that is what we have passed out. >> get a copy. >> why don't you pass them out over there. let me go ahead and to describe this while it is being passed out. the amendment directs -- a portion of the amendment which is the streamlining would direct the secretary of health and human services working in conjunction with the secretary of the treasury to establish a system of application enrollment and retention for medicaid, chip, and tax credits that need -- and that meet a series of requirements. there are eight requirements listed. .

fraudulently obtaining credits or obtain access to these benefits, that all of those protections would remain in place.

the only issue is whether a person has to go to three or four offices to try to figure out what they are qualified for, or whether they could go to the exchange and have that determination made, and verified and sign up at that point. >> if the senator would yield for a question? >> certainly. >> what i saw earlier -- and maybe i'm reading this wrong, and maybe staff can even collar fly this. it says this form can be filed on line, in person, by mail or by telephone. how do you know that is who this person is if they can do it on line by mail, in person or by telephone. >> let me ask staff to respond to that and ask if this is a procedure that is not currently possible in those programs

otherwise? >> so we may give a joint response here, but at least as relates to medicade, i think a number of states have already tried to undertake some of these efforts. as you indicated, senator bingaman especially in the situation that population finds itself in. we've talked about that in the last couple of weeks, the difficulty of going to an office when you have an hourly job that would require me -- require you to take off. >> give me an example and tell me how we know it is you, you're legal, that you're here legally, that there isn't some kind of moaning games going on or whatever, and that he we also know it is you?

you are filling out this form over the telephone. >> well, obviously, senator, there is no fingerprint over the telephone. i'm not aware of fingerprints for medicade. there are documentation requirements for medicade. that goes to your question on the status as a legal permanent resident. a number of documents confirm your identity because a thing like a passport or a drivers license have a photo. >> except that if you don't see the person, how do you know the photo is correct? let me give you an example. i remember watching 60 minutes, several years ago -- birth certificates and death certificates are not cross referenced in states. ok?

let's just say for instance somebody dice. and we have all had these case ns our offices where somebody's social security benefit gets cut off. we call them our lazarus cases because they really dment die. all kind of position good on because they don't coordinate the death and birth certificates. somebody gets a birth certificate and they fill it out. how do we know this isn't being done? they have a valid birth certificate. >> there are ways around the system. of course that is illegal. so if you apply for federal benefits, i'm unfamiliar with all the statutes, but it is like a false claims accusation because you are misrepresenting the truth. >> but you are already here illegally. by definition if you are here illegally, you have broken the

law already. you're an illegal alien. you are now applying with somebody else's birth certificate that you have obtained. how do we know it is you? there are so many protections built in. i don't see the protections. >> let me clarify. the concerns that you are raising relate to the chairman's mark. they don't relate to my amendment. >> well, it says the form can be filed on line, in person by mail or by telephone. >> but that is true with medicade as i understand it. is that wrong? >> that is true under current law. >> that is what you are concerned about? >> yes. i have been concerned about that for some time. >> so it is not a concern about my amendment. it is a concern about current law. i am not changing the requirements that people have to meet in order to sign up. i'm not changing the eligibility, and i'm not

changing the verification requirements that they have to meet. >> well, mr. chairman, senator bingaman would yield for a question on this point. i know this language is not legistlative language, but the form says it can be filed on line by person by mail or telephone. >> that is what staff just advised is current law. that each of those is possible under current law. i don't mind crossing out line two if you don't like line two. we are not changing current law with regard to how you -- what process you follow. all we are saying is let's all do it in a coordinated way so that you don't have to go to one office to get signed up for chip and a different office to

get signed you for medicade and a different office for the exchange. >> so there are no tax credits in current law. is staff telling me that for medicade you can sign up by telephone? >> i don't know for sure by telephone, but i do know you can do things on line and by mail. >> well, sure. and i really suggest that the senator think carefully about this. this is one of those ones that is made to order for the talk shows, i'm afraid, and would strongly suggest that you consider modifying that. people are already concerned that we are going too easy on eligibility, and obviously there is a lot of money involved here. if we are worried about waste, fraud and abuse, and the president at least has said he is, then we should do everything we can to make sure

