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46–779 2009

THE INSTABILITY OF 

HEALTH COVERAGE IN AMERICA 

HEARING 

BEFORE THE

SUBCOMMITTEE ON HEALTH 

OF THE

COMMITTEE ON WAYS AND MEANS 

U.S. HOUSE OF REPRESENTATIVES 

ONE HUNDRED TENTH CONGRESS 

SECOND SESSION 

APRIL 15, 2008 

Serial No. 110–78 

Printed for the use of the Committee on Ways and Means 

( 

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COMMITTEE ON WAYS AND MEANS 

CHARLES B. RANGEL, New York, Chairman 

FORTNEY PETE STARK, California 

SANDER M. LEVIN, Michigan 

JIM MCDERMOTT, Washington 

JOHN LEWIS, Georgia 

RICHARD E. NEAL, Massachusetts 

MICHAEL R. MCNULTY, New York 

JOHN S. TANNER, Tennessee 

XAVIER BECERRA, California 

LLOYD DOGGETT, Texas 

EARL POMEROY, North Dakota 

STEPHANIE TUBBS JONES, Ohio 

MIKE THOMPSON, California 

JOHN B. LARSON, Connecticut 

RAHM EMANUEL, Illinois 

EARL BLUMENAUER, Oregon 

RON KIND, Wisconsin 

BILL PASCRELL, JR., New Jersey 

SHELLEY BERKLEY, Nevada 

JOSEPH CROWLEY, New York 

CHRIS VAN HOLLEN, Maryland 

KENDRICK MEEK, Florida 

ALLYSON Y. SCHWARTZ, Pennsylvania 

ARTUR DAVIS, Alabama 

JIM MCCRERY, Louisiana 

WALLY HERGER, California 

DAVE CAMP, Michigan 

JIM RAMSTAD, Minnesota 

SAM JOHNSON, Texas 

PHIL ENGLISH, Pennsylvania 

JERRY WELLER, Illinois 

KENNY HULSHOF, Missouri 

RON LEWIS, Kentucky 

KEVIN BRADY, Texas 

THOMAS M. REYNOLDS, New York 

PAUL RYAN, Wisconsin 

ERIC CANTOR, Virginia 

JOHN LINDER, Georgia 

DEVIN NUNES, California 

PAT TIBERI, Ohio 

JON PORTER, Nevada 

JANICE MAYS, Chief Counsel and Staff Director 

BRETT LOPER, Minority Staff Director 

SUBCOMMITTEE ON HEALTH 

FORTNEY PETE STARK, California, Chairman 

LLOYD DOGGETT, Texas 

MIKE THOMPSON, California 

RAHM EMANUEL, Illinois 

XAVIER BECERRA, California 

EARL POMEROY, North Dakota 

STEPHANIE TUBBS JONES, Ohio 

RON KIND, Wisconsin 

DAVE CAMP, Michigan 

SAM JOHNSON, Texas 

JIM RAMSTAD, Minnesota 

PHIL ENGLISH, Pennsylvania 

KENNY HULSHOF, Missouri 

Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public hearing records 

of the Committee on Ways and Means are also published in electronic form. The printed 

hearing record remains the official version. Because electronic submissions are used to 

prepare both printed and electronic versions of the hearing record, the process of converting 

between various electronic formats may introduce unintentional errors or omissions. Such occurrences are inherent in the current publication process and should diminish as the process 

is further refined. 

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C O N T E N T S 

Page 

Advisory of April 15, 2008, announcing the hearing ............................................ 2 

WITNESSES 

Diane Rowland, Sc.D., Executive Vice President, Kaiser Family Foundation ... 29 

John Z. Ayanian, MD, Professor of Medicine and Health Care Policy, Harvard 

Medical School, Boston, Massachusetts ............................................................. 49 

Michael O’Grady, Senior Fellow, National Opinion Research Center, University of Chicago, Chicago, Illinois ......................................................................... 61 

Stan Brock, Founder and Volunteer Director of Operations, Remote Area 

Medical, Knoxville, Tennessee ............................................................................ 79 

Stephen Finan, Associate Director of Policy, American Cancer Society ............. 81 

SUBMISSIONS FOR THE RECORD 

American College of Physicians, Statement .......................................................... 103 

Edward M. Burke, Statement ................................................................................. 106 

George Stone, Statement ........................................................................................ 108 

Jonathan B. Weisbuch, Statement ......................................................................... 108 

Karen Hawes, Statement ........................................................................................ 110 

March of Dimes Foundation, Statement ................................................................ 110 

National Congress of American Indians, Statement ............................................ 112 

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(1) 

THE INSTABILITY OF 

HEALTH COVERAGE IN AMERICA 

TUESDAY, APRIL 15, 2008 

U.S. HOUSE OF REPRESENTATIVES, 

COMMITTEE ON WAYS AND MEANS, 

SUBCOMMITTEE ON HEALTH, 

Washington, DC. 

The Subcommittee met, pursuant to notice, at 10:00 a.m. in room 

1100, Longworth House Office Building, Hon. Fortney Pete Stark 

(Chairman of the Subcommittee) presiding. 

[The advisory announcing the hearing follows:] 

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1http://www.commonwealthfund.org/publications/publications_show.htm?doc_id=280812. 

ADVISORY 

FROM THE COMMITTEE ON WAYS AND MEANS 

SUBCOMMITTEE ON 

HEALTH 

FOR IMMEDIATE RELEASE CONTACT: (202) 225-3943 

April 08, 2008 

HL–23 

The Instability of Health Coverage in America 

House Ways and Means Health Subcommittee Chairman Pete Stark (D–CA) announced today that the Subcommittee on Health will hold a hearing on the instability of health coverage in America. The hearing will take place at 10:00 a.m. 

on Tuesday, April 15, 2008, in the main committee hearing room, 1100 Longworth House Office Building. 

In view of the limited time available to hear witnesses, oral testimony at this 

hearing will be from invited witnesses only. However, any individual or organization 

not scheduled for an oral appearance may submit a written statement for consideration by the Committee and for inclusion in the printed record of the hearing. 

BACKGROUND: 

There are nearly 47 million uninsured people in this country and their ranks have 

been growing rapidly in recent years. Those without health insurance have worse 

health outcomes than those with insurance, often pay more out-of-pocket for services 

when they do seek care, and increase costs to the entire health care system. Additionally, there are millions of people who have private health insurance but have 

trouble affording and accessing care. 

The inadequacy of current coverage options forces many people to forgo needed 

medical care because of the costs associated with seeking care. A 2005 study by The 

Commonwealth Fund 1 estimated that nearly 16 million non-elderly individuals (12 

percent of the insured population) were ‘‘underinsured’’ in 2003. Despite the fact 

that they have insurance coverage, underinsured individuals can be exposed to significant out-of-pocket costs in the form of higher premiums, deductibles and co-pays 

relative to more adequately insured individuals. They also can have trouble accessing doctors, obtaining prescription drugs and getting their insurance to pay for 

needed care because the insurance that they can afford does not cover the treatment 

that they need. 

In announcing the hearing Chairman Stark said, ‘‘America’s health system is 

broken. Every year more and more people join the ranks of the uninsured. 

Even those who have insurance are discovering the inadequacy of their 

coverage, all the while their premiums and cost sharing continue to rise. 

I am pleased to hold this hearing. It is important we understand the problems of today’s system as we prepare to embark on health care reform.’’ 

FOCUS OF THE HEARING: 

The hearing will focus on the instability of health coverage in America, examining 

the problems facing those with and without health insurance. 

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DETAILS FOR SUBMISSION OF WRITTEN COMMENTS: 

Please Note: Any person(s) and/or organization(s) wishing to submit for the hearing record must follow the appropriate link on the hearing page of the Committee 

website and complete the informational forms. From the Committee homepage, 

http://waysandmeans.house.gov, select ‘‘110th Congress’’ from the menu entitled, 

‘‘Committee Hearings’’ (http://waysandmeans.house.gov/Hearings.asp?congress=18). 

Select the hearing for which you would like to submit, and click on the link entitled, 

‘‘Click here to provide a submission for the record.’’ Follow the online instructions, 

completing all informational forms and clicking ‘‘submit’’. Attach your submission as 

a Word or WordPerfect document, in compliance with the formatting requirements 

listed below, by close of business Tuesday, April 29, 2008. Finally, please note that 

due to the change in House mail policy, the U.S. Capitol Police will refuse sealedpackage deliveries to all House Office Buildings. For questions, or if you encounter 

technical problems, please call (202) 225-1721. 

FORMATTING REQUIREMENTS: 

The Committee relies on electronic submissions for printing the official hearing 

record. As always, submissions will be included in the record according to the discretion of the Committee. The Committee will not alter the content of your submission, 

but we reserve the right to format it according to our guidelines. Any submission 

provided to the Committee by a witness, any supplementary materials submitted for 

the printed record, and any written comments in response to a request for written 

comments must conform to the guidelines listed below. Any submission or supplementary item not in compliance with these guidelines will not be printed, but will 

be maintained in the Committee files for review and use by the Committee. 

1. All submissions and supplementary materials must be provided in Word or 

WordPerfect format and MUST NOT exceed a total of 10 pages, including attachments. Witnesses and submitters are advised that the Committee relies on electronic submissions for printing the official hearing record. 

2. Copies of whole documents submitted as exhibit material will not be accepted 

for printing. Instead, exhibit material should be referenced and quoted or paraphrased. All exhibit material not meeting these specifications will be maintained in 

the Committee files for review and use by the Committee. 

3. All submissions must include a list of all clients, persons, and/or organizations 

on whose behalf the witness appears. A supplemental sheet must accompany each 

submission listing the name, company, address, telephone and fax numbers of each 

witness. 

Note: All Committee advisories and news releases are available on the World 

Wide Web at http://waysandmeans.house.gov. 

The Committee seeks to make its facilities accessible to persons with disabilities. 

If you are in need of special accommodations, please call 202–225–1721 or 202–226– 

3411 TTD/TTY in advance of the event (four business days’ notice is requested). 

Questions with regard to special accommodation needs in general (including availability of Committee materials in alternative formats) may be directed to the Committee as noted above. 

f 

*Chairman STARK. The Subcommittee will begin its hearing, 

and the Chairman will make outstanding introductory remarks, if 

he can find them. 

Thank you for attending today and I hope to be brief. 

We are going to depart a little from our standard procedure. 

We’ll show a short video that deals with the issues many Americans who are uninsured and are underinsured are facing. We know 

that there’s a lot of discussion in the campaign and in the press, 

and everyplace else, about healthcare reform. 

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It’s been some years since the last large attempt at system-wide 

reform and the failure to be able to come to a conclusion with it. 

In this election year, candidates on all sides are talking about 

healthcare with different approaches and philosophies, but I think 

each candidate recognizes that there have to be some changes in 

the system of delivery of medical care. 

The number of uninsured is increasing. Middle class Americans 

are having trouble paying their premiums, paying their cost-sharing. They just announced the other day they’re going to charge us 

more for expensive drugs; and, we all know, I think, that the medical care delivery system is in need of change; and, before we rush 

into solutions, I think we should develop an understanding of 

where we are. What is the problem? Can we identify the problem 

we are trying to fix? 

Hopefully, Mr. Camp and I can come to some kind of agreement 

on that. We may not agree on what the fix ought to be, but hopefully, we don’t have to argue about what the problem is, and that’s 

the purpose of today’s hearing. 

I’d like to defer on mentioning our first witness for a moment, 

but after we do hear from our first witness, we will hear from a 

panel of witnesses who will describe the instability of health coverage and the availability. After a second, I am going to recognize 

Mr. Camp. We will then go off the record and view a ten- or twelveminute clip that comes out of a sixty-minute program in February; 

and, it features the work of one of the witnesses that we will hear 

from later today. 

I want to thank the witnesses and my colleagues for being here 

as we try to lay some groundwork for what may face us in the coming months and years ahead. 

Mr. Camp? 

Mr. CAMP. Thank you, Mr. Chairman. I want to thank our witnesses for being here today as well. The laws and regulations governing the U.S. health system can prevent from between 25 to 45 

million Americans from having health insurance, and that’s wrong. 

Every American should have access to quality healthcare. 

Before we can solve the problem, we need to ask why so many 

Americans lack health insurance. One of the most immediate 

causes has to be the skyrocketing cost of healthcare and health insurance. Since 2000, employer-based insurance premiums have increased by about 100 percent, and that’s four times the rate of inflation. These spiraling costs are driving increasing numbers of employers to drop health insurance coverage for their employees. At 

the same time, over-regulated state insurance markets are failing 

to provide affordable health insurance for many American families. 

We also need to identify who is uninsured. Approximately twothirds of the uninsured are in families with incomes below 200 percent of poverty, or about $40,000 a year. In the current, difficult, 

economic times, it shouldn’t come as a surprise that these individuals do not have the resources to purchase private health insurance. That does not mean, however, that they cannot have private 

health insurance. Every uninsured person in this country shares 

one common characteristic: they receive no assistance under the 

Federal Tax Code to help them purchase health insurance. 

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At the same time that costs for health insurance are soaring, our 

Tax Code affirmatively discriminates against the uninsured. If we 

were to simply equalize the tax subsidies that we provide, millions 

more Americans would be able to get health insurance. 

The generosity of the American taxpayer should not only go to 

those with employer-purchased health insurance, it should apply to 

individuals, small businesses, and large corporations alike. To do 

that, we must make sure those Americans who already have insurance keep it, and we must help those who don’t have coverage get 

it. 

I want to thank Mr. Stark for calling this hearing to give us all 

the opportunity to examine this issue. I hope that in exploring this 

issue, we can begin to identify solutions to reducing the number of 

uninsured without further burdening existing entitlement programs that are already facing insolvency. 

Thank you, Mr. Chairman, and I yield back. 

[The prepared statement of Mr. Camp follows:] 

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*Chairman STARK. Well, as the Committee knows, when it 

comes to introducing witnesses we draw straws; and, this morning, 

Mr. Ramstad, our colleague from Minneapolis drew the short 

straw, and I’d like to recognize him at this point. 

Mr. RAMSTAD. Well, thank you very much, Mr. Chairman, and 

I’m very pleased today that our Subcommittee will hear from one 

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of our country’s most respected leaders in healthcare policy, former 

Minnesota Senator, Dave Durenberger. 

I would also like to recognize another distinguished Minnesotan 

in the audience, Hennepin County Commissioner, Randy Johnson, 

who at the county level has worked long and hard on extending access to healthcare for Hennepin County residents. 

My good friend, Dave Durenberger, served as Minnesota Senior 

Senator from 1978 to his retirement in 1995. In the Senate he was 

highly respected for his mastery of healthcare policy and his ability 

to work with people from both sides of the aisle to find solutions. 

He brought some of Minnesota’s most innovative and successful 

ideas to Washington. 

Dave Durenberger served on the two Senate Committees with jurisdiction over health policy, the Finance Committee and Labor 

Committee, and also chaired the Finance Health Subcommittee. 

Senator Durenberger left his mark on every major piece of 

healthcare legislation through the 1980s and into the 90s. He also 

authored ‘‘Prescription for Change,’’ a book on healthcare reform 

through consumer choice. 

Since his retirement, I know firsthand, Senator Durenberger has 

not slowed down one iota. In addition to teaching graduate-level 

courses in health policy, and I understand his graduate students 

from St. Thomas University are here today with him, he formed 

the National Institute on Health Policy, a joint effort between the 

University of St. Thomas and the University of Minnesota. 

Senator Durenberger also started the Medical Technology Leadership Forum, and also serves on the Medicare Payment Advisory 

Commission. Of course, most significant to me personally, Senator 

Dave Durenberger has been a close friend, mentor, confidant for 30 

years. 

We would be here all day if I listed all of Dave Durenberger’s 

credentials, but let me just say I deeply appreciated your expertise, 

David, and your friendship over the years. This Subcommittee certainly looks forward to your testimony. We appreciate your collaboration on what I believe is one of America’s most pressing problems. Thank you again for being here, and thank you to all the witnesses. 

I yield back, Mr. Chairman, thank you. 

*Chairman STARK. Thank you, and I’d like to join you. 

It is my pleasure to welcome Dave here. He and I worked together since, I guess, 1985, on issues with Medicare and other 

issues on healthcare and look forward to your testimony, following 

which we will view the video. 

Go ahead and enlighten us. 

*Mr. DURENBERGER. Thank you, Mr. Chairman, Mr. Camp, 

Members of the Committee, but especially Jim Ramstad, because 

as Jim said he has been a very close friend for a long period of 

time. I had mixed feelings when Jim announced that he was retiring, as many of you had too. On the one hand, I was happy for him. 

On the other hand, I was unhappy for the rest of you, because of 

the contribution that he has made to not just good health policy, 

but a good policy in so, so many ways. 

Each of us is reflective in a way of the people that we represented, the places we were raised, how we were educated, and so 

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forth. Jim did this better than most people. As I see from some of 

the people that I know here like Mr. Camp and his part of Michigan, and Mr. Kind and his part of Wisconsin, we much more alike 

than we differ. 

That certainly is true of health policy as well. It was an honor 

for me to serve Minnesota for three terms in the Senate. It was always a challenge, I must say, to go to conference near the end of 

each of those 16 years with the chair of this Subcommittee and the 

chair of the energy and Commerce Committee, because they always 

insisted on winning. I’m really honored, Mr. Chairman, to have 

been asked to testify here today. 

I do so in the spirit that for most of those years characterized 

our relationships and our effort to make national health policy; 

and, particularly, to improve the health system of this country by 

changing the financing incentives for providers in the Medicare 

Program. One of the things you learn fairly early on in this process 

is we don’t have a national health system; and, Mr. Camp alluded 

to that, I think, in his comment. 

But, what we do have, because we know this from our personal 

experiences in the communities we represent, we have a series of 

systems and the work at Dartmouth explains that to us quite clearly. But my job is not to talk to you about the health system or the 

specific challenge of the uninsured. I was asked to reflect on my experience in doing health policy. First, let me say that not since the 

Presidential campaign 1992 have Americans been as concerned 

about their financial well-being as they are this year. 

Most Americans know they can’t afford the rapid rise of health 

insurance premiums, especially when it is currently accompanied 

by the escalation and the cost of so many other of their basic needs; 

so it’s a big challenge. But it isn’t just health policy; and, you know 

this better than I. Public opinion polls reflect this in strong support 

for proposals to guarantee access for all, the health and medical 

services for all Americans through some system of health insurance. 

But, clearly, the same polls will tell you that there’s no consensus on how to do it as both of you have pointed out. The debate, 

as it always has been, is between universal coverage and cost containment; and, it’s also between social insurance systems and private insurance. For example, Senator Clinton advocates a universal 

coverage path that can utilize a form of what we might call Medicare for persons under 65. 

Senator Obama, same party, advocates using the model of the 

Federal employee health benefits plan. Senator McCain advocates 

cost containment through greater tax subsidies for private, major 

medical insurance. Interestingly, each advocates similar cost containment measures through realigning financial incentives to 

produce better quality, outcomes, effectiveness and efficiency from 

the delivery system. Similar battles, as we know only too well, are 

being waged at the state level—in part, coverage; in part, quality 

and value. 

So it has always been. Unfortunately, critics of the Democratic 

proposals characterize them as socialized medicine; and, critics of 

the Republican proposal criticize them as doing nothing to meet the 

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issue of affordability which was driving up the numbers of uninsured and underinsured. That will probably get us nowhere. 

As policymakers, we have always followed a two-path course to 

universal coverage. It is most obvious in the Medicare Program, 

where we have been making most national health insurance policy, 

since I became active in health policy reform in the early 1970s. 

We have used both social insurance and private insurance in our 

financing policy changes, aiming ourselves at expanding access coverage and cost containment. The test for high value health insurance is how well it does for people when they are sick, seriously 

injured, or chronically ill. It’s the 80–20 problem. 

Twenty percent of the people present us with 80 plus percent of 

the cost challenge. So the real test, choosing an insurance course 

to universal coverage is how well does the plan do in that regard. 

How many benefits a plan has or how little people use a deductible 

is not the measure. The value test for both social insurance and 

private insurance is how well each does to consistently pay for 

quality, for outcomes, for effectiveness, and for efficiency. 

That has been our challenge since I started doing this sort of 

thing. How do you move both social and private insurance in that 

direction? For example, the Federal F benefit plan has always been 

a model for consumer choice of private health plans, and the impact of that choice was important in creating health insurance competition, community by community, using Federal employees and 

retirees to accomplish that. 

My first health legislation proposal was the Consumer Choice 

Health Plan of 1979, when some of you were born, probably. The 

purpose of it was to require choices similar to the HBP in the private employment in exchange for the employer tax subsidy. 

So, Medicare always used private insurance: first in its benefit 

design and its implementation through Blue Cross/Blue Shield carriers and intermediaries, and then, on my watch in cost have 

HMOs, and in a major national test of HMO, in HMO risk contracting starting in 1985. These were hugely successful in areas of 

the country where they were tried and where medical practice in 

relations with community and state-based health insurance guaranteed their success. 

For example, in our part of the country which always brags 

about being the low cost area, we were one of the high cost areas. 

We were in the upper quartile in the Hennepin County, St. Paul 

area, and in North Dakota and places like that. Within two and a 

half years of the start of this experiment with private HMOs, we 

went to the bottom quartile; and, unfortunately, we’re still there; 

principally because we didn’t share there savings. 

We in the Medicare Program did not share the savings with the 

people that made them possible, who are the physicians, the hospitals, and the local health plans. The rest of the country chose to 

follow the path of hospital DRGs which we instituted at the same 

time, but on another vehicle. By 1989, of necessity we adopted the 

prospect we payment system to physician position payment and 

created lots of other problems, none of which I endorse that you repeat. 

The mistake we made, of course, was not to leaving more of the 

financial savings, for changing the overuse of medical services with 

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the care professionals, and the hospitals, and the plans that were 

responsible for doing it. The mistake the medical industry made 

was to take these community-based examples of physician-hospital 

cooperation national, and to take the local managed care organization national as well. 

For example, United Health Group in our own community became the largest health insurer in the country through merger and 

acquisition of lots of local HMOs all over America. Likewise, 

Wellpoint became the largest insurer in the country through the 

conversion of lots of local and state blues plans to for-profits, and 

their subsequent merger and acquisition. This new national private 

insurance phenomenon was very successful for a while in driving 

down healthcare costs, and their premiums and profits made them 

Wall Street darling. 

But, by the end of the 1990s, the same plans were in national 

industry playing by either state rules or no rules in the employer 

self-insured market because of ERISA. Congress in 1997 authorized 

private plans to do what markets are supposed to do, determine 

through price competition for basic benefits, what’s the real cost of 

a basic set of medical services in a community-by-community across 

the country. 

