supported evidence based intervention -- >> you would not support a system that would not do screening mammography, would you? >> i would support a system that used screening mammography at appropriate age groups and appropriate situations. >> i agree, but not at all, this is not at all -- >> i am aware of that. i will go to my office and look up -- [talking over each other] >> one other question, medical loss ratio, can you comment on that? >> there are a lot of plans that have been abused, that have terrible loss record and a lot of private plans with very good loss ratios, 94, 95, 96%. we have a tendency to focus on the extreme. there are plans that are private plans that have a community focus, that are interested in

the people they serve, want to make sure they get cost-effective high quality health care and do it at a very low cost and i am not opposed -- i think medicare, in terms of consistent, fair administration, they are one of the best plans in the marketplace. i don't think it is a great example of what we want our financing system to look like. there are issues with respect to the fact that they incentive a lot of unnecessary care. a lot of things you saw in texas has been referred to, based on a reimbursement system perpetuated by medicare. i am not saying the private system is any better, they followed suit and have done the same thing, incentivizing more care, not cost-effective care. there are examples of private plans that do a pretty good job. current >> i would like to focus on the

self-employed which we talked about in his testimony. can you tell us about louise hardaway who was quoted $13,000 a month? i want to ask you to confirm what i think is true, her situation is not created by government, by government option programs or mandates. the self-employed are completely exposed to the marketplace with absolutely no protection under prior hippo laws in both states, in the regulatory protection. that group needs help. isn't that correct, mr. arensmeyer? >> that is correct, it is growing as part of the twenty-first century high-tech economy. you're absolutely right. the system could not be worse than it is working for them, directly or impeding economic

growth. >> i am trying to decipher where the chamber is. at the end of your statement you talk about the chamber, time to reform insurance markets but you danced around the question about making the folks in the market participate or not. the question i want to ask is does the chamber support or not support an individual mandate? >> i would say we would consider that. >> wait a minute. you are representing the chamber, speaking on health insurance. i come from connecticut, we are surrounded by insurance companies. when you talk about reforming the market, the response is always fine, you have to have an individual mandate because otherwise you are creating a system of adverse selection and rates are going through the roof. the chamber is smart and experienced enough to understand that the leva and this committee

and the people in this country and frankly your members, of which i was one of them until two years ago, deserve an answer in terms of where the chamber stands on this issue? >> i can't make policy for the chamber. [talking over each other] >> i frankly think the issue has been out there for years and the chamber have enough staff and experience in this issue and enough members who are directly impacted that they deserve an answer and we need to understand at as we go forward over the next 6 weeks or so. >> i promise getting an answer back from staff on that point. >> you were very clear on supporting an employer mandate. there was an absence of, and in

individual mandate. i was wondering if you want to chime in. >> healthcare for america there is an individual mandate. it is essential you have an employer and an individual requirements, that there be a real emphasis on the affordability of coverage. if you have an individual requirements, my main concern is always how do you insure people get enrolled? the individual requirements, strong measures ensure enrollment, will not work. this is particularly true with those that are self-employed. any employment group from having the choice of plans within an exchange. this is not in the legislation, there is a tax penalty associated with failure provided insurance that at the same time the penalty is assessed, people should be given a menu of options to enroll, get coverage within the exchange.

that is the constructive step being proposed in a lot of areas, try to get people these choices and when the adjustable, people are opting for automatic employment -- and rowland, we did get seamless coverage close to covering all americans and achieving the goal of health care as a human right. >> mr. arensmeyer, your members those through the experience of planning for insurance and the risktakers, the capitalists who want to pursue their dream but if they have a sports injury or cesarean or chronic illness, they get shot out without rages premiums or denial of coverage completely. for them, we have to fix this. if we care about the market and the capitalist system, these are the people we have got to create a path to health insurance coverage? >> there is tax inequality too. a self-employed person can't

deduct the way a business owner can. when you talk about how this country prides itself on entrepreneurship, this does nothing but put impediments in the way of going out on your own, striking out, taking risks, and if you are looking at traditionally pulling out of recession in the past, the small business sector leads the way out of the recession. this sector is creating new jobs as we move out of the recession. it is completely crazy. a lot of talk about the private sector and competition but we don't have a system that has competition. if you don't have a system that encourages competition among businesses, it is this type of approach that is going to enhance the ability for everyone in the system to compete, the businesses to our building products and providing services.