people cannot skirt what would be good practices in eligibility verification. >> can i ask staff to confirm or contradict what i'm trying to convey to my colleagues here, that nothing in this amendment changes the law with regard to how a person's identity is verified? is that right? >> i think that is correct, senator, in terms of the medicade program. i think that the question that senator kyl asked is specifically what states do today. i don't know if they allow telephone applications. they do vary. though certainly do in person, mail or on line parts of the process. and if i understand your point correctly, you are saying you would leave that untouched, the state flexibility, and the goal of your amendment is to better

coordinate among these three programs, the tax credit, chip and medicade, and you are not changing the current law for chip or medicade. >> i think somebody ought to tell us exactly how citizenship will be checked. senators of good faith says we aren't changing anything. but how do you do it? if there is an internet or phone application, how do you check citizenship under those circumstances? >> senator grassley, for medicade and chip, there are two basic ways. there are the list of documents that were included in the deficit reduction act. and then more recently earlier this year in the children's health insurance program re-authorization, we created what we refer to as the social security option, which involves submitting the applicant et cetera -- >> but what if it is done over

the phone? how are you going to show those documents? >> well, i don't actually know if the phone works. i don't know if it is an option. >> through the internet or online application? >> if you do an online application. if it is a passport, you could certainly be required to give your passport number, or you could be required to mail in a copy of the front page. i've not applied for benefits in these programs, so i don't know. >> mr. chairman, let me point out it says here the form can be filed in person, online, by telephone or mail. it isn't saying the verification isn't being done that way. it is saying that is how you file your i application. >> but how do you file it by

telephone? >> you could fafment it. >> or you can call up, or you can say here's all my information, and they can fill it out while you give it to them over the phone. >> could you put a line in that says the verification has to take place in person with a photo i.d. >> that is not current law. >> couldn't we make it better? aren't we trying to say -- since you won't go for photo i.d., couldn't we at least say it should be verified in person? >> senator bingaman, would you yield? >> yes. >> this is largely the debate we had the other night, and there was a vote, and the vote was pretty decisive, same issue. it is an attempt to move from a birth certificate or a gnatization certificate as

proof of citizenship to government-issue photo i.d. you only have to show a place of residency in a county and that will get you an i.d. much at all with the g.a.o. report that reviewed six state medicade programs in 2007 and found that verification rules had cost the federal government an addition $8 million, and they caught only eight undocumented imgrants? so in other words, according to the g.a.o. report, the federal government spent $8 million to save $11,000. for each dollar the federal government saved, we had to spend $755. are you familiar with that report? >> i am. i believe it was a review of the list of requirements that

the deficit reduction added. >> $8 million spent to catch eight undocumented immigrants, saving $11,000, spending $8 million to save $11,000. that is really cost efficient. >> let me just ask staff to briefly review, when an application is made for these tax credits in the exchange, how that process will work. as i understand it, people would apply for the tax credits, and it would be verified with thers? could you go through that? >> certainly. the way the mark reads, everyone that has an s.s.n., their name, dirt of birth and s.s.n. would be verified with the social security administration. if that person is a citizenship, it will be checked

with s.s.a.'s records as well. if they are not a u.s. citizen, they are required to supply their a-number or i-94 number. we also require that people submit their income information which we verify with the i.r.s. >> so all of that is in the chairman's mark? >> that is correct. >> and all of that would continue to be there under my amendment? >> that is my understanding of your amendment. >> that is about all the explanation i can think of to give you. >> mr. chairman, may i ask a question? >> the chairman is right there. >> are those required in everything? in other words, not just the tax credit? are they required for the other portions of the bill

or the other government programs in the bill? the medicade expansion -- >> we got confused. could i ask your indulgence? could you repeat your question? >> yes. the requirements that you just read off, are those requirements for all the new programs in the bill, required for some kind of subsidies, whatever new programs that the citizens are signing up for? >> if i under correctly, you need a social security number or a tax i.d. number. it is not required for medicade and chip. if you have one, we can verify. >> let me give an example.

somebody has a taxpayer identification number, and that person was here legally. now that person has overstayed their visa and still has an i-10 number. are we going to find that out? if you are going through the expansion of medicade right now, are you going to be able to find that out? >> if a person was a non-citizen, they would have an a number or an a- 4 number and that would be checked. >> that is what i said, and he just said that is for tax credit. i am saying is it applied for all of the programs in the chairman's mark. >> for the access to the exchange, yes. >> for the expansion to medicade? >> i misspoke and policy jidse. we would cash that under the same mechanism because you do actually have to submit a social security number for medicade. >> you have to --

>> you have to submit your social security number when you apply for medicade. >> and is that checked against if somebody has overstayed a visa. you get a valid social security number when you have a work visa in this country. >> when you apply for medicade, and you claiming to be here legally 8 >> you started legally, but then you overstayed your visa -- there are are several million in this country that have over stayed their visa. i don't know the numbers. >> the system would work the same because if you are not claiming citizenship, then it is d.h.s. >> for all of the programs in the bill? not medicade zprangs what i under. >> it is current law. >> i think if my amendment is adopted, the problem that the senator is identifying or thinking he might be

identifying is solved. as i under it, when a person comes into the exchange, if we are going to have these benefits provided through an exchange -- >> and by the way, i am not trying to be argumentative. we want to have all these precautions in place. >> the chance of these precautions being in place are enhandlesed by my amendment. everybody comes into the exchange. everybody's identity is verified. everyone demonstrates what their incomposition is. and then if they are eligible for medicade, they can be referred at that point to medicade. but they will already have been identified and verified through the i.r.s. or through the department of homeland

security. >> does the staffer agree with the statement? >> i was actually conferring with people smarter than i am to try to be better able answer your question. when'7" for current law in medicade they are required to verify, that is in section 1137 of the social security act. we don't have to specific ply apply it to the medicade expansion. what we do in the expansion is increase the minimums for income eligibility levels, but we don't specifically reapply all of the rules because we are just adding new people to the program as it exists. >> but senator bingaman just said -- my concern is his amendment would strengthen, and there would be no question that all of the things that mr. kluda said would be applied to everything across the board in

the ball. is that correct? >> my understanding that the procedures that you in the chairman's mark for verifying eligibility are similar to the procedures used in medicade. they are essentially correct. >> you said it strengthens. does it strengthen or keep it the same? >> i missed his point on how it strengthened. >> would you mind repeating it, senator bingaman? >> what i was trying to say was that having a coordinated system for identifying folks when they come in, and routing them to the right place would, i thought, help solve the concern that i think the senator from nevada is trying to raise here, which is that someone is going to sneak through the cracks and not be properly identified or verified for eligibility before they get their benefits. it seemed to me that having it done in a coordinated way,

which is what my amendment tries to do, would help solve that. >> i think to the extent that there is sort of one gateway into the system, the same verification is occurring, yes, it would be a strengthen system. >> what in statute does a stat have to cross check with d.h.s.? where? the statute? you mentioned current law. in the statute they have to cross check with d.h.s. if they are a noncitizen. >> also in section 1137 of the social security act -- i don't have the exact cite, it says if such an individual is not a citizen of the united states there must be presented, a or b, alien documentation or other proof, registration from i.n.s.

or such documents as the state determines reasonable evidence indicating a satisfy status. >> so if the state determines it doesn't want to, it doesn't have to check with d.h.s.? you said a or b? >> a or b relate to the documentation you have to present. and so the verification of those for a non-citizen is done through d.h.s. >> and it has to be done with d.h.s.? >> states are charged under 1137 with verification of these things. that is my understanding. that is the federal agency that does the verification. >> so that's a yes. >> that is a yes. >> ok, thank you.

>> mr. chairman, could i make one final point on this? senator bingaman, the staffer  was talking about the almost futile effort of the internal revenue service, which has now spent billions of dollars to coordinate all of its computer active. i am aware of the f.b.i.'s attempts as well to compute rise their operations. they started 10 or 12 years ago and still don't have it done. the intention is laudible. but i suspect there is no idea of how long it might take or how much it might cost to do this. this is meant as a constructive

suggets. rather than mandating this into law, would it not make sure this should be a study back to congress to recommend how much it would cost or something along those lines? >> mr. chairman, we are setting up -- if this legislation becomes law, we are putting in place a system that will have about a four-year time period before it goes into effect. to me, it would be fool hardy for us to miss the opportunity to direct that this be done in a coordinated fashion. for us to say we ought to study whether it would make sense to do it in a coordinated fashion is not right. clearly they are going to have

to do it. we have four years to do it. we may have to have some oversight hearings down the road to find out whether they have done it properly. but in this legislation we are trying to say here is what we are directing you, the executive branch of government to go do, and clearly it makes sense to direct them to go do it right, not to study it. >> senator bingaman, if i could just complete an answer i should have given before. i policy jidse. it is 1137, subsection did-2. that lists the documents for noncitizens. if i had continued reading, i would have seen b-3. it specifically references the state's obligation. it says the state shall utilize the individual's alien file to verify the status with the

i.n.s. so there are things in place to verify for a non-citizen. >> i don't think the chairman intended for us to vote at this point. i think we were waiting to be sure we could find theoff set necessary to pay for this. so maybe there is other business to trance act. thank you, mr. chairman. >> thank you, mr. chairman. this is about medicade, and that is not a surprise perhaps to some of you, but it is necessary for a lot of people. you always hear a lot of talk -- >> do you have a number, senator? >> yes, if somebody will give it to me. >> c-21. >> fair question. >> thank you. >> i believable it is c-14 and 15. >> merged.

>> right. >> and one score is 20 positive and the other 20 negative. so it is neutral. i have heard a lot of talk about protecting the needs of the vulnerable populations, children, pregnant women, women, seniors, et cetera. very little talk about the vulnerable. that is sort of the nature of our american society. medicade is a reflection, if i could have the attention of my colleagues -- >> may i ask the senator, is this c-21, the chip bill? >> no, it is not. >> sorry. >> it is the two medicade bills, 14 and 15, joined together. >> medicade is a reflection to me of the nature and the tradition of community and mutual obligation that we share as a country.

it is unique. we care about our poor. we care about our underprivileged, unsufficiently, but we do, and we have programs for it. lyndon bainls johnson signed in not ewes medicare, but medicade. i care about medicade. not only because i care about the people who are on medicade, but it is also the type of social contract that america has made as a commitment that doesn't involve republicans or democrats. it is a bipartisan commitment. it is a moral obligation. i have to say that because medicade so often gets painted as a democratic program, and it is not. it is an american program, and it is worth improving and worth protecting, and that is what my amendment is about. i know the chairman agrees.

when he issued his health care reform white paper several months ago, he included significant improvements of the medicade program. as is often the case during intense negotiations, many of the provisions were lost. and the final mark actually includes provisions that will harm people who depend on medicade for health care, which is what we are here for. i believe, if i could have the attention of my colleagues -- i believe that people who like the medicade and the chip coverage they have today should be allowed to keep it. this bill does not achieve that goal, this mark. it forces vulnerable populations into private coverage, mandates them into private coverage, and reduces benefits for new medicade enrolle everyone s. it is for this reason i am offering an amendment to allow

medicade populations to remain in medicade and to eliminate the deficit reduction act language requiring states to reduce medicade benefits for people who need them. now we did that some years back, d.r.a. that was not a single democrat who voted for it in either the senate or the house. it was a unanimous -- on our side, a unanimous no, everybody no, on d.r.a. but it is the law. and that is why i am trying to change it. before we proceed to vote on my amendment, i have a few questions i would like to ask staff. mr. david schwarzenegger. >> yes, sir. >> last week you and i discussed the fact that some medicade eligible beneficiaries will be forced to enroll into private coverage instead of staying in medicade. i would like to talk a bit more about that today. the mark includes a provision

that gives non-elderly, not-pregnant adults between 100% and 133% of poverty a "choice" between medicade and private coverage. so my question, number one, is mr. schwarz is how did c.p.o. score this provision? does it cost the federal government money, or does it save the federal government money? >> senator, according to the c.b.o. that costs the federal government money. >> and isn't it the case that the increased cost is largely because private insurance is much more costly, approximately 25% more costly, than medicade coverage? >> i can't swear to the 25%, but your basic premise is correct, that private coverage is more expensive than medicade. >> additional follow up. let me get this straight. in addition to the $463 billion

we are given private sure remembers in premium subsidies, we are giving them $20 billion for medicade funding for those populations, and we know that medicade provide better coverage than medicare? >> that is correct. >> question number two. mr. schwarz, the medicade overpayments to private insurers that would be allowable under this bill are similar to the medicare advantage over payments. that is my judgment. some have made an argument for privatization of medicade. not so much recently, but it has been big. and medicare, at all costs. and it seems that the chairman's mark also includes some elements of medicade privatization. this is me talking. my question. support it true, mr. schwarz,

that states can already contract with private insurers to enroll medicade eligible populations in private managed care ambulance? >> that is absolutely true, senator. >> how do the consumer protections under medicade-managed care exom pair to the beneficiary managed care? >> sir, the protections available in title 19 do not apply in the exchange. i think it is probably fair to say that the protections available within title 19 for medicade beneficiaries are more protective, particularly as it relates to cost sharing and an extended benefit package depending on the population in medicade that you are talking about. >> medicade is the best coverage you can get. you don't have to answer that.

the follow up. would private fee for service plans, the most inefficient and expensive private plans in the market, be able to enroll vulnerable medicade populations? >> senator, to the extent that a private fee for service plan could operate in the exchange, then theoretically yes. if a beneficiary opt todd use this medicade bridge as we call it and leave medicade for the exchange, then it is theoretically possible that they would enroll in any of the exchange plans. >> and would lust for that opportunity? you don't have to answer that. mr. schwarz, question number three. except for children, are there any requirements that private sure remembers have to provide the same benefits and cost sharing protections in medicade in order to receive the $20

billion in payments? >> no. they get what is available in the exchange and do not bring medicade provisions or protections with them. >> so how does the 90% of fehb pb compared to the benefits under medicade? as i understand from c.r.s., medicade is the standard for been its, particularly for children, and the other actually provide less benefits than medicade. am i right? >> i think you are correct. i think on average act warle values are lower everywhere sexared to medicade because they approach 100%. >> mr. schwarz, let's recap everything we have just discussed. under the mark, congress would effectively be paying private insurers an extra $20 billion to provide fewer benefits and fewer protections than what states currently provide under medicade, is that correct?

>> i believe so, sir. >> the final question. mr. schwarz, on the first day of this mark up, you and i had an exchange about the so-called benefit flexibility language that has always caught my attention. from the deficit reduction act included in this mark which i am trying to get rid of. first of want to point out that flexibility in this context means cut. the d.r.a. gives states the option of reducing benefits or cutting people off all together. this is me talking. i would state forward once again that no democrat in congress supported the deficit reduction act. furthermore it should be noted that the language included in the chairman's mark, with all due respect, is far worse than

the language in the d.r.a. the d.r.a. gives states the option of implementing flexible packages. the lapping here makes benefit reduction packages mandatory in the mark. that is me talking. mr. schwarz, can you explain the characteristics of the newly eligible parents and childless adults in this expansion? are they helter than the current medicade population? >> senator, i think they are very similar to the current medicade population. they are low income, obviously below 133% of the federal pop lation level. they are sicker than the average. some parents are already covered in the medicade promise, and they tend to be very low levels, in some states

11% or 12% of poverty. so we would be adding peel like that, up to 133% of poverty level. >> in closing, mr. chairman, i want to close this debate by appealing to all of my colleagues by saying we can do better than this. it is our job to help american families and provide policies that work for them in this bill, not to take those solutions away. none of you know when i was governor irks worked very hard to provide health care for the people of west virginia to make a difference with very limited resources. i had to fire 10,000 highway workers. i saw first hand what medicade meant to the poorest families and the hardest hit workers struggling across west virginia, just holding on. when nothing else was certain, they could count on medicade. it was rock solid protection

from the worst. and so when i came to washington, i made these issues central. that is my close. i hope that this amendment passes. >> senator, when i stepped out, this amendment came up. i didn't realize this was going to come up at this time. i very much appreciate the amendment you are offering. in order to expedite our business tonight. i would ask this be temporarily laid aside so we could take up the schumer-snow amendment, and then we could come back to this later this evening. >> but this evening? >> this evening, yes, that is right. >> senator schumer? >> yes.

>> mr. chairman, while we are waiting, the members on my side want to know what the plan is for tonight. it seems like we are bringing out a lot of amendments we never thought a little while ago we even had. so my members would like to know where we are and what you have planned? >> frankly, it is kind of like the last inch of darkness, the dark before the dawn. we are close. we are working out some issues. they can get worked out with not a lot of difficulty. once we take up the schumer-snow amendment, then the cowl amendment, the rock

fund amendment, and then chip, white, free choice. we are getting there. i think it is worth the earth. it may take a couple of hours to get this done tonight. so i now recognize senator schumer. >> thank you, mr. chairman. i offer this amendment on behalf of senator snow and myself. it is similar to the amendment we discussed before with a few changes. just to go over the thrust of the amendment, it is to take the affordability waiver down from 10% to 8%. the idea is the same as before, first to give middle-class families in a difficult situation a relief from a proposal that would say you have to spend 12% of your income for insurance. it would say if no plan is offered at 8% of your income, you are waved from the mandate. there are many, many families

in my state and every other state making $60,000, $70,000, $80,000, they may have two kids in college and the small business they run may be in double. and it would be wrong to put such a burden on them. most people want insurance. families will stretch and scrounge to help their loved ones. but some of them can't, and this gives much more flexibility to those families by moving the affordability waiver down from 10% to 8%. i had originally asked for 7%. 8% where the consensus came about, and that is where we are. we will see if that will go further on the floor. the second benefit, it will get insurance companies to offer lower cost insurance. not just cadillac, gold or

silver plans. there are many plans that wouldn't have been offered without this amendment. now they will be, and that is good. and then the third benefit is that we are using the savings that come here to make the penalty -- to reduce the penalty. we've modified that. i am going to let senator snow explain that because it was her suggestions that we have adopted here. i think there a broad consensus on both sides of the aisle that the penalty should be reduced. they were originally $3,800 for a family of four. the chairman in his wisdom moved them down to $1,900, and here there would be a further phase in over a period of time. we have taken senator ensign's second suggestion, which we very much appreciate and not only removed the criminal

penalties, but the more extreme civil penalties such as wage garnishment that senator ensign was concerned about. you won't get your refund back and they will put that towards it, but not the things that senator ensign was concerned about. i thank him for his help. this is the major amendment on affordability. i would say that i would agree with senator bingaman, senator menendez and so many others who have talked bewe should make the insurance more affordable by increasing the subsidy that was not fiscally possible to stay within the constraints that we have in this committee. hopefully we can make them better as we move forward in the process. but if we can't do that, it is unfair to put the entire onus on the middle-class individual family, and this removes it. c.b.o. has scored the entire amendment as generating modest

savings. about two million people, same as before, will not be on the rolls on 019 without the amendment. if you have a high income, all plans will be at your income level, so you will be ok. with that, let me call on my colleague, senator snow, who will discuss the penalty stretch-out and waiver, and the g.a.o. report that was added at her request. >> i want to thank you, mr. chairman and thank my colleague, senator schumer for working on some modifications on the individual mandate and the penalty that were candidate from the chairman's mark. i know the chairman's mark was modified further from the original proposal, and i think this represents a very strong

step forward. i still have concerns about the overall individual mandate, and i hope we are can work on it further on the floor of the senate. i think that first and foremost we have an obligation to achieve the goal of afford anlt, which is what this legislation is all about. i happen to think that these penalties -- we have reduced them. in fact, in 2013 there will be no penalty, so it is delayed for a year. then thereafter, they increase by $200 increments from $2000 in 2014, $ 50 for 201. i would prefer to have no penalties frankly. i understand the rationale, that we need to get everybody into system. but frankly, we are creating a whole system that would require a national plan, and i think until we have been able to demonstrate accomplished the

goal of achieving the level of affordable for average americans that about should withhold the idea of penalties. it is one thing to suggest an individual mandate. it is quite another on a penalty. i think this is a first step in this process, and i appreciate working with senator schumer to defer penalties for a year. and to incorporate senator ensign's suggestion of having no lesson easy or fees by the internal revenue service. this isn't about punishing people. it is about making sure we can create an affordable health care system in this country, which is, after all, long iverson due. the amendment will include a government can'tability g.a.o. report to undertake a study of the afford anlt of coverage so we will have the ability to measure whether or not we are

successful. including the impact on small businesses, individual tax credits. the availability of affordable plans and the ability of americans to people the requirements. so to have the ability to have g.a.o. review what has been achieved to that date in the first year that the exchange is up and running, the tax credit for small businesses will already have kicked in for two years prior to the exchange. the individual tax credit will have prabble for a year. so we will have the ability to really learn a lot in that year as to whether or not we are achieving the goals and the targets that are established in this legislation to expanding affordable kurkjian for all americans. -- affordable coverage for all americans. and then this report will be made available to the committees of jurisdiction no

later than 2014. then the committees will have to report the legislation to the full house or senator by april of 2014 on the implementation and assessment of this particular provision on an expedited consideration in the congress. that gives us the ability to review it and to take action based on that report. and we can also revise the penalties if necessary. i think it is important to mention here, mr. chairman, as well, in looking back and even reviewing the experience in massachusetts, their rate reforms had been underway for almost a decade before the implementation of an individual mandate and the penalties that were incorporated in massachusetts. we are do a rating reform phase-in of five years in the chairman's mark. so at the time when the exchange and rate reforms begin

in 2013, it will not be fully implemented. it will be the first year of rate reforms. they will be phased in over five years. so i think it is important to make sure that we have a system that is working. therefore, we shouldn't punish people before the rate reforms have fully kicked in, that we have an ability to evaluate the plans that would be offered on the exchange to insure that ardable to average americans. that is what we are hoping for. hopefully all that will be accomplished brks you we don't know. because we don't have that assurance, i think it is all the more crucial that we defer and eliminate penalties that are imposed on individuals through this individual mandate requirement until we have a

better opportunity to evaluate the impact of all that we are trying to achieve in this legislation. and as i said, rate reforms will be phased in over five years. so that is 2018. therefore, i think it is premature to impose penalties on individuals as we are trying to make the major changes in this legislation to achieve the affordable standard that we hope to accomplish as a result of our efforts. mr. chairman, i appreciate your patience in all this. hopefully we can each do more on this particular provision on the floor of the senate because frankly, i think we should defer the penalties. i don't want to see congress imposing penalties on average americans who are struggling, and certainly don't want to impose penalties for which they have zero to show for it.

so we are asking people to pay penalties on their inability to get health insurance for whatever reason, but we should give a reasonable period of time to see that we have achieved the goals of affordable health insurance. >> first of all. i thank you both, senator schumer, senator snowe who have been working on this, because this is one of the key issues, frankly in the coverage part. that is, making sure that the insurance required is affordable. the affordability issues gets to the penalties. it gets to the basic point of whether the people can afford the shurps that we are asking them to get. frankly, we probably do need more work on this down the road. >> mr. chairman. >> very briefly. >> briefly i want to thank senator snowe.

i will work with her to reduce the penalties further, particularly none in the first two years. >> senator kyl. >> i think we have a problem with this last paragraph, the paragraph that outlines a procedure for committees of the senate to report legislation within certain time frames, the senate to act on it in a certain number of hours and so on. it seems to me there are several things that preclude us from doing it. first of all, one congress can't bind another. certainly this committee doesn't have jurisdiction to require another committee to report legislation as is required here. this seems like sort of a reconciliation light kind of procedure that i don't think we have the ability to do in legislation in this committee. i'm not sure whether the rules committee would have jurisdiction to do this, or

whether it would have to be done on the senate floor as an amendment to the senate rules. but i would strongly suggest that this paragraph not be included in the amendment. >> is there further debate? >> mr. chairman? >> senator bingaman. >> did you want to respond on that before i commented? >> i don't know if anybody does. senator snowe, did you wish to comment? >> on the expedited procedures? >> on the reporting. >> the question raced by senator kyl. >> it was similar to the language we included in the med care provision. >> we have rules in statute that bind us to report in future congresses all the time. >> it is standard language.

>> could i make a suggestion to senator kyl because i know he is trying to improve it. i'm chairman of the rules committee that has some jurisdiction over this. could we work on the floor? this is senator snowe's provision and she has put a lot of effort into it? could we work with it on the floor and make sure? >> if i ask counsel for a ruling, we could make a decision based on that. we tried to do medical malpractice reform and were told it was outside the jurisdiction of the committee. therefore, we couldn't even talk about it. we dropped our amendment. i do think this goes beyond the jurisdiction of this committee. maybe council could speak to the issue.

>> that is an interesting question. on the other hand, this congress has passed expedited decision-making. for example, the trade act. it was a fast track provision. that is all expedited. it is in the statute. it is in this committee's jurisdiction when this committee passed that act. the modernization act refers to a 45% trigger. i think in the spirit of working together here, the suggestion offered by the senator from new york is a good one. use the rules committee and see what is proper here. this congress has passed legislation requiring expedited procedures, and i don't see why this is any different in terms of the power and ability of our committee to do so. >> mr. chairman? >> senator.

>> just 30 seconds. i want to compliment both the senators for the amendment, especially on the individual mandate. i want to appreciate you including the language. but i also want to recognize the one who brought the issue to our attention. because of that work, because of professional staff, we actually improve things around here. i think because of his comments and the note that he wrote to me, we were able to include this and protect people really from some pretty harsh penalties in the future. thank you. >> i think we are ready to voice vote this. >> mr. chairman? >> senator bingaman. >> i wanted to clear. in that second paragraph where you are saying that individuals -- where the cost of lowest cost coverage exceed 8% of income, the individual would be exempt from the personal ability assessment. that implies that they are also

exempt from my obligation to purchase insurance. is that correct? >> yes. >> i just wanted to be sure. that is the part that i objected to. the rest of it i think is a very constructive set of changes. >> all -- >> i have a question. >> mr. chairman, just to that point, they would be eligible for the young invincible plan. >> senator kerry? >> mr. chairman, i am in favor of the basic concept. i want to clarify one thing. either the sponsors or the staff could clarify it. this doesn't effect any cost to the bill itself because these finals were going to go to the treasury, tharkt? >> as i understand it, we save money on the first part. we spend a little money on the second part. but overall there is a net savings. >> and we don't have that figure? >> well, c.b.o. has confirmed i