around medical malpractice reform where if doctors understood they would be protected the they followed evidence-based medicine, that question you raised, you know, the most expensive thing in health care is that pen in the doctor's hand, if we could be able to focus on evidence-based medicine, then i think we'll get at those procedures or those tests or diagnostic tools -- >> yeah. unfortunately, that's one thing that's off the table in tomorrow's discussion. we really went going to talk about tort reform, i don't think, other than in a very superficial way. we'll say caps, they'll say no way, and that'll be the end of the discussion. thank you. >> thank you, mr. burgess. maybe we can get a chance to get another round in. mr. chairman, mr. waxman. >> thank you very much, mr. stupak. ..

>> so your senior executives said wellpoint determined a rate increase averaging approximately 25% was necessary, is that right? >> that's correct. >> now i'd like to ask you about a document produced on your internal files at wellpoint. on october 24, 2009, mr. chin, senior wellpoint actuary e-mailed mr. saucy, the head of wellpoint individual market division and let me put up that e-mail. mr. shane writes that wellpoint

executive must reach agreement on a funding strategy quickly, specifically in the area of do we file with a cushion all out for negotiations or do we file at a lower level that does not allow for negotiations. this e-mail says that you are considering filing a rate increase that was padded because you expected california to reduce your proposed increase. is that an accurate conclusion to reach? >> i don't believe so. cindy described these e-mails earlier in the process, there was a question of what medical trends would be. what we filed did have a margin of 2.4 present on operating margin base of 1.4%. and it reflected the trend that we're experiencing in california. so it was not, there was not a cushion in the rate. >> it's hard to understand these words differently, because the words say a cushion allows for

negotiation. you decided you needed 25% but it sounds like you were willing to go to 20%. there was a presentation prepared for your board of directors, the presentation outlined wellpoint strategic plan individual line of business for 2010. let me put that slide up on the board. this slide is titled key assumption individual pricing. it distinguishes between your rate ask and the actual rate increase you are assuming for 2010. and according to this slide, the 2010 rate ask is listed as 25 percent to 26%, but the assumed 2010 rate increase is just 20%. this seems to say that you're asking for 25% increase but expected to see that lowered to 20 percent to negotiations. that sounds like padding. how did you respond? >> i will respond to that since my team is responsible for the

rate filings. it's important to note this was prepared before the rate filing before the rates were finalized. and it recognize the flags the political belly that department of insurance have political pressures and often will change rates in response to those pressures. what turned out to happen is medical costs continue to escalate through the latter part, the last three months of 2009. and the 25% rate increase became necessary to achieve, as angela said, and profit margin of less than 2 percent on an after-tax basis. >> yes, sir. is like you are prepared to ask for a rate higher than what you needed as a negotiating tool. you could have anticipated rates were going to go up and you have to make a decision, that you wanted an average increase of 25% but you're really looking at an average increase of 20%. you can see the document says a sims two month approval delay, decreased 5%, this is exactly the same thing as a presentation

to your board. it say youe asking for more than you need because you have built any large christian. here's what i think is going on. you're raising your rates far above what's necessary. you're trying to squeeze every dollar of profit you can out of policyholders in california and across the nation. at a time when families across the nation are struggling to pay their bills, you're trying to charge them an inflated rates that padua profits in support the salaries, the trips and the retreats and everything else. >> mr. chairman, we have described that in 2009 in individual business in california, our prices were not adequate. to cover the losses, for example, in a guarantee part of the products that are required to be covered. and we had a loss. and our pricing that was filed that certified, you know, refused and evaluated by other

actuaries confirmed that the -- >> other actually for me the state actuaries? >> milliman came in specifically at our request. >> you indicated you are trying be more efficient to hold down these cost that is the biggest efficiency you produce trying to shoot people on two plans would have to come up with more money out of pocket so you don't have to pay that amount? >> no. in fact, we could be making less money windows shift to products that have less benefits that our goal is to make sure that we have a product offerings for -- >> we heard three witnesses this morning, as did you. all three of them seemed reasonably healthy but all three of them were told they were going to get a 39% increase, not the average of 25. 39% increase. but they were in luck, they could get a plan that would cost less. they just have to pay more out of costs for the drugs because you wouldn't cover the brand name drugs or they would have to come up with greater, higher deductibles. is that efficient? >> what we -- we try to make sure that the customer can get

access to a product that they want and afford and provides them the benefits they need. for example, -- >> they would like to have what they been paying for. they have increased every year that they been seeing. >> and as the pool of insured changes because sometimes healthy, younger individuals leave, and we have people that stay in the pool that are more expensive. because overall the pool continues to grow up. >> so you would argue we need a pool that includes everybody, is that right? >> correct. >> if you're pulling people together, then you don't need these individual risk analysis because you are spreading the cost, is that what you're telling is? >> we are an advocate for reform that would include the elimination of preexisting conditions, provided there is a mechanism to keep everyone in the pool so that we don't have this phenomenon. >> that's what the bill does that passed the house. that's what the bill does in the senate. that's what the president has

been called for. let's get everybody insured, and let's put them in a pool and then you spread the risk. was the individual insurance market seems to be doing is if you've got an illness, you're not going to be even considered for consideration. if you're in the plan and you've got some illnesses, we're not going to drop you but we will shift into another plan what you pay more money out of pocket. and your individualizing insurance so that the individual has no leverage. they have to pay what you ask, or drop down to something else. >> the actuarial analysis is not based on an individuals health status that is based on who's in a pool. to your point about healthcare reform i think it is important, the concept and the goal was to eliminate pre-existing everyone in the pool. but what happened in both of the bills that we have seen is that the effectiveness of keeping someone in the pool really fell apart as the legislation was moving forward. and the great concern is you wouldn't keep everyone in the

pool because you don't have the right mechanisms in place to keep them in the pool and they would opt out. >> what would you do? >> we would make sure that there was a continuous coverage requirement. in massachusetts speed is if somebody says i don't want insurance, what would you do? what would you do to that individual or family. i can't afford it, i'm not going to pay. specter should be and enforceable and effective penalty of some sort that catches all individuals and a requirement to have continuous coverage. because people jump in and out of coverage in massachusetts where there is a mandate. they jump in, consume healthcare, don't their policy, jump out that the cost continues to excellent because they dealt with coverage and not cost. >> i think we tried in the house bill to cover everybody and require that everybody get coverage. spread the cost out. and we didn't get a lot of support from the insurance industry from the house though, let alone the senate bill that i have started gone way beyond my time.

thank you, mr. chairman. >> ms. schakowsky, for questions, please. >> first, mr. chairman, on behalf of representative, i would like to add to the record a letter that she wrote februa february 11 to ms. angela braly. if we have unanimous consent. >> without objective. do you want to see it first? spoke i will hand it to you. in the letter, that represented as you wrote, she quotes from your anthem, blue cross unit in an e-mail message urging your employees to oppose healthcare reform, and is reported to have said that reform proposals would quote cause tens of millions of americans to lose their private coverage. and she makes a point that the

39% rate increase flies in the face of this concern for those who would supposedly lose coverage. wonder if you could respond to that? >> i would be happy to. we are very concerned with the legislation that was being proposed because we didn't feel like it addressed that concept of addressing getting everyone in the pool. and as a result, that, with combined with some other changes that were proposed, including changing the age rating, that our analysis, our actuarial analysis which we shared publicly and have available speed is what is the measure you use? >> it varies by state you're in sydney could probably give the details around california. but by constricting the age restrictions, we found that individuals, young individuals in california would see an excess of 106% rate increase. and that was before trend. so that would be an addition to the rising healthcare costs that we saw as well. >> i would like to, you know, he

began by talking about how happy he would be, you were to be here to talk about rate increases. i want to remind you that the name of this hearing, its premium increases by anthem blue cross in the individual health insurance market. and what i actually expected was not for you to come and lecture us about what we should put in our bill, but actually to explain to us, and a good start with a big to answer some of the concerns. i don't know if you were here for the testimony of jeremy arnold who talked about a whopping 74% increase that he has experienced, or julie henriksen, who i just calculated pays $24,504 a year. and if i'm correct, if i heard you correctly, you're saying you never even met the deductible. so you paid this amount, but you

really didn't get any benefit from the health insurance, because you didn't meet the deductible. or respond, and it would be nice if you could, because she wrote two letters, talking about how she realize that for months she had been paying for a costly unnecessary benefit, switched plans and finally did get a letter that her premiums were going to be raised 38%. although she could change to a lesser coverage and pay only 16%. isn't that fabulous? i do have a couple of questions, but i want to tell you something. that i think that a 39% rate increase at a time when people, americans, are losing their jobs, losing their healthcare, is so incredibly audacious, so be responsible.