>> mr. stapley, you noted in your testimony that private employers subsidize costs of medicare. can you provide an example of that? >> i provided examples earlier. the situation on electronic claims where medicare does not pay for that, so the private participants have to subsidize. on the other hand, i just gave the example on the negotiation when you are working out rates that you are going to pay providers, medicare is giving a 2% increase. that means yours is going up by 6%. from my perspective the issue really is, if the public plan truly does compete on a level playing field, i am not having to pay them money to compete

against the to compete on a level playing field. if you can resolve that issue you will find employers feel better about it. i don't know if they feel totally good about it but if the public plan, in terms of the reimbursement perspective, on a level playing field, that makes it easier to deal with. we don't want to subsidize, they have lower rates, and create an incentive for our employees to leave the system and go to the public plan. >> the recurring themes i have heard our innovation, competition, decrease in costs, all important things when it comes to improving the health care system. other than taking out of the equation the taxpayer funded government competitor, are there other methods, this is for the old panel, that you would recommend for would do that,

among private health insurance providers, that would encourage competition, decrease costs, motivate innovation? i will open that to the entire panel. >> i would be happy to speak to that to a degree. the establishment of an insurance exchange is a huge step forward in a positive direction. if you do that so you level the playing field, it is true that a small group in the individual market is totally dysfunctional, an embarrassment to this country that has to be reformed. in the process of putting together the ground rules, in terms of how the extra -- insurance exchange works, you have to be sure every individual american, whether an employer plan, small employer plan individuals, they access the exchange and the plan on the same basis, if a private plans have a set of rules to play by,

there is community rating, risk adjustment, modified community rating, all those things that are essential insurance reform that must absolutely, unequivocally, uniformly applied to every plan that is offered in the exchange. that is a huge step forward in creating a better basis for competition than we have in the present system. beyond that, in my opinion, the centerpiece of reform has to be cost management. we talk about competition, you have to have payment reform. you have to create an incentive for the payers and health care system that are engaged with the system to do something differently than incentivize the provider system to do more even if it has no value. you have to look at episodic reimbursement, different kinds of reimbursement systems that reward providers who provide

high-quality, low-cost care focus on medical guidelines and so forth, and this incentivizes the care that has no value. there are challenges in terms of the number of plans in some market places, the availability of the exchange antiestablishment of the uniform playing field would make it so you have more entrants in this system. >> we need to look at the exchange of the free market place. there needs to the rules of the road, but beyond that, insurance companies, whoever is providing insurance, whether a public plan or private, they are going to be judge, their success is based on local service, the quality of what they are providing, it is something that will be transparent, for everyone to see, individuals, small employers, has got to be as robust as possible in order to

get the level of competition that is needed. >> can i make one more statement? one of the unique provisions of the proposal set forth a couple years ago, there's a section that deals with health plan transparency. i would honestly have to say the regulatory structure of the united states has not done a very good job regulating insurance companies. you have to have transparency to the extent that a lot of things that are not public with respect to how insurance companies do business become public and that has a huge impact on the ultimate benefit. you might have a plan, 90% of the benefit after the deductible, at the end of the day the administrative practice in terms of claims can result in a lesser benefit. we experienced that. we offer benefits in all 50 states.

because of their aggressive practices deliver lower benefits. helped plan transparency, a cornerstone of the initiative, it is critical to the proper functioning of the exchange, part of leveling the playing field, making sure the public knows exactly when they are buying when they purchase. >> thank you, mr. chairman. we have heard a lot about the difference in reimbursement rate of the medicaid the possible medicare program as opposed to the private plans. i wasn't aware there was that much difference. do any of the insurance plans pay less than medicare/medicaid? does anybody know?

dr. hacker? >> medicaid rates are substantially lower than private insurance rates. that is highly unlikely. there are probably some plans that are not on the same basis as medicare. they are paying something equivalent, close to equivalent to what medicare pays. the evidence is that most private insurance plans pay something higher than what medicare rates are. >> should we require all insurance companies including the public auction to pay the same reimbursement rate? >> i don't think we should require hmos to pay the same reimbursement rate for the reason i mentioned, they pay in a different way. if you pay your doctors on a person basis or salary or using bundled payments, it is not comparable to the way medicare pays and as we have argued, we think strongly that medicare

should move towards innovative ways of paying for care. proposals have been discussed in the past for having private plans that are competing with public plan or separately from a public plan, as the rates that a public plan would, in many countries, the rate setting. the medicare advantage will pay rent care range, the privacy for service plan. something that should be said that is very important, medicare's past innovations. they frequently set the standard to pay for care. this is one of the reasons we need a public plan, very different needs than the

elderly. we believe strongly that the transparency will be made available and disseminate into the private sector. >> one of the ways to underwrite and put healthy people in the plan, this is prohibited in the plan. how do you avoid informal underwriting where you market and the benefits, you have very poor benefits for diabetes, so that those problems don't choose your product. how do you avoid informal underwriting? >> i have got to learn how to run this thing. how can we are run this thing and we cannot run the microphone? a lot of things have to be part of the exchange to prevent this from happening. my opinion is there are lots of ways to avoid risk. the name of the game in the

current system is risk avoidance. the reason that is the case is the incentives in our system create that. you can make more money by avoiding risk than by being an efficient administrator. you had to structure the design of the exchange to takeaway those incentives. there are things, classic things like underwriting. you have a small group in the individual market. you can have benefit design that is intended for it. you need some standardization, or you can have geographic risks election. we have employers in illinois. it is fascinating to me the kind of coverage we can get in chicago that we can't get in the central part of illinois because those plans have made a decision. i can't make as much money in central illinois as i can make in chicago.

the plans ought to cover the entire service area. that has to be a regulatory ischetschemieschemscheme to eli external -- >> mr. shea, there's a play in massachusetts where you can -- your employees don't get any insurance. it is important that if you don't choose to pay option, the employees get coverage. >> absolutely. is also important that there is a meaningful payment option, not let massachusetts, $300 a year per employee and you are proposing something substantial. that is the right way to design it. >> mr. cassidy? >> mr. visco, when you speak, i think of my wife is a breast cancer survivor, that is music

to my ears. dr. hacker, a couple things. as i think about it, your proposal, congratulations, this is your brainchild and it has become something. the public auction is innovative, the sense that nationalizing the insurance company creates a government run health insurance company, but as you're speaking of the need for innovative payment methods, medicare and medicaid have lagged far behind other companies in coming up with innovative payment schemes. and certain as i look at this, the patient is central. i never see that the patient is central to cost or central to improving outcomes, what i do see is there's emphasis on using

bargaining power to decrease costs, even though in your paper you mention bargaining power has been used to excess and you can show in some cases physicians that access the decrease because of and the scoring of this or the senate documents, there is limited access to fund specialists because of rates paid by the public auction. i don't see that much of a debate. let me bounce back to you. if we are coming back to a patient center plan, the only way history has shown we can save money is by doing so, the only way to improve outcomes is by doing so. hsacalleds, i keep saying this but it is like a tree falling in the forest, for a similar demographic, similar set of benefits, they cost 30% less than a fee for service plan. the patient is in control. i was talking to someone who has

h hsa, they went to them and said we are paying for this out of our age as a --hsa they got a $20 substitute. the patient initiated and her health care was not compromised. a couple questions. i don't see much innovative beyond using monopoly power to drive down costs and presumably shifting whatever degree you shift. how do we effectively make the patient central as opposed to the payment mechanisms or government bureaucracy which must administer the program? >> thanks for the compliment, i think. i am not sure i want to be considered the author of this proposal. >> of what d there, but that is okay. >> i want to address each of your questions in turn.

with regard to the question of whether or not this is an innovative approach, it is very important to emphasize, as i have, in the legislation, the idea would not be to replicate the medicare program but create a new program that had a broader set of benefits, different risk. >> you were explicit that you are using the same way to control costs as medicare which is through monopsony power and your bargaining power to lower rates. >> i said it should be -- something that a plan to have -- >> the other tool has not been proven to work, accountable care organizations or theoretical, but even the proponents will admit that basically, the project, health it, you point out the benefits and controlling costs are limited. >> i don't remember saying prevention is limited. there has been some skepticism on the part of the congressional budget office with regards to the cost control effects of some of these measures.

should be noted that whether or not prevention reduces costs is a good thing to do with what i was going to say quickly that one to we should use is bargaining power, i was pleased to see in this legislation that after a period of time, the plan would be developing a new payment without these. i have said repeatedly that i believe that that is what needs to happen and it will be easier to do with a public plan that focuses on the non elderly than the current medicare program and is important to think about how to separate this plan from the political forces that have made it hard for medicare to do the more value oriented pricing that we like to do. i agree completely that patients are central. it is worth noting that for all its flaws in the medical program there are high levels of patient satisfaction. >> that is because they were screened from the cost and that is why they are going bankrupt

in 2017. there is no requirement for market capitalization, or business capitalization. that concerns me. >> there are many reasons patients are satisfied with medicare but the survey is favorable toward it because of the ease they had finding physicians or having access to specialists in the sense they don't have to wait for doctors. those are things the public can provide. >> 13. >> thank you for your patient -- your patience with the committee and the testimony you have given us today. i hope that we can continue to engage you as we move forward in this process. there are a number of good and relevant suggestions that have been made by this panel and we hope you will agree to let us continue to pick your brains on this one.

>> thank you very much. >> the u.s. senate is gaveling to start an unusual day in the chamber as lawmakers will begin the impeachment trial for texas district judge samuel kent. first, a quorum call together senators who may have to have ceded. the house judiciary members will present articles of impeachment against the judge and later the senate will appoint a special committee to gather evidence in the matter of process that could take several weeks. also, a vote to advance the nomination of harold code to the legal counsel for that state department. that is expected at 11:00 a.m. eastern time. now, live senate coverage on c-span2. cert

may their consistent communion with you radiate on their faces, be expressed in their character and be exuded in positive joy. fill this chamber with your spirit and our senators with your strength and courage. we pray in your gracious name. amen. the presiding officer: please join me in reciting the pledge of allegiance to the flag. i pledge allegiance to the flag of the

united states of america and to the republic for which it stands, one nation under god, indivisible, with liberty and justice for all. the presiding officer: the clerk will read a communication to the senate. the clerk: washington d.c., june 24, 2009. to the senate: under the provisions of rule 1, paragraph 3, of the standing rules of the senate, i hereby appoint the honorable daniel k. inouye, a senator from the state of hawaii, to perform the duties of the chair. signed: robert c. byrd, presidet pro tempore. mr. reid: at 10:00 or thereabouts we'll proceed with the impeachment matter.

quorum call: