this Act rests is the power of Congress to regulate com-
merce with foreign nations and among the several States, 
set forth in article I, section 8 of the United States Con-
stitution. 
SEC. 2. FINDINGS. 
(a) NEED FOR STRUCTURAL REFORMS.—Congress 
finds that the majority of Americans are receiving health 
care of a quality unmatched elsewhere in the world but 
that the method by which health care currently is financed 
and delivered is inflationary and does not distribute qual-
ity care to all Americans. Congress further finds that the 
major structural reforms must be implemented in order 
to institute a competitive system based on individual 
choice, under which each American is permitted individual 
choice to select the method of health care delivery which 
he believes is most appropriate for himself and his family, 
with appropriate assistance from the United States Gov-
ernment. Such a system would introduce internal incen-
tives for the cost-effective delivery of quality health care 
to the American people. 
(b) SPECIFIC DEFICIENCIES.—Congress finds that 
the major deficiencies of the present method of delivering 
and financing health care as follows: 
(1) EMPLOYER OWNERSHIP OF HEALTH BENE-
FITS.—The biggest problem with health care today
is that the tax code has encouraged employers, not 
individuals, to become the purchaser of health insur-
ance. Employers have a tax incentive to offer health 
care benefits to their employees, which means that 
employers are truly the owner of the plan, not indi-
viduals. Therefore employees, who are the consumers 
of health care services are unconcerned with and not 
involved with issues of cost and overutilize health 
care services in the belief that such services are 
‘‘free’’. 
(2) INSUFFICIENT ACCESS.—Numerous persons 
are not able to obtain sufficient health care either 
because the necessary personnel and facilities are 
not located in their communities or because they do 
not have adequate financial resources to obtain such 
services, or both. 
(3) EXCESSIVE
GOVERNMENT
REGULATION.— 
Continually increasing and complex Government reg-
ulation of the economic aspects of the health care 
delivery system has proven ineffective in restraining 
costs and is itself expensive and counterproductive in 
fulfilling its purposes and detrimental to the care of 
patients. 
(4) THIRD-PARTY
PAYMENT
SYSTEMS.—Pay-
ment by third-party payers (including commercial in-
surance companies and various levels of government) 
for the preponderance of the health care delivered 
each year insulates patients, as well as physicians, 
hospitals, and other deliverers of health care, from 
the need to consider the cost of treatment in addi-
tion to the medical benefit expected from it. 
(5) REASONABLE COST REIMBURSEMENT.—Re-
imbursement of hospitals and other health care insti-
tutions by third-party payers on the basis of reason-
able costs of operation provides these institutions in-
sufficient incentives to introduce more efficient 
methods of delivering care and at the same time di-
minishes the extent to which these institutions and 
their patients are affected by the consequences of in-
efficiency and overexpansion. 
(6) GOVERNMENT AND THIRD-PARTY PAYER.— 
The present role of government as a third-party 
payer poses a conflict of interest whereby the Gov-
ernment purchases or finances health care services 
and unilaterally determines the amount the deliverer 
will be paid for those services. 
(7) LACK OF COMPETITION.—The present sys-
tem of financing and regulation prevents health care 
deliverers from competing with each other on the 
basis of efficiency and price as well as quality.