you know, we see these lavish retreat places. i would be interested to know what your salary is as the ceo, incredible ceo salaries. i don't know how may people have said that make over $1 million a year at your company. what? how much money do you make? >> my salary is $1.1 billion. i received a stock compensation with a value of $8.5 million, and last year and annual incentive payment of $73,000. >> well, of course it makes sense then that you would need a big rate increase now that you have told us that. i want to know, i know that you said in your written testimony

that anthem blue cross profit margin is in line with, and below that, of many of your competitors. can you name any california competitors who have raised their rates up to 39%? >> yes, we believe in number of our competitors have raised rates. in fact, in individual markets are products available, our products are competitively priced and in many cases lower price than many of our competitors, both for-profit and not for profit. >> that got approved by the commission for more than -- >> that are available now that the rates, we are very efficient company on a relative basis and our administrative costs continue to go down. and so we do have very competitive rates in the marketplace, many times. they are are less expensive than other products that are currently available. and there are a number of competitors in california in our rates are quite competitive in the marketplace. >> if i could address your earlier -- >> know i have another question.

has your company met the legal requirement to use 70 percent of premiums collected in the individual market for the payment of medical claims? >> yes. we have submitted those filings, and believe they are compliant with the requirement. you have to keep in mind that product is a product sold in the commercial market, that the losses that are incurred in the hippa and the graduate program are born in the marketplace as well. in the end, the individual marketplace lost many in 2009 and would produce an after-tax return of 1.4%. >> when you figure profit you don't figure it across the country. you look at just the profits made or lost in the individual market. there's a very important reasons actuary to make sure you price the products that are being incurred in those products. city, you might talk about the potential -- >> know, i don't want to hear that. i don't want to hear, because it

seems to me that when you have a company that is providing not widgets and not some luxury item, but healthcare, that might make sense to look across the whole topic is the what kind of profits because people who are in the individual market are often least able to be able to come up with these very high rates. what would you think about an 80 or 85% medical loss ratio? >> our medical loss ratio is an enterprise is a 2.6, for 2009. one thing that's important about the individual market, we in some states what has been regulation that tries to restrict the ability to raise rates of all the competition has left. we are blue cross and blue shield to give you look at main, 1983 to 11 carriers in main offering products in individual market that matters us and another company that is not a major national competitor because we're blue cross and we have geography licensure and we don't want to lead the

individual market. and so we need to make sure that it is a viable marketplace for our customers so we can continue to cover their costs. so as they incur healthcare costs were there to provide and pay for those costs. >> i yield back. >> let me go to vermont for question. >> thank you very much, mr. chairman. ms. braly, it our last panel we did hear from some anthem policyholders of a very high rate increases. two of the policyholders had premiums that were being raised 38%. the third had a rate notification increase of 30%. all of those were markedly higher than the average increase at wellpoint has reported publicly. and the current rate increases put the policyholders in a tough position. they can drop insurance altogether or try to get a much less comprehensive policy. and i'd like to show you and

ms. miller a document that suggests that these rate increases, in fact, could be much higher in the future. you can find this chart on tab seven of the document binder. and this is as you know wellpoint and a analysis of of the potential rate increases, which was included as part of the individual leadership pricing memo. document providing recommendations and analyses about the individual market in california. i'd like to put this document on the screen. do we have the document up? okay, thank you. ms. miller, as well point chief actuary, i want to make certain i understand the three scenarios proposed by wellpoint officials in this document. scenario one i don't think this is on the screen. appears to propose that wellpoint make no change in as a half a rate increase caps, correct? >> that try.

>> center to is 2% after accounting for age. so am i reading that correctly? >> yes. >> and scenario three which is the focus of attention here, that's the chart that caught my attention. it appears to consider the possibility of removing rate increased caps altogether. the document state and i quote, we move saf completely. and then below that header, is a chart that shows that it will port -- taking away the rate caps, removing them entirely for certain plans over 27,000 policyholders would be subject to a 228 per attend .4% increase in the monthly payments, is that right? >> i don't see the number of policyholders you're referencing on the one that is in her book but i do see a 228% increase. if we took the caps off under your internal analysis, if i

were a wellpoint policyholder, subject to the situation, i could be receiving a 228% increase in my premium cost, right of? >> yes. i would like to point out that these are labeled scenarios, not proposals. when we do our actuarial work you start by looking at the rate increases that are necessary for each so that, the starting point, and it is meant to illustrate that if we didn't cap, these would be the increases. we did in fact cap the rates. this was not a proposal. it was just an order to illustrate, you know, how dramatic some of the increases would be. >> i get that pick your sing if you had caps off, by your analysis, you might actually and were too maintained using bruce braley's language, a viable marketplace, would require you to raise my premium by 228%. that's what we are headed. this is the problem.

that's where we are headed. do you consider ms. braly, that is a viable marketplace if a machine tool industry who has got 15 machine tool company has 15 workers that they have been loyal to and the workers have been loyal to them, and they are trying to hang onto the jobs and trying to hang onto health benefits, they get a notice in the mail saying they're getting a 228% premium increase? is that sustainable? >> absolutely not, which is why we need to focus on the rising healthcare costs. we think we are an important part of that, that mechanism and healthcare. >> that's pretty self-serving. if you're medical loss ratio issues that about 82%, you know, just years ago the medical loss ratio is in the range of 95%. so there's a business model that is working for you, for you as an insurer. so that you can't pay your salaries and maintain your bottom line. but it's coming out of, it's coming at great expense to other people.

>> our administrative expense, you know, really does go focus on disease management, we have 2500 nurses who work with our customers to make sure they're getting the benefit -- >> ms. braly, i don't mean to interrupt. we've got a situation here that your own internal analysis suggests the obvious conclusion. it's not sustainable. i mean, if left to strict marketplace interpretation of what is quoted market viability, market viability in order, that being as i understand, what you would have to charge in or to maintain the financial solvency of your business, if that requires charging that machine tool company 228%, that's not a market that is viable to anybody who is on the receiving end of that premium rate increase. so it suggests the market model that we have is fundamentally broken. >> we agree that we need a

sustainable solution to this difficult problem, particularly in the individual market where we see these issues, extremely in terms of the rate increases. which is why we are an advocate -- >> so basically you're in agreement with the proposition that i just made, that the current insurance model is fundamentally broken, where the premiums are going up, potentially, 220 percent of? >> i think we need to continue to create an opportunity for both consumers to have, the better purchasers of healthcare and understand the dynamics which we're doing to our investment, as well as continue to innovate around how we fundamentally change the first -- >> when you say the consumer can be a better purchaser of healthcare, when you send out your premium notice, whether it is a 40% are potentially 228%, someone calls, do you negotiate the rate with them? >> we have a mechanism where we

do work with our customers to make sure that they can get another product potentially, that they can afford, or that has benefits that they want or need. or not the benefits that they don't want to. >> literally, again, -- >> go ahead and finish it up. that will be at. spent i think the point of the major. thank you, mr. chairman. >> thank you, mr. welch. ms. capps for questions, please. >> thank you, mr. chairman. it is an honor to be with your subcommittee, and i know, i see a couple of the mems of the previous panel before i address the current panel. i just want to say thank you for being such wonderful witnesses. useful for a lot of my constituents. i represent that district in california and their stores are so similar to yours and you are very eloquent that i had to leave and so i wasn't able to say that to you and allow you to expand. you have been more -- but to this panel, listening to a couple of my colleagues, and

your responses to them, it just makes the case for me as one member of congress that we really do need a lot more competition within the insurance health insurance market. here's the story from one of my constituents. and a quote. we as many others, she writes, have received a notice from and them that are health insurance premiums will increase by 30% starting march 1 that my husband i are both self-employed. we currently afford a ppo with a $5000 deductible. and out and them being so understanding has offered a $75 deductible. if anything series happens to our health, we lose everything. to pay our medical bills, even though we technically have insurance. here's another constituent. i'm 61 year old milk with individual health insurance from anthem blue cross. i just received a notice of a rate increase from $660 a month to $881 a month. another says this.

the premiums on my anthem blue cross policy is going up from 545 per month to 712. as of march 1 that i want you to be where she writes to me, of his 30% hike in insurance rates. ms. braly, these are hard-working people, i know, who have no choice but to purchase health insurance on the individual market. it doesn't seem like they get much for it. you claim you must raise prices on or to make up for healthy people who drop out of the system. but isn't it true you have long engaged in the practice of recession? i know that you have. i am well aware that anthem has been fined for doing that in years past. and knowing that it may well drop be the, as a consumer, who would any that i would become sick it certainly not an attractive enticement for me as a healthy customers to join forces so that you can help to keep your costs down. you don't market yourself very

well. at a time when your company is bringing in record profits, but when rest of our economy is suffering. i want to know what steps you're going to take now to make quality health insurance products affordable to the people like my constituents who want to be responsible and want to purchase health insurance, but just can't do that. do you want to respond quickly? >> i would. thank you for the opportunity to talk about what we are doing to try to make healthcare premiums more affordable. for example, when we negotiate with hospitals in california, our goal is to have zero increases. often those hospitals come to us requesting a 40% increase. and if there is not competition among hospitals, the regulars have said that it is inappropriate for us to turn great those hospitals from our network because then we would have an access problem. so as a result, we don't have the ability to not agree to those of very high rate

increases from the hospital. so we are going to continue to fight on behalf of our customers to make sure that the healthcare that they are receiving is affordable and high quality. and it is a difficult fight. it is one we keep doing. is why we sold our pharmacy benefit management company so we could get access to lower cost drugs because of those costs are driving the overall increase the. >> so you're shifting the blame to the hospitals pretty much. >> we're working together -- >> there's nothing within your own system that you can find any flaws with? >> we continue to work on our efficiency. if you look at our administrative efficiency ratio, we continue to improve our efficiency as an organization while we provide more services in terms of getting to that underlying healthcare cost. >> i'm going to just again address the topic that has come up, when i saw slides and showed of the places where you hold your retreat. this is a sticking point that it's not the whole story, but it

is one because it is so visible that is pretty galling for people who have had to sacrifice their vacations for the past two or three years because of the economy and what it's doing to their personal lives, and yet i'm going to and then i want to give you the rest of the time to respond. you have continued to make these retreats a part of your work, and working relationship in offering these to your employees. consumers are making sacrifices in order to hold onto their health insurance as the premiums go up. and as they face being denied. these retreats hold more sway with your company than the health and well being of your subscribers. and i will allow you any time left. >> that. those meetings have been characterized as retreats where our associates, and that is incorrect. those meetings that were described armies that we have with our customers come and meetings -- >> which customers because often i meet quarterly with

representatives for our customers, our customer advisory group. -- >> who are those people? >> they are representatives from our customers, so business people who buy the benefits on behalf of speeded so you're selling or benefits at those lavish resorts? >> we are meeting with representatives, brokers and agents. you were one of the panel sessions going to work with her agent to understand spirit so that was where her agent was which is trying to get a hold of her? >> we make sure that our agents and brokers consultants and customers know what our benefits are, know what plans and services we can provide to them. >> and you justify that cost as you are raising the premiums? >> no. we continue to focus on making sure where more efficient. we do need to meet with people that our agents, brokers and customers. we find and provide input to us in terms of how we can improve the services and benefits that we provide to come in the case of -- >> you ever meet with your

premium holders? do ever talk with an? >> i do and i'm delighted to. and i appreciate the opportunity when i get too. and yes, i -- >> do you hear the stories in addition to the stores you are distorting? >> it is a challenge. we are on their side. >> they don't feel like it picks back and we want them to understand there is so much misinformation about what is driving these premium increases that i think it is important for people to understand the margins that are available to pharmaceutical companies and hospitals and where we stand on a relative basis. because we are fighting every day to make sure we can make the health benefits more affordable. >> thank you, mr. chairman. >> thank you. there was a request earlier that a letter dated the 11th, 2010, from and as you, a member of congress to ms. brady entered in record without objection it will be entered. second round of questions, mr. lax in? >> thank you, mr. chairman. is a couple times you want to

make healthcare services for your beneficiaries. you want to provide more services for the. you want to provide more efficient services for the. you want to ride good sources for them. is that which have been sitting? >> yes. >> you see that as your raw? >> we see it as a critical role for us to get them access to affordable, quality health care. and by providing the services that we do, we think that create real value for the customer. >> some of these documents paint a different picture. there's a document that's titled wellpoint individual 2010 plan, opportunities, not reflected in the forecast. so you have the -- is a business plan. and under this business plan, there's a section called risk management. it says medical loss ratio should improve as we eliminate subsidies and other risk management initiatives.

and then you have a number of initiatives. one initiative is to take pre-existing waiting period and adjusting to be the 12 months or the legal maximum, if less. you want to make sure they have to wait, if they have a pre-existing condition, to wait as long as the maximum will allow. secondly, reinstate, reinstatement will only be allowed for a period of 60 days after termination and will require underwriting and payment of back premiums. so that's going to make it more difficult for people to get back into getting access to this good quality care. does wellpoint have initiatives to reduce the amount of premium dollars that are used to pay for medical claims? >> we have a number of initiatives to try to reduce medical costs, period, and then -- >> how about to reduce not just medical costs but medical services? >> we want to make sure that our members get access to the

quality care they need and the right sitting at the right time. so if we are avoiding a fraudulent expense for an unnecessary expense, yes, we want speed is not fraudulent or necessary. you're saying people with precision conditions you will make them wait as long as possible before they can get care. there's another document, let me put it up on the screen. it is have a 14. this document will put executives identified key issues concerning the individual market and a stated lack of attention to risk management decreased ability use pre-existing claim denials and recent policies and maternity policies have led to our first year of loss ratios climate from less than 50% five years ago to over 65%. to these documents seem to indicate in senior executives are actively considering steps to reduce the amount of premium benefits that are used to pay for medical claims. if you're going to reduce the

payment for claims, you're reducing payment for claims for legitimate medical services. >> we are trying to make sure that the pool of members that we have is not disadvantaged in the market place. one of the reasons that our rates are going up so much in 2010 is that healthy people are making the choice when faced with the hardship of the premium increases they are seeing. we recognize -- >> what does a medical loss ratio been? >> what's a medical loss ratio? it's the claims they, the medical claims they divided by the premium. >> so you are trying to reduce the amount of claims that you will pay for people in order to make sure that you are still within the medical loss ratio, but you can reduce the claims were for people, isn't that right? >> no, what you can reduce claims without changing the medical loss ratio. that's not possible.

>> well, if you're looking for ways in a business strategy to manage the risk, these all sound very nice, managing the risk, and in the way to do that is to deny people access to care so you don't have to pay for that care for a longer period of time, that sounds like you want to make sure that you got less money going into paying for care. >> know, and specifically in individual market in california, there is a minimum loss ratio requirement that we comply with. in fact, in the hipaa and guarantee products that we describe, the medical loss ratio's are medical costs ratios exceed by far the premium increases that we can -- >> them reason you have a medical loss ratio is we want to guarantee that insurance companies are using premium dollars to pay for medical care for the customers and not for overhead, corporate expenses and profits. >> which is why --

>> you have to balance that out but since i could people are looking at business strategies to reduce the amount of payment of the premium dollars for medical care for the customers. >> actually, if we take some of those risk management ideas, we can potentially reduce the cost for the overall pool. and therefore, not have -- >> but for the individual involved, that individual is not going to have access to more efficient care. they're not going to access to good services. they're not going to have access at all, because you're going to hold down the cost for the overall pool. but that individual is going to have to go without or pay for the services that you wouldn't otherwise pay for. >> that's one of the critical elements about how reform. if an individual doesn't buy his or her policy when they are well, and there is an underwritten market, then if we allow them, like we do in some markets where we have guaranteed issue like new york and maine, to wait until they are sick to by the policy, then they won't

buy the policy. >> no but heants to do that. but you've got people covered and your business, you can't drop them because the law won't let you drop them. so you have people covered entity want to shift more costs onto them and use more of the premiums for overhead instead of for services. what i think we need is a meaningful, health reform to guarantee that the insurance companies are using premium dollars to pay for medical care for the customers, not for the overhead corporate expenses and profits. in the bill, what do we have with 80% requirement that the money collected by the premiums be used to pay for health insurance claims. >> correct. >> you're at 85%. you don't do that now. >> we're at 82.6%. i want to address that question so though, too. when every administrative dollar that we spend, we want to produce a lower cost of care as a result of that.

so we make investments in things like -- >> you don't produce a lower cost of care. to produce a certain amount to me to ratio and certain amount to make sure that you are meeting your expenses and your profits. but people are being denied care and that's why i think health insurance reform is so necessary. and i dispute your statement, although i don't have time to go into it, that this bill does not bring more people into the pool. an individual has no power to deal with you. but if they are pooled together, with others, then those who had the opportunity under healthcare legislation to say we want to make sure that 85 percent of the money that you collect from us pays our healthcare claims, not more money going to retreats and expenses and salaries. we want it for that purpose commanded you can spread the cost out. thank you, mr. chairman. >> mr. burgess for questions, please. >> let me just clarify, american

medical association site last night, of course they are not your biggest ally our fan, but they report a medical loss ratio for wellpoint at 84.8% which is right at that 85% figure that was mandated in the bill. y., is that for the whole company and different for california? >> they may be looking at statutory financial statements versus gap, the gap statements show for year end we were at 82.6 which is enterprise wide. so i'm not sure exactly where they are 84.8. but there many products. >> let me ask you a question. i thought blue cross was a nonprofit. we have all this discussion of profit today. i always thought when i was in practice blue cross was a nonprofit? >> there are many counties of blue cross licenses. we are a for-profit company, but as we describe, but not for profit companies continue to have margins, sometimes in excess of ours.

because we have come together as former blue cross independent states, we have great a lot of efficiency and skill. at wellpoint. and so we are more efficient blue cross plan that we are for-profit blue cross plan. >> one of the areas i'm sorry, mr. waxman is gone. one of the areas i disagree with mr. waxman but you agree with him, is we need a mandate, and enforceable mandate, we get mandate in his healthcare bill. mandates are an anathema of free society and my submission is they do not work. would've a tremendous a mandate right now with the irs. everybody knows you have to pay your income taxes, and if you don't may not be exactly sure of the penalties but you know it is bad. you don't want to find out. and our compliance with the irs is about 85%. well, we are 50 percent of people uninsured and a voluntary system in this country. so i don't know how much more complex we get by going to a

mandate. and yet, we ask all his people to give up significant freedoms when we did the medicare part d program, several years ago, and part of my job was to go and talk to people about the changes coming to medicare. and i get to the number of people who would tell me that you can't make me take that prescription drug benefit. no, ma'am. , i am not here to make you take it. it is therefore you if you want. well, you can't make me take a. i said no, that's right that you are doing what you are doing right now and that's okay. you can't make me take a. what are you doing right now? i don't have coverage. you can keep it. you can keep that noncoverage as long as you want. there was a penalty involved, and we got a lot of criticism for that that if you didn't sign up in the open and will appear, which at that point was six-month after the area. but people would pay 10% penalty for coming into the system after they got sick because we're trying to make the benefit look more like insurance and less like an entitlement.

although it is not perfect, is it has provided a benefit now to 92 or 93 percent of seniors have incredible prescription drug coverage of some sort. and 92 or 93% are satisfied or very satisfied. so there's a pretty good track record. we did that with out a mandate. and a model that we should follow in my opinion is that model which is too great programs people want. if you get a mandate which is a program you want, but if you get a mandate, there is no reason for you to try to compete for that for any of these, subscribers business. and yet, how much better would it be if you said we're going to great programs that people want and don't want to stay with us over time, i wish i could have a longitudinal relationship with my health insurance company. i have with my car insurance company since i was 18 years old. but health insurance, you shopper and every year to get the best deal and when you're in small business or your employer

stop shops around for the best you. as a consequence you don't get to keep your ensure overtime. one of the reasons i went with a high deductible policy and so i could have a longitudinal relationship with my insurance company. we are fed better off if we can have programs people rather than telling them what they have to have. i think it's come up that it would, of the increase in the california individual market can be as much of 106 percent under the confines of the house passed the. at a pretty significant figure. mr. stupak is correct. the benefits of star for four years so my not having to grind away but at some point the causal going. and the truth is nobody knows because we haven't, we do these budget scores but no one really knows look how far off the mark we were would passed medicare in 1965 with what it costs us today. mr. waxman talks about your medical loss ratio. look at our unfunded liability in medicare and medicaid. that's what is getting people in the face.

we've got a lot of problems that we need to fix. we need to do them. we've got a much bigger problem staring us in the face which is the unfunded obligation that we have with our existing public options, if you will, that those bills are going to come due before any of us really had planned. and we've got, that's where we need to be focusing right now. we're not doing our part very well right now with medicare and medicaid. before with 50 percent of the market that we pay for right now we're asking you to go to 75 percent at the federal level. that's big for the american people. they'll think we're going to do a good job for we have now. and they don't want to give us another 25 percent of that market. thank you, mr. chairman. i will yield back. >> thank you, mr. burgess. speculated the drivers or this increase to 39% increase your seeking, doctors were at 6%, hospital was 4% i think he said.

and pharmaceutical 13%, right? >> hostile trait is about 10%. physician trained is six and the pharmaceutical trend is about 13 for california for the 2010 rates. >> so that is about 29%. so ds at least 10 percent for administrative costs? >> cindy can take you through the different elements that went into the pricing increase. but i decide to keep it simple. so average laypeople like me can understand how you come up with 39%. if your project, these are all projected, doctors take this exit, pharmaceutical 13. what's the other driver there? >> the ms. schakowsky describing the trend in each of those elements. >> so you're looking for sort of a destination of which are going to need? >> no. cindy can give you more detail in terms of exactly how we got to the 39%. because you have rising healthcare costs. you also have what we called adverse selection due to the fact that a lot of -- >> i will have are submitted for

the record. what is the driver then? doctors, pharmaceutical, hospital? what else? >> correct. were also having adverse selection been to healthy people and their payment is going away to. >> how many healthy people did you have last you in your individual policy? >> you know, we look at -- >> how many people did you have speakers we have 800,000. >> how many this year in your individual? >> we're expecting 25,000 on aggregate basis between the two regulated companies less that will have been spent by the individual post them how many less we have? >> about 25,000 less we think that we are projecting. what happens in the product -- >> i understand. and because they can't afford it. >> pardon? >> because they can't afford it? a lot of people in this country every year because they just can't afford it. whatever it might be. >> we want to have a customer and we want the customer to have coverage.

>> you indicated are you for thousand nine your corporate profits work 2.3, almost 2.4 million because you sold a management company, right? >> well, we sold a pbm and we have operating earnings as well. >> what was your company profit than in 2008? >> our profit margin was 4.8 percent on a relatively similar base. so actually the margin was less. 4.6 in 2008. 4.8 is our overall margin in 2009. >> so that is about the same? >> yes. >> what would that be and dollar signs because i'm not sure exactly. we probably had a $62 billion worth of revenue total. so not a dissimilar number. >> so 2.4 speak what we can get you the exact. >> so 2010 been would you anticipate again you're going to be around $15 billion?

>> fifteen billion? >> is that what you said? >> no. >> what you think you'll be in 20 didn't speak up will have lower operation journeys in 20 and it is a reflection of the economy and the loss of our membership primary. >> but your profit will be what? >> we expected to be in the same range, potentially. yes. >> so you're expecting a lease for the last three years for profit will be the same? >> it's been pretty steady in that range, 4.6, 4.8 would be appropriate. >> okay. >> which a relative basis and many other industries is very modest. >> well, you may think it is modest but if you're looking at a 39% increase or in michigan when they proposed a 56% increase, that's not very modest to folks. >> we are not blue cross blue shield of michigan. >> i know you're not. i know you're not, but michigan blue cross blue shield is not

profit. >> we are for-profit. >> i am sorry. your in may know, right. and they have had double-digit increases you mentioned earlier, about main? >> main is one of the places where we're one of the few players left in the individual market because others have left. >> and less players in the market the easy to manipulate that market because of your sheer size be? no, what is happening is because the regular tour in by men in main and particularly the individual market was right late in the way it was, everyone left except for us. we are blue cross. we're not going to lay. we will stay in our geography. and continue to serve our members to. >> maine expects to be 23% this year, right? >> we filed for a rate increase in maine. maine regular has to die debt and we are in litigation with the maine regulars about the ability as provided in the statute to have an appropriate

margined. >> how about an maine is yr dr. cosby or 6% or less in maine? >> the dr. cosby very high and at relative bases covered other parts of the country it's one of the most high speed is isn't 16% like california? i am looking for your drivers and maine. you have your drivers in california which is doctors, hospitals, and made, what is at there? >> off the top of my head i don't know disaster into an. the driver in maine is that is guaranteed issue. and there is no requirement for people. >> guaranteed issue -- >> people wait until their second telling purchase cover and it drives up care. >> guaranteed issue is you're guaranteed to present the policy and then it's up to consumers whether or not they can't afford. we call a purging. >> only people know they will incur healthcare cost more than a premium by policy. and that's not a sustainable business model. that's what all the other

insurers left the state because they were forced to lose money in that business. that's not what the last i'll say that they don't take inches because they expect again more than what they pay. and fat, our last they'll be basically pay and really never access it because you have such high deductibles and everything else. >> well, obvious a there are people are using the covers because otherwise our medical loss ratio would be zero. i mean, that is insurance that you buy it when you don't need so it will be there when you do need it. if ever to wait until they need to buy it, we result in decision we have to do in the individual marketplace while the of escalating insurance costs. which is again why we've talked about the fact that we need sustainable healthcare reform. we need to address not just the insurance market reforms, which we agree need to occur, but you also have to address the underlying cost to care. we are only charging what the cause that come through to us. >> well, i still don't see how you justify 39%.

i got up to 29 percent in your drivers -- >> 39% was the high. the average was 25. >> right. >> cindy, you want to talk what each element? >> we have three witnesses who talked about 39%. you are saying the average. >> again, we don't like raising a rates that much. we know it is a hardship on these people, but at the end of the day, speed is do you believe you can raise your rates were no one is going to want to take a policy any more? >> pardoning? >> do you think you will find get to the point, do you think you'll get to the point where basically you are killing the goose that laid the golden egg? no one can afford to? >> it is an issue that we have got to get to the underlying cost of care because when one access to healthcare. there are wonderful advances, wonderful technologies, and we want to make sure that we continued to have access and our customers continue to have access. and it needs to be affordable. and so we have to think about

speakers do you believe will be a point where we can no longer afforded? >> i think we as human beings greatly value our access to healthcare, which is why we continue to be his i agree and every family has to make a value judgment. and i afford it today or not. so when my rates go up 39% as our first panel said, we look at and present it will be cannot afford it anymore or do i just drop it and hope i don't get 60? which is why we are in the markets they would have to get to reducing healthcare cost, making sure that people aren't getting unnecessary procedures or redundant procedures. we played that important role in healthcare. to eliminate us from the process, eliminates the opportunity to get to that value equation. without us, -- >> when the average family sitting there and say my rates just went up 39% or if you want to use your words, the average in your case 25%, and i can't afford anymore, it is as much as my house payment as the first panel said, then i look at the end of the year and darn it, you

made 2.3, five, $8 billion the sellers are in millions of dollars for executives. how can i sustain that because i'm the one who paid it? not been. and you get to the point where no one can't afford it. >> and we are serving 34 million americans across the country, and our goal and desire is to try to get for them affordable health benefits that they can continue to access the quality care, the drugs that they need and what. >> and it is not working. when i came to congress, like our first panel, 64 percent of the people had health insurance. would buy it and now we are bound to about 34%. that's the we have to do something on healthcare in this country. because the cost is killing us. and we're just going and arguing. propagating outside the scope of this hearing. >> and i asked the one last question for of what to? >> sure. >> we have a vote. you have an opinion as to whether or not that's going to bring down healthcare costs to? my believe that it will not

affect healthcare costs one way or another. >> will it affect your business or is there any reason not to do at? >> the unattended topic was that we were about is that there are initiatives to share data with the evolution of health i.t. in particular. if we can address some of the quality opportunities through the sharing of data, we have for those to be a limited as part of this process. >> but that would be true in anything. you could control ideas, identifying and aggregating data is going to be critical in that. >> exactly. and as health i.t. advances and we're investing in the to make sure we can use that data as mental information, we take for that to be a limited as an unintended consequence of that review. >> what about professional baseball? would it be any unintended consequences be? none to us. >> with that, let me conclude this panel, and thank you both bring you and thank you for your

testimontoday. >> think you. >> i want to thank all our witnesses for coming today and for the testimony. the committee rules provide that members have 10 days to submit additional questions for the record. i ask unanimous consent that the contents of our document by to be entered into record provide the committee staff may reject any information that it is a propriety relates to privacy concerns or is law enforcement sensitive. without objection our document by to will be entered in the record. also ask unanimous consent the letter from mr. dingell to the national to the national association of insurance commissioners and their response data figure 17, 2010, be submitted as part of the record. without objection, documents will be entered into record for mr. dingell. that concludes our hearing. this mean of the sub meeting is adjourned. thank you all again. [inaudible conversations] [inaudible conversations] [inaudible conversations]

[inaudible conversations] [inaudible conversations] >> going live now to the u.s. senate where members continue work on a bill that promotes u.s. travel. the legislation would create a nonprofit corporation that encourages foreigners to travel to the u.s. for leisure or business. there won't be any vote in the

chamber until after four eastern so several senators can attend the white house healthcare summit with president obama. we can also see debate on short-term extension of several measures, including unemployment benefits. live now to the senate floor here on c-span2. senate will come to order. today's opening prayer will be offered by reverend bennie tate, senior pastor of rock springs church in georgia.

the chaplain: let us pray. our heavenly father, we bow our heads in your presence. the bible teaches us, behold how good and how pleasant it is for brethren to dwell together in unity. because a house divided against itself will not stand. may your servants in this body not to look to parties, personalties, preferences or press, but may they focus on principles and people. god, we call our senators politicians, but you call them ministers in the bible. may all 100 members of this body make foolproof of their ministry. i ask you for your guidance on their decisions and your grace on their families. keep every one of them close and clean being accountable to you. we ask for your protection for our men and women who so bravely protect us all over our world. we pray this prayer, respecting all faiths, but we pray this

prayer in the name of the lord jesus christ. amen. the presiding officer: please join me in reciting the pledge of allegiance. 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, february 25, 2010, to the senate: under the provisions of rule 1, paragraph 3, of the standing rules of the senate, i hereby appoint the honorable kirsten gillibrand, a senator from the state of illinois, to perform te -- state of new york to perform the duties of the chair. signed robert c. bird, president pro tempore. the presiding officer: under the previous order the leadership

time is reserve. the senate will resume consideration of the house message with respect to hfer 289 -- 1299. the clerk: certain administrative authorities of the united states capitol police and for other purposes. mr. casey: madam president? the presiding officer: the senator from pennsylvania. mr. casey: madam president, today the senate will resume consideration of the house message with respect to h.r. 1299, the legislative vehicle for the travel proportion act. yesterday the majority leader filed cloture on the motion to concur. that vote will occur tomorrow morning unless we're able to reach an agreement to vote today. in addition we're also working on an agreement to consider a bill that would extend certain expiring tax provisions for 30 days. if we're able to reach an agreement, we could see votes on that after 4:00 p.m. there will be no roll call votes prior to 4:00 p.m. to allow

senators to attend the health care summit with the president of the united states. mr. chambliss: madam president? the presiding officer: the senator from georgia. mr. chambliss: madam president, i rise this morning to thank our distinguished guest chaplain, dr. bennie tate, of millner, georgia. dr. tate is a senior pastor of rock springs church in milner, georgia and serve his congregation well for 20 years. when dr. tate began preaching at rock springs church, only 20 people came to worship on a given sunday. today dr. bennie tate preaches to more than 4,000 people on any given sunday. rock springs church is now the largest church in the congressional methodist denomination. dr. tate's the kind of pastor who finds creative ways to go

out to the community and spread the word of good. he host the am ms of -- amples of god -- apples of god radio program. he has worked with local civil organizations. leading his flock by example. he serves as a fire station chaplain and as a georgia youth camp board member to name a couple of his activities. he's written three books as well as pieces for the local "griffin daily news." one of his books read by my wife and mic myself has a unique tite called "happy wife, happy life." all of us males have a great appreciation for that title. i've had the privilege of attending dr. bennie tate's church on many occasions and i have always found rock springs church to be a very holy spirit filled church.

dr. tate has a very unique way of spreading the gospel in a manner that is mixed with humor and, yet, direct personal feelings about the word of -- of the holy spirit and the message that jesus christ gives to him. in short, he has effected positive changes in the church and the community through his outreach. we appreciate his efforts and his words of worship this morning and i'm just very pleased to have my dear friend dr. benny tate to be here with us today. with that, madam president, i would yield the floor. mr. chambliss: madam president, i suggest the absence of a quorum. the presiding officer: the clerk will call the roll.

quorum call:

a senator: madam president? the presiding officer: the senator from delaware. mr. kaufman: madam president, i ask consent the quorum call be dispensed wit the presiding officer: without objection. mr. kaufman: i ask to speak as if in morning business for up to five minutes. the presiding officer: without objection. mr. kaufman: thank you. i rise once again to recognize one of america's great federal employees. i have spoken before about the values that bind our nation's public servants together. one of the most fundamental of these is sacrifice. we see the quality each day in the men and women who serve in

uniform both in the military and in law enforcement. they put themselves in harm's way to keep a safe -- to keep us safe and protect our freedoms and way of life. those who work in civilian roles also routinely take risks to their safety when performing their jobs, including the many federal employees posted overseas and at our borders. this week, sadly, our nation mourns the loss of a truly outstanding public servant who was killed last thursday in the tragic attack against an office building be in austin, texas. vernon hunter was a 27-year veteran of the internal revenue service, and before that served for two decades in the u.s. army. earlier this month, i honored an i.r.s. employee who made it possible for tens of millions to file their taxes electronically. at that time i spoke about how

i.r.s. agents and employees continue to work hard and make it easier and less stressful for americans to pay their taxes. vernon was one of the great i.r.s. managers who helped process tax filings and resolve issues for taxpayers. he had a reputation for being kind and full of life. he always wanted to help people solve their problems. his biography reads like a lesson in service and sacrifice. a native of orangeburg, south carolina, vernon enlisted in the united states army after graduating from high school. he served two combat tours in vietnam, at the same time facing discrimination at home when he was turned away from an all-white boarding house, despite wearing the uniform. vernon remained in the army for 20 years, after which he worked for a short time in the private sector. but like many of our great federal employees, he felt he had always been called to serve

his nation, and he returned to federal employment nearly three decades later -- nearly three decades ago when he began working for the i.r.s. last week, vernon lost his life when a small plane appeared out of the clear morning sky and struck his office building. the pilot also died in an act of apparent suicide, leaving behind a lengthy manifesto condemning corporations, the government, and singling out the i.r.s. although 13 people were injured, vernon was the only person killed in the violent explosion that ensued. loyal, dedicated public servants like vernon put themselves at risk each and every day through the mere act of doing their jobs. the attack in austin was preceded by the oklahoma city bombing and the anthrax attacks of 2001. civilian federal employees know

there is always a risk. many pass through metal detectors each morning coming to their office. mail is screened and emergency drills are rehearsed. a federal office building is a place of both dedicated work and risk in the service of country. vernon tragically epitomized both. he is 68 years old and is survived by his wife valerie who also works for the i.r.s. in the same office building. along with six children and stepchildren, seven grandchildren, and a great grandchild. according to his son, vernon was planning to retire from the i.r.s. and go back to school. he wanted to teach children with special learning needs. vernon was also an active member of the graint zion baptist church in austin where he ushered and where his funeral will be tomorrow. i hope my colleagues honor me in

honoring vernon hunter and expressing our condolences to his family, friends, and those who worked with him at the i.r.s. he made the ultimate sacrifice while in the service of our nation. i yield the floor and suggest the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call:

quorum call:

a senator: madam president? the presiding officer: the senator from texas. mr. cornyn: madam president, i ask unanimous consent that the quorum call be rescinded. the presiding officer: without objection. mr. cornyn: madam president, i'd like to speak as if in morning business. i'd like unanimous consent to be able to do so. the presiding officer: without objection. mr. cornyn: madam president, i was watching, as many of us were, at the great interest of the bipartisan health care summit that's being broadcast on television and i am happy that there is a bipartisan meeting at

the white house to discuss health care reform. i think the practicalities are that only 38 of the 535 members of congress could participate directly in that. but i know that representatives of the -- of our political parties are there, along with the president, talking about something that is very near and dear to all of our hearts, and that is how do we bring down the costs of health care, which is priced out of the reach of many american people, inclining too many in -- including too many in my state in texas. unfortunately, sometimes the -- in washington what happens is you see what's happening on tv or what's happening on the floor of the senate and it looks like one thing and then you find out that behind-the-scenes something very different is happening. and what i'm speaking about in particular is in contrast to a

bipartisan summit on health care, my understanding is that there are efforts under way on part of the staff of the majority party to consider the use of reconciliation to try to pass an unpopular health care bill with 51 votes on a party line basis. i think that is the contrast between what people are seeing on tv and what is actually happening behind-the-scenes is pretty telling. i would say it's disappointing because i just think that health care reform is just too important. it affects one-sixth of our economy, it affects many americans, it is too strict to do along partisan party lines. while it is true that reconciliation has been used in the past, it's never been used

for anything like this. this would be unprecedented. i think it would be an act of defiance of the american people who overwhelmingly disapprove of this legislation. but there's no doubt that we need health care reform. premiums have more than doubled over the last decade. medicare, which provides access to health care for our seniors has a $38 trillion -- $38 trillion unfunded liability. which translates into an i.o.u. for every american family in amount of $325,000. if we heard anything out of the recent election in massachusetts, i think it is that the american people think that there's too much spending and too many borrowing taking place here in washington, d.c. too many responsibilities like this unfunded medicare liability

that are simply not being met. and we know that medicaid continues to be problematic in not providing access to enough low-income people who are ostensibly beneficiaries of medicaid. for example in the metro pleks in texas -- metroplex in texas, only a percentage of doctors will see medicaid patients because reimbursement rates are too low. it is too much like appearing to do one thing on one hand and delivering something far different on the other hand. so i think everyone agrees we need to solve these important problems, but how we go about solving the problem is important to maintaining the confidence and trust of the american people. bipartisanship, i think, on this

subject is absolutely crucial. after massachusetts sent our new senator, scott brown, to washington, we know that there was more talk about bipartisanship. but instead of working together to solve these problems, bipartisanship has so often translated into take it or leave it. and if we can do this strictly with majority party votes, we will. that's what happened on christmas eve. i remember that 7:00 a.m. vote on christmas eve when 60 senators on the other side voted to pass a health care bill that the american people have simply said in every poll after poll they do not want. and, of course, now we see the white house repackaging an unpopular house bill with an unpopular senate bill and posting 11 pages on the white house website and claiming that this is somehow a package that

sacrosanct and cannot be touched and in no way could it be considered a bipartisan piece of legislation. to have the minority parties, this is the basic template, but you can't change any part of it, that's not bipartisanship. and so now after the election of senator scott brown, who campaigned on the pledge that he would be the 41st vote to defeat the senate health care bill because of its spending that's raising taxes, it's raising premiums on people with insurance. it's taking half a trillion dollars from medicare. already another fiscally unsustainable entitlement program, which i mentioned wit with $38 trillion in unfunded liabilities to create another entitlement program. the people of massachusetts sent scott brown here to stop that bill that they don't want and

now we find the majority party wanting to use reconciliation, a hyper partisan tactic to ram a bill through that the american people have rejected most recently in massachusetts. but if we're talking about trying t to regain the public's confidence, not only as -- is bipartisanship important in terms of bringing solutions to health care, but transparency is crucial when we're talking about something so big and that affects so many. you'll remember in 2008, when president obama was senator obama running for president of the united states, he promised to broadcast negotiations on c-span so the american people could see who was arguing on their behalf and who was not. but in stark contrast, again, between what was said then and what was actually done we saw the white house cutting deals

with special interest groups like the pharmaceutical industry. we saw individual senators demand and get special deals for their states as a condition to giving their vote to pass that bill. and as much as anything else in the bill, i think the way that the bill was passed with these sweetheart deals, the secret negotiations, the lack of transparency turned the american people off to this -- to these health care bills. i know the president said that after his election washington would not be business as usual. but, unfortunately, it has been and the american people don't like it. and this bill -- the subject, health care reform, is simply too big and too important and too costly to do sweetheart deals, backroom negotiations and

with disregard for transparency. the american people are smarter than i think many folks in washington, d.c., give them credit for. because they know that this health care proposal is not lasting reform and it simply won't work as advertised. the white house proposal will still increase premiums on american families, that is, if you have health insurance now, this white house proposal, an amalgum of the senate an house bill will raise your insurance premiums because of costly federal government mandates. but this white house bill does one thing the senate bill did not, it actually spend spends $75 billion more than the senate bill that passed this body on christmas eve at 7:00 a.m. in the morning. and the white house bill does share some common elements with the senate proposal though. it still cuts nearl nearly $500 billion from medicare to create a new

entitlement program including a program that's very popular in my state called medicare advantage which gives seniors access to more choices and quality care that they like. but rather than allow them to continue to keep that medicare benefit, this proposal, the white house bill, like the senate bill, would cu cut $500 billion from medicare including medicare advantage. but the basic problem, here again, is that we call this health care reform, but the health care bill offers no long-term plan for the medicare program's solvency. in other words, that $38 billion i mentioned a moment ago, this actually makes it worse by taking another half a trillion dollars out of medicare making things worse, not better, when it comes to the program's long-term solvency. and i simply think that the choice that the president has

made and that the senate and house health care bills have made to force millions of low-income people on to medicare -- excuse me -- medicaid is simply not right. giving them no choices but a government-run program, which, as i mentioned earlier, denies them too many times access to a doctor because they can't find a doctor who will accept government rates for medicaid reimbursement to see patients. i mentioned the 38% figure in the metroplex of dallas-fort worth, only 38% of physicians will see those patients because of low rates. these health care bills force millions of people on to that program along with in the process promising them access to care, but then not delivering as advertised. and then there's this problem, as you know, madam president, the medicaid program is the cost -- the cost of that is borne by the federal government and the state governments.

in my state alone the health and human services commission in texas estimates that the expansion of medicaid under the presiden will cost texas taxpayers an additiona additional $24.3 billion over the next 10 years. $24.3 billion that is an unfunded mandate that's contained in this bill. now, where does that money come from? well, too often i think some of our former governors will tell you that what happens is that's money that has to be used for an unfunded mandate from the federal government that comes from education, higher education budgets, law enforcement budgets, other state priorities. and it's simply irresponsible for congress to force on state taxpayers this responsibility to pay for this unfunded mandate when there are -- there are other priorities that the states have chosen that they think are

important. things like education, i mentioned, and higher -- and law enforcement. so the unfunded mandate in this bill is simply unacceptable. "the wall street journal," summed up the president's proposal this way, they said -- quote --"it manages to take the worst of both the house and senate bills and to combine them into something more destructive. it includes more taxes, more subsidies and even less cost control than the senate bill. and it purports to fix the special interest favors in the bill not by eliminating them, but by expanding them to everyone. we know the furor caused across the country when some senators were able to negotiate more favorable medicaid reimbursements than the rest of the country. and when everybody found out that those who were not in those favored states would end up paying for those special favors that were necessary in order to

get 60 votes. but this bill doesn't repeal those, it simply expands them to everybody. vastly increasing the cost of this legislation and making it even worse, not better. the president and his congressional allies who support this legislation seem to think the only reason the american people oppose these bills is misinformation. so i would suggest we simply look at facts. and in this case straight from the congressional budget tofs see what the congressional budget office, the official scorekeeper for congress, what the congressional budget office has to say about these pieces of legislation. the c.b.o. said that premiums for those who have health insurance, 85% of the american people who have coverage of some kind, both whether it's through government programs like medicare, v.a., or the like. but those who have private insurance, that their premiums

will go up 10% to 13%. an average of $2,100 for families buying policies on their own. that's in the individual market where most small businesses and individuals have to shop for their insurance. their health insurance premiums will go up 10% to 13%, an average of $2,100 a family. no wonder this legislation, the more people learn about it, the less popular it becomes. and individuals who get their health care through small businesses or larger employers, which are 83% of americans, will see the status quo. they will see premiums will continue to increase by 5% to 6% a year. i thought health care reform was about bringing down the costs and making it more affordable. bending the cost curve to use the jargon that's been used here time after time after time in the last year and a half or so. but we find out for those in the

individual market premiums will go up 10% to 13%. for those in the larger employer market, it will go up 5% to 6%. not bend the cost curve down. it will either be ineffective at all and keep premiums basically where they would have been anyway or make it worse. and then there's gamesmanship in how it deals with the budget deficit. here's what the c.b.o. said about the bill's impact on the budget deficit. washington budget gimmicks allow the white house to pretend the bills reduce the deficit b by $132 billion which is a fraction of the $1.3 trillion budget deficit. americans don't believe reducing the deficit is possible at the time time you're spendin

spending $2.5 trillion over the next 10 years. and they're right. it's easy to produce -- to pretend you're reducing the deficit when you're raising taxes by $500 billion and taking another $500 billion from medicare in order to pay for this program. the administration's own actuaries have worried that future congresses really won't let the $500 billion in medicare cuts happen. in other words, the bill spends now, but won't pay later. and amazingly, and i assume the majority leader's going to bring this up sometime soon because he needs to, the 23% cut in reimbursement rates for doctors who take medicare patients is not taking care of in this bill and it should be. i mean, if this is really about health care reform, shouldn't it be making sure that our seniors who are on medicare have access to doctor? they can actually find a doctor who will see them? well, if you cut 23% in those doctors' reimbursement rates,

which is where we're headed now, they're not going to have access to doctors. and here's what the obama administration's own experts say about the cost curve, whether it's bent up or down. the senate bill, they say, will increase overall american health care expenditures b by $220 billion. so it won't bend the cost curve down, it will actually bend it up, making things worse, not better. now, the american people, i think, have been pretty smart about this. they have been more engaged, better informed on this subject than i have seen in a long time, and of course it's a very complicated area, health care reform, but they have gotten very well informed about this. and they want lasting reform that will lower costs. well, here's what we know works to lower costs, but this is not something that's in the president's bill and apparently not something that the majority party is even willing to

consider. if they did, i submit this would be a big step forward to bending the cost curve down, making health care more affordable and yield a bipartisan product that the american people could support. i believe that we need to give control over health care dollars to patients, not to washington bureaucrats or to insurance company bureaucrats either. the american academy of actuaries found that consumer-driven health care plans have saved as much as 12% to 20% in health care premiums. 12% to 20%. that's a lot. and then, of course, there is the practice of defensive medicine, ending lawsuit abuse which would save $54 billion over the next ten years, according to the c.b.o. we also support allowing small businesses to pool together like big companies do to pool their

risks to help bring down premium costs. according to the congressional budget office, this would lower premiums for small businesses by 2% to 3%. now, that's not a huge amount, but i'm sure they will tell you that every little bit helps. and in conjunction with these other reforms would have real meaningful impact in terms of bringing down health care costs. i also support and our side of the aisle supports allowing americans to purchase health insurance from any state they want to, and that would create a national competition, it would allow people to buy policies that they could afford that suited their families' needs rather than those loaded up with state government mandates with no choices which would result in higher costs. but if congress would allow americans to purchase their health insurance in any state they choose and by increasing

competition, the congressional budget office says the costs of their health care premiums would go down by 5%. so clearly, competition, transparency, keeping the power in the hands of the consumer, not in government, these are some of the things that would lower the costs, not cause them to go up, but are these part of the bipartisan health summit at the white house? unfortunately, apparently not. i would also support, and i would think there would be a lot of support on a bipartisan basis, for giving medicaid patients the ones who can't find doctors because of low rei reimbursement assistance to give them premium assistance, that is to supplement what they can pay so they can buy private sector coverage which pays doctors at more of a level that they would accept in terms of seeing those medicaid patients, so providing

medicaid premium assistance rather than forcing people onto a medicaid program that's dysfunctional and doesn't work. that would be an improvement, and you could do it cheaper. according to the c.b.o., this would reduce federal spending by by $12 billion over ten years. so my conclusion from all this, madam president, is that the american people want us to start over. we need lasting health care reform. i have offered some concrete suggestions on how we could lower the costs, make it more affordable, and i believe that if republicans and democrats could work together, we can achieve it. and on something as big and important and costly as this, we need to do it on a bipartisan basis. it needs to be transparent. it needs to be devoid of special interest deals and secret negotiations and done out in the open where people can see it and trust it for what it is. we have to reject, though,

solutions, purported solutions that would do nothing but increase spending, increase taxes and increase premiums. we need to start over and implement commonsense steps that will lower costs. madam president, i yield floor. mr. udall: madam president, i seek recognition. the presiding officer: the senator from new mexico. mr. udall: thank you, madam president. thank you. i rise today to introduce the roads safe act of 2010, and i'm pleased to be joined in introducing this legislation by my colleague, the senator from tennessee, senator bob corker. this legislation will encourage the development of new tools to

fight drunk driving and has the potential to save 8,000 lives every year. tragic drunk driving crashes often prompt communities to do more to prevent drunk driving. this was the case in my home state of new mexico back in 1992 when a drunk driver killed a mother and her three girls on christmas eve. he was speeding down the highway 90 miles an hour, going the wrong way down interstate highway. this crash helped change attitudes in my state, but it should not take a tragedy for us to do more to prevent drunk driving. in 2008, drunk driving killed about 12,000 americans, including 143 people in new mexico. that is an average of 32 people killed every day by drunk driving. this unacceptable death toll is all the more shocking when you

consider that each one of those deaths was preventable. the united states has already made significant progress. compared to 20 years ago, our roads are much safer today, yet even as the overall number of people killed on our highways has declined, drunk driving still accounts for about a third of all traffic fatalities. it's even more worrisome that a drunk driver has just a 2% chance of being caught. in fact, one study found that the first time drunk driving offender has on average driven drunk 87 times before being arrested. imagine, 87 times. this is unacceptable. something must be done to prevent these drivers from getting on the road in the first place. the good news is that there are

potential technologies out there that could do just that. that's why senator corker and i are introducing the roads safe act today. new safety technology has already transformed the automobile and saved countless lives. for example, air bags and antilock brakes are now standard features in many vehicles. these safety devices are built into the car and are unobtrusive to the driver. such technologies are an important reason we have fewer traffic fatalities today. now, emergency -- now, imagine a future with vehicles that could detect whether a driver is drunk when he or she gets hyped the wheel. before he or she even starts their vehicle. that would be no drunk driving

crashes if it were impossible for drunk drivers to drive. if such technology were widely deployed in cars, an estimated 8,000 lives could be saved every year. i realize that many may think this is a far-fetched idea, yet consider the vehicles today can already give driving directions thanks to g.p.s. satellite navigation devices. some cars can even parallel park themselves. new mexico and other states require convicted drunk drivers to use an ignition interlock, a breathalyzer device they blow into before their vehicle's engine will start. the success of ignition interlocks for preventing repeat drunk driving offenses suggests that a better technology could be used to prevent all drunk driving. in 2006, mothers against drunk driving convened an international technology symposium in albuquerque, new mexico. the goal of the meeting was to

review efforts to develop advanced ignition interlocks technology. in 2008, the national highway traffic safety administration partnered with leading automakers to explore the feasibility of in-vehicle technologies to prevent drunk driving. the recent progress of this cooperative effort fuels optimism that such technology could be deployed within five to ten years. clearly, such advanced technologies must win widespread public acceptance in order to be effective. they must be moderately priced, absolutely reliable, and unobtrusive to sober drivers. the aim is to stop drunk driving, not discourage responsible social drinking. a recent insurance institute for highway safety poll found that 64% of americans believe that advanced alcohol detection technology is a good idea and

that it's reliable. so what would the roads safe act do? this legislation would authorize authorize $12 million in annual funding for five years for the driver alcohol detection system for safety program, also known as dads. dads is a public-private partnership between nhtsa and the automobile coalition for traffic safety. the goal is to explore the feasibility, potential benefits and public policy challenges associated with using in-vehicle technology to prevent drunk driving. this increased federal funding to combat drunk driving is a smart investment in public safety. drunk driving has direct and indirect economic costs in terms of damaged property, medical bills, and lost productivity. in economic terms, drunk driving costs $129 billion per year. of course, such monetary costs

cannot be compared to the value of saving 8,000 lives every year. several organizations dedicated to fighting drunk driving already support this bipartisan proposal. mothers against drunk driving, the century council, and the distilled spirits council all support the roads safe act. madam president, i urge my senate colleagues to join me, senator corker, and these important organizations in the fight against drunk driving by supporting the roads safe act. we have made much progress in our efforts to prevent drunk driving, but there is so much more to be done. thank you, and i note the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call:

quorum call:

a senator: madam president? the presiding officer: the senator from new mexico. mr. udall: are we in a quorum call? the presiding officer: we are. mr. udall: i'd ask unanimous consent to vitiate the quorum call. the presiding officer: without objection. mr. udall: madam president, i ask unanimous consent that the senate stand in recess from 12:30 until 2:00 p.m. today. the presiding officer: without objection. mr. udall: madam president, i note the absence of a quorum. the presiding officer: the clerk will call the roll. recess: quorum call:

a senator: mr. president? the presiding officer: the senator from oklahoma. mr. inhofe: i ask that the quorum call be vitiated. the presiding officer: without objection. mr. inhofe: madam president, this afternoon it's my understanding we're going to have one more vote and it's going to be on the travel promotion act. i have opposed this in the past. i've voted against it three

times. i'm not going to hang around here and waste a whole day to vote against it a fourth time. so i would like to ask unanimous consent that i make a very brief statement and then it appear in the record immediately following the vote that takes place this afternoon. the presiding officer: without objection. mr. inhofe: and statement is this, i have no real strong feelings about this bill other than i don't think this country needs to create another corporation and a corporation that would be authorized to impose an annual assessment on u.s. members of the travel and i tourism industry represented on a board of directors, the corporation, establishing in the department of commerce the office of travel promotion. i don't believe we need another office in this bureaucracy and so i would be voting against this bill and i have voted against it on june 22 of last year, september 8th of last year and september 9th of last

year and so my vote would be the same this year. so i ask consent that that be put in the record. the presiding officer: without objection. absence of a quorum.t the the presiding officer: the clerk will call the roll. quorum call: quorum call: