer which of the different competitive plans that are out there you will choose from among those will be a plan that has a public care to it character to it similar to medicare similar to the veterans programs and similar to what we provide through medicaid for low income and i think what you'll find is because this is based so much on medicare that you can use a good model from medicare to get a sense of what this would look like forty eight million americans today rely on medicare and it's not that bad a model but to make it sound like we are compelling people to go in one direction i think it's unfair characterization of the gentleman therefore i would like germany also clear absolutely afaik you appreciate you yielding i do have some fear that there are some that don't understand  the magnification of this particular piece of legislation and particular it's not the individuals are going to have a choice we're talking about putting thousands of millions of americans at the choice of their employers not the employees themselves let me reclaim my time let me reclaim my time for them to reclaim my time good enough for a time i think i would ask my friend mr heller to please point out to me where in the bill we say the choice of plans that consumers must take is the choice of an employer or the choice of the insurer or the choice of the government i can show the gentleman if he wishes in the bill the language says that the choice of plans that get consumers select are the consumers and so let's let's not treat them like they're infants americans can make good selections and that's what this whole reform is about letting americans decide what they wish to have it will be their choice if they like what they have they'll get to keep it if they want something different they'll get to choose what that different plan will be but no one should believe anyone who claims that we're going to dump anyone into any particular plan this is all about giving consumers choice whether someone wants to off the skate the issue or not this is about giving consumers for the first time in a long time the choice not the ensure not the government but the consumer simple if the public option is good enough for the american people then it should be good enough for the people this committee in fact we just voted down the ryan amendment that would have eliminated the public option so you know some studies are out there that show two out of three americans could be put into the public option one study shows that there could be one hundred fourteen americans put into the public hundred fourteen million americans put into the public option so if it's good enough for one hundred fourteen million americans and it ought to be good enough for all of you on that side of the aisle who just voted down getting rid of the public option furthermore i mean i actually don't think that this amendment goes far enough and i know this is not in the jurisdiction of our committee but many of view and this and this bill are saying that medicaid is ok that th unfunded liabilities of medicaid are ok that we want to push more people on to medicaid mr ryan myself and others have said that that we want to fix medicaid make medicaid better not have a second class type of health care in this country  you for a question sure mr or if i'm reading your m m a correctly it says that in the case of an individual who is a member of congress or a dependent in so far as the individual is an exchange individual the individual shall only be eligible to enroll in the public health insurance option why would you want to limit any individual whether a member of congress or anyone else to one option why not just say that individuals shall be eligible to enroll in any of the plans in the exchange that in fact i would make that an amendment to your him and say i think every member of congress that would be eligible for the exchange if i general knew yes well i would just say that members of congress should lead and i've heard from the other side of the aisle all through the cap and tax or cap and trade debate how america needs to lead i think members of congress need to lead and this is an area where we can lead and if we're going to have a government run plan members of congress ought to be and i yield back and i would just say i would just say that one hundred one hundred fourteen million americans could go into this public option we ought to be willing to go on to the public option i don't want the public option that's not what i want i'd rather fix medicaid fix medicare and deal with these problems not by adding a trillion and a half dollar program that's not going to be paid for now you'll back may i don't think the purpose of this amendment is to create a parallel between members of congress and the public mr b'seros correct of the purpose of the amendment or to do that he would give members of congress the same choice the public asked but candidly i think the animating purpose behind this amendment is to give members of congress a stake in how the public option works and to give members of congress a stake in making sure the public option is a high quality vehicle for the numbers of americans who want to roll in it will the numbers on the low side or the high side and i think it's something that frankly we shouldn't dismiss on this side of the aisle simply because it's been proposed by a member of the minority this public option is going to serve a significant number of our constituents we ought to have some stake in how it's developed we ought to have some stake in how it works and i'm of the members if there's a possibility they may enter into this government plan but i just want to support this amendment it would as i read it it refers to current members of congress and their dependents and the the government run plan i think it's a simple way of saying to our can stay she wants that the president congress like a government run plan is a good enough for them should be good enough for us too and that's been said so  just rise and support this amendment and  hide behind the widows and orphans of former members as an excuse to sort of parse off a responsibility and it seems to me ironic that that is raises the specter of a defense to vote against this amendment when we've retirement accounts another eight million person swing and now work we're going to hold back because of what widows and orphans of former members i just think we can do a lot better than that i think the gentleman from alabama raises a good point and that is that if if we are in this as i think we ought to be we're going to be a very early barometer of success or failure within the system we have been assured by the majority and time and time and time again implicitly and explicitly that there is no rationing no how no way under any circumstance not withstanding some very significant questions on that and it's my suggestion that we would be wise to be in this because if rationing does become does become and issue members of congress will be the first to discover it and are in the bass position to remedy it i urge passage of the amendment  thank you mr chairman i'll be brief and just in closing i want to get back to the theme of what former senator john glenn said and that is that laws that are good enough for everybody else ought to be good enough for us and we are going to force millions of americans into a public fund or go for a government run health care system and i agree with my colleague from illinois what better way to analyze and i said this in my initial remarks what better way to analyze how the public plan works then for members to participate themselves so if we do get into a point of rationalize rational rationing health care what better way for us to find out than to be in the system itself will know more about runaway costs we'll know more about rationing the best way to do this so we are doing exactly what we're asking the american people to do themselves and that is a decision by their employers to put them into a public public run the short shorts votes no mr davis of alabama mr davis of alabama votes yes mr davis of illinois mr davis of illinois votes no education amendment thank you mr chairman i have an amendment at the desk mr chairman my amendment addresses the critically chairman my amendment addresses the critically important issue of protecting the doctor patient relationship and ensuring that our senior citizens continue to have access to life saving medical care the bill before it contains a new initiative providing federal funding for comparative effectiveness research many of us agree that this research can be beneficial by providing patients and doctors with better information about which drugs and treatments work best however we must ensure that this research does not become a tool for the federal government deny coverage a medically necessary treatment on the basis of costs the bill before us attempts to address this problem by restricting the board that oversees comparative effectiveness research from making cover easy terminations but this misses the point the research board doesn't issue health insurance or pay claims so it is no reason to decide what is covered and what is not on the other hand c m s does make coverage determinations and not bring in this bill affects the ability of c m s to deny coverage based on comparative effectiveness research my amendment would prohibit c f s c m s from using comparative effectiveness research to make cost base coverage determinations  s would still be permitted to make coverage decisions based on safety and effectiveness just not cost this language is taken from legislation i introduced recently with delegate christensen a position and is the only bipartisan comparative effectiveness bill in the congress we need only look at the u k s national institute for clinical excellence the see the importance of this amendment nice uses comparative effectiveness research to decide whether the british health system where pay for treatment based on a formula that divides the cost of the treatment by the number of years a patient is expected to live for example nice fail that herceptin the first therapy of its kind to treat women with pass breast cancer was too expensive after public outcry nice decided to cover this drug for women with late stage breast cancer in two thousand and two nearly four years after it was approved in the us this de la needlessly placed u k women at risk by denying access to a drug that had been hailed as a breakthrough in the fight against breast cancer physicians and patients not government bureaucrats should be in charge of health care decisions my management protects the doctor patient relationship and ensure chairman and like to just briefly respond to this amendment and with all due respect to my good friend and colleague mr herder from california i really don't feel that this amendment is necessary or needed in this legislation just to be clear if my friend would go to section fourteen zero one subparagraph h it explicitly states and i quote nothing in this section shall be construed to permit the commission for comparative effectiveness research or the center the mandate coverage reimbursement or other policies for any public or private payer so the language is explicit and that current law with c m s says that coverage decisions will be based on what is reasonable and necessary in the care of the patient based on safety standards all that comparative effectiveness research is meant to do is to find out what works and what doesn't work and here's the key