Johanns issues statement on health care

WASHINGTON -- Below are remarks as prepared for delivery by Senator Mike Johanns regarding the realities of health care reform. Speaking on the Senate floor, Johanns shed light on the unintended consequences if the proposal in the Senate Health, Education, Labor, and Pensions (HELP) Committee were enacted.

Highlights of the speech as prepared for delivery:

"While the headlines may have touted a HELP Committee bill that scored at $611 billion over 10 years, the real price tag when fully implemented totals over $2 trillion. That's a big darn difference, Mr. President. An almost $1.5 trillion discrepancy simply cannot be swept under the rug. It's too big to be a rounding error and too much of a budget buster to be ignored."

"In fact, the HELP Committee's bill seems to directly encourage employers to dump their employees into the government run plan. In the Committee draft, businesses that employ 25 or more employees would be required to pay an annual penalty of $750 per full-time employee if they choose not to provide private health insurance for their employees. When you do the math, this is no penalty at all compared to the cost of private insurance. In 2008, the average employer's cost for an individual in a group health plan was $3,983. So putting their employees on the public plan option would save them $3,233 a year for each employee [link to chart]. Paying the so-called penalty to get out from under these private health insurance costs looks like a pretty smart business decision."

"Ladies and gentlemen of the middle class, this will directly impact your ability to choose the doctor you want. It will inject government bureaucrats into your medical decisions. To promise otherwise is misleading. False promises will not help us achieve true solutions."

Remarks as prepared for delivery by Senator Mike Johanns Regarding Health Care Legislation:

"Late last week, media reports heralded the decrease in the price tag of the HELP Committee's health care proposal. But before we uncork the champagne and celebrate some great accomplishment, let's look more closely at the untold story and accounting gymnastics employed.

"While the headlines may have touted a HELP Committee bill that scored at $611 billion over 10 years, the real price tag when fully implemented totals over $2 trillion. That's a big darn difference, Mr. President. An almost $1.5 trillion discrepancy simply cannot be swept under the rug. It's too big to be a rounding error and too much of a budget buster to be ignored.

"So, where is the difference Mr. President?

"First, the Congressional Budget Office assumes that it will take federal bureaucrats over four years to get government-run health care and other subsidies up and running. So while the $611 billion score claims to be a ten year number, essentially it only includes six years of costs. If you look at the CBO score for the first ten years after the program is fully implemented, the actual spending is closer to $1.5 trillion.

"In addition, while the press releases were claiming credit for increased insurance coverage, they were leaving out what it actually costs to make that happen. That euphoric claim that 97 percent of Americans would be covered under the HELP proposal is not even in the HELP Committee proposal. Only in Washington, Mr. President, can you assume something to be, take credit for the accomplishment, but not pay the bill.

"The 97 percent statistic is based upon the 'assumption' that Medicaid will be expanded up to 150 percent of the Federal poverty limit. This expansion is estimated to bring 20 million new people into government-run health care. However, CBO estimates that it will cost around $500 billion over 10 years. Nowhere is that cost yet considered. And this is only the federal share of the program.

"It does not take into the account the state taxes that will need to be raised in order for each state to pay its share of this bill. In my own state of Nebraska, this expansion will cost state taxpayers $73 million a year. That's a lot of money to come up with in these tough economic times.

"The American people deserve more than just cheap budgetary tricks. Let's be honest about what we are trying to do here and let's be truthful with people about the real cost of this proposal.

"Let's also be upfront about the realities of what a government run program can or cannot accomplish in bringing down health care costs. Some claim that a government run plan will serve as competition for private insurance and thus bring down the costs of insurance premiums. However, the CBO score makes clear that if a government run plan competes on a truly level playing field, it will not lower health care costs.

"The only way a government-run program can offer reduced insurance premiums is if they pay providers and hospitals at rates equivalent to current government programs. This would not cover costs. Instead, it would create cost shifting onto private insurance. CBO cautioned that reducing payment rates would only increase the access problems we have with current government programs.

"Currently, 40 percent of doctors refuse to take Medicaid patients due to the low reimbursement rates. This directly contradicts the Obama Administration's promise that 'if you like your doctors, you will be able to keep them.' The CBO score actually confirms that many employees would lose their employer based health care should this bill become law.

"In fact, the HELP Committee's bill seems to directly encourage employers to dump their employees into the government run plan. In the Committee draft, businesses that employ 25 or more employees would be required to pay an annual penalty of $750 per full-time employee if they choose not to provide private health insurance for their employees. When you do the math, this is no penalty at all -- compared to the cost of private insurance.

"In 2008, the average employer's cost for an individual in a group health plan was $3,983. So putting their employees on the public plan option would save them $3,233 a year for each employee. Paying the so-called penalty to get out from under these private health insurance costs looks like a pretty smart business decision.

"In fact, I don't think it is coincidence that a large retailer recently came out in support of this employer mandate. When I heard this news, my initial reaction was 'what's the catch?' I think we've found it. With over 1.4 million employees, this company reports that 51.8 percent of their employees have coverage through their employee health plan. If all these employees ended up on the public plan, it would save this company almost $2.4 billion dollars a year. No surprise, this company is supporting an employer mandate. Ultimately, people will NOT have a choice to keep their employer-based coverage and will not receive the same level of care when their employer dumps them onto the government plan.

"Ladies and gentlemen of the middle class, this will directly impact your ability to choose the doctor you want. It will inject government bureaucrats into your medical decisions. To promise otherwise is misleading. False promises will not help us achieve true solutions.

"Congress has been tasked with solving this problem. And we must work together to resolve problem -- reigning in soaring costs. Adding another $2 trillion entitlement program onto our already strained budget is not true reform.

"The American people have not sent us to Washington to exacerbate the problem but to fix it. Let's not put together bad policy and end up with another financial debacle. This time, there is far more than money on the line. The ability of Americans to see their own doctor and receive treatment without a federal bureaucrat's approval is at stake.

"Let's be honest with the American people and put together a good bill that actually addresses the real problems.

"Let's get it right this time."