The industry refused to play. The managed care industry, slowly 

but surely, adopted itself to the realities of consumer demand for 

freedom of choice, access, innovation and expectations. This is unfortunate. They did that particularly in areas in which physician 

groups and hospitals had the power to make sure that sort of thing 

happened. So, in effect, we’ve lost some of the benefit and the potential that exists in private insurance. That’s the point I’d like to 

make. Not that it’s wrong—it’s very right—it’s been our course 

from the beginning. The question is what are we trying to achieve? 

At the Medicare Payment Advisory Commission, on which I 

served until last week, we simply asked the public policy question 

that Members of Congress like me have been asking since 1982 

when Senator John Hines put the privatization amendment on the 

tougher risk contract. If traditional Medicare is less effective in 

achieving performance improvement than private insurance, then 

how do we structure the value proposition in the relationship between Medicare and private health insurance? 

Paying financial bonuses to Medicare Advantage Insurance plans 

for simply adding service benefits to the Medicare Program is probably something you could do as a congress. But it’s not the right 

thing to do without clear evidence that those services have value 

added over existing insured services, this makes us to issues 

around comparative effectiveness, which I won’t dwell on, because 

you’ve heard plenty of that. 

So, let me conclude by saying there are many reasons why universal coverage is important. Many of them relate to the vastly improved economics of reducing or eliminating cross-subsidies from 

paying to non-paying services in hospitals especially. I have now 

lived long enough with the consequences of our National failures to 

secure financial access to needed healthcare services for all Americans that I believe a commitment of the next president to this goal 

is important to my vote. I do not believe it is possible in a Federal 

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system for each of the 50 states to accomplish this goal on their 

own. Their fiscal capacity, their populations are just too disparate. 

This is a matter of income security policy for the nation of which 

we are all citizens. We have no income security policy and we have 

a bunch of aging entitlement programs, and Mr. Camp pointed this 

out. We have a bunch of aging entitlement programs, which are 

bending and sometimes breaking under the weight of population 

health and aging and the cost of medical technology and providers. 

It would be an appropriate challenge for this Committee, the full 

Committee, to take the lead in going beyond reforming programs 

that were enacted in the 1930s for the 30s and the 60s for the 60s 

in developing an income security policy in this country. A good 

place to start would be as we recommended in the Pepper Commission, get long-term care out of the welfare program and convert it 

into a combination social and private insurance program. That 

would make your challenges a lot more simple. 

I have no reason to believe that as Republicans or Democrats we 

have much disagreement about the need to agree quickly on how 

to do the work of data gathering, measuring performance, motivating better outcomes, and rewarding the first-rate performers in 

the business of an informed consumer in as many communities as 

possible. I am also pleased to have been afforded this opportunity. 

Much is expected of each of you in an area that is too complex 

to be understood by any one of you, but challenging circumstances 

always bring out the best. I hope that I may continue to serve 

whatever interest you may take in health coverage and reform. 

*Chairman STARK. Thank you, Senator. Dave, thank you very 

much. As you know, you and I have a great difference in this problem of the underpayment of the Minnesota, North Dakota Wisconsin area, representing a district that is drastically in your opinion overpaid. I’ve always said, swell, let’s just cut the payments to 

California down to the level that we’re paying in Minnesota and 

think of all the money we’ll save. 

I’m not so sure that that’s the most popular approach to this solution in your part of the country, and it sure wouldn’t be very popular in mine. But it occurs to me that that’s one way to do it. I 

just want to ask one question, and that is one of the issues that 

we are going to be faced with—and I’m not sure any of us as yet 

have an answer in the reimbursement program for physician services—is what we do about volume. I’m sure that in redesigning that 

system as I think we all agree it must be redesigned. 

We are going to have to deal with that issue, and my question 

is will you come back and help us with it? 

*Mr. DURENBERGER. Well, I’d be glad to, and I’m going to connect the two, just very, very briefly. The disparities exist in payment across the country, but it is largely because there are disparities in performance, and whether you look in Mr. Camp’s district, 

or you look in my district, or you look at La Crosse, Wisconsin. 

By the way, Congressman Kind is a doctor from Gunderson out 

here in the MBA class as well. If you compare measurable, quality 

outcomes performance for the dollars that are spent in your district, in his district, in my district, and so forth, it is a bargain for 

the rest of the country. But it’s also a model for the rest of the 

country to be followed. Unless you can design a payment system 

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that begins to reward high performance in some way appropriately, 

we are going to continue to have these problems. The key to that 

is physician payment reform. 

We’ve talked about accountable care organizations. We talk 

about bundling. We talk about a variety of approaches, and I would 

be happy to come back and be helpful. 

*Chairman STARK. Look forward to it. 

Mr. Camp? 

Mr. CAMP. Thank you, Mr. Chairman, and thank you, Senator 

Durenberger. 

*Mr. DURENBERGER. You are welcome. 

Mr. CAMP. You made a number of good points. 

I appreciate you outlining really sort of the background on Medicare that it always has had a private insurance component to it. 

Tell me, what do you think of some of the proposals that have been 

introduced either in the Senate or the House that are attempting 

to use the Tax Code, either a tax credit or a tax deduction, or a 

combination thereof to really create an individual insurance market. 

Tell me, and also what you might think about the question of 

mandates, if you have time. 

*Mr. DURENBERGER. I’ll again try to be brief. Number one, we 

just had the benefit yesterday of having both Ron White and Bob 

Bennett speak to our class. So, I’m fresh from the ideas that are 

out there. 

First, with regard to the proposal for the tax subsidy, they have 

this increase. Everybody pays, like $10,000, and then make them 

pay with their insurance. That, like President Bush’s proposal, has 

been needed for the 35 years that I’ve been involved with this. It’s 

the question of getting from here to there that is always the challenge. So, I think on the appropriateness of the tax subsidy for individuals, that is so much better than any other approach that has 

been taken. 

The challenge, I think, in this concept that we can blend the universal coverage of the Democrats with the market ideas of the Republicans is whether have real markets. I will start with something 

simple, like insurance. 

You will not have real markets in health insurance until you 

have national rules by which all health plans have to pay. The idea 

that we should just stay with 50-state regulation and you can go 

shopping around the country for a good deal just will not work. It 

won’t protect consumers. But the idea of having a set of national 

rules by which both national and state plans can truly compete is 

really a great idea, and that’s been presented as value-based benefits. It’s been presented as a guaranteed issue and renewal, and 

some of the other things that I know that this Committee is familiar with, but I think that is critical to getting the best out of private insurance. 

After that, the issue becomes the same with regard to doctors 

and hospitals and we talked about that in terms of what’s quality, 

what’s good outcome, how do you measure it, how do you get consensus, and a lot of progress is being made on that. But, again, and 

like the secretary’s ideas on value exchanges and things like that, 

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focusing on local communities and finding out who are the people 

that are already ahead of the curve is critically important. 

When you get the market working, you’ve got all the information 

you need. People are informed and they are getting their information from reliable sources. They’ve curbed their own expectations 

about having the sun and the moon and the stars and everything 

else. Then the only way a national system works most effectively 

is through everyone having an ownership of that insurance. Long 

term care insurance, as we’ve analyzed many times, is basically 

supportive services for elderly people. If we were able to sell disability insurance to everybody in this country when they were 

young, you know, you wouldn’t have to worry about meeting longterm care insurance, because people can use it at various times 

through this system. Same thing applies to health insurance. 

Mr. CAMP. Just quickly before my time, what do you think of 

the individual mandate, some proposals think that’s essential. Others don’t. 

*Mr. DURENBERGER. Yeah, again, you have to tie it together 

with the insurance reform in my book before you even consider it. 

You also have to tie it together with some other reforms. I think 

in the end at some point you are going to need it. I would not start 

with an individual mandate on whether it’s at the state level or the 

Federal level. 

There are other ways, I think, to explore the problem that’s created by freeloaders or whatever the economists call it, the free 

somebody or others on the system. 

Mr. CAMP. All right. Thank you very much. 

*Mr. DURENBERGER. You are welcome. 

*Chairman STARK. Mr. Doggett, would you like to inquire? 

Mr. DOGGETT. Thank you very much for your testimony. 

Does any other country provide us a model of any aspect of what 

we should be striving for here, or is our predicament so unique that 

we have to strike out on our own? 

*Mr. DURENBERGER. The policy models have been tried in one 

form or another, although we’ve had some discussion about what’s 

the appropriate policy model to get from here to there. 

One of the challenges that you face as a Subcommittee and the 

larger Committee on Ways and Means is there’s already by most 

people’s assumptions a lot of money in the system, and a lot of it 

is being spent on tax subsidies that are not doing. I mean, they are 

benefiting wealthy people rather than lower income people. However, you might consider this. Long term care going into a welfare 

system rather than being in it’s an insurable event and we ought 

to be having insurance for it. 

There’s all kinds of money out there, the inside buildup on tax 

subsidized savings and things like that, so there’s plenty of money 

in the system, but there’s no policy to guide you as a Committee. 

There’s no policy to guide you to get from here to there, which is 

why I made the argument about income security. Thinking about 

it as income security policy, and I know along time ago, I think it 

was the 25th anniversary of Medicare or something, I made the 

statement that Medicare and Medicaid are not health programs. 

They aren’t. They are income security programs. 

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If you think about that long enough, you realize we’ve got this 

whole series of programs built for various purposes at various 

times that are not working today for the benefit of the people that 

need them the most. That is an enormous challenge for you in 

terms of cost reduction or cost containment. Let’s take Medicare 

Advantage, because I just heard this yesterday from Abbey Block 

who runs the Medicare Advantage program at CMS. 

She didn’t know there was going to be somebody in the audience 

from La Crosse, Wisconsin, so she says the difference in the value 

to a Medicare beneficiary in Dade County, Florida, and the amount 

of money that you are spending on her services in Miami, Florida, 

versus La Cross, Wisconsin, and this is what I heard from her, is 

248 percent. More money being spent on the same beneficiary in 

Dade County for no reason, you know, other than part of the policy 

design and the practice design. 

Mr. DOGGETT. I certainly agree with you that these tax credits 

by their very nature are very blunt instruments and they are very 

costly for what they produced. They are not the most efficient way, 

sometimes, of getting health coverage where we need it, and I certainly concur in your comments about how costly some of them are 

for what the y produce. 

Do you believe that it’s possible for some type of government insurance program to co-exist with private insurance to address this 

problem? 

*Mr. DURENBERGER. It does now to the potential advantage of 

both. This is America. We’re a pluralistic society and we ought to 

build on that and that’s why I made the point, that we’ve always 

followed two paths. The question is have you set the goals correctly? 

I mean, is the goal to be paying for the sick, the severely injured? 

I mean is that the purpose of insurance? 

Also, is part of the purpose of insurance to facilitate the rewards 

for quality outcomes and efficiency and things like that? 

So, if you set the policy goals right, there might be some circumstances, some populations, for which social insurance works 

much better and others for which private insurance works better. 

Mr. DOGGETT. Thank you so much. 

*Mr. DURENBERGER. Thank you, Lloyd. 

*Chairman STARK. Mr. Thompson? You pass? 

I think Ms. Tubbs Jones. Would you like to inquire? 

Ms. TUBBS JONES. Thank you Mr. Chairman. 

Good morning, Senator. I don’t think I have ever had the chance 

to meet you, and it is my pleasure. 

*Mr. DURENBERGER. It has been my pleasure. 

Ms. TUBBS JONES. I would like to focus for a moment and ask 

you about healthcare disparities. 

Today, the Congressional Black Caucus is hosting their annual 

healthcare disparity conference at a hotel here in Washington, 

D.C., and I had to choose between which I could attend. So, I decided to be here with you. I wondered that in the work that you 

have done around healthcare, have you had any focus in on health 

disparities as it involves the delivery of healthcare to minorities 

and majority. If so, what your experience has been and what your 

recommendation would be to this Committee as we walk down the 

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road of trying to repair the healthcare delivery system in this country. 

*Mr. DURENBERGER. Thank you very much for the question, 

and I will give you two brief reactions. 

There are communities in this country where because of state efforts to provide universal coverage. Mine is one. You have heard 

about Massachusetts. You can see a group of states in this country 

that have gone the extra mile to finance access for as close to 100 

percent of their population as you possibly can; and, so, in varying 

ways we, have relied traditionally on the states to provide the initiative for financing access for people who are disadvantaged by income, by education, for whatever reason. Those states are on most 

charts of health, access and so forth are going to be ahead of states 

that have taken different courses, and have not chosen either 

through the way they practice healthcare deliver or the way they 

organize their systems or the way they finance them to accomplish 

it. 

One of the ways you can consider to broaden access to the financial insurance side of this, of course, is to think about it in terms 

of income related subsidies for either private insurance or for some 

other form of access. The transition to getting from here to there 

would involve taking long-term care out of Medicaid particular 

thing. But, the second, and maybe more important comment to 

make, is about a hearing on cultural and other disparities, economic and other disparities today. 

That same discussion is taking place in every community in this 

country, and the link that organized medicine broke between public 

health and medicine 80 years ago is now being reattached in many 

of our communities. In Texas, for example, I can point to Parkland 

Hospital in Dallas and some of the leadership there to involve the 

communities. When the legislature is unwilling to provide the financing of access, the leadership at that very public, very challenged hospital, is out in the community, reaching out to the gang 

leaders and other leaders to try to bring the community into the 

delivery system. 

One of the values of not-for-profit hospitals is the community 

benefit tax exemption for contributing to bringing in the access, not 

just through insurance, but access to services. It is happening in 

many communities around this country and it is a wonderful thing 

that it’s happening. We reconnect public health, personal responsibility and, you know, the insurance programs for medical care services and fostering that in some appropriate way. 

Ms. TUBBS JONES. Thank you. 

I would just put on the record another question about how do we 

increase the availability of healthcare delivery personnel, nursing 

being one of the huge things that one of the areas professions that 

we were in such deep need for. One idea is that you don’t have 

time to give me the answer today, but I would be interested in 

what you might think how we might address that issue. 

*Mr. DURENBERGER. Well, in 28 seconds, I am going to tell 

you to start financing the students, and stop financing the institutions that educate them. I mean, you look at where all the Medicare money is going, for example. It is going to large academic 

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medical centers and they are overpaying for indirect medical education, benefits, and so forth. 

My sort of conservative side says I’d rather finance the consumer 

of education than to continue to finance the establishment. 

You are welcome. 

Ms. TUBBS JONES. Thank you. 

*Chairman STARK. Thank you. 

Mr. Ramstad, would you like to inquire? 

Mr. RAMSTAD. Thank you, Mr. Chairman. 

Thank you for your excellent testimony, Senator. Thank you Mr. 

Chairman for inviting this witness to lead off this important hearing. I don’t think anybody frames the issues better than Senator 

Durenberger. 

Senator, you have often pointed out that Minnesota does a lot of 

things right when it comes to healthcare delivery. We all know 

that. We were recently ranked as the healthiest state in the nation. 

We have the lowest rate of uninsured. We have a long history of 

delivering high quality, efficient care at a low cost. Yet, as you 

pointed out, as we all know on this Subcommittee, every Federal 

program seems to punish Minnesota for doing the right thing. 

We get low Medicare fee for service and Medicare Advantage reimbursement because of our history of low cost. I don’t know how 

many times I have copied your illustration comparing Dade County 

vis-a-vis Hennepin County in my district. We can’t use SCHIP 

funds to cover children because we were already covering kids 

through Minnesota Care before SCHIP was ever created. Our state 

high risk pool for the uninsurable gets low Federal funding, because our state has done a good job of covering the uninsured. 

How in your judgment can Federal incentives be realigned so we 

are actually paying for quality and value instead of inefficiency and 

utilization as you put it? 

*Mr. DURENBERGER. Well, thank you for the question and 

thank you for the self-serving comments about Minnesota. We 

could say the same thing about Mr. McDermott’s constituency, and 

I’ve said that about Mr. Kind and Mr. Camp. There’s probably others on this Committee that I am not aware of. The short answer 

is we tried it already. 

I mean we tried using what was then called the HMO and managed care to do our work for us, basically to identify all of the poor 

quality areas that were just costing us a lot of money, and they 

performed well. They continue to perform well. 

The Virginia Mason Clinic, for example, in Seattle, is one of the 

leaders in this country on efficiency and effectiveness, and issues 

like that. Inter Mountain Healthcare is probably one of the best 

places to go to get healthcare in this country. There are places in 

the Chairman’s district as we know, some of the Kaiser programs, 

and so forth. 

So, it isn’t possible, I’d say, for the Committee or the Subcommittee to start designating who do you like and who do you not 

like. You almost need an intermediary to do that for you, and that’s 

why I make an argument for changing the rules and changing the 

goals and the requirements for both public and private. 

If you are going to pay extra money for private insurance to go 

out there and find the most effective places to spend money, then 

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you ought to do the same thing for traditional Medicare and enable 

the doctors and the hospitals to be regarded for their outcomes and 

their quality as well. 

Mr. RAMSTAD. Well, first of all, I should thank you for being 

less parochial than I am. 

*Mr. DURENBERGER. That’s because I’m here and you are 

there. 

Mr. RAMSTAD. Yeah, but I am not running for re-election, either. 

[Laughter.] 

*Mr. DURENBERGER. Somebody you’ll be just like me. 

Mr. RAMSTAD. I mean don’t we really have to get rid of—I 

mean, there’s not enough money in the system or the Federal 

treasury for that matter to equalize things through the AAPCC formula. I mean, we really need a new system. Don’t you agree? 

*Mr. DURENBERGER. Yes. But the design of that system will 

probably vary from one place to the other. I mean your tasks is to 

reward quality. This is where Med-Pac was going, you know, with 

bundling payments, with defining accountable care organizations. 

That’s where some of the people in the professions are going with 

the concept of medical home. 

We had a regional medical home application under the 646 demonstration program. We had the entire region from Montana to 

Wisconsin. The medical group at the University of Wisconsin was 

part of it and a six-doctor group out in Western South Dakota was 

part of it, just to demonstrate, if we had the authority to demonstrate it, from CMS, to demonstrate that paying for quality saves 

money. There’s a variety of those ways that can be chosen, most 

of which are going to relate to physicians. 

Mr. RAMSTAD. Those criteria are much more important than 

geographic criteria. Some have suggested moving to a regional system, but wouldn’t we still have some of those same geographic in 

equities? 

*Mr. DURENBERGER. You have the same problems within 

some of our systems that you have nationally. I mean, you can go 

to one of the Fairview hospitals, or whatever it is in MinneapolisSt. Paul area, and you are going to find disparities there. That’s 

why the physician becomes so important. Physician payment becomes important, and the Chairman has already pointed that out. 

Mr. RAMSTAD. Thank you, Senator. Thank you, Mr. Chairman. 

*Chairman STARK. Thank you. 

Mr. Becerra, would you like to inquire? 

Mr. BECERRA. Mr. Chairman, other than to acknowledge the 

Senator for all his work and to thank him for taking the time to 

be here, I very much appreciate it and with that Mr. Chairman I 

will yield back and say that I hope we are able to move forward 

with some of the ideas that the senator has articulated and more 

importantly just recognize it. More and more people are saying that 

it is time to do something. 

So, thank you for your testimony and thanks for being here. 

*Mr. DURENBERGER. You are very welcome. 

*Chairman STARK. Mr. Kind? 

Mr. KIND. Thank you, Mr. Chairman. 

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Just for the record, Senator Durenberger’s testimony today is not 

a paid advertisement on behalf of myself, Mr. Ramstad and Mr. 

Camp. Although I’m sure we are all nodding in strong agreement 

with the statements and it is good to have you back, and it is good 

to hear from you again. 

I really appreciate the effort you have made too in reaching out 

with so many of the providers in my own congressional district to 

have this type of conversation ongoing. I couldn’t agree with you 

more that there is going to be tremendous savings had within the 

Medicare system if we can get to out outcome or performance-based 

type of reimbursement system. But that, of course, will follow the 

huge investment in HIT which will be important in establishing 

the standards and inoperability and everything that is taking place 

right now. 

I don’t know if you have had an opportunity to pick up Shannon 

Bromley’s book, ‘‘Overtreated,’’ at all. If you have read that, many 

people have. Her basic thesis is that there is huge disparity, obviously, in utilization, and that is backed up with the Dartmouth 

Atlas study every year. If we look at how the utilization is taking 

place from region to region, there could be tremendous cost savings. 

One of the points that she made, I had a chance to talk to her 

a little bit more about, is the crucial, six-months, end of life care, 

and the tremendous spending that goes on there. Her point was if 

we get back to listening to the patient a little more closely, because 

again there is vast differences in utilization and what type of hospital stay is recommended or tests that are ordered in those final 

months or weeks of life. 

There could be tremendous cost savings there, not through a 

major reform with healthcare treatment, but just by listening to 

the patient. She says, invariably, patients don’t want to be in the 

ICU for weeks and weeks and weeks and having multiple tests ordered and multiple drugs administered, and that generally patients 

are more conservative than a typical provider and they just like 

pain management and have a chance to be at home in those final 

days of life. 

If we get back to that, listening to the patient, there could be not 

only greater satisfaction with the patient and the family but also 

a tremendous change in the healthcare system. One of the bills 

that I’ve been working on through a period of years, and you know 

it modeled closely what you were advocating when you were still 

serving in the Senate, is trying to set up that national purchasing 

pool. 

Of course, we have had the ongoing debate about associated 

health plans and Federal preemption of State mandates; but, I also 

agree with you that we do need a set of national rules, national 

standards. 

My question to you is how do we get there? What would the process look like? One of the things I have been toying with in the legislation would be a small business and family farm health act modeled after the Federal employee purchasing pool concept, because 

when you look at the 47 million uninsured, most of them are working Americans, either in small business or on farms, who just can’t 

afford to provide any healthcare coverage. 

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But part of the key to the success, obviously, is getting away 

from the 50 different rules and mandates that are established from 

state-to-state, which would make it easier for the plans to come in 

that and be able to compete in the national pool. One of the ideas 

I had forming this commission perhaps represented strongly by the 

various state health insurance commissioners to see if they can 

reach some type of agreement on what minimal standards should 

look like and therefore have a national template. 

I don’t know if you have any thoughts, or I’m sure you do. 

*Mr. DURENBERGER. Right. Just two comments on what you 

said: first with regard to the role of the patient in the last 6, 12, 

and 24 months of life, which Dr. Wennberg has demonstrated for 

us. Jack Wennberg has always been focused on the relationship between the doctor and the patient. He started with shared dialog. 

He moved to all of this data that Dartmouth grinds out; and, today, 

he sent a recommendation to you to consider changing the legal 

standard for liability in healthcare to informed patient choice. 

Informed patient choice means there is an obligation on the doctor to access all available information that relates to that patient’s 

condition, to provide that to the patient, and then have the patient 

make the choice and take the responsibility for that choice. On the 

second point, Jeff Bingaman from New Mexico, and I think it was 

’91 or ’92 introduced the health insurance purchasing cooperative 

bill. 

Unfortunately for us that got picked up in Mrs. Clinton’s health 

plan, and like so many good things that were in Mrs. Clinton’s 

health plan, it died an unfortunate death. Nobody brings it up anymore except folks who want to talk about association health plans, 

which is a very different approach. So, I would recommend to you 

to look at that, Health Insurance Purchasing Cooperative, because 

it is basically a local way in which to do large group purchasing 

and it serves the individual and the small group market as well. 

Mr. KIND. Just to stop you there, real quick. In fact, we’ve got 

some pilot programs taking place in Wisconsin right now targeting 

family farmers throughout the state. It was the health insurance 

cooperative, and allowing them to pool together, and it has been 

tremendously popular and just a backlog of waiting lists developed 

right now. May just decided to participate. There are like six or 

seven plans right now participating in this program, and may just 

decided to participate as well. 

Thank you, Senator. It was good to hear from you. 

*Mr. DURENBERGER. You are welcome. Thank you, very much. 

Mr. KIND. Thank you, Mr. Chairman. 

*Chairman STARK. I want to thank the gentleman from Wisconsin, but I do want to suggest a political implication. 

When he starts talking about this end of life savings, you’ve got 

to remember that Senator Durenberger and I are very concerned 

about turned indicators, satellite radio, two-tone paint, little motorized scooters; and, if I thought you were going to take that away 

from us. 

Mr. KIND. It’s a dangerous subject, Mr. Chairman. 

*Chairman STARK. I’d tread carefully there. 

Mr. Johnson, would you like to weigh in on that issue? 

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Mr. JOHNSON. Yeah, I’d love to have one of those motorized 

deals. 

[Laughter.] 

Mr. JOHNSON. Thank you for being here Senator. 

Let me just ask one thing. It seems to me the companies that 

provide insurance for their employees do it with pre-tax dollars, 

and yet individuals or small companies that can’t provide insurance have to buy it with after-tax dollars. This Committee has an 

opportunity to fix that, and I wonder what your thoughts are on 

that subject. 

*Mr. DURENBERGER. I think you ought to fix it and there are 

proposals around. 

We talked earlier in the morning about the proposal that Senator 

Wyden and Senator Bennett had put forward. We talked about 

President Bush’s proposal, which is an excellent one. Thirty years 

I’ve been asking the same question you’ve been asking and we 

haven’t gotten to the point of changing it. I think in my opinion, 

these are two good ways to change it. 

One of the things I don’t agree with in some of the proposals is 

getting rid of the employer. I think the employer is a vital part of 

the purchase and whole lot of other things. This whole effort to go 

to health fitness and health management and helping people become more productive persons, and so forth, is really being driven 

by employer involvement in the healthcare system. 

You know, everybody walks around with no contribution from 

their employer. It’s too expensive to get any kind of coverage unless 

you can keep those people involved. 

Mr. JOHNSON. No, I think you are on target. 

Thank you sir, I appreciate you being here. 

Thank you, Mr. Chairman. I yield back. 

*Chairman STARK. Thank you. 

Mr. Emanuel, would you like to inquire? 

Mr. EMANUEL. Thank you, Senator. 

*Chairman STARK. You are welcome. 

Mr. EMANUEL. That’s all I got to say. Actually, I do want to 

pick up with Ron and on the end of life. 

I mean, if you look at healthcare, five Presidents have tried universal care: Truman, Johnson, Nixon, Carter, and Clinton. We’re 0 

for 5, but we’ve universalized care for segments of the population: 

Medicare, Medicaid, Veterans. SCHIP was an attempt at that. 

You are always torn between trying to just do the system and get 

it right, because I want to associate it myself with what your comment is. There’s a lot of money in the system. We spent $2 Trillion 

on 300 million people and have life expectancy of 73. The EU, 

which is similar population, spends a trillion dollars yes and has 

life expectancy of 75. 

If you were doing this smartly, you would just say ‘‘we ain’t 

gettin’ our bang for the buck’’, if that’s one measurement. I’m always torn between just doing the whole thing, hopin’ for hope, that 

the six times a magic number, we are then taking steps here that 

you have outlined. One is the end of life. We do spend a preponderance of dollars on the last six months of life. 

Two, something Dave and I are working on, which is getting people earlier in life, that is early retiree, 55, 65, participating in a 

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chronic illness management before they get into Medicare, and they 

get reduced co-pays for every illness or year they spend, whether 

it’s smoking, diabetes, heart blood, etcetera. 

So, you reward the right type of behavior, and that’s one option 

to look at. The other thing is to invest in the IT and get to the national standards you talked about and then allowing people to compete once that kind of floor and boundaries were set up. 

Based on what you’ve seen in the history of reform where it has 

succeeded and where it hasn’t, what would guidance be given the 

next congress and the next presidents. Go for the whole thing, or 

try to make significant reforms, kind of early retiree buy-in to 

Medicare and then alter that? I mean, take kind of the piece-meal 

approach, or go for the ‘‘Hail Mary’’ pass and see if this time is different than the last 50 years. 

*Mr. DURENBERGER. Back in 1988 long-term care financing 

was the big political issue, and Claude Pepper wanted to create a 

commission to deal with long-term care. Danny Rostenkowski said 

right after we lost the Medicare Catastrophic Act, a step in the direction of making some sense out of the Medicare program, ‘‘No. 

It’s got to be a commission for long-term care and everything else.’’ 

Out of that came the employer mandate. It did not come to the 

answer to your question. We came with a solution. The Republicans 

voted against it, but the AMA person and the Democrats including 

Pete voted for it. Excuse me, Mr. Chairman. Out of it came the employer mandate, which was, you know, it was a solution or an answer, but it wasn’t the answer to your question. 

We’ve always had this kind of debate between cost containment. 

What belief about 2009 is the importance of the President. It 

doesn’t make any difference whether its Republican, Democrat, or 

which Democrat. It is critical that the President begin by giving all 

Americans a view of what is possible in a country as rich as ours, 

as varied as ours, with the entrepreneurship that we see in 

healthcare and medicine. 

With a vision like that, people like you all can accomplish a lot. 

Because with no vision, the status quo, you have, the old business 

of what is one person’s income is somebody else’s cost, or the reverse of that. So, I think leadership right now is the biggest factor 

in getting to all this other stuff. 

There’s a lot of things we can talk about, but unless the people 

are on board this thing, you know. You aren’t going to make it or 

you are going to lose it at some point, so that leadership issue is 

my answer. 

Mr. EMANUEL. I’d add one point and then I’ll end, Mr. Chairman. 

The difference between the 90s and now, vis-a-vis household income, where we saw a $6,000 rise in the nineties and an $1,100 

drop in median household income, all related to healthcare. In fact, 

Americans got a raise in the last six years. The problem is it all 

went to the health insurance industry. 

When you get healthcare costs for a family of four going from 

6,000 to 12,000, median income is dropping by 11,000. They got a 

raise; it just went to the healthcare system. It didn’t go to their 

bottom line to meet other needs. Unless we do something about 

this, we just double it again. 

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Thank you. 

*Mr. DURENBERGER. You’re welcome. 

*Chairman STARK. Again, Dave, thank you very much. We are 

going to take you up on your generous offer to help us as we grind 

through this next year. 

I appreciate you sharing your thoughts with us today. 

*Mr. DURENBERGER. Thanks to all of you, Mr. Chairman. 

*Chairman STARK. We will now in just a moment, we’ll go off 

the record for about 10 or 12 minutes and observe a video. Perhaps 

while we are doing that, if the second panel would like to come on 

up, I think you will be able to see the video from the witness stand. 

Why don’t we just start the video. 

[Video.] 

*Chairman STARK. Without, we will go back on the record. We 

have a print script of that, and without objection, I ask that we put 

the script in the record. 

[A transcript of the video follows:] 

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*Chairman STARK. We will proceed with our second panel, and 

they include Dr. Diane Rowland, who is familiar to all of us. Diane 

has testified many times. She is vice president of the Kaiser Family Foundation, which I am told to remind people has nothing to 

do with Kaiser Permanente in my district, which provides hundreds of thousands of people with medical care. 

Dr. Ayanian, who is a professor of medicine and healthcare policy 

at the Harvard Medical School. 

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Dr. Michael J. O’Grady, who is a senior follow of the National 

Opinion Research Center at the University of Chicago. 

Stan Brock, who we saw displayed just a few minutes ago; and 

Stephen Finan, the associate director of policy for the American 

Cancer Society. 

Each of you have submitted testimony which will without objection appear in the record in its entirety and we will ask you each 

to summarize or expand upon your testimony in any manner that 

you are comfortable. 

We will start with Dr. Rowland. 

STATEMENT OF DIANE ROWLAND, SC.D., EXECUTIVE VICE 

PRESIDENT, KAISER FAMILY FOUNDATION 

*Ms. ROWLAND. Thank you, Mr. Chairman, and Members of 

the Subcommittee. 

I am pleased to be here today and will try to put some numbers 

to go with the very human experience you just saw in the video. 

Health insurance coverage can provide a valuable lever to help 

gain access to primary and preventive healthcare services, as well 

as piece of mind and financial security for many facing serious 

healthcare problems. Yet, our latest statistics show that nearly 47 

million Americans were without health insurance coverage in 2006. 

Whether or not one receives healthcare coverage in the U.S. 

today depends on a variety of factors: age, income, workplace, and 

state of residence. For those over age 65 and those with permanent 

disabilities, Medicare provides health insurance protection. Slightly 

more than half of all Americans receive employer-based coverage 

and about five percent purchase coverage through the non-group or 

individual market. 

Together, Medicaid and SCHIP play a critical role for the low income population covering 29 million children and 24 million nonelderly adults and people with disabilities. This leaves, however, 

one in six Americans, 16 percent of our population, uninsured. 

The 47 million uninsured Americans include 9 million children 

primarily coming from low-wage, working families. 80 percent of 

the uninsured are from families with a full- or part-time worker 

and two-thirds have incomes below 200 percent of poverty or 

roughly $40,000 for a family of four. 

Most work in places where health insurance is not offered 

through their job, and the rising cost of health insurance premiums, now over $12,000 for a family, means that if coverage is 

offered, the employee’s share of the premium is becoming more and 

more unaffordable for working families. 

Take for example one of the families participating in our study 

on family budgets. Sam is uninsured and has just gotten a job in 

a home improvement store. His wife, Carmen, is at home with their 

three children. Once he becomes eligible for employer-sponsored 

coverage, he will be required to pay $400 per month in his share 

of the insurance premium, which is a quarter of his $1600 monthly 

take-home pay. Today, nearly 90 percent of the family spending already goes to basic necessities, leaving little room in their budget, 

roughly $150 a month, for additional spending that could be used 

for healthcare or to pay deductibles and cost sharing for the health 

plan. 

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Yet, having health insurance matters. It affects how and when 

people use the health system, and ultimately their health and financial well being. The uninsured are much more likely to postpone or forego care due to costs than those with coverage. When 

they seek care, they are often billed full charge and left to pay 

what they can, sometimes accumulating large medical debts that 

can lead to bankruptcy. 

Leaving 47 million Americans without health coverage affects not 

only the uninsured, but also puts a growing burden on our 

healthcare system and adds additional strain on the economy. In 

2006 it is estimated that some 22,000 Americans died prematurely 

as a consequence of being uninsured, and the lost productivity of 

the uninsured had an annualized, economic cost of between 100 

and 200 billion dollars. 

As the availability, affordability, and scope of insurance decrease, 

both insured and uninsured Americans are now dealing with budget-consuming medical bills and debt. In 2004 some 45 million 

Americans were in families that had a high financial burden for 

healthcare, i.e. spending more than 10 percent of disposable family 

income on healthcare services and insurance premiums. This financial burden provides a measure of underinsurance. 

Individuals at high risk for these levels of financial burden include those 55 to 64 who are not yet eligible for Medicare, those 

in fair or poor health, and especially those with diabetes, stroke, 

heart disease, and other chronic illnesses. It is clear that for many 

health insurance alone is no longer a guarantee of financial protection from the cost of healthcare and financial stress when illness 

strikes. 

Health insurance is an important source of financial security for 

families when illness strikes and helps to promote access to 

healthcare services that can often stave off more serious illness. 

As Congress moves forward to address the growing uninsured 

population and the impact of rising healthcare costs for America’s 

families, promoting improved access to affordable healthcare and 

adequate health coverage for all Americans, will be an important 

but challenging objective. 

I appreciate the opportunity to testify before you today and will 

welcome your questions at the conclusion of the panel. 

Thank you. 

[The prepared statement of Diane Rowland follows:] 

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Prepared Statement of Diane Rowland, Sc.D., Executive Vice President, 

Kaiser Family Foundation 

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*Chairman STARK. Dr. Ayanian? 

STATEMENT OF JOHN Z. AYANIAN, M.D., PROFESSOR OF MEDICINE AND HEALTH CARE POLICY, HARVARD MEDICAL 

SCHOOL 

*Dr. AYANIAN. Thank you, Chairman Stark, Representative 

Camp, and the Members of the Subcommittee on health for inviting 

me to testify on the health consequences for Americans who lack 

insurance and on the persistent problem of racial and ethnic disparities in the U.S. healthcare system. These topics are of vital importance to our Nation. 

My name is John Ayanian, and I am a professor of medicine and 

health care policy at Harvard Medical School. Over the past 16 

years, I have studied the adverse effects Americans experience 

when they lack health insurance, as well as racial and ethnic disparities in healthcare. 

From 2000 to 2004 I served on the Institute of Medicine Committee on the Consequences of Uninsurance. I am also a practicing 

physician at Brigham and Young Women’s Hospital in Boston, 

where I have seen first-hand how patients lives are affected when 

they lose their insurance. 

Uninsured Americans are much more likely than insured Americans to avoid seeing a doctor because of the cost. Among those in 

poor health, 50 to 70 percent of uninsured adults go without needed medical care, compared with only about 20 percent of insured 

adults in poor health. Uninsured adults are less likely to receive 

high quality primary care and important preventive services, such 

as cholesterol testing and mammograms. As a result, they are often 

unaware of their major health risks, such as high blood pressure, 

high cholesterol, and those with curable cancers such as breast 

cancer or colon cancer, are diagnosed at a more severe stage of disease. 

Because of their unstable and sporadic medical care, uninsured 

adults have a much greater risk of dying at younger ages than insured adults. The Institute of Medicine has estimated that 18,000 

Americans died prematurely in 2000 because they lacked health insurance. Sadly, many of these premature deaths occur among people with conditions that are readily treatable, including high blood 

pressure, HIV infection, and breast cancer. 

The instability of insurance coverage in the United States has especially harsh effects for adults who are uninsured or erratically 

insured between ages 55 and 64. About four million adults in this 

age group were uninsured in 2006. For those who have lost their 

coverage, finding insurance in the individual market is often prohibitively expensive, if not impossible, when they have pre-existing 

medical conditions. 

As a physician, I see that people who receive good medical care 

in their 50s and early 60s live longer and healthier lives; however, 

recent research by our group and others has shown that the health 

of uninsured adults declines more rapidly in middle age than the 

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sure, diabetes or heart disease, precisely the conditions for which 

we know good medical care makes a difference. 

But the evidence on this topic is not all grim. If uninsured adults 

survive to age 65, Medicare improves their access to physicians, 

medical tests and effective treatments. In our most recent research, 

we have found that differences in health between uninsured and 

insured adults with cardiovascular disease or diabetes at age 65 

are reduced by half after five years of Medicare coverage. Our research also shows that after these uninsured adults gain Medicare 

coverage, they experience fewer heart attacks, less heart failure, 

and less severe chest pain. 

The status quo masks hidden cost to the Medicare Program when 

millions of uninsured adults enroll in Medicare. Uninsured adults, 

particularly those with chronic medical conditions, have fewer visits to physicians and fewer hospitalizations than insured adults in 

similar health before age 65. After becoming eligible for Medicare, 

uninsured adults have a rapid increase in physician visits and hospitalizations that persists for at least seven years after age 65. 

Their care in the Medicare Program is thus more costly, because 

they reach age 65 in worse health and have more immediate and 

expensive medical needs than if they had been insured and welltreated in their fifties and sixties. If all adults in this age group 

had insurance coverage, the cost of covering them could be off-set 

by better health and potential savings for the Medicare program. 

The instability of insurance coverage in the U.S. is also an important factor contributing to racial and ethnic disparities in 

healthcare and health outcomes. Rates of coverage very widely 

across racial and ethnic groups in the United States with the highest rates of uninsurance among African Americans, American Indians, and Hispanic Americans. Without consistent insurance coverage, many minority Americans receive fewer preventive services 

and less effective treatment for many medical conditions. 

In the latest national healthcare disparities report, three key 

themes have emerged since 2001. First, overall disparities in 

healthcare quality and access are not getting smaller. Second, some 

progress is being made, but many of the biggest gaps in quality 

and access have not been reduced. Third, the problem of persistent 

uninsurance is a major barrier to reducing disparities. 

In conclusion, as you consider the instability of health coverage 

in the United States, the financial challenge of achieving universal 

coverage may appear daunting, but the human and economic consequences of the status quo are substantial. To put it bluntly, uninsured Americans live sicker and die quicker because they receive 

too little medical care that often comes too late to prevent avoidable complications and death. 

Thank you for inviting me to speak with you today about this important problem for our Nation. 

[The prepared statement of John Ayanian, M.D. follows:] 

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Prepared Statement of John Z. Ayanian, MD, Professor of Medicine and 

Health Care Policy, Harvard Medical School, Boston, Massachusetts 

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*Chairman STARK. Thank you. 

Dr. O’Grady? 

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STATEMENT OF MICHAEL J. O’GRADY, PH.D., SENIOR FELLOW, 

NATIONAL OPINION RESEARCH CENTER, UNIVERSITY OF 

CHICAGO 

*Mr. O’GRADY. Mr. Chairman, Members of the Subcommittee, 

my name is Michael O’Grady, and I am a senior fellow at the National Opinion Research Center at the University of Chicago. 

Previously, I was the assistant secretary for planning and evaluation at the Department of Health and Human Services. I have 

also served on the professional staff of the Senate Finance Committee, the Joint Economic Committee, and the Congressional Research Service. In all of those roles I have studied the problem of 

the uninsured. 

First slide, please? 

[Slide.] 

*Mr. O’GRADY. An important point I urge you to keep in mind 

is the uninsured are not one single population. Consider the following: more than half of the uninsured who are of working age are 

full-time workers. It is not only the unemployed who lack insurance. 

Second, those who work in small firms are far less likely to have 

coverage than those in the larger firms. 

Third, the uninsured are found at all income levels, but most notably the poor and the near poor. 

Four, the uninsured are found at all ages, except for seniors, because of Medicare. Youth, 18 to 24, are the least likely to be insured, and sometimes by their own choice. 

Hispanics are the last likely to have insurance, followed by 

blacks, Asians, and then whites. About 20 percent or 10 million 

people of the uninsured living in the United States are not U.S. 

citizens. 

Other than being uninsured, these individuals often have very 

little else in common. Designing and evaluating proposals to expand health insurance coverage is remarkably complex. It is made 

even more difficult in the event that budget constraints require 

tough choices about who will be assisted in what way. 

I offer two suggestions. First, consider coverage options along 

several key policy dimensions. Second, consider the mix of coverage 

tools for providing coverage to this very diverse population. 

Next slide please. 

[Slide.] 

*Mr. O’GRADY. The first dimension I recommend is the desire 

for coverage. It can be broken down into at least three groups. 

First, people who are desperate for coverage, such as the chronically ill and are willing to pay almost any price if it was only 

available. Second, those who seek coverage, but are priced out of 

the market. They just can’t afford it. Third, people who do not seek 

coverage, even if it is available and affordable. 

Traditional definitions of universal coverage: provide coverage to 

everyone, regardless of an individual’s desire to be covered. For example, the single, healthy, young adult who isn’t interested in 

health coverage at this point in life. On the other hand, those following a phased approach might rank some groups of the uninsured as a higher priority than others. For example, they may be 

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more concerned about an uninsured, 55-year-old diabetic with complications than a young, healthy, recent college graduate. 

The second dimension I’d suggest is time without coverage. The 

data on coverage indicates that the longer a person is uninsured, 

the longer the potential gap in needed services. In this example, 

higher priority might be given to those uninsured for the longest 

period of time. For example, more than two years. 

The third dimension is citizenship status. There may be neither 

the political consensus nor the budget to extend coverage to all the 

people living in the United States. A likely scenario might have 

coverage first off to citizens before coverage would be considered for 

non-citizens, either legally or illegally in the country. This chart 

provides a visual way to think about the interactions among the 

three policy dimensions I’ve just outlined. 

People falling into the highest priority on all three dimensions 

are assigned the highest overall priority of one. While policymakers 

may differ on the assignment of priorities or on the dimensions 

they wish to consider, this provides a common framework on which 

to base decisions. In addition to those policy dimensions, different 

policy tools may be needed to meet the needs of these very different 

subpopulations. 

For small business with moderate income employees, the successful solution might include access to both purchasing pools, so they 

have the same options as larger firms, and an improved tax advantage to help them offset the cost of coverage. For the uninsured 

without employment-based coverage, it could be made more affordable if they had access to the same tax advantages as employerbased coverage. 

For immigrants, legal or illegal, that same combination of incentives would probably not be as nearly as effective. Also, especially 

for the illegal immigrants, it would seem unlikely that expanded 

government programs would prove effective, asking illegal immigrants to interact with government intake and eligibility officials is 

unlikely to generate much trust or compliance. 

This subpopulation may be better served through a clinic approach, which insures care, if not coverage, and is closer to the 

model of care found in many of their home countries. Policymakers 

will need to carefully consider the circumstances of the subpopulation involved to judge which type of design will be the most successful. The systematic examination of the composition of the uninsured, a prioritization of those who receive insurance assistance, 

and a review of the mix of tools available to help the uninsured 

gain access to health care will prove useful in shaping a scientifically sound and viable policy for the future. Thank you. 

[The prepared statement of Michael J. O’Grady follows:] 

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Prepared Statement of Michael O’Grady, Senior Fellow, National Opinion 

Research Center, University of Chicago, Chicago, Illinois 

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*Chairman STARK. Thank you very much, doctor. 

Mr. Brock, what can you add to the wonderful program, which 

we just viewed? Please. 

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STATEMENT OF STAN BROCK, FOUNDER AND VOLUNTEER DIRECTOR OF OPERATIONS, REMOTE AREA MEDICAL, KNOXVILLE, TENNESSEE 

*Mr. BROCK. I’ll try. Thank you, sir. 

Remote Area of Medical, often referred to the acronym, RAM, 

was formed in 1985 as a tax-exempt 501(c)(3) publicly supported 

organization headquartered in Knoxville, Tennessee. Its intent was 

to provide airborne medical and veterinary relief for the Wapishana 

indians, with whom I had lived for many years in a remote area 

over the upper Amazon. However, observations at our U.S. base in 

the heart of Appalachia revealed a substantial need for RAM free 

services here at home. The need is massive and it touches all regions of America, both rural and urban. It’s not limited to the 

homeless, unemployed, and uninsured. It affects the working class 

and those who have insurance. Health care in America has become 

a privilege of the wealthy and well-insured. 

More than 15 percent of America’s population are uninsured, and 

there are millions more who have insurance inadequate to meet the 

needs of a catastrophic medical event or visits to the dentist or eye 

doctor. 

The RAM experience in hundreds of thousands of cases proves 

huge numbers of Americans cannot afford routine dental care and 

simply neglect their teeth. RAM data showed that our volunteer 

dentists extract an overwhelming number of teeth that are beyond 

repair. People tell us they face thousands of dollars of dental work, 

and when we look in their mouths, we see cases as bad as any discovered among the Amazonian tribal groups. 

The state of vision care among those who visit RAM clinics is no 

better. They can’t afford an eye exam and if they had one, can’t afford the prescription glasses. No wonder hundreds, sometimes a 

thousand people line up throughout the night before a RAM-free 

clinic in an effort to get their teeth fixed and obtain a free pair of 

glasses from us. 

Services for children under the age of 18 usually are covered by 

state programs, but access can be difficult. Toping the list of reasons is government reimbursements are too low, and paperwork too 

cumbersome to make it worthwhile. 

Once people transition into adulthood, they are on their own for 

dental and vision care, unless they’re able to pay large insurance 

premiums. I received a call last Sunday from a 38-year-old working 

mother of four in Kentucky. All five of the family have serious dental problems. She has insurance through her employer, but it has 

a $50 deductible, and when the plan pays, she has to cover an 

unaffordable 20 percent co-payment. Her 17-year-old needs his wisdom teeth extracted, but the plan does not cover the $700 for the 

anesthesia. The mother needs her own teeth extracted so she can 

get dentures. Oh, and the family cat needs to be spayed. I told her 

to come to the RAM clinic at Lincoln Memorial University at the 

end of May and would fix everybody’s teeth, and a RAM volunteer 

vet would spay the cat, all free. 

Why does the United States, the richest country on our planet, 

have a health care system ranked No. 37 out 190 countries by the 

World Health Organization? We have the most advanced technology accessible only to those who can afford it. 

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America’s poor and the not-so-poor, who have some type of insurance are suffering debilitating pain and health risk from diseased 

teeth and are handicapped with vision problems that are correctable, but not affordable. 

When Britain was at war in 1941 the government realized that 

they needed a national health care system, and in 1944 gave the 

minister of health and Aneurin Bevan a mandate to develop it. I’m 

not advocating that the United States follow Britain, France, Canada, Germany, or any other developed country which has some 

form of national health care system; however, I am convinced that 

the RAM experience with the hundreds of thousands of patients we 

have seen that America does need to provide free care for the millions who cannot afford it, and free dental and vision care for the 

adults must be included. 

In closing, I would like to stress that a great impediment to providing free care in this country is that willing volunteer health care 

providers holding licenses in one state are not allowed to provide 

free care in another. 

Tennessee changed this in 1995 with the enactment of the Volunteer Health Care Services Act. Under that law, any charitable organization can bring volunteer medical workers and vets licensed 

anywhere in the U.S. into Tennessee to provide free care. House 

concurrent resolution No. 69 was introduced to Congress in 1997 

to encourage national adoption of the Tennessee model. To our 

knowledge, it never got out of Committee. If practitioners were allowed to cross state lines to provide free care for those in need and 

had protection from frivolous malpractice suits, the system of free 

care that RAM has developed and proven throughout all these 

years, could be replicated throughout America. 

I’d like to thank the Committee for inviting me today, and thank 

you, CBS, 60 Minutes, for dramatically focusing on this national 

problem. 

[The prepared statement of Stan Brock follows:] 

Prepared Statement of Stan Brock, Founder and Volunteer Director of 

Operations, Remote Area Medical, Knoxville, Tennessee 

Remote Area Medical, often referred to by the acronym, ‘‘RAM,’’ was formed in 

1985 as a tax exempt 501c3 publicly supported organization headquartered in Knoxville, TN. Its intent was to provide airborne medical and veterinary relief for 

Wapishana Indians with whom I had lived for many years in a remote area of the 

upper Amazon. 

However, observations at our U.S. base in the heart of Appalachia revealed a substantial need for RAM free services here at home. The need is massive and it touches all regions of America both rural and urban. It is not limited to the homeless, 

unemployed and uninsured. It affects the working class and those who have insurance. Health care in America has become a privilege of the wealthy and well-insured. 

More than 15 percent of America’s population are uninsured and there are millions more who have insurance inadequate to meet the needs of a catastrophic medical event or visits to the dentist or eye doctor. 

The RAM experience in hundreds of thousands of cases proves huge numbers of 

Americans cannot afford routine dental care and simply neglect their teeth. RAM 

data show that our volunteer dentists extract an overwhelming number of teeth that 

are beyond repair. People tell us they face thousands of dollars of dental work and, 

when we look in their mouths, we see cases as bad as any discovered among the 

Amazonian tribal groups. 

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The state of vision care among those who visit RAM clinics is no better. They cannot afford an eye exam and, if they had one, cannot afford the prescription eyeglasses. 

No wonder hundreds—sometimes a thousand—people line up throughout the 

night before a RAM free clinic in an effort to get their teeth fixed and obtain a free 

pair of eyeglasses from us. 

Services for children under the age of 18 usually are covered by state programs, 

but access can be difficult. Topping the list of reasons is government reimbursements are too low and paperwork too cumbersome to make it worthwhile. Once people transition into adulthood, they are on their own for dental and vision care unless 

they are able to pay large insurance premiums. 

I received a call last Sunday from a 38-year-old working mother of four in Kentucky. All five of them have serious dental problems. She has insurance through her 

employer but it has a $50 deductible and, when the plan pays, she has to cover an 

unaffordable 20 percent co-payment. Her 17-year-old needs his wisdom teeth extracted but the plan does not cover the $700 cost for the anesthesia. The mother 

needs her own teeth extracted so she can get dentures. Oh, and the family cat needs 

to be spayed. I told her to come to the RAM clinic at Lincoln Memorial University 

at the end of May and we would fix everybody’s teeth and a RAM volunteer veterinarian would spay the cat—all free. 

Why does the United States, the richest country on our planet, have a health care 

system ranked number 37 out of 190 countries by the World Health Organization? 

We have the most advanced technology accessible only to those who can afford it. 

America’s poor, and the not-so-poor who have some type of insurance, are suffering debilitating pain and health risk from diseased teeth and are handicapped 

with vision problems which are correctable but not affordable. 

When Britain was at war in 1941, the Government realized they needed a national health care system and in 1944, gave the Minister of Health, Aneurin Bevan, 

a mandate to develop it. I am not advocating that the United States follow Great 

Britain, France, Canada, Germany or any other developed country which has some 

form of national health care system. However, I am convinced by the RAM experience with the hundreds of thousands of patients we have seen that America does 

need to provide free care for the millions who cannot afford it and free dental and 

vision care for adults must be included. 

In closing, I would like to stress that a great impediment to providing free care 

in this country is that willing volunteer health care providers holding licenses in 

one state are not allowed to provide free care in another state. Tennessee changed 

this in 1995 with the enactment of the Volunteer Health Care Services Act. Under 

that law, any charitable organization can bring volunteer medical workers and veterinarians licensed anywhere in the United States into Tennessee to provide free 

care. House Concurrent Resolution No. 69 was introduced to Congress in 1997 to 

encourage national adoption of the Tennessee model. To our knowledge, it never got 

out of committee. 

If practitioners were allowed to cross state lines to provide free care for those in 

need, and had protection from frivolous malpractice suits, the system of free care 

that RAM has developed and proven throughout all these years could be replicated 

throughout America. 

f 

*Chairman STARK. Thank you, Mr. Brock. 

Mr. Finan, would you? 

STATEMENT OF STEPHEN FINAN, ASSOCIATE DIRECTOR OF 

POLICY, AMERICAN CANCER SOCIETY 

*Mr. FINAN. Good morning, Mr. Chairman, Mr. Camp, and distinguished Members of the Committee. Thank you for inviting the 

American Cancer Society year to testify today. The American Cancer Society is a nation-wide, community-based voluntary health organization dedicated to eliminating cancer. The Society and its sister advocacy organization, the American Cancer Society Cancer Action Network, are working together to elevate the issue of access 

to care and its impact on cancer patients and their families. 

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I would like to begin my discussion of inadequate health insurance by sharing Doreen’s story with you. Doreen, a 57-year-old 

former medical office receptionist, was diagnosed with stage IV 

breast cancer in the fall of 2005. The cancer spread to her spinal 

column, liver, lungs, and left femur. 

Doreen’s husband is a retired New York policeman, and she has 

health insurance through his retirement plan. Her plan limited her 

to thirty outpatient visits a year, a number Doreen quickly exceeded. Her plan had other restrictions as well, including a limit that 

initially prevented her from getting a stent for her chemotherapy. 

She was ultimately allowed to have the procedure for the stent, but 

only after a delay. She also learned of some of these restrictions 

from her plan, only after she had exceeded them. As a result, in 

less than a year Doreen and her husband owed more than $100,000 

to the hospital for various treatments. These significant restrictions 

resulted in delays in treatment and great emotional stress that further jeopardized her health. 

As defined by the Society, adequate health insurance insures 

timely access to the full range of evidence-based health care services necessary to maintain health, avoid disease, overcome acute 

illness, and live with a chronic condition. These services include the 

complete continuum of evidence-based cancer care for preventing 

treatment and support needs, including clinical trials. 

Doreen is one of 16,000 people who have called the American 

Cancer Society because she had problems with her private health 

insurance. The primary problems we have identified among those 

with inadequate health insurance include annular life-time dollar 

limits or restrictions on necessary services, like Doreen experienced; no or limited coverage within the plan for out-of-network 

specialists, limiting the patient’s ability to access care; no or limited coverage within the plan for prescription drugs. 

But the biggest single issue we see is related to cost sharing. 

Nearly two-thirds have trouble meeting deductibles, paying their 

co-insurance for prescription drugs and treatment, and covering 

costs for necessary services not covered by their plan. 

Let me illustrate the cost-sharing problem with Martha’s story. 

Martha, a 63-year old retired woman, was diagnosed with stage I 

breast cancer in November of 2007. Martha’s cancer treatment included surgery followed by radiation. Martha has health insurance 

but the policy is inadequate. For example, the insurance paid 

$100,000 of a $10,000 hospital bill for her surgery. Her accumulated deductibles and co-pays for various medical services have left 

her with $28,000 in medical debt and the hospital is threatening 

her with a collection agency. 

Co-pays and deductibles may be reasonable or routine care, but 

when a person has a serious medical condition like cancer, the accumulated expenses can become very significant. Today Martha is 

struggling with keeping her head above water financially. 

Some of the most disheartening kinds of stories we hear are from 

people who have had to interrupt their treatment because of inadequate coverage. We logged nearly 900 such cases last year. Please 

think about this for a minute. These are people who have stopped 

treatment for a deadly disease because they cannot afford to pay 

for additional necessary care. 

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For them a decision to delay treatment is often a life-or-death decision, but if they proceed, they risk breaking themselves and their 

families financially. 

More formal studies support our experience. For example, nearly 

1 in 3 cancer patients who are insured have out-of-pocket costs that 

exceed 10 percent of their family income. More than 1 in 9 cancer 

patients with insurance have out-of-pocket health costs that exceed 

20 percent of their family income. Twenty percent of cancer patients with insurance use all or most of their savings when dealing 

with their financial costs of cancer. And 10 percent of medical 

bankruptcies are from people who have had a cancer diagnosis. 

The problem of under-insurance is very difficult to measure, but 

we know the problem is very real for many cancer patients. This 

should be a concern to everyone, because cancer can touch us all. 

Slightly less than 1 in 2 men will have cancer in their lifetime, and 

slightly more than 1 in 3 women will. 

Although I’ve focused on the issue of adequacy of insurance, the 

American Cancer Society is also greatly concerned about the problems of the uninsured which the other witnesses this morning have 

addressed. We believe that the science and the knowledge exist to 

provide quality care for all Americans, but we must work together 

to restructure our coverage and delivery systems to achieve that 

goal. Your hearing today is a valuable contribution to that discussion. 

Thank you, Mr. Chairman. 

[The prepared statement of Stephen Finan follows:] 

Prepared Statement of Stephen Finan, Associate Director of Policy, 

American Cancer Society 

Good morning, Mr. Chairman and distinguished Members of the Committee. My 

name is Stephen Finan, Associate Director of Policy for the American Cancer Society. The American Cancer Society is a nationwide, community-based, voluntary 

health organization, dedicated to eliminating cancer as a major health problem by 

preventing cancer, saving lives, and diminishing suffering from cancer through research, education, advocacy, and services. 

Thank you for inviting the American Cancer Society to testify. As you may know, 

ACS, and its sister advocacy organization the American Cancer Society Cancer Action Network (ACS CAN) are working together to elevate the issue of access to care 

and its impact on cancer patients and their families by educating the public and 

policymakers about problems in the health care system and the need for change. We 

look forward to working with this Subcommittee as you work toward solutions to 

improve and expand access to quality care. 

This morning you are listening to other speakers on the panel describe the problem of availability of health insurance. Although we fully share that concern, I 

would like to take this time to shed light on the under-appreciated, and at times 

overlooked, problem of adequacy of insurance. I would like to paint a picture—all 

too common in America—of how cancer patients and survivors with inadequate insurance face barriers and financial burdens in getting the quality health care they 

need to fight their dreadful disease. 

Doreen’s Struggle With Inadequate Insurance Coverage 

Let me begin our discussion of inadequate insured by sharing Doreen’s story with 

you. Doreen, a 57-year-old former medical office receptionist, was diagnosed with 

Stage IV breast cancer in the fall of 2005. The cancer metastasized to her spinal 

column, liver, lungs, and left femur. Doreen and her husband, a retired New York 

City police officer, have health insurance through his retirement plan. The insurance covers 30 outpatient visits a year, a number Doreen quickly exceeded after beginning treatment for her cancer. After she reached this annual limit, she was billed 

$5,000 a week for chemotherapy treatments. In less than a year, Doreen and her 

husband owed more than $100,000 to the hospital for her treatment. By the time 

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Doreen’s insurance company informed her that she had exceeded her maximum 

number of outpatient visits, she had already made additional visits the plan would 

not cover. Fortunately for Doreen, she spoke at an American Cancer Society event 

about her inadequate insurance and the story ran in the Long Island Newsday. Upon reading the article, the insurer reversed the decision and paid Doreen’s medical bills in full. While Doreen’s story turned out well, countless others are not as 

fortunate to have a platform to share their story. 

It was stories like Doreen’s and the countless stories of uninsured Americans’ 

struggle with this dreadful disease that brought the American Cancer Society to the 

conclusion that we had to enter the broader national debate about access to care. 

Defining Adequate Health Insurance 

As defined by the Society, adequate health insurance ensures timely access to the 

full range of evidence-based health care services (i.e., rational, science-based, patient-centered)—including prevention and primary care—necessary to maintain 

health, avoid disease, overcome acute illness, and live with chronic illness. These 

services include the complete continuum of evidence-based cancer care for treatment 

and support needs including clinical trials. Coverage should be comprehensive and 

protect the individual from incurring catastrophic expenditures. 

Little Help Available for Those With Inadequate Insurance 

The stories we are giving you come from our Health Insurance Assistance Service 

(HIAS), which is a service offered through the American Cancer Society’s National 

Cancer Information Center (NCIC). HIAS is a free resource that connects callers 

with health insurance specialists who work to address their needs. The specialists 

at NCIC handle inquiries about health insurance, coverage dynamics, and state programs—all specific to the caller’s needs. To date HIAS has captured almost 16,000 

cases from 32 states, with plans to expand the program to other states. 

The volume and type of calls received are captured as part of an internal database 

that allows for analysis of trends and emerging issues. While the database is not 

systematic or representative of all Americans, the volume and type of calls we receive identify serious problems that exist in our insurance system today. A recent 

analysis of the cases in the database revealed interesting information about cancer 

patients who have inadequate health insurance. In general, the Society is able to 

assist 1 in 6 cancer patients who contact HIAS about their health insurance problems. In the cases where we were unable to help the cancer patient, we can identify 

barriers in the current health insurance system facing cancer patients. 

HIAS receives calls from individuals who are uninsured, those who are 

transitioning between plans, and cancer patients who are currently insured. Many 

of these callers are people who have been recently diagnosed or who are in treatment for cancer. 

The problems we have specifically identified among those with inadequate insurance include: 

• Annual or lifetime benefit limits within the plan that results in the patient not 

being able to access further cancer care without incurring medical debt. • No or limited coverage within the plan for out-of-network specialists, limiting 

the patient’s ability to access quality cancer care. • No or limited coverage within the plan for prescription drugs or treatments. • Mounting, affordable co-pays or co-insurance. 

For these callers, there is seldom help available to solve their problems. Unfortunately, there are few safety net options for the under-insured. 

The biggest single issue is related to cost-sharing being too high. Nearly twothirds (63 percent) stated cost-sharing as their primary reason to call HIAS. These 

callers had trouble meeting deductibles, paying their co-insurance for prescription 

drugs and treatment, and covering costs for physician visits and non-network specialty care. 

Martha’s Financial Struggle With High Cost-Sharing 

I would like to share a story from HIAS of a cancer patient who was insured and 

struggled financially because of the high cost-sharing for covered benefits. Martha, 

a 63-year-old retired woman, was diagnosed with Stage I breast cancer in November 

2007. For her cancer treatment, Martha had surgery followed by radiation. Martha 

is now post-treatment, but still needs periodic follow-up visits to her oncologist to 

monitor for recurrence. Martha has a health insurance policy, but the policy is inadequate for her needs. For example, the insurance paid $1,000 of a $10,000 hospital 

bill for her surgery. Martha said she is $28,000 in medical debt due to her cancer 

diagnosis, and the hospital is threatening her with a collection agency. Martha lives 

in a state that has a medically underwritten individual insurance market, so it is 

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1 Banthin JS, Bernard DM. Changes in financial burdens for health care: National estimates 

for the population younger than 65 years, 1996 to 2003. JAMA 2006; 296: 2712–19. 2 USA Today, the Kaiser Family Foundation, the Harvard School of Public Health. National 

survey of households affected by cancer, August 1–September 14, 2006. 

unlikely she would be offered another policy. Martha beat her cancer, but now she 

is struggling with keeping her head above water financially. 

Patients Interrupting Treatment Because of Inadequate Coverage 

Some of the most disheartening kind of stories we hear come from people who 

have had to interrupt their treatment because of inadequate coverage. Nearly 900 

of the cases logged in the last year have involved cancer patients interrupting their 

treatment, meaning they elect to stop their treatment before it has been completed. 

Please think about this for a moment—these are people who stop treatment for a 

deadly disease because they cannot afford to pay. The consequences of this decision 

could be detrimental to their health and may very well be a life or death situation. 

Another common problem we see involves pre-existing condition restrictions on 

coverage. Although this is an access problem, it can also be viewed as an adequacy 

issue. If the caller has a current cancer diagnosis or a history of cancer, insurers 

may limit their coverage by imposing a pre-existing exclusion period. These exclusions eliminate all coverage for cancer-related health care for the duration of the 

exclusion period—usually 6–12 months, but sometimes permanently, depending on 

the coverage type. Pre-existing condition exclusion periods are a leading reason why 

HIAS callers do not enroll in coverage options available to them. They cannot afford 

to pay for premiums without receiving coverage for their cancer. 

Let me share a story illustrating the adequacy problems related to the exclusion 

of pre-existing conditions. Thomas, a 35-year-old married father of three, was diagnosed with testicular cancer in March 2004. At the time, he was insured and able 

to get the appropriate care to successfully treat his cancer with surgery and radiation. Thomas’ wife called HIAS because Thomas was without insurance and needed 

follow-up care to ensure his cancer remained in remission. Thomas could not receive 

the follow-up tests, which cost more than $2,500, without insurance or a means to 

pay. Since his remission, Thomas started his own business and lost his previous coverage. He attempted to get coverage in the individual market, but due to medically 

underwriting he was denied several insurance policies. Thomas was eligible for the 

state high risk pool; however, Thomas said the 12-month pre-existing exclusion period renders this option not viable. Thomas remains uninsured and unable to access 

the follow-up care to monitor his health. 

Cancer and the ‘‘Under-Insured’’ 

The problem of paying costly medical bills affects middle-class families, particularly those with chronic diseases such as cancer. Often insurance policy deductibles, 

co-payments and limits on health services may leave cancer patients without access 

to the timely, lifesaving treatment they need. Cancer patients may have to deal with 

major financial burdens because of out-of-pocket costs in addition to their cancer diagnosis. We receive calls everyday from cancer patients with these problems and 

published research is available that supports these problems of inadequate and 

unaffordable insurance as illustrated through the HIAS stories. 

A recent study analyzing data from the Medical Expenditures Panel Survey 

(MEPS) shows the breadth of this kind of financial problem.1 The MEPS household 

survey, sponsored by the Agency for Health Care Research and Quality (AHRQ), collects information from the non-elderly, non-institutionalized U.S. population. The 

survey asks American families questions about health insurance coverage, health 

care utilization, and health care expenditures. In this study, the researchers defined 

‘‘under-insured’’ as people with insurance spending 10 percent or more of their taxadjusted family income on health care services, including insurance premiums. 

Nearly 1 in 3 (28.8 percent) cancer patients who are insured have an out-of-pocket 

health care burden that exceeds 10 percent of their family income. More than 1 in 

9 cancer patients with insurance have out-of-pocket health care burdens exceeding 

20 percent of their family income in health care expenditures. 

Cancer patients who have inadequate coverage have higher medical costs and 

must deal with the additional stress of financial instability. A survey of cancer patients and their families found that one in five cancer patients with insurance uses 

all or most of their savings when dealing with the financial costs of cancer.2 Another 

study found that more than one in five people with chronic conditions have problems 

paying medical bills. Furthermore, the incidence of burdensome out-of-pocket spendrmajette on PRODPC74 with HEARING

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3Tu HT. Rising health costs, medical debt, and chronic conditions. Center for Studying Health 

System Change Issue Brief No. 88, September 2004. 4Doty MM, Edwards JN, Holgren AL. Seeing red: Americans driven into debt by medical bills. 

The Commonwealth Fund, August 2005. 5 Himmelstein DB, Warren E, Thorne D, Woolhandler S. Illness and injury as contributors to 

bankruptcy. Health Aff 2005; Web exclusive: 63–73. 6 Halpern MT, Ward EM, Pavluck AL, Schrag NM, Bian J, et al. Association of Insurance Status and Ethnicity with Cancer Stage at Diagnosis for 12 Cancer Sites: A Retrospective Analysis. 

Lancet Oncology 2008; 9:222–31. 

ing among low-income, privately insured people with chronic conditions is rising 

dramatically.3

Medical debt has been an important cause of bankruptcy filing in the U.S. An 

analysis of national survey data found nearly six of ten adults who had current-year 

difficulty paying medical bills and 70 percent of those reporting medical debt said 

they were insured at the time their problems began.4 Another study examined the 

causes of bankruptcy and found that 1.9–2.2 million Americans experienced bankruptcy related to medical problems in 2001.5 Among those with illnesses that led 

to bankruptcy, their out-of-pocket costs average $11,854 and three-quarters had insurance at the time of their diagnosis. 

Despite having insurance, many cancer patients and survivors experience major 

financial burdens. The situation of the ‘‘under-insured’’ is difficult to measure because wide variation exists among health insurance plans and people do not realize 

they are ‘‘under-insured’’ until they have a health crisis such as cancer. Furthermore, studies like the one I previously mentioned use a narrow definition to measure the number of ‘‘under-insured’’—that is, they do not include those who stop or 

delay treatment because they will not be able to afford it. While we use these studies to talk about the ‘‘under-insured,’’ they do not fully capture the nature and extent of the problem. 

American Cancer Society’s Commitment to Access to Care 

Our testimony this morning focused on the issue of adequacy, but the American 

Cancer Society is also greatly concerned about the problems of the uninsured, which 

the other witnesses this morning are addressing. 

We have made significant progress in recent years in addressing the cancer problem. Cancer death rates have decreased by 18.4 percent among men and 10.5 percent among women since the early 1990s. Despite this significant progress, the 

American Cancer Society realizes that its long-term goals of reducing the incidence 

and mortality of cancer cannot be achieved unless the gaps that exist within the 

current health care system are addressed. The challenge lies in the fact that our 

health care system is not up to the task. 

A recent American Cancer Society study of 12 types of cancer among more than 

3.5 million cancer patients dramatically demonstrates the problem of access today 

for uninsured cancer patients.6 The study found uninsured patients were significantly more likely to present with advanced stage cancer compared to patients with 

private insurance. The study found consistent associations between insurance status 

and stage at diagnosis across multiple cancer sites. Compared to patients with private insurance, uninsured patients had significantly increased likelihoods of being 

diagnosed with cancer at more advanced stages. The greatest risk for diagnosis with 

moderately advanced cancer (stage II) instead of the earliest stage (stage I) was in 

colorectal cancer, while the highest risk for diagnosis at the most advanced stage 

of cancer (stage III/IV) was in breast cancer. The study shows that too many cancer 

patients are being diagnosed too late, when treatment is more difficult, more expensive, and has less chance of saving lives. 

We know that individuals and families who are uninsured or have inadequate insurance often go without preventive care despite research showing that early detection and timely treatment are effective in improving outcomes. 

We know that cancer patients who are uninsured or have inadequate insurance 

often do not receive necessary and appropriate treatment in a timely manner, and 

that they have worse health because of these problems. 

And we know we cannot meet the American Cancer Society’s goals of reducing 

cancer mortality by 25 percent and cancer incidence by 50 percent by 2015 if we 

don’t achieve greater improvements in our nation’s coverage and health care delivery systems. 

The recognition of these problems for cancer patients led the American Cancer Society to decide to enter the broader national debate on health care reform. Last year, 

the Society developed evidence-based principles defining meaningful health insurance to be adequate, available, affordable, and administratively simple without rermajette on PRODPC74 with HEARING

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7Dr. John Seffrin, American Cancer Society CEO, Statement to ACS Board of Directors during January 2006 meeting. 

gard to health status or risk. These guiding principles, known as the 4As, are essential to any health care reform. (The principles are attached as Appendix A.) 

Conclusion 

Cancer death rates are decreasing and we know what we must do as a nation to 

defeat cancer. Much of the public debate today is about the need to cover the 47 

million uninsured, and the American Cancer Society fully shares that concern. However, we need to recognize more fully the very significant problem of underinsurance. Health plans vary enormously in their deductibles, co-pays, benefits covered, 

and exceptions. Insurance plans are written in very detailed legalistic language that 

very few lay people can begin to comprehend, and the summary plan documents 

that are provided to enrollees almost never begin to convey the adequacy of coverage. Put another way, if you were to look at an array of plans that might be available to you as a consumer, and you were to ask, what would be the adequacy of 

your coverage if you were to be diagnosed with cancer or some other serious disease, 

you would probably conclude that you have no idea whether the plan would be adequate. As we see all too often in our HIAS cases, people often discover after their 

diagnosis what their plan really means—and that is a point where for most patients 

it is virtually impossible to change coverage. As an appendix to my testimony, I am 

including additional stories that highlight the problems of the inadequately insured. 

(The stories are attached as Appendix B.) 

In adopting our principles for meaningful health insurance—our 4As—we said 

that adequacy should cover the full array of necessary services, from early detection 

through treatment and survivorship, but we did not attempt to define the specifics 

of an adequate plan. Rather, our goal is to stimulate a public discussion that will 

lead to a broad consensus. We want to raise the issues through the campaigns this 

year and carry the discussion forward at the Federal and State level as legislative 

reform efforts are developed. We believe the science and the knowledge exist to provide quality health care for all Americans, but we must work together to restructure 

our coverage and delivery systems to achieve that goal. Your hearing today is a valuable contribution to that discussion. 

Thank you. 

Appendix A: 

American Cancer Society Statement of Principles on What Constitutes 

Meaningful Health Insurance 

The American Cancer Society is the nationwide community-based voluntary 

health organization dedicated to eliminating cancer as a major health problem by 

preventing cancer, saving lives and diminishing suffering from cancer, through research, education, advocacy, and service. The American Cancer Society has set ambitious goals for significantly reducing the rates of cancer incidence and mortality 

along with measurably improving the quality of life for all people with cancer. 

‘‘The ultimate conquest of cancer in America is as much a public policy aspiration 

as it is a scientific and medical challenge. There are many stakeholders in the cancer fight actively doing their part to defeat this disease, but it cannot be done without the sustained leadership and strong commitment of government. We are poised 

to make gains so substantial that we now can talk about a time when cancer is no 

longer a killer and is instead just a chronic condition, or even better, a disease for 

which a cure is a realistic, frequently achieved goal. Our nation’s current health 

care system is not up to this challenge. If we are to ultimately conquer cancer our 

system must ensure that all Americans have access to high quality care.’’ 7

Improving the nation’s health care system requires a new partnership for the nation that will facilitate the coverage and delivery of quality evidence-based cancer 

care and work to eliminate disparities and inequities in the current system. This 

will require a commitment from the private, public, and not-for-profit sectors and 

individuals. Stakeholders in the health care system, from doctors, hospitals, and insurers, to employers, and not-for-profit organizations, all have critical roles to play. 

All Americans have an obligation, as well, to take responsibility for their own health 

to the extent possible, by pursuing healthy lifestyles, and educating themselves 

about their health needs, including ways to prevent and detect cancer. 

A critical aspect of improving the health care system is to define and ensure access to meaningful public or private insurance. This includes adequate financing. 

Our nation has had much conversation on the insured and uninsured and less on 

what it means to be meaningfully insured. Below is the statement of the American 

Cancer Society on what constitutes meaningful health insurance. 

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Statement of Principles 

It is a fundamental principle of the American Cancer Society that everyone 

should have meaningful public or private health insurance. 

Meaningful health insurance is adequate, affordable, available and administratively simple. 

Adequate health insurance means: 

• timely access and coverage of the complete continuum of quality, evidence-based healthcare services (i.e., rational, science-based, patientcentered), including prevention and early detection, diagnosis, and 

treatment 

• supportive services should be available as appropriate, including access 

to clinical trials, chronic disease management, and palliative care 

• coverage with sufficient annual and lifetime benefits to cover catastrophic expenditures 

Available health insurance means: 

• coverage will be available regardless of health status, or claims history 

• policies are renewable 

• coverage is continuous 

Affordable health insurance means: 

• costs, including premiums, deductibles, co-pays, and total out-of-pocket 

expenditure limits, are not excessive and are based on the family’s or individual’s ability to pay 

• premium pricing is not based on health status or claims experience 

Administratively simple health insurance means: 

• clear, up-front explanations of covered benefits, financial liability, billing procedures, and processes for filing claims, grievances, and appeals 

are easily understood and timely, and required forms are readily comprehensible by consumers, providers and regulators 

• consumers can reasonably compare and contrast the different health insurance plans available and can navigate health insurance transactions and transitions 

Appendix B: Stories from Cancer Patients on the Adequacy of Health Insurance 

Since 2005, the Society has documented real stories from cancer patients who 

have had trouble accessing adequate coverage. These case studies reflect actual 

cases of cancer patients who called the American Cancer Society National Cancer 

Information Center for advice navigating the health care system and solving coverage problems. 

Randy, 63 years old, Pennsylvania 

Following his diagnosis with Stage IV esophageal cancer, Randy had surgery to 

remove his esophagus and stomach. Radiation and intense chemotherapy followed. 

Randy quickly reached the $100,000 lifetime cap on his major medical coverage and 

now receives no further benefits. He has paid out of pocket for follow-up scans and 

labs to monitor his condition. Because he had 18 months of continuous, creditable 

coverage, Randy would’ve been eligible by Federal law for a policy with no pre-exclusionary period. However, he wasn’t aware of the option until after it had expired. 

Meanwhile, Randy and his wife are ineligible for AdultBasic or Medicaid, and he 

is unlikely to get private insurance due to medical underwriting. Randy’s only option, a guaranteed issue policy, includes a pre-existing condition exclusionary period 

of up to three years. The policy allows for riders that could modify the benefits and 

conditions of his coverage. Ultimately, Randy will have to wait two years to become 

Medicare eligible. He has no other choice. 

Valerie, 34 years old, Georgia 

Valerie, a mother and wife, is a contract worker for a small staffing agency. Her 

husband, Jeff, is a car salesman. The family’s income fluctuates based on her workload and his commission. Valerie was recently diagnosed with Stage IV breast cancer and is currently undergoing treatment. She has employee-sponsored insurance 

through the staffing agency, but she quickly met the plan’s $10,000 yearly maximum benefit. She now owes $6,000 in bills to her oncologist’s office and is responsible for the cost of her treatments moving forward. Those treatments include three 

more rounds of chemotherapy and potentially radiation or surgery. Valerie doesn’t 

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want to change insurance, largely because the other members of her family are covered under her plan. Jeff doesn’t have access to employee-sponsored insurance at 

his job. Valerie will likely be denied insurance in the individual market because of 

medical underwriting. Therefore, she can’t buy a supplemental policy to cover her 

chemotherapy. She will continue paying her considerable treatment costs out of 

pocket. 

Kay, 61 years old, Florida 

Kay works part time at a large department store earning $13,000 per year. She 

has insurance through her employer but quickly exceeded the plan’s $25,000 annual 

maximum following her diagnosis with Stage II breast cancer. She has received 

eight cycles of pre-operative chemotherapy, had a lumpectomy with auxiliary lymph 

node dissection, and now needs radiation. Kay already has $40,000 in outstanding 

medical bills from various diagnostic tests that were not covered. Now she’s been 

told that she cannot begin radiation unless she plans to bring $115,000 with her 

to the first appointment. Kay’s Medicaid application is pending; it will take months 

before she learns if help is available. Meanwhile, she will likely be denied private 

insurance because of medical underwriting. Kay has no adequate insurance options. 

Bettie, 57 years old, Florida 

Bettie works at a toll both in Florida. She exceeded the $50,000 annual maximum 

on her employer-sponsored insurance within six weeks of her breast cancer diagnosis. Bettie had a lumpectomy followed by auxiliary dissection of her underarm 

lymph nodes. She has been unable to start radiation treatments and is now uninsured; her plan was terminated when her employer changed parent companies. 

Bettie has been told that she cannot enroll in the new employee-sponsored plan 

until she returns from short-term disability. She is currently caring for her husband, a double amputee, and spending many hours searching for a way to afford 

her radiation treatments. 

Andrew, 19 years old, Rhode Island 

Andrew was recently diagnosed with Hodgkin lymphoma. He is on leave from his 

landscaping job and receives $641 per month in unemployment compensation. Andrew’s outstanding medical bills currently total between $15,000 and $20,000. He 

has private insurance but his treatments sometimes exceed the policy’s limit of 

$1,000 per day for chemotherapy. The insurance also does not cover many of his 

hospital costs. Andrew’s boss has offered him a different insurance policy once he 

returns to work. Andrew will elect the new coverage option when the time comes. 

However, his medical debt will remain. 

Donna, 45 years old, Ohio 

Donna has two children. She works full time, and her annual income is $27,000. 

She was recently diagnosed with breast cancer. Donna does have health insurance, 

a major medical individual policy that she purchased after her company ended its 

group plan. However, she quickly met the $10,000 limit on outpatient services under 

her new plan. Donna’s treatment, including 15 chemotherapy sessions, has left her 

with more than $100,000 in outstanding medical bills. Donna is uncertain how she 

is going to pay the debt and handle future out-of-pocket costs. She had been 

supplementing her income through a second, part-time job but had to give that up 

once her chemotherapy began. Donna’s hoping she can get one of Ohio’s guaranteed 

issue policies, which are limited by enrollment caps. The plans are only available 

during an annual 30-day open enrollment period, so Donna will wait to see what 

happens. She has no insurance options otherwise. 

f 

*Chairman STARK. Thank you. I had agreed that I would yield 

my first chance to inquire to Mr. Thompson. Would you like to inquire, Mr. Thompson? 

Mr. THOMPSON. Thank you very much, Mr. Chairman. I appreciate your generosity, and thank you to all of the witnesses who are 

here today. Mr. Finan, I’d like to pick up where you left off. I’m 

a huge proponent of preventive care, an area where I see there is 

a huge problem is the barriers that seniors face in regard to getting 

preventive care in the form of cancer screenings and such. It seems 

to me that someone’s a senior in many instances their disposable 

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income numbers are going down, and right now sadly at the same 

time that the costs for food and gasoline and energy and everything 

else is going up, I’m concerned that copayments and co-insurance 

payments are having an impact, a negative impact, in providing a 

barrier to these preventive services. That’s had an impact on things 

like cancer screening, which costs us more money in the long run. 

Anything you want to add to that? Push your button, please. 

*Chairman STARK. Your mike please, Mr. Finan? 

*Mr. FINAN. Yes, I would. First of all I want to thank you very 

much for your continued support on this issue. We totally agree 

with you that it is a significant problem, and we are totally supportive of your legislative efforts in this area. 

I’d like to point out that there was an article recently in the New 

England Journal of Medicine that looked at the issue of co-pays 

and preventive services among the Medicare population; and they 

found that even a co-pay as little as $10 resulted in about an 8 percent decline in the number of women who sought mammograms. 

So, it does suggest that there’s enormous price sensitivity among 

the elderly to these kinds of services. 

Mr. THOMPSON. Then we pay for it at the other end, when it 

becomes an acute problem. 

*Mr. FINAN. Exactly. Here for $10 we see a decline in women 

getting the mammograms, and yet, as you just point out, the cost 

if they’re not getting them could be extraordinarily high. 

Mr. THOMPSON. Thank you. Dr. Ayanian? Thanks. On the 

other end of the spectrum, on the other end of the age spectrum, 

the issue of preventive care for children. When I was in the state 

legislature, I had success with legislation that required all providers to provide health care for kids, preventive health care for 

kids from birth to 18 years of age. One loophole in that legislation 

was the ERISA loophole. Its my feeling that that is, in fact, a true 

loophole, and I know we can save a lot of money and a lot of lives 

and a lot of anguish if we can catch problems early in kids. It’s everything from keeping kids out of the hospital and hospitalization 

for kids is more expensive than adults, and it’s longer than adults. 

Then also if we can deal with these things when they’re preventable, rather than when they’re acute, we’re building a more healthy 

Medicare population in the future, should we close that ERISA 

loophole. 

*Dr. AYANIAN. It’s clear that investing in the health of children 

is a very worthwhile endeavor, and anything we can do in a costeffective manner to achieve that goal is very important. We this at 

the issue Institute of Medicine regarding the consequences of 

uninsurance and the importance of consistent coverage for children 

as well as their parents. It was clear that the evidence is that children are more likely to get the care they need when they have coverage and it’s consistent across different plans; and particularly 

also when their parents are covered the parents use the health system more effectively for their children. We get long-term benefits 

from that. So, yes. 

Mr. THOMPSON. Then, lastly, Mr. Brock, thank you for being 

here and thank you for all of the work that you’re doing. That’s 

pretty fascinating. 

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Ten percent of the doctors practice in rural areas, and I’m told 

about 25 percent of the patients are in rural areas, so there’s a real 

disparity. Representing one of those rural areas, I hear all the time 

about the trouble that we get to attract physicians to our areas and 

keep physicians in our areas, and we share the same health care 

problems as under-served areas, be they rural, urban, or otherwise. 

How much of the lack of access to health care in rural areas can 

be attributed to the lack of providers? 

*Mr. BROCK. Well, thank you for asking that question. A lot of 

the problems do stem from the fact that there are programs to help 

some of these people, but the paperwork requirements and the reimbursement rates unfortunately are not attractive enough for 

many of the providers to be willing to accept the patients. 

The other problem that we are continually faced with and actually it doesn’t matter whether we’re in a very, very rural area of 

Appalachia or whether we’re in a downtown urban area, the number of patients that are going to show up for our services are about 

the same. As a small turnout, there are going to be 5 or 6 hundred 

patients turn out. At a large RAM event, there are going to be several thousand that turn up. It doesn’t matter whether they’re living 

in an urban area or a rural area. 

The biggest problem really in providing this kind of care for 

these people is that we have found over many, many years now 

that the local physicians, dentists, and eye doctors really don’t 

want to deliver the care to these people in their hometown. Those 

same doctors are very, very willing to travel hundreds of miles with 

us, perhaps to Eagle Butte, South Dakota, to provide the care, but 

they’re really not interested in providing the care in their own 

home districts. For that reason, we are strongly hoping that rules 

will change, so that doctors can cross state lines from all over the 

country and alleviate this very, very serious problem. 

Mr. THOMPSON. Thank you. Mr. Chairman, Mr. Doggett, thank 

you both for yielding me the time. 

*Chairman STARK. Mr. Camp? 

Mr. CAMP. Thank you, Mr. Chairman. Dr. O’Grady, you testified 

that of the uninsured population that 22 percent are non-citizens. 

What percentage of the total uninsured population are eligible for 

Medicaid and other programs, but are not enrolled? 

*Mr. O’GRADY. I don’t have that figure right off the top of my 

head, but I can certainly get it for. Although it is one that is under 

some considerable kind of discussion of figuring out what the right 

figure is—and part of it has to do with the interactions between 

these eligibility questions—so if some of these kids, given immigration laws, would not be eligible as is true for the legal immigrants, 

that you’re not eligible in the first five years for either Medicaid 

or S–CHIP, exactly who’s eligible or not is certainly somewhat of 

a bone of contention. Although one of the nation’s best experts in 

this is right across the street at the Congressional Research Service. So, candidly, I’m going to go and pull that, and get back to you 

on it. 

Mr. CAMP. All right. If you could get back to the Committee 

with your—— 

Mr. Rowland. Mr. Camp, if I could—— 

Mr. CAMP. I just have a short time. I’m not done with him yet. 

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Mr. Rowland. I was going to just answer—— 

Mr. CAMP. All right. If you could submit that in writing, that 

answer, I’d appreciate that. 

What percentage of the uninsured lack coverage for just a short 

period of time, say less than three months or less than six months? 

*Mr. O’GRADY. Well, we tend the see this pattern. Again, I’ll get 

back to you with the exact figure. But what we see is we see there’s 

points in your life where you are more vulnerable. Some of these 

vulnerabilities we worry about more than others. So, you do—I 

gave the example in the oral testimony about the kid who leaves 

college, and before they start that first real job and get coverage, 

that is, certainly they’re uninsured, we would certainly prefer to 

have them insured, but we don’t really worry about them quite as 

much as we do about the chronically ill and these people who have 

been uninsured for years. 

So, it is this idea of where I’ve tried to introduce this idea of 

thinking about how you might triage this problem, because the 

likelihood of having enough money and political consensus to do everything for everybody might just not be there, in reality. 

Mr. CAMP. Do you know, and can you tell us what percentage 

of the uninsured elect not to purchase health insurance, even if it’s 

offered to them? 

*Mr. O’GRADY. There are certain ways we sort of back into that 

question. There is not good data. What we do know and you’ll see 

in the written testimony is we know that the offering rates, especially among once you’re over about 500 or a thousand employees 

in a firm, that almost all those firms offer. But you still see perhaps 10 percent in both those categories as being uninsured. 

Now we know they’re offered. We don’t know exactly whether 

they are, like I said, what we tend to jokingly call the young immortals, who sort of as long as they don’t fall off their motorcycle, 

they really don’t see much need for insurance. Is it that category?, 

or is it someone who is in a position where, you know, coverage is 

being offered, but whatever their share of the premium, their share 

of the cost-sharing going on makes it unaffordable for then. Splitting those two kinds of groups is—I don’t know anyone who’s done 

it well yet. 

Mr. CAMP. Difficult to do? 

*Mr. O’GRADY. Yeah. 

Mr. CAMP. There’s been a lot of debate around the question of 

an individual mandate to buying health insurance. Do you have 

any opinion on whether there should be a mandate, and what 

would be the pros and cons of imposing a requirement that an individual is to buy insurance, even if they feel they don’t need it. 

*Mr. O’GRADY. Yeah. An individual mandate is a tough issue in 

terms of you have these situations in the last generation of these 

sort of proposals we heard an awful lot about employer mandates, 

and in some today we hear about matching of employer and individual. The individual mandate does get to the point of where we 

talked about before, my young immortals. The idea of should you 

be in a position where you in effect force them to have coverage? 

Now that’s much of the discussion that’s gone on, on the campaign 

trail between Mrs. Clinton and Mr. Obama. Mr. Obama sort of 

wondering once you’re out of children, once you’re at a certain age, 

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you want to make it as affordable as possible; do you actually want 

to take that extra step to mandate? 

Mr. CAMP. Okay. 

*Mr. O’GRADY. It is true, the term that the Senator was searching for before is ‘‘free rider.’’ So, when these folks do fall off their 

motorcycle and all of a sudden need the health care system, they 

are going as bad debt on the rest of us; there’s no doubt about that. 

Mr. CAMP. All right. I noticed in the tape we saw that—well, let 

me just say there are 23 federally qualified health centers in Tennessee, and from what I understand, they have a list of services 

that are required, including emergency medical and dental services, among a list of other services. Can you tell me why individuals would not be able to be also attending the federally-qualified 

health centers that have a mandate to see anyone who comes in? 

*Mr. O’GRADY. Right. They do have a mandate, they certainly 

serve the uninsured. They serve the underinsured, Medicaid population, and even a few, just because of locale, regular insurance 

people. All the evaluations I’ve seen is they scored very high on 

what they do; they have—this was brought up before about health 

information technology—they have one of the best systems in the 

country right now—whether it’s poor outreach or just a nod of allowing them to know, but I know of no structural barrier of why 

folks can’t seek out those clinics. 

As you may have remembered, the President a few state of the 

unions ago, made the push to have a clinic in every poor county, 

and from what I saw when I was at the Department of Health and 

Human Services, they took that seriously. Especially in those areas 

like in the, you know where Katrina hit, especially poor. 

Mr. CAMP. All right. Thank you very much. Thank you, Mr. 

Chairman. 

*Chairman STARK. Mr. Doggett, would you like to inquire? 

Mr. DOGGETT. Thank you, Mr. Chairman and thanks to each 

of you for your insightful remarks. Of course, Mr. Brock, what 

we’ve seen that you’ve accomplished is incredibly impressive, and 

yet it is an indictment of the failings of our public health system 

in this country that those serious needs are there, demanding the 

extraordinary effort you’ve undertaken. 

One of the issues that I noted from the 60 Minutes clip is the 

difference between providing a one-stop or a periodic kind of service like eyeglasses or dental care versus the need for continuing 

treatment, continuing care, like the young woman who had had 

cervical cancer. Is there any way through your program that you 

can provide someone a primary health care home for that type of 

continuing care?, or what happens to the person who requires the 

periodic checkup, whether it’s for cervical cancer or for maintaining 

their blood pressure or their cholesterol, or whatever, on a repeat 

visit basis? 

*Mr. BROCK. Well, I think that that question is admirably demonstrated at our clinic that we do every year in Wise County, Virginia. In Wise County, Virginia, for 21⁄2 days, people come at the 

rate of twelve hundred people a day, and they wait eight, ten, fifteen hours for the service. 

Now we provide all of the services that you’ve just mentioned. 

Not only do we have about a hundred dentists there and dozens 

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and dozens of eye doctors, but we also have cardiologists and we 

have cancer experts, we do mammograms and we do Pap smears. 

The whole gamut. The interesting thing is—and again this goes 

back to the fact that so few of these state and Federal programs 

address the dentistry and the vision care—so here you have twelve 

hundred people who arrive at one of our clinics, and wait many, 

many hours. When they get in the door, they want to see the dentist so bad because their teeth are just in agony and they want a 

pair of eyeglasses because they can’t see to read the paper or they 

can’t qualify to get a job. We are constantly, with the hundreds of 

other practitioners that we’ve got there, saying, ‘‘Save your place 

in line. You need to come down here and you need to have a diabetic check-up. You need to have a check-up for high blood pressure’’, and so on and so forth. 

It is extremely difficult to get those people motivated to do that. 

So, if some of these programs were addressing and enabling people 

to get their teeth fixed, those immediate problems, then we would 

find it easier to get them to see the other specialties that they 

need. 

When you look at the cross-section of the thousands of people 

that we see, it’s largely self-induced problems. They’re all smoking 

and they’re all eating the wrong things; they’re largely overweight, 

and of course there’s an educational factor in there too. 

But the services are there, but they’re so hung up on the teeth 

and the eyes, that’s it’s very difficult to get them to take advantage 

of the rest of it. 

Mr. DOGGETT. Thank you. Dr. Rowland, and Dr. Ayanian, 

you’ve touched on this issue, but really the lack of insurance is a 

matter of life and death, and I have seen one recent study in the 

state of Texas, which is notable for having more uninsured children 

proportionally than any other state in the nation, tragically, that 

about seven working-aged Texans die each day because of a lack 

of health insurance. I suppose if the death certificate were amended to show the true cause of death along with the physical cause 

as being a societal disability, that we would see lack of health insurance on that death certificate on a pretty regular basis. It would 

be up perhaps as high as deaths from diabetes. 

Could you just comment again on what you see as the life and 

death cost of the failings of this Congress and this administration 

to see that there is access to health insurance for more of our citizens? 

*Ms. ROWLAND. Well, clearly we see from all of the research 

that when you don’t have health insurance, you make decisions 

that are contrary to your health. So, as we saw in the film so 

graphically, people delay care, and as a result of delaying care they 

come at a later stage of diagnosis, where treatment options are 

fewer and where the outcomes are worse therefore mean this 

means that on their death certificate they may die from a cancer, 

but the cancer could have been treated if caught in an earlier 

stage. 

Dr. Ayanian’s work has really helped to really the impact of lack 

of insurance by looking at specific conditions, so I’ll let him comment in addition. 

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*Dr. AYANIAN. I would just add that we all know that effective 

insurance coverage is the gateway to the health care system for 

most people in our country, and when people lack that, they don’t 

have the good primary and specialty care that we know makes a 

difference. In many ways we just defer the costs. Effective primary 

care can be very cost-effective. Preventive care screening tests, and 

care of chronic diseases like high blood pressure and diabetes. If we 

don’t take measures to provide coverage and provide access to care 

for people at those early stages of disease, then we end up with 

more costly complications of heart attacks, kidney failure, advanced 

cancer. 

*Chairman STARK. Mr. Johnson, would you like to inquire? 

Mr. JOHNSON. Thank you, Mr. Chairman. For any of you first 

three over there, you know, I believe one way to increase access to 

health care for more Americans in this country is to decrease the 

cost, and if there’s one thing America has proven, that it’s competition is the best way to drive down the cost. Health care is no different. 

There’s two initiatives I think are critical in achieving this goal: 

Health savings accounts, and association health plans. You know, 

over 4.5 million Americans have chosen HSA type insurance, and 

some studies show that as many as one-third of them were previously uninsured, and almost half have incomes below $50,000. 

Concerning HPs, estimates indicate that at least 60 percent of 

the working uninsured work for small businesses. I think we can’t 

have a conversation about the uninsured in this country without 

talking about a way to allow small businesses to pool their resources in order to provide health insurance for their employees. 

Would you all discuss that for me? 

*Ms. ROWLAND. When you look at the problems facing our 

health care system, rising costs from the increases that we’ve seen 

in premiums over the last few years have taken a real toll on both 

employers’ ability to offer coverage as well as on employees’ ability 

to pay their share of those premiums. 

However, I think one of the things that’s important when you 

look at the low-income, uninsured population, is that two-thirds of 

the uninsured come from families with incomes below $40,000 a 

year. How much they can they afford for the premium, how much 

would you subsidize that premium, and also how much they are 

able to pay out of pocket. One of the concerns we have stems from 

some of the research we’ve done is looking at the liquid assets of 

individuals at these lower income levels. We see that they have relatively few savings. As a result, if they have a health care policy 

that requires a fairly high deductible, they may not have the resources to be able to pay those co-payments and deductibles, which 

in the end could end up having them behave more in their interaction with the health system, like an uninsured person rather 

than like someone with health insurance coverage. 

So, I think one really needs to look at the availability of income 

and the availability of assets to be able to meet obligations as one 

assesses the adequacy of health insurance coverage. Work that the 

Department of Health and Human Services has done, looking at financial burden, finds many families, especially those with higher 

deductible plans, as end up spending much more of a share of their 

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income on health insurance coverage than people with more comprehensive plans, especially those offered now through the employer sector. 

*Mr. O’GRADY. Yes. There are a couple of things you brought up 

which were very good. One thing to keep in mind is that making 

this more affordable is essential. At the same time it is that value 

proposition that was being discussed earlier about we have the 

baby boomer retiring, we have these other pressures that are coming, so it’s more spending smarter, not more, not—and how we’re 

going to control that, and how we’re going to determine whether 

we’re really getting—most of us don’t mind spending more if we 

think we’re getting that breakthrough drug or that breakthrough 

device that’s going to really make a difference. But we mind spending more for something that seems wasteful and is just nicer cars 

for physicians. That sort of thing. 

So, when the chief actuary came in, I assume a week or two ago, 

and showed those trends in Medicare, those same trends exist for 

employers trying to offer coverage, Medicaid. They just don’t have 

a trustee’s report that you get every year. 

So, all that money being absorbed there is more money being 

taken off the table for the uninsured. So the notion of how you ease 

up on that cost pressure to give yourself enough leeway to start to 

think about expansion and doing it in a fiscally responsible way is 

vital. 

There was a piece done a few years ago by a researcher at the 

University of San Diego, that looked at those small firms, and in 

years when premiums were going up very fast, they either had to 

drop their coverage, or for the firms that were looking to add coverage, not in a 10 percent premium increase here. In the slower 

years, that’s when people either held their own in terms of offering 

coverage, or were able to expand. So, it’s very important. HSAs fill 

a niche, a very important niche in terms of affordability. Because 

by changing the structure of the health benefit, moving it to the 

more serious, more catastrophic things, they definitely lower the 

premium. 

Now I have one personally. I’ve had it for about three years now. 

I like it very much. I have a chronic illness. It works because it 

means also that account I can go to whatever provider I want to, 

whether they’re in the network or not, or participating with my 

plan or not. 

So, it works very well on the affordability, but certainly it is putting financial pressures on folks for that up-front cost. There’s no 

denying that. Again, none of these particular solutions that people 

put forth, me or anyone else you’ll hear from, are going to be totally pain-free. Also, you’ll help on affordability but you’ll hurt on 

cost-sharings on the beneficiary. 

But back to your first notion about bringing down this overall 

growth in spending, you know, that’s where you can have it cost 

less for both the employer and the worker, for the government and 

the beneficiary is by slowing that growth in overall spending. 

Mr. JOHNSON. Yeah. They get to pick their hospital. That’s important. 

Thank you, Mr. Chairman. 

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*Mr. BROCK. Is it possible that I can just in the half-minute 

light on unemployment insurance thing from a statistic that we 

came up with last Saturday? 

*Chairman STARK. Certainly, Mr. Brock. 

*Mr. BROCK. Two hundred and fifty people showed up at a rural 

area in Tennessee and 124 of them were prepared to answer the 

following questions. It turned out that 73 percent of them were unemployed; 18 percent were employed part time; and 10 percent 

were employed full time. Of the full-time employed, only 18 percent 

had any kind of insurance. Of those employed part time, 58 percent 

of them had insurance; and of the unemployed of which there were 

73 percent of them were unemployed, 46 percent of them had insurance. So, from this non-scientific but carefully done study last 

Saturday, if you were unemployed you were more likely to have 

some kind of insurance. 

*Chairman STARK. Mr. Becerra, would you like to inquire? 

Mr. BECERRA. I don’t know if I should be more depressed now 

after hearing that. 

[Laughter.] 

Mr. BECERRA. Thank you all for your testimony. I think you 

are reiterating much of what we’ve heard or experienced. I wish we 

knew how to crack this nut that keeps us from having universal 

coverage; but perhaps I can try to whittle my thoughts here down 

to a couple of questions. 

I was wondering, Mr. Brock, if you’d give me just a quick sense 

of what your understanding or what your sense is of an individual 

mandate, the proposals to require that individuals purchase insurance in order to obtain access to health care that rather than require an employer, or rather than do it through a system like 

Medicare, which is government-financed, that we put the burden of 

obtaining the insurance on the individual and by requiring everyone in the country to have insurance, then we will end up having 

that universal coverage that we need. 

*Mr. BROCK. I think—— 

Mr. BECERRA. Your microphone. You need to turn your microphone on. 

*Mr. BROCK. I think that in light of the fact that 73 percent of 

the people that show up are unemployed, this would demonstrate 

that those people could not afford to buy insurance. So, that presents us with a very difficult problem. 

Mr. BECERRA. Another question. Give us again a very quick 

sense, because I know my time is limited—what are some of the 

comments you hear from some of the caregivers, the doctors, the 

dentists, the other providers, that volunteer to be part of these clinics that you set up? What’s their sense? They obviously go back to 

their paying job later on, where they’re providing health care, but 

what’s their sense of where we have to go, where a solution lies? 

*Mr. BROCK. Well, they want coverage for malpractice. The first 

question that doctors ask us when they volunteer is, ‘‘Am I covered 

for malpractice?’’ The answer unfortunately is not, they are not. So, 

that’s something that needs to be fixed. Again, going back to—we 

really need to allow these doctors and dentists who are willing to 

provide the service to cross state lines and provide free care anywhere in the country as long as they can prove that they are a docrmajette on PRODPC74 with HEARING

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tor in good standing. The Tennessee Volunteer Health Care Services Act, it’s as simple as this: The doctor shows up, even without 

any notice. ‘‘Hey, I heard you’re holding a clinic. I’m from Iowa, 

here’s my license, I’m not under any judicial review.’’ ‘‘Sign that 

statement, roll your sleeves up, and go to work.’’ 

Mr. BECERRA. Let me ask—my question is more—I imagine the 

doctor from Iowa who goes to Tennessee can only do that once in 

a while. My question goes more to the point of: What do they see 

as a longer-term solution to this crisis that causes hundreds if not 

thousands of people to show up on a weekend to try to receive the 

care you offer? 

*Mr. BROCK. Well, I think that they would like to see some type 

of national coverage for people who are in a certain economic strata, whether it’s twice the poverty line or three times the poverty 

line, that people in that group need some kind of national health 

care coverage, and people who are above that economic group let’s 

not mess with the system that we’ve already got, which is fabulous 

as long as you can afford it. 

Mr. BECERRA. Dr. Rowland, let me see I can ask you something. I find what Mr. Brock does inspiring and demoralizing at the 

same time: inspiring because you have people who are willing to 

volunteer, the good Samaritans who go out there, professionals who 

provide this care; demoralizing because hundreds and thousands of 

people have to rely on a weekend opportunity to get a tooth taken 

care of. 

In all these studies that have been done, in all the work that 

we’ve had come before us for presentation, I still don’t see that the 

American public is any more angry and prepared to take us to a 

place where we, then, as policy-makers feel that we could go and 

provide that type of coverage that gets the universality that I think 

most of us would like to see for the American public. 

So I guess my question to you is: Do you see any further movement in the eyes of the American public—not so much the policymakers, but the American public, in having the outrage to having 

their policy-makers move in a universal direction? 

*Ms. ROWLAND. As we do our work in public opinion, we ask 

the public about the uninsured and about their access to care, and 

one of the startling things from our research is that people say, 

‘‘Well, the uninsured get the care they need; they just may get it 

a little later.’’ I think we still have a real burden of educating the 

public on the facts. I think things like the 60 Minute documentary 

is very important about to show that if you’re uninsured, you make 

different choices and you may not get the care you need. As John 

and others’ work shows, the consequences on your health and on 

our society’s health are really monumental. 

But I think it really is a lack of understanding—we think that 

we have the best medical care system in the world, and that if anyone really gets sick, they can show up at an emergency room and 

they can get the care they need. Yet we know they don’t even show 

up often at the emergency room, and the consequences of not getting preventive and primary care are overwhelming. 

Mr. BECERRA. Thank you. I appreciate your testimony, all of 

you, and look forward to having you back again. Thank you very 

much. Mr. Chairman, thank you. 

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*Chairman STARK. Ms. Tubbs Jones, would you like to inquire? 

Ms. TUBBS JONES. Mr. Chairman, thank you very much, and 

to all the witnesses, thank you for appearing here today. 

I think the public is actually saying to policy makers like us and 

legislators that they do want and need health care. I think the dilemma is that the United States has been so reluctant to focus on 

preventive care that we tend to be a country that focuses on acute 

and chronic care versus preventive care. That’s my little piece of 

it. 

But I want to focus for a moment, if I can, with you, Dr. 

Ayanian, if I’m saying your name appropriately. As I said earlier 

before this panel came, the Congressional Black Caucus Foundation is doing a health disparities session at a hotel here yesterday 

and today, and I’m hoping to get over there this afternoon. But I 

see that in your report—and I don’t recall that you had enough 

time in your 5 minutes to really delve into what we need to focus 

in around disparities. There were seven things that I just had in 

front of me, and I lost them. So, why don’t you go back through 

that again for me, and if you had to prioritize the 1 through 7 factors around health care disparities, would you give them to me in 

that order? 

*Dr. AYANIAN. Sure. You’re referring to a set of what have been 

described as voltage drops in the health care system from the basic 

essential of having insurance coverage to ending up with high-quality care and the seven steps in which we can lose voltage, and people not get the care and the quality of health outcomes that we’re 

looking for. 

Clearly insurance coverage is an important part of the health 

care disparities we see for different racial and ethnic groups and 

economic groups in this country, and so that’s one of the most important factors. We have a safety net. In many areas safety net 

providers are doing very important and effective work. But it 

leaves too many people outside the boundaries of our health care 

system, who are not coming in until their illnesses are too far advanced. 

We also know that health care providers that serve predominantly minority communities, low-income communities tend to be 

less well-supported, and less access to appropriate specialty care. 

If primary care is available, it’s not consistently available to all in 

the community. 

So, I think we also need to focus on the providers, the health 

care organizations, hospitals, community health centers, and medical groups, that care for disproportionate shares of minority patients, and make sure that they’re well supported, that their staff 

are highly qualified, that they have the services that are needed, 

and relationships within their communities. 

I think one of the points that was touched on in the first panel 

discussion was the need for communities and states to understand 

the presence of health care disparities in their midst and develop 

their own local and state plans. We’re seeing some promising evidence about this work in Chicago, trying to address racial disparities between African American women and white women, and 

breast cancer mortality, where community health centers, breast 

cancer survivors, community leaders, leaders of the major medical 

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centers, are coming together and really working on access to mammography, access to effective treatment, and then the quality of 

care that people get. 

So, I think those are some of the highest priority areas, and I 

think it’s very important at a national level through tools like the 

National Health Care Disparities Report, to pay close attention to 

what progress or lack of progress we have on this front; and then 

also to use data and resources to support local communities in addressing the health care needs, where they’re well understood. 

Ms. TUBBS JONES. I remember that as a kid in the public 

school systems, there were at least a school nurse and a dentist 

that fell through at least every once in a while. I can’t understand 

why we can’t get back to some of that service. There’s less schools, 

there are less students in many of the schools. Because to me it 

would be the broker for other services for folks at every level, and 

hopefully begin a process of working with young people with the vision of what prevention really means, because that is what’s ultimately going to be the concept. 

I don’t have time to allow the rest of you to respond to that particular issue, but I think it’s something we need to think about, 

how do we marry an education and then an education about preventive care within the system? 

Mr. Brock, I want to applaud you for the work you’re doing, and 

I think I’m going to be in Knoxville on Friday, and depending on 

my schedule, I may try to catch up with you, if I can get a number 

or an address. 

*Mr. BROCK. I’d be delighted to see you, madame. 

Ms. TUBBS JONES. Thank you. Mr. Chairman? 

*Chairman STARK. Thank you. Dr. Rowland, you were going to 

add an answer or a comment to Mr. Camp’s question relative to the 

make-up of the uninsured. Would you like to? 

*Ms. ROWLAND. It’s roughly 20 percent of our uninsured population are children. When we look at uninsured children, we think 

that about two-thirds of those children are actually eligible today 

for either the Medicaid or the S–CHIP program, but have not been 

enrolled, partially because they may be unaware of their eligibility 

or their family may not have taken them in. About half a million 

children who are uninsured have an immigration status that prohibits them from being eligible for either Medicaid or S–CHIP, although their incomes are below the 300 percent of poverty. 

*Chairman STARK. Thank you. Further, can you comment on 

what’s happening to the projections of the growth in uninsured 

Americans, and this question of citizenship or documentation unhappily will come up and for those who are more xenophobic than 

others, it’s a great political stance to suggest that—I don’t know of 

other countries that deny coverage to people who happen not to be 

citizens—but how big a part of our problem is that? 

*Ms. ROWLAND. Well currently, about 22 percent of our 47 million uninsured are non-citizens; however, the majority of them are 

legal and not illegal, and we estimate that about 10 million people 

therefore out of the 47 million are non-citizens, many of them waiting for eligibility for citizenship. About 4 million are from the illegal immigration population and therefore currently ineligible for 

anything except for emergency care in the U.S. 

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*Chairman STARK. So, can I infer from that, that if we think 

there are 12 million undocumented workers here and there are 

only 4 million of the 12, at least with about 8 million who have 

some form of insurance, even though they are not documented, is 

that fair? 

*Ms. ROWLAND. Correct. 

*Chairman STARK. Okay. 

*Ms. ROWLAND. In fact most of the growth we see in our uninsured population comes growth among citizens, who makes up 

about 80 percent of the growth each year, since the number of 

illegals is still small in comparison to the total population. 

*Chairman STARK. Okay. 

I want to ask both you and Dr. Ayanian, in your testimony, doctor, and I think Diane as well, you’ve talked about hidden costs. 

Dr. Ayanian points out that if—I think if I remember correctly— 

if I’m uninsured before I mature into Medicare for the next 7 years, 

65–72, I’m apt to be more expensive than those who have a continuum of medical—which one presumes means they were insured. 

Then there’s the issue of the local emergency room. I’d like to 

think, although I’m not positive, that we don’t let people bleed to 

death on the streets, so if they end up in an emergency room, 

they’re at least stabilized if they’re treated, somebody pays for that, 

either those of us who are paying for insurance pay through higher 

premiums, or the local community pays through taxes to subsidize 

care. 

Then there is the issue of benefit caps, in other words, whether 

it’s the people who sell these association plans that generally don’t 

meet decent standards in terms of providing care that is covered 

by most insurance commissioners or other reasons—can we get— 

I think Commonwealth did a study that deals with the social costs. 

Productivity is kind of an elusive issue. You know, is General Motors going to make less money because of productivity, or is the dry 

cleaner in the shopping going to make less money because their 

workers may be absent more than others—are there many studies, 

and any of you I’d appreciate the answer, seriously—it’s kind of 

hard for us to quantify that. I mean how much more do we spend 

on Medicare?, can we find out?, because of the uninsured who mature into Medicare? Is there a number out there that would available to us without extensive research? 

*Dr. AYANIAN. I’d have to say at this point there is not a definitive number, but it’s something that we’re actively working on, and 

working with Medicare data to try to understand that better. From 

some of the work that I discussed earlier, we found that people in 

their late fifties and early sixties who are uninsured use 15 percent 

lower levels of services in the presence of heart disease and diabetes, so this is a group clearly that should be in care and where we 

know health care makes a difference. 

Then almost immediately after they turn 65, we see a sort of flipping of that, and the people who are previously uninsured use 

about 15 percent more services after they enter the Medicare Program. So, we’re now moving forward to try and understand exactly 

what services. Some of them may be fairly expensive, like people 

needing coronary bypass surgery. Other aspects may be fairly 

basic, like seeing primary care physician for diabetes care. Another 

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issue that we’re pursing is to what extent might those savings be 

available to the Medicare Program if we did a better job of covering 

people in their 50s and 60s before their conditions became more severe. 

*Chairman STARK. Okay. It would be helpful, I’m sure to all of 

us if we could, at least as we have to wind our way through this, 

we could in fact quantify those areas, because there are a lot of 

people who on both sides of the aisle that unless we can assure 

them that we’re not wasting a lot of money, we’re going to have 

trouble. It’s one thing to talk in generalities; it’s another thing to 

say, ‘‘Hey, this costs X bucks’’ to Medicare. That makes our job a 

bit easier. 

Mr. Brock, I just want to commend you as well for the efforts of 

your organization, and I hope you’ll keep it up. I’m concerned that 

many of the services that you suggest are not insurable, insofar as 

I know, the American Dental Society is not very anxious to see 

dental insurance made available by any kind of mandate, and so 

without their help, I’m not sure it will ever happen. 

Speaking of mandates, which is an issue that was brought up, 

I’d be remiss if I didn’t suggest that Governor Romney and Governor Schwarzenegger, whom I have not ever seen at any of our 

progressive caucuses, or any other liberal groups, both suggested 

mandates as part of their state plans, and I don’t think to their political disadvantage. I think they both felt, as I feel, that there was 

no way they were going to get universal coverage without somehow 

‘‘mandating’’ it. I just don’t think that whether it’s the youngsters 

who think they’re invincible, who won’t buy it if they’re not told to, 

but at some point I think mandate—if we would like to see universal coverage, I don’t know how we’re going to avoid that. 

My commentary on that. I appreciate, Mr. Finan, the work that 

American Cancer Society does to try and save us from ourselves, 

and what happens the somebody diagnosed with cancer with no insurance, no money? You’re a male and when you get prostate cancer, if you’re uninsured you go to the emergency room. Prostate 

cancer generally doesn’t present itself except for maybe an urgency 

to go to the bathroom that you can’t satisfy, but other than that. 

What happens to that person? What happens to the woman who 

says, ‘‘Oh, oh, I’ve got a lump, but I don’t know whether that’s 

breast cancer or not.’’—and they virtually don’t have access to a 

systematic medical protocol—what do they do? 

*Mr. FINAN. Well, you’re correct, Mr. Chairman. These people in 

those situations typically show up at the emergency room. At that 

point they probably have an advanced stage of a cancer. It obviously becomes much more expensive to treat at that point. That 

cost is being borne more widely by society because they’re uninsured. 

*Chairman STARK. Do they get treated, though? I mean if they 

show up, do they get surgery or radiology or chemo, which could 

be a long and expensive procedure. Is that—— 

*Mr. FINAN. It depends on the state of the condition, actually. 

Where they happen to go into the emergency room. I think it varies 

considerably by the facility and where they are, and what kind of 

charity is available. But the fact is we know that some recent research was done by some of my colleagues in the Society shows 

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that for those who are uninsured, they tend to be diagnosed much 

later and are much less likely to survive, or they have less chances 

of survivorship for the uninsured. 

So, insurance makes a huge difference. 

*Chairman STARK. Okay. Well, I can’t conclude this hearing 

without commenting that the one thing—and Dr. O’Grady, I hate 

to tell you, but you failed me—I know coming from the ‘‘Let them 

eat cake’’ school of social consciousness that you’d like to find ways 

to provide care like public clinics, but with all your perspicuity and 

intellectual curiosity, you blew it. The Stark solution for these people who are truly uninsured, be they citizens with document or people without documentation—how you could have missed the chance 

that I have suggested for every uninsured American, who under 

the Constitution, all they have to do is walk out of this room, step 

out there on the corner, and kick a cop. You’ll end up in jail, where 

the Constitution will require us with the medical care you deserve. 

So I’ve always suggested, if you don’t have medical care any place 

else, go hit a cop, you’ll get all the medical care—you’ll probably 

need a little extra when you’re done—but please add that to your 

testimony because you really haven’t done the job that I think your 

position requires. 

[Laughter.] 

*Mr. O’GRADY. I stand corrected. 

*Chairman STARK. Having said that, I want to thank the witnesses and the Members for starting at least on this road to seeing 

whether we can identify the problem that faces us. 

Thank you all very much for being with us today. 

*Mr. BROCK. Can I just add a 10-second thing—that comment 

that you made a moment ago? 

*Chairman STARK. Certainly, Mr. Brock, you may. 

*Mr. BROCK. About the state of Massachusetts. I have here as 

a result of the 60 Minutes piece a request from the Campaign for 

a Better Tomorrow in Massachusetts, saying to us, ‘‘We are proposing a convoy of 300 southeastern Massachusetts residents via 

school bus for treatment by Remote Area of Medical in Tennessee.’’ 

Does this mean, then, that one of the richest states in the Union 

is going to be sending patients to us, at one of the poorest states 

in the Union? But I found it rather interesting. If they show up, 

we’ll treat them. 

*Chairman STARK. You’re very kind. Thank you very much, and 

the hearing is adjourned. 

[Whereupon, at 12:37 p.m., the hearing was adjourned.] 

[Submissions for the Record follow:] 

Statement of American College of Physicians 

The American College of Physicians (ACP) is the largest medical specialty society 

in the United States, representing 125,000 doctors of internal medicine, residents 

and medical students. ACP commends Chairman Pete Stark for holding this hearing 

to better understand the problems of today’s health care system so that we may 

achieve effective health care reform. The College advocates that all Americans 

should have affordable health insurance coverage. 

To determine how to achieve a high performance health care system with universal health insurance coverage, the College examined the U.S. health care system 

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i American College of Physicians. Achieving a High-Performance Health Care System with 

Universal Access: What the United States Can Learn from Other Countries. Annals of Internal 

Medicine. 2008;148:55–75 (accessible at http://www.annals.org/cgi/content/full/0000605– 

200801010–00196v1) iiOrganization for Economic Co-operation and Development. Total Expenditures Per Capita, 

June 2006. iii U.S. Bureau of the Census. Income, poverty, and health insurance coverage in the United 

States: 2006. U.S. Deptartment of Commerce (P60–233). August 2007. iv American College of Physicians—American Society of Internal Medicine. No health insurance? It’s enough to make you sick. Philadelphia: American College of Physicians—American Society of Internal Medicine; November 1999. 

and compared it to health care systems in other countries.i The analysis revealed 

lessons that could be learned from high performance health care systems in other 

industrialized countries. Based on these lessons, ACP proposes recommendations to 

achieve a more efficient, better functioning health care system in the USA with 

health insurance coverage for all. 

The U.S. health care system spends far more on health care than any other country. Costs continue to rise at a faster pace than spending in the rest of the U.S. 

economy. Yet, an estimated 47 million Americans (15.8 percent) lack health insurance protection.ii These Americans are much less likely than those with insurance 

to receive recommended preventive services and medications, are less likely to have 

access to regular care by a personal physician and are less able to obtain needed 

health care services. People without health insurance live sicker and die younger.iii

Even among those with health insurance coverage, wide variations exist in terms 

of cost, utilization, quality and access to health care services. Rising costs are creating financial burdens for individuals, government and employers, resulting in reduced access to care, and adding to the number of uninsured.iv

Additional problems in the U.S. include disparities in health care based on race, 

ethnicity and geography; an insufficient supply of primary care physicians for an 

aging society; a dysfunctional system for paying physicians; and excessive administrative and regulatory costs. 

Our analysis of health care systems in twelve other industrialized countries included an overview of each country’s healthcare system, its advantages and disadvantages, and possible lessons to be learned for the USA. Criteria developed by 

the Commonwealth Fund were used for measuring the performance of health care 

systems. 

Although many individuals in the United States receive exemplary health care, 

international comparisons on most key indicators of the public’s health have shown 

that the United States has poorer health outcomes in the aggregate than many 

other industrialized countries. Major improvements are needed in the health care 

system in the United States to achieve performance levels attained by health systems in other countries. 

The following lessons and recommendations were identified for improving health 

care in the United States: 

Lesson: Well-functioning health systems guarantee that all residents have access 

to affordable health care. Some countries achieve universal coverage with a system 

funded solely by the government. Most, however, have opted for models that include 

a mix of public and private sources of funding. 

Lesson: Global budgets can help restrain health care costs but do not provide incentives for improved efficiency unless they are set reasonably and targeted to small 

enough groups. 

Lesson: The use of government power to negotiate prices can achieve cost savings 

but may result in shortages of services subject to price controls, delays in obtaining 

elective procedures, cost-shifting, and creation of parallel private sector markets. 

Recommendation: Provide universal health insurance coverage to ensure that all 

people within the United States have equitable access to appropriate health care 

without unreasonable financial barriers. Health insurance coverage and benefits 

should be continuous and not dependent on place of residence or employment status. 

ACP calls on policymakers to consider adopting one of the following two pathways 

to achieve universal coverage: 

A single-payer system in which one government entity is the sole third-party 

payer of health care costs. The advantages of single-payer systems are that they 

generally are more equitable, have lower administrative costs, have lower per capita 

health care expenditures, have high levels of patient satisfaction, and have high performance on measures of quality and access than systems using private health insurance. The disadvantages of this system include potential shortages of services 

subject to price controls and delays in obtaining elective procedures. 

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A pluralistic system in which government entities as well as for-profit and notfor-profit organizations ensure universal access while allowing individuals the freedom to purchase private supplemental coverage. The disadvantages of this system 

are that it is more likely to result in inequalities in coverage and higher administrative costs. Pluralistic financing models must provide a legal guarantee that all individuals have access to coverage and sufficient government subsidies and funded coverage for those who cannot afford to purchase coverage through the private sector. 

Lesson: Cost-sharing designed so that low-income individuals pay no or nominal 

amounts can help restrain costs while assuring that poorer individuals are still able 

to access services. 

Recommendation: Create incentives to encourage patients to be prudent purchasers and to participate in their health care. Patients should have ready access 

to health information necessary for informed decision-making. Cost-sharing should 

be designed to encourage patient cost-consciousness without deterring patients from 

receiving needed and appropriate services or participating in their care. 

Lesson: Societal investment in professional medical education can help achieve a 

health care workforce that is balanced, well-trained, and in sufficient supply. Investment in primary and preventive care can result in better health outcomes, reduce 

costs, and may better assure an adequate supply of primary care physicians. 

Recommendation: Develop a national health workforce policy that includes sufficient support to educate and train a supply of health professionals that meets the 

nation’s health care needs. To meet this goal, the nation’s workforce policy must 

focus on ensuring an adequate supply of primary and principal care physicians 

trained to manage care for the whole patient. The Federal Government must intervene to avert the impending shortage of primary care physicians. A key element of 

workforce policy is setting specific targets for producing generalists and specialists 

and enacting policy to achieve these targets. 

Lesson: Effective physician payment systems include support for the role of primary care physicians, incentives for quality improvement and reporting, and incentives for care coordination. Establishment of performance measures, financial incentives, and active monitoring of performance can encourage higher quality of care. 

Countries that organize care around the relationship between a primary care physician and the patient through a patient-centered medical home have better outcomes 

at lower cost. 

Recommendation: Provide financial incentives for physicians to achieve evidencebased performance standards. The United States should revise existing volumebased payment systems to create care coordination payments for physicians working 

with health care teams to provide patient care management and maintain a fee-forservice component for separately identifiable visits. Redirect Federal health care 

policy toward supporting patient-centered care and the patient-centered medical 

home. 

Lesson: Uniform billing systems and electronic processing of claims improve efficiency and reduce administrative expenses. 

Recommendation: Support with Federal funds an inter-operable health information technology infrastructure, create a uniform billing system for all services, and 

reduce regulatory burdens. 

Lesson: Insufficient investments in research and medical technology result in reliance on outdated technologies and medical equipment, and delay patients’ access to 

advances in medical science. 

Recommendation: Encourage public and private investment in medical research 

and assessments of the comparative effectiveness of different medical treatments. 

Conclusion 

The American College of Physicians appreciates the opportunity to provide the 

Health Subcommittee with this summary of our views on health system reform. We 

recognized that although we can learn much from other health care systems, any 

solution for the United States must be unique to our political and social culture, demographics, and form of government. Many factors make it unlikely that we can 

simply adopt systems used by other nations, particularly those that involve a substantial expansion of the power of the Federal Government to regulate health care. 

Nevertheless, we believe our examination of the evidence identified several approaches that are more likely than others to be effective in achieving a well-functioning health system that could be adapted to the unique circumstances in the U.S. 

Additional information on ACP’s analysis and proposals for improving access to 

health care can be found on our website at: http://www.acponline.org/advocacy/ 

where_we_stand/access/#access. 

The American College of Physicians would welcome an opportunity to provide further details of our findings and recommendations or to answer any questions. 

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(1) Health Insurance Costs Climb; Workers Pay 1⁄4 of Premiums Emily Fredrix, The Associated 

Press, Page 9 (2) UCLA Center for Health Policy Research, California Budget Project, August 2007, ‘‘What 

Does It Take For a Family to Afford to Pay for Health Care’’, David Carroll, Dylan H. Roby, 

Jean Ross, Michael Snavely, E. Richard Brown, and Gerald F. Kominski 

Statement of Edward M. Burke 

Hello, my name is Edward M. Burke and I am a 49-year-old individual with hemophilia. I want to share my concern with you about the increasingly unobtainable 

and unaffordable health insurance coverage for Americans, especially the unemployed, the disabled and vulnerable youth. Therefore I am submitting for the record 

the following statistics: 

Health insurance costs continue to climb and will probably rise again next year 

according to the survey released by the Kaiser Family Foundation, a health care research organization that annually tracks the cost of health insurance.(1) Traditionally health care premiums rises between 9–14 percent per year, challenging the 

standard of income increase. Although health insurance is a priority issue in American lives and amongst political candidates no new significant advance or major 

change has been applied in years. 

The largest uninsured population of the U.S. are the young people between 19– 

30. The reason they do not have health insurance is because most have jobs that 

do not offer it or because they only make average annual incomes of less than 

$26,000. If they were to pay premiums they would require approximately $3,600 

which would be 13 percent of their income before taxes and other expenses. 

Here is an example at $26,000 ($2,166 monthly): 

Monthly Income: 

$2,166 per month 

Monthly Expenses: 

$375 per month 4,500 Taxes 15% of income 

$300 per month 3,600 Health Premiums 

13% of income 

$900 per month Rent 38% of income 

$400 per month Transportation—18% of 

income 

$250 per month Food—11% of income 

$150 per month Utilities—7% of income 

$100 per month Debt—4.5% of income 

$2,475 per month 

($309) Monthly Debt with health insurance(2)

It is clearly evident from an economic standpoint that the younger uninsured population cannot afford health insurance. There is nothing to scale down unless you 

expect this population to live in section 8 housing, ride bicycles to work, live off of 

soup and crackers, and heat their homes with dangerous space heaters. Many in 

this population would rather ‘‘roll the dice’’ of chances than live in debt, given the 

fact that they are already living from ‘‘hand to mouth’’. The strategy for this population is, ‘‘if I need medical attention, I will just go to an emergency room and either 

the state or government will pay for it. . . . not me.’’ 

Now that we have looked at the livelihood of a relatively health young adult population, let’s assume there is a small population within this population who have expensive chronic illnesses. Suddenly the $309 monthly debt would significantly increase to an additional $500 to $1,000 per month in co-payments. Me, having hemophilia and being one of these young people would have to not only incur a debt of 

$300 per month so I can stay insured, but I would have to incur an additional 

monthly debt of $2500 per month until my out-of-pocket was met or it would be a 

recurrent monthly debt for all 12 months if I were on Medicare totaling $30,000. 

And you wonder why people who are uninsured flock to the emergency rooms?! 

Our health care system does not provide affordable coverage, plummets working 

tax-paying citizens into public assistance programs (which incurs cost to the governrmajette on PRODPC74 with HEARING

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(3)www.HemophiliaGalaxy. About Lifetime Caps, Page 1 (4)www.HemophiliaGalaxy. About Lifetime Caps, Page 1 (5)www.hemophilia.org, Lifetime Insurance Caps, Page 1 (6)www.hemophilia.org, Lifetime Insurance Caps, Page 2 (7) Jack Rodgers, November 8, 1995, Research Letter, Page 7 

ment), and removes any incentive to better oneself or even maintain a work environment. Why not just live off the State and Federal Governments? 

In all due respect, many legislators are not understanding the economics livelihoods and capabilities of their constituents. There seems to be a loss of reality between those making the laws and those trying to live the laws. 

The Factor Foundation would like to propose two solutions to provide an incentive 

for helping young people afford health insurance and helping people maintain 

health insurance. The first is simply to negotiate with health plans to offer more 

affordable premiums that would provide at least catastrophic coverage for injuries, 

hospitalizations, and necessary tests and surgeries. The second would be the elimination of lifetime health insurance caps. 

‘‘Sixty (60) percent of all individuals affected by hemophilia have private health 

insurance and approximately 3,000 people in the U.S. exceed their lifetime cap each 

year,’’ (3)

‘‘The average cap for hemophilia A is around $1.4 million.’’ (4) Since this chronic 

disease state can incur from $100,000 to $2,000,000 per patient per year health insurance coverage is a constant concern for families with hemophilia. In 1970, the 

cap of 1 million dollars was set by the insurance industry. ‘‘The same coverage today 

would equal $18 million.’’ (5)

Eliminating or raising lifetime caps would be of the utmost benefit to chronic disease states such as hemophilia. Other disease states like Cancer, Cystic Fibrosis, 

Fabry Disease, Parkinson’s and Multiple Sclerosis as well as so many others would 

also benefit. 

‘‘In 1995 Price Waterhouse found that eliminating the lifetime cap would save the 

Medicaid program alone more than $7 billion over seven years. These savings are 

likely more in today’s dollars. A study from the American Academy of Actuaries, 

also in 1995, found that eliminating the lifetime cap would increase premiums as 

little as $8 a year. Eliminating lifetime caps would allow individuals with manageable, but high costs such as those with bleeding disorders to maintain their private 

insurance.’’ (6)

Further, as per the research of Mr. Jack Rodgers, then Director of Health Policy 

Economics at Price Waterhouse in 1995, Mr. Rodgers stated, ‘‘based on our preliminary calculations, we estimate that removing lifetime insurance caps on medical 

care would result in an annual savings of $440 million to the entire Medicaid program for 1995 and increasing to roughly $1.3 billion in year 2002. The cumulative 

estimated Medicaid savings for Federal and State/local governments for years 1995 

to 2002 is approximately $7 billion. Of the $440 million Medicaid savings in 1995, 

we estimate that approximately $250 million would go towards Federal Medicaid 

savings and $190 million would go towards State/local Medicaid savings.’’ (7)

In 2001 Price Waterhouse estimated about 2,500 patients per year reached their 

insurance cap. The Price Waterhouse report prepared in 1995 as Congress was considering legislation to require higher lifetime caps, estimated that State and Federal 

health programs could save $1.3 billion in 2002 if lifetime caps were completely removed. 

Eliminating lifetime caps would allow the Federal Government and State governments to experience cost savings to ever increasing challenged budgets, and avoid 

costly utilization of emergency rooms and hospitalizations due to the chronically ill 

being uninsured and limited by lifetime caps. Making health insurance minimal and 

more affordable to fit a young persons budget illustrated above would also provide 

cost savings to the Federal Government. 

I thank you for the opportunity to present this information to you and would be 

willing to provide you with the documented resources that support this statement. 

Thank you for your interest and concern. 

Additional information provided by Dana Kuhn, PhD, President and 

Founder of Patient Services Incorporated. 

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Statement of George Stone 

Thank you for looking into the rising cost of health insurance in this country. I 

retired about 6 years ago and since that time the cost of my health insurance has 

gone up dramatically while my income has not. 

Without help controlling those health care costs I will be joining the ranks of the 

uninsured. 

Retired Firefighter/Paramedic 

f 

Statement of Jonathan B. Weisbuch 

Thank you for the opportunity to submit a statement to your informational hearing, Health Subcommittee Advisory No. HL–23. Since my graduation from NYU 

Medical School in 1963, this country has struggled to provide health care to all its 

residents. Medicare and Medicaid were initial steps, but continue to leave huge gaps 

that have not been closed. Now is the time to make the major changes that will 

set the system right. 

Plans currently promoted by Senators Clinton and Obama are insufficient. Their 

plans rely on an insurance industry which profits by denying care, and a Medicaid 

program for ‘‘medically indigent’’ that promotes the myth that a health system for 

the poor can be separate, but equal. 

Preserving a profit system continues the benighted notion that medicine operates 

under the rules of Adam Smith, Milton Friedman and the economics of the market 

place. This cultural error produces waste, inefficiency, and unnecessary human morbidity and mortality. It encourages the outright greed we now find in hospitals, physician practices, the medical equipment and pharmaceutical sectors, and the insurance industry. The business model is driven by profits and competition; a medical 

system should focus on preventing disease, using science to diagnosis and treat patients, and providing humane care when cure is no longer possible. Profit does not 

enter the equation. Quality care and profits frequently conflict; nothing in the business vocabulary speaks to serving human needs where no economic benefit accrue 

to the corporation. The cultural misconception that medicine is a business, not a 

profession, must be eliminated from any reform. 

Similarly, Medicaid, focused on serving the ‘‘medically indigent,’’ has produced 50 

state systems, all of which are different. Eligibility is variable, coverage is not transportable; individuals are subject to means tests, and may lose coverage for themselves or their children when income exceeds a minimal level. States invariably 

have difficulty covering their medical costs, reducing eligibility, services, and the fee 

schedule. A special system for the poor must be eliminated. Congress must adopt 

a universal program that assures that everyone has coverage that is equitable and 

accessible in every region of the country; is based on common standards of care, 

practice and quality; and is reimbursed by fees agreed upon by all parties. Administration costs should be a low percentage of total expenditures. 

The one program in the United States that could meet these objectives, if expanded and modified, is Medicare. It is true that the VA system provides the highest quality care at the lowest cost of any large system in this country; but proposing 

a program, fully owned by government, is inconsistent with the independent nature 

of medical practice. The VA should be preserved until the new health reform 

achieves the level of quality, cost and patient satisfaction that exists in the VA. 

Until that time, however, the Medicare model will suffice for non-veterans. The New 

Medicare should eliminate Parts C and D, and modify Part B in lieu of a service 

model that expands primary care and prevention, supports quality improvement, 

and spreads all costs across the entire system. The New Medicare should pay hospital costs on a per diem rather than a DRG basis; and should encourage the use 

of high technology only when clear outcome improvements to health are demonstrable. The differences in care and cost that exist between regions are unconscionable. The New Medicare should also include mental health and dental services, rehabilitation, and community care. 

Expanding Medicare to include everyone can be accomplished in three years. The 

age for eligibility for adults could be lowered annually by 15 year increments; for 

children, providing coverage for those 0–1 in year one, then up to 10 in year two, 

and to 20 in year three would achieve universal coverage with minimal strain to 

the current system. Patients now covered by insurance would maintain their current 

patterns of care; those without coverage or a medical home, would be given the opportunity to choose one. Adding 16 percent to every primary care practice in the 

country might be a short term burden to the system; but if primary providers were 

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given a large increase in their fee schedule, they could be willing to add one hour 

to their day to meet the demand. Over three to five years, the increased primary 

care fees might draw physicians into primary care specialty training, helping to 

equilibrate what is now a disproportionate number of specialists in the American 

system. 

A significant outcome of this change, apart from the fact that everyone will be 

covered, is that all providers will know the fee schedule for a particular service. 

Today, insurance carriers all have different fees, Medicare and Medicaid differ, and 

fees paid to some providers of care differ from those paid to others for the same 

service. This promotes inefficiency and efforts to beat the system; it encourages dishonesty. Adjustment in the fee schedules will take time, hard work; and must include representatives from all segments of the system to be equitable and acceptable. 

Payment for the new program will require transferring premium dollars now paid 

by employers for private insurance into the Medicare Trust Fund, as each eligible 

age group moves from private insurance into the New Medicare program. The coverage for pregnant women and children would be paid in part by transferring the 

family coverage premiums into the Trust Fund, and the rest from the Federal monies now used by Medicaid for deliveries and other pediatric programs like SCHIP. 

The New Medicare should allow states to retain their portion of Medicaid dollars, 

a benefit of nearly $200 billion, funds sorely needed by the states. 

Under this scenario, the insurance industry will remain active for three years, diminishing in size each year. Corporate costs for health benefits will remain approximately the same, since the monies now purchasing private insurance for each age 

group will be transferred to the Trust Fund as that age group becomes eligible. 

Family coverage will be transferred to the Trust Fund. As premiums shift to the 

Trust Fund, corporate staff now used to choose insurance programs, examine utilization, determine benefits, and respond to personnel complaints, can be reassigned. 

Other insurance costs that cover worker health benefits will decline over time: 

Workers’ Compensation, vehicle insurance, pension health benefits, etc. 

Corporate premiums will not cover all health costs, however, since current costs 

also include patients’ out-of-pocket costs. These point-of-service fees will be eliminated for patients, but will have to be covered by a small increase in personal income taxes. 

No new finances will be required to pay for the New Medicare, sufficient funds already exist in the system to meet the $2.3 trillion cost. Corporate premiums generate about $900 billion. Out-of-pocket costs today approximate $1,500 per individual, or $450 billion. The payroll tax going into the Medicare Trust Fund to cover 

the elderly, approximately $500 billion, will continue; and may decline in time as 

the system becomes more efficient in preventing the morbidity of those entering the 

65 year old window. The Federal portion of the $350 billion now spent by State and 

Federal general revenues for Medicaid will be added to the Trust Fund, and the 

state portion retained by each state. Most of the categorical funding now coming 

from HHS, such as Ryan White, Maternal and Child Health funds, special disability 

monies, etc. will all be rolled into the Trust Fund. These monies will allow the New 

Medicare to operate without a means test, without exclusions for pre-conditions, 

without the need for annual state legislative action, without the need for any definition of eligibility based on the Federal Poverty Line, and without the 30 percent 

overhead and profits now drained from the system. The only new ‘‘tax’’ is the income 

tax on individuals to offset the out-of-pocket costs now paid at the point of service. 

The New Medicare program will function as did the old, with minimal administrative overhead, saving clinicians and hospitals hundreds of billions of dollars in billing costs now required to keep up with the current paperwork. 

In three years everyone in the U.S. will be covered. Preventable deaths in the uninsured, failure to use preventive services, individual bankruptcies for catastrophic 

illness, and the failure to provide adequate health care to prisoners, will all be 

eliminated. Initially, everyone will be covered under the same rules now governing 

Medicare; but these rules will have to change, so that by year 5, the entire system 

will have common service guidelines. Some service exclusions will exist, including 

cosmetic surgery, experimental treatments and those without scientific justification; 

but, the approved set of services will include all the care needed to promote health, 

to cure and care for disease. Profits will no longer drive the process, rather the care 

giving concept outlined by Hippocrates 2500 years ago will prevail. The pharmaceutical industry, the medical equipment industry, private transport services, etc., 

will provide services to the program under competitive bids. Fees and reimbursements will be based upon the cost to provide care and a relative value scale. Incentives may be used to encourage providers to work in underserved areas. And the 

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tures; allowing PH to meet its legislative mandates and be prepared for mass 

events. 

HB 676 submitted by Congressman Conyers, and over 100 cosigners, would 

achieve these objectives. Everyone would be included, the states would be relieved 

of their Medicaid burden, companies providing health benefits would experience a 

decline in their costs. 

Medicare Trust Fund problems would be resolved as large additional revenues 

from individuals and corporations are added, increasing the risk pool with large 

numbers who use limited medical services. With an entire nation covered by one 

common payer, the actual cost of care per individual will decline as many exploit 

prevention services, utilize early diagnosis and treatment, and reduce inappropriate 

use of hospital emergency services. 

f 

Statement of Karen Hawes 

Speaking one’s mind is what we should all be doing, in healthy debates and not 

heated arguments. When 47 million Americans is quoted as the number of people 

adversely affected by our present-day, health-scare system, the numbers game can 

be flipped and dissected to support any argument, even using the same numbers. 

However, knowing/seeing much of the impact firsthand, alongside comparisons with 

what is provided in other countries, the U.S. is not the leader when it comes to caring for its own. We may have many technological advances, but they are limited to 

the select few—this does not translate to being great as a nation; other nations, 

with perhaps fewer or less-fantastic advances, but who provide necessary care to 

their people, provides a greater national advancement than any bleeding-edge technology. The rhetoric does not reflect the reality, when it comes to our health care 

system. 

Some mention that there are millions in America who choose to go without health 

care coverage. For those who are choosing to go without healthcare coverage, it’s 

most likely because of cost, not because of choice. We all want quality care, not all 

of us can afford it; especially when you have families who have to choose between 

paying the rent or paying for ever-inflating insurance—for coverage that may not 

pay for your medical needs (due to multiple loopholes and contractual fine print). 

So, people gamble with their lives, in order to keep afloat and provide what they 

know is needed: food, shelter, etc. I think that every American should volunteer at 

one of these health clinics, at least once a year, to see it first-hand and at the frontline who ‘‘these people’’ are and how it is that things got this way ′′for them′′. It’s 

a lot different than what’s covered in the sound-bytes of our news sources. There 

are more people than we’re being shown, who are frightened to death, no pun intended, about getting sick. This also reflects the factoid that well over half of Americans who file for bankruptcy have done so as a result of a major medical illness. 

When in America, it often is ‘‘your money or our life.’’ 

f 

Statement of March of Dimes Foundation 

The March of Dimes is pleased to submit testimony on the importance of health 

insurance coverage for women of childbearing age, infants and children on behalf 

of its over 3 million volunteers and 1500 staff. As you may know, the March of 

Dimes is a national voluntary health agency founded in 1938 by President Franklin 

D. Roosevelt to conquer polio. Today, the Foundation works to improve the health 

of mothers, infants and children by preventing birth defects, prematurity and infant 

mortality through research, community services, education, and advocacy. The 

Foundation is a unique collaboration of scientists, clinicians, parents, members of 

the business community, and other volunteers affiliated with 51 chapters in every 

state, the District of Columbia and Puerto Rico. 

The March of Dimes thanks Chairman Stark and Members of the Subcommittee 

for holding a hearing on the topic of the instability of health coverage in America. 

According to the Institute of Medicine, health coverage is the single most important 

factor in determining whether a child receives medically-needed care. The IOM has 

also found that health coverage plays an important role in access to maternity care, 

and pregnant women without health insurance receive fewer health services and report greater difficulty in obtaining needed care than women with insurance. 

Given the Foundation’s history with the polio epidemics and our current focus on 

preterm birth, the March of Dimes is equally committed to ensuring that all women 

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of childbearing age, infants and children have coverage for preventive services as 

recommended by the American College of Obstetricians and Gynecologists (ACOG) 

and the American Academy of Pediatrics (AAP) and that high risk pregnant women 

and medically compromised children, such as those born preterm or with birth defects, have comprehensive coverage for special health care they require. 

The March of Dimes has worked with Members of Congress, other Federal officials, and numerous states on efforts to improve, expand and protect both private 

and public coverage. Specifically in regard to private coverage, in 2006, the March 

of Dimes commissioned a report from the Georgetown University Health Policy Institute entitled, ‘‘Health Insurance Regulation by States and the Federal Government: A Review of Current Approaches and Proposals for Change.’’ This report 

found that numerous states have enacted laws to ensure that individuals covered 

by state regulated insurance plans received access to certain important benefits. For 

example, 19 states have requirements regarding maternity coverage, 27 states have 

requirements regarding the screening for and treatment of phenylketonuria (PKU), 

and 13 states have requirements that address coverage for the treatment of cleft 

lip/palate malformations. These measures provide access to critical care. As the Subcommittee considers healthcare reform proposals, the March of Dimes urges Members to recognize the importance of these mandates to pregnant women, children 

with birth defects, and their families. 

The need for continued efforts to expand access to health coverage is clear. According to Census Bureau data prepared for the March of Dimes, in 2006, 9.4 million—12 percent—of the nation’s 78 million children under age 19 lacked health insurance coverage. Some 61 percent of these children lived in families with incomes 

below 200 percent of poverty and may have been eligible for Medicaid or the State 

Children’s Health Insurance Program (SCHIP). In fact, public programs like Medicaid, SCHIP and Medicare are a critical source of access to care for many low income women of childbearing age, infants and children. Medicare finances approximately 10,000 births annually, and Medicaid financed 41 percent of hospital births 

in 2002. Medicaid also covered nearly 30 million children in 2004, and SCHIP covered approximately 6 million. The March of Dimes is dedicated to continuing to 

work with Members of the Subcommittee to ensure a swift reauthorization of 

SCHIP that will provide states with the tools and resources necessary to make significant gains in enrolling eligible pregnant women, infants and children. The Foundation is also eager to work with Members to ensure that the specific healthcare 

needs of women of childbearing age, infants and children are addressed in any 

healthcare reform efforts. 

The March of Dimes supports access to comprehensive insurance coverage for all 

women of childbearing age, especially those who are pregnant, that covers the full 

scope of maternity care benefits recommended by the American College of Obstetricians and Gynecologists (ACOG) and the AAP. Women who receive maternity care 

are more likely to have access to screening and diagnostic tests that can help identify problems early; services to manage developing and existing problems; and education, counseling and referral to reduce risky behaviors like substance use and poor 

nutrition. Such care may thus help improve the health of both mothers and infants. 

In addition, postpartum care helps women appropriately space pregnancies, thus reducing the risk of preterm birth. 

While maternity care is crucial, research increasingly shows that women who 

have regular access to health care before becoming pregnant have healthier pregnancies and better birth outcomes than women who begin care after they become 

pregnant. In fact, ACOG now recommends that women receive preconception care, 

defined as, ‘‘the identification of those conditions that could affect a future pregnancy or fetus and that may be amenable to intervention.’’ Such care includes tobacco cessation counseling and pharmaceuticals, nutrition and folic acid counseling, 

and controlling pre-existing medical conditions that could impact a pregnancy (such 

as diabetes or hypertension). For these reasons, the March of Dimes believes that 

all women of childbearing age should have access to comprehensive health coverage 

to improve their chances of receiving these services. 

Once again, the March of Dimes thanks Chairman Stark and Members of the 

Subcommittee for holding this important hearing and for providing us with this opportunity to submit testimony. The Foundation looks forward to working closely 

with Subcommittee Members to improve access to comprehensive health coverage 

for women of childbearing age, infants and children. 

Submitted by Marina L. Weiss, Senior Vice President, Public Policy and Government Affairs 

Contact: Amanda Jezek, Deputy Director, Federal Affairs 

f 

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1 Results from the 2006 National Survey on Drug Use and Health: National Findings 

2 National Vital Statistics Reports, U.S. States Life Tables, 2003. Available from http:// 

www.cdc.gov/nchs/data/nvsr/nvsr54/nvsr54_14.pdf. (accessed April 2008). 3 United Nations, Department of Economic and Social Affairs, Population Division (2007), 

World Population Prospects: The 2006 Revision. CD–ROM Edition—Comprehensive Dataset 

(United Nations publications, forthcoming); supplemented by official national statistics published in United Nations Demographic Yearbook 2003 and Demographic Yearbook 2004, available from the United Nations Statistics Division website, http://unstats.un.org/unsd/demographic/products/dyb/default.htm (accessed Dec 2007); and data compiled by the Secretariat of 

the Pacific Community (SPC) Demography Programme, available from the SPC website, http:// 

www.spc.int/prism/social/health.html (accessed Dec 2007). http://unstats.un.org/unsd/demographic/products/indwm/tab3a.htm 4 National Center for Health Statistics, Health, United States, 2007, With Chartbook on 

Trends in the Health of Americans. 5 Adjusted to compensate for miscoding of Indian race on death certificates. 

6Trends in Indian Health 1998–1999. Indian Health Service. http://www.ihs.gov/PublicInfo/ 

Publications/trends98/trends98.asp. 7 Adjusted to compensate for miscoding of Indian race on death certificates. 

8Trends in Indian Health 1998–1999. Indian Health Service. http://www.ihs.gov/PublicInfo/ 

Publications/trends98/trends98.asp. 

Statement of National Congress of American Indians 

On behalf of the National Congress of American Indians (NCAI), we are pleased 

to present testimony to the House Committee on Ways and Means, Subcommittee 

on Health for the hearing on the Instability of Health Coverage in America. 

NCAI is the oldest and largest American Indian organization in the United 

States. NCAI was founded in 1944 in response to termination and assimilation policies that the United States forced upon the tribal governments in contradiction of 

their treaty rights and status as sovereign governments. Today NCAI remains dedicated to protecting the rights of tribal governments to achieve self-determination 

and self-sufficiency. 

American Indian and Alaska Natives Face Massive Disparities1

Throughout America, health care is a top priority. It is widely accepted that highquality health care is a necessity, not a luxury. In Indian Country, even the most 

basic health care is a luxury and high-quality health care is usually not even an 

option. Most tribal communities cannot easily access health care services and, even 

when services are available, they are often subject to decades-old, outdated practices 

and services. 

Across every indicator, American Indian and Alaska Natives face massive disparities in health: 

Life Expectancy 

• Life expectancy of American Indian and Alaska Natives is nearly six years less 

than any other race or ethnic group in America—72.4 versus 77.8 for the general population.2

• The life expectancy for males on the Pine Ridge Reservation is 56 years old. The 

life expectancy for males from Iraq, Haiti, and Ghana is higher at 58, 59, and 

60, respectively.3

Diabetes 

• American Indians and Alaska Natives have the highest prevalence of Type 2 

diabetes in the world and the incidence of type 2 diabetes is rising at 2.6 times 

the national average among American Indian and Alaska Native children and 

young adults.4

• The American Indian and Alaska Native diabetes death rate of 36.35 per 

100,000 6 places Indian Country 17th out of 191 World Health Organization 

Member States. 

Heart Disease 

• The leading cause of death among American Indian and Alaska Natives are 

heart diseases—at 133.5 7 per 100,000 8—a higher rate than found in the general population. 

Suicide 

• Native people ages 15–34 make up 40 percent of all suicides within AI/AN populations. 

• As a recent example, in the past 12 months there have been 213 suicide attempts on the Rosebud Sioux reservation. At least one suicide attempt every 

other day. 

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9 Henry J. Kaiser Family Foundation Issue Brief, February 2004 & Income, Poverty, and 

Health Insurance Coverage in the United States: 2005. 10Zuckerman et al., American Journal of Public Health, Volume 94, Number 1, January 2004. 11 American Cancer Society report February 2008 issue of CA: A Cancer Journal for Clinicians. 12De Maeseneer JM, De Prins L, Gosset C, Heyerick J. Provider continuity in family medicine. Ann Fam Med 2003;1:144–8. 

• Fetal Alcohol Syndrome (FAS) 1.5 to 2.5 Native children per 1,000 live births 

are afflicted with FAS. 

By Comparison, the general U.S. population is 0.2 to 1.0 per 1,000 live births. 

Substance Use 

• 19 percent of the Native population aged 12 years and over are substance abuse 

dependent. • By Comparison, the general U.S. population is 9 percent of those aged 12 years 

and over are substance abuse dependent. • 2 percent of the Native population currently abuses methamphetamine. • By Comparison, the general U.S. population is 0.07 percent currently abuses 

methamphetamine. 

Mental Health 

• 30 percent of Native adults have had a serious psychological distress. • By Comparison, the general U.S. population is 11 percent. 

Health Insurance Coverage in Indian Country 

American Indians and Alaska Natives have limited health care options. Because 

of higher rates of poverty and economic insecurity, American Indian and Alaska Natives are less likely to have continuous health insurance, and as a result, less access 

to healthcare resources. In 2003, 45 percent of American Indians and Alaska Natives have private health insurance coverage, 21.3 percent relied on Medicaid, and 

30 percent had no health insurance—this compares to the 8.8 percent of uninsured 

in the majority population.9

Indian Health Service (IHS), the agency tasked to uphold the Federal Government’s obligation to provide health care to American Indians and Alaska Natives, 

largely provides primary, onsite treatment. Coverage varies widely among Indian 

health programs and should not be assumed to be equivalent to the defined benefits 

packages of private insurance.10 In fact, according to the U.S. Census Bureau’s Current Population Survey, individuals who solely report IHS health coverage are classified as uninsured. 

Uninsured American Indian and Alaska Natives, which includes those receiving 

health care thought IHS, are less likely to see a physician than those with insurance coverage. Uninsured Americans are also less likely to get screened for cancer, 

more likely to be diagnosed with an advanced stage of the disease, and less likely 

to survive that diagnosis than their privately insured counterparts.11 Strong evidence suggests that having a usual source of care produces better health outcomes, 

reduced disparities, and reduced costs.12 Considering the staggering health disparities faced by American Indians and Alaska Natives, it is clear that action must be 

taken to improve the health and well-being of our tribal communities. 

Indian Health Care Improvement Act 

The United States has a longstanding trust responsibility to provide health care 

services to American Indians and Alaska Natives. This responsibility is carried out 

by the Secretary of the United States Department of Health and Human Services 

through the Indian Health Service. Since its passage in 1976 the Indian Health 

Care Improvement Act (IHCIA) has provided the programmatic and legal framework 

for carrying out the Federal Government’s trust responsibility for Indian health. 

The need for this reauthorization is clear. The American Indian and Alaska Native population is the most negatively impacted by health disparities and suffers 

from chronic diseases and other illnesses at a rate disproportionate to that of the 

mainstream population. 

The statistics provided accurately illustrate the deplorable health conditions of the 

American Indian and Alaska Native population at large. Many of these diseases and 

illnesses could be treated and/or prevented with adequate funding and proper care. 

While the health services delivered to American Indians and Alaska Natives have 

improved over time, the current service level is not adequately addressing the 

chronic need in the American Indian and Alaska Native population. 

Reauthorizing the IHCIA would allocate funding to address the current needs in 

Indian health and provide Indian people with the same modernized and technormajette on PRODPC74 with HEARING

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logically advanced health care delivery systems and services that are already afforded to mainstream America. 

Nationally, health care has progressed to provide in-home care and to focus on 

disease prevention and health promotion. The IHCIA addresses these progressive 

approaches to health care delivery and will help move Indian health care into the 

21st Century. 

The reauthorization of the IHCIA is critical to ensuring healthy Indian communities nationwide. It is necessary to modernize the outdated health care delivery 

system and services that are currently found throughout Indian Country. Indian 

people must be given the opportunity to access health care that is up-to-date and 

directly addresses their needs. Indian people deserve to live in a world where their 

health care is as cutting edge as their fellow Americans. 

Tax Treatment of Health Care Coverage 

In light of these shattering disparities, tribal governments have been trying to be 

creative in addressing the health care challenges in their communities. Some tribes 

have met this challenge by providing an affordable healthcare plan for all their citizens regardless of need. This type of universal health coverage is similar to Medicare. However, some IRS agents—in examining specific tribal governments for their 

compliance dating back to 2002 or 2003—are asserting that this type of coverage, 

when provided by a tribal government, should be treated as a taxable benefit unlike 

Medicare which is another government benefit health plan that is not viewed as taxable to those eligible for coverage. 

By virtue of this IRS action, Tribes are being penalized for providing creative solutions to their healthcare challenges. The penalty asserted is substantial: Withholding tax equal to 30 percent of the entire expenditure for tribal health care, IRS 

reporting penalties, possible negligence penalties, and interest—amounts totaling 

several millions of dollars each year. In the interim, no IRS guidance has been 

issued. The justification given by these IRS agents is that (1) government provided 

health plans do not have the benefit of a statutory exclusion (unlike employer-provided health care), (2) exclusion under the general welfare doctrine is not available 

where the coverage provided is universal (i.e., not restricted to low-income members), and (3) healthcare benefits, when funded with gaming revenues, are considered to be deemed per capita distributions by a Tribe. This justification fails to recognize the basic function of a government which is to provide for fundamental citizen needs. 

NCAI encourages the committee to begin oversight of this important issue in Indian Country. Guidance is needed at the highest level to ensure that Tribes who 

are diligently working to address the health needs in their communities are not subject to tax disincentives. If necessary, NCAI would support legislative action consistent with the sovereign power of governments to provide health care for their citizens. 

Conclusion 

The Federal Government’s constitutional and treaty responsibility to address the 

serious health needs facing Indian Country must be met. We at NCAI urge you to 

make a strong commitment to meeting the Federal trust obligation in passing the 

Indian Health Care Improvement Act, investigating the tax treatment of health care 

coverage in tribal communities, and fully funding Indian Health Service. Such a 

commitment, coupled with continued efforts to strengthen tribal governments and 

to clarify the government-to-government relationship, truly will make a difference 

in helping us to create healthy communities in Indian Country. 

Æ 

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