Floor Speech: Murkowski Comments on Negative Affects Health Care Bill Will Have on Alaskans

Mr. President, I wish to acknowledge the very eloquent and articulate comments of my friend from Florida. We recognize that his time in the Senate has been relatively short, but in terms of an individual jumping in with both feet and embracing the challenges we clearly have in front of us and representing the constituents of the State of Florida in the manner he has, I think that deserves public recognition, and I thank the Senator for his leadership.

We have had occasion to talk about the similarities between Alaska and Florida. You might not think there would be much in relationship there--my being from the North and the cold versus the sunny South in Florida. But when it comes to our senior populations, this is where we truly have a shared interest. Florida has probably the largest number of seniors per capita, and in my State of Alaska, we are the State that has the fastest growing population of seniors per capita.

One might not think of Alaska as being a retirement haven, but more and more we are becoming so, and we share the same problems when it comes to access. When you can't get in to see a provider, when that insurance card is all we have given you, then we haven't done anything to provide for a level of care to improve the situation for the residents of Florida or the residents of Alaska. So what we are doing today--as we move toward final passage on legislation that I would concur with the Senator from Florida does not fix the problem--we are not dealing with how we appropriately and adequately provide for access to quality health care. We have much work remaining before us.

We have had some time these past couple days--actually these past couple weeks--as we have spent a considerable amount of time in our offices waiting for votes at 1 in the morning or votes at 7 o'clock in the morning, and I have had a chance to go through some things on my desk, but I have also had an opportunity to spend a lot of time checking to see what people are saying when they are contacting our office. The volume of correspondence, whether in e-mails or faxes or phone calls, coming in from Alaskans during this time has been absolutely unprecedented.

I think, typically, in the legislative calendar about this time--several days before Christmas--you don't see constituents contacting their Senators and pounding the drum. Well, let me tell you, the people in Alaska are pounding the drum. In just the past 24 hours, we have gotten probably close to about 500 health care e-mails that have come in. Overwhelmingly these are e-mails from constituents saying: No, this is not good. You must do what you can to prevent this reform package, as you call it, from moving forward.

It seems the longer the people from Alaska, the longer the people from around this country have to look at what is contained in this 2,000-plus page bill, the more they realize the negative impacts, the consequences to them and their families and their businesses and they are no longer silent. I have had so many calls and letters coming from people saying: I have never weighed in with you before, never weighed in with my delegation, but this is something I can't keep silent on. 

When you look at some of the ones that have come in, these are just today's. This is one from a woman in Anchorage who says: Yesterday on the TV news I heard about the sweetheart deal Senator Nelson made regarding the rest of us paying Nebraska's Medicare bill forever. To say I am angry is putting it mildly.

There is a gentleman in Fairbanks who writes in: I am very skeptical about this mandatory health insurance that apparently everyone will have to buy in.

Here is one from a fellow in Anchorage also. He says: 'You are moving a health care bill that can't be understood unless a person has a law degree.'

Another individual and this is an interesting one. He and his family apparently own four indoor tanning businesses in Alaska. 'We need to get a little sunshine, even if it is not what God has provided us. But these are good businesses, and he says: When did this go from a 5-percent tax increase for cosmetic surgery to 10 percent for indoor tanning anyway?' And he adds: 'Adding another 10-percent tax hike on small businesses, like indoor tanning, will likely drive many families, just like mine, into bankruptcy.'

I could go on and on in terms of the stacks of correspondence and phone calls we have gotten, but suffice it to say, the more people understand what is in this legislation, the greater their concerns are and the greater their outrage as they learn what is contained in it.

One of the things I learned just yesterday, which I don't think we have gotten the focus or the attention on--and this is a concern that was raised by the Anchorage homebuilders and the Alaska State Home Building Association. They have pointed out that as an industry, the homebuilders industry, they are being unfairly singled out in this bill.

We have talked about the employer mandate that is contained in this legislation, and that mandate applies to those businesses with 50 or more employees.

But there is a zing in this legislation to homebuilders who are now responsible for providing federally approved health benefits if they have five or more employees.

Look at what is going on throughout this country in terms of industries that have taken a real hit with this economic downturn and this recession. The homebuilding industry has suffered incredibly during this downturn. On top of depressed house prices and increases in home foreclosures, now we are now going to punish them with an employer mandate that treats them worse than any other employer. In other words, if you have five or more employees as a homebuilder, you need to know that your industry is the one, the only one that will be subject to the employer mandate of $750 per employee. 

In Alaska, we checked to see how many individuals are homebuilders within the State. We have about 250 homebuilders in Alaska. But when you look to see how many individuals they employ, that is about 3,078 employees, it is about 12 employees to every builder. So the total homebuilding industry that would be impacted is about 800 employers in my State.

Yesterday, there was a letter sent to Members of the Senate. This is from the homebuilding industry as well as many other associated industries--the air-conditioning contractors, the builders and contractors, the electrical contractors. I wish to mention some of the statements that are contained in this letter. Again, it is written yesterday. They say:

We are writing to express our strong opposition to language contained in the managers' amendment which excludes the construction industry from the small business exemption contained in the bill. The fact that the managers' amendment was made public less than 2 days before the first vote on the matter has increased the difficulty of playing a constructive role in the legislative process.

I will take a little detour from the letter. This is part of the problem. You have these organizations and groups, and there is a list of about a dozen of them here, that have signed on to this letter. They had literally hours before we were forced to vote on the managers' amendment. They did not know what was in the bill and how it impacted them. They go on to say:

The managers' amendment singles out the construction industry by altering the exemption so it applies only to firms with fewer than 5 employees. This is an unprecedented assault on our industry. It is unreasonable to presume that small business owners can bear the increased costs of these new benefits simply because Congress mandates that they do so.

They go on to conclude in the letter: 'We are unaware of any data or evidence that suggests that the needs and struggles of a construction contractor with fewer than 50 employees are so different from those of small business owners in other industries, and absent such convincing evidence, we are left to assume that this specific provision is merely a political payoff to satisfy the desires of a small constituency. '

Those are some pretty strong words there toward the end. But it does cause you to wonder why, in this legislation, we are going to require that businesses--only businesses in excess of 50 employees are going to be subject to this mandate. Why this unprecedented assault on the homebuilders? I don't get it. But what it does cause me to get is that there is a heck of a lot more out there that, the more we read it, the more we sit down and we connect the dots, the more we realize this fish we have set out on the front porch is going to continue to stink.

It stuns me. We have the homebuilders up in Alaska who are beside themselves, saying: 'Can you take a look at this and let me know how the Senators feel. What are you going to do about this, Lisa,' is the question I have received.

This is something we all have to reckon with.

I am going to speak a little bit about how aspects of this legislation have impact specifically on my State. As a rural State, sometimes the impacts we see are different than you have in more urban States. Our geography is different, our lack of providers, our high senior population, our extremely expensive costs, there are a lot of dynamics at play that cause real issues and real concerns.

There have been many words that have been exchanged on this floor about what this bill doesn't do or what it does do. I find it helpful to go to the experts, the think tank in my State, and ask them flat out. We have an institution at the University of Alaska called the Institute of Social Economic Research. I take what they have to say very seriously.

I also take very seriously what our Congressional Budget Office has to say, what the CMS Actuary has to say, because, as my colleague from Florida pointed out, these are the independent arbiters. These are the guys whose job it is to work the numbers. I would like to discuss some of the findings from the University of Alaska and also try to inject a little bit of common sense into the debate as to what it means for Alaska, how it increases their premiums, how it raises that cost curve on the Federal health care expenses, the taxes on small businesses for the individuals, the families, the health benefits of the police, the firefighters, other public protective service people who put their lives on the line for so many. These are the things about which, unfortunately, we might not be getting the full picture.

Our colleagues on the other side have claimed that health care coverage will be expanded. Again, let's go to our nonpartisan entities--the CBO and the Joint Committee on Taxation. The average premium per person, if you purchase in the individual market, is going to be 10 to 13 percent higher in 2016 than the average premium under current law. That tells you if these Federal scorekeepers are correct, your premiums are going to go up under this health bill if you buy insurance yourself.

In Alaska, according to ISER--again, the Institute for Social and Economic Research--you have about 28,000 Alaskans who would pay 12 percent more for their premiums. It is going to cost an individual in my State an extra $1,100 per year and a family in my State nearly $3,000 more per year for the coverage by 2016.

Again, you have to ask the question: Is health care expanding? This bill forces you to purchase federally approved health care; otherwise, you have to pay the penalty of $750 or 2 percent of your income if you earn more than $37,500.

If you look at Alaska's population, this is going to bring in more than 50 percent of Alaska's population who are going to be penalized if they fail to have health insurance. Again, you ask the question: Is health care coverage going to be expanded?

Since the law we are advancing is going to require that you buy federally approved health insurance, and then we are going to penalize you if you do not buy it, then what you have is the heavy hand of the Federal Government that forces you to buy health insurance, which is going to cost about 12 percent more once this bill is enacted--12 percent more than it would today.

The Democrats will also talk about the hidden tax on families and how that will go away because once this bill passes, under this bill, everyone is going to have coverage. Alaskans and all Americans who do not get federally approved health insurance that the Federal Government is going to require that you have, they are going to be fined $750, 2 percent of your taxable income, and what the Democrats will not tell you when they say health care coverage is going to be expanded or the hidden tax is going to go away is, those with income greater than $37,500--again, affecting over 50 percent of the people in my State--are going to be taxed a full 2 percent of their household income, once the bill is fully phased in, if they do not get health insurance. It is this penalty that is going to raise $15 billion to help pay for this bill. This is how we are paying for the bill.

CBO and CMS told us the taxes on medical devices--whether they are tongue depressors or x-rays or blood sugar meters--these are going to be passed on to the individuals so you are going to be taxed for vital medications and other health products. The question you then have to ask yourself: OK, so do these hidden costs actually go away?

I suppose they do because they are no longer hidden. What we will have done is we will have raised your premiums, we will have increased the penalties on those earning more than $37,500 who did not buy into health insurance, and we will have taxed your tongue depressors and x-rays to pay for the bill.

In addition, the smallest of the small businesses are going to be taxed if they do not provide insurance for their employees, and individuals and couples earning over $200,000, they are going to be penalized because they are the higher income earners.

The Democrats are also telling you that as Medicare patients, they are going to get some good, positive things. They will get free preventive services. This is good. This is absolutely great. We should be encouraging preventive services.

But as my colleague from Florida was explaining, as I mentioned, after this bill passes, are any of the 13--I think we are down to only 12 now--primary care doctors in Alaska, in the Anchorage area anyway, accepting new Medicare patients? We are saying we are going to provide this service to you at no cost. But, again, if you can't get anybody who will take you as a patient, how are we helping you? We have heard from a doctor in Anchorage. In fact, I have an opinion piece that was published just this week in the Anchorage Daily News. She indicates she is dropping out of Medicare and she is doing it because of this legislation.

I ask unanimous consent that be printed in the Record.

It is no secret, in my State of Alaska and in far too many States around this country, we do not have enough providers that will take these individuals. ISER has said seniors in low payment Medicare States will be forced to wait in line. Alaska is one of two States--we are, I think, second to last in terms of Medicare payments and where we stack up in relation to the reimbursement. ISER goes on to state:

Independent of the doc fix, in Alaska the remainder of seniors are at risk of long lines to see a primary care doctor and overflowing to community health center and hospital emergency rooms where existing capacity is highly likely to be quickly overwhelmed and long wait times become increasingly common.

ISER has also said that additional new insured patients are going to hurt Medicare beneficiaries, and they state:

Federal healthcare reform applied to Alaska likely will exacerbate an already very challenging situation for Alaska's seniors as baby boomers age into Medicare and finding themselves waiting in line behind a rapidly expanding line of better paying private plans.

We are told 5 years from now our Medicare population is going to increase by 50 percent. We cannot accommodate those who are Medicare-eligible now. Our boom is not sustainable.

The CMS Actuary has said: 'The Reid bill reduces payments to health care providers, which is unlikely to be sustainable on a permanent basis. As a result, providers could find it difficult to remain profitable and absent legislative intervention, might end their participation in the Medicare program. 

It is happening. Doctors, providers, physicians are making those decisions as we speak. They are opting out. So this is not some theoretical approach to the problem. This is happening.

Madam President, I want to speak about small businesses because we have all been talking about the impact to small businesses. Under this bill, as we know, small businesses are going to be penalized $750 per employee if even one of their employees seeks governmental health care through Medicaid or through Federal subsidies. So if you have 50 or more employees, you can be expected to pay fines in an amount of $750 per employee, which amounts to over $37,000 or $3,000 for that individual employee.

I think we need to put it into perspective in terms of who these businesses are. These are the solo-practitioners, like the one-lawyer office or the small doctor's office. If these individuals purchase health care in the individual market, they are going to see their premiums go up an extra $1,160 per year for a family--nearly $3,000 more in 2016.

Alaska is defined as a high-cost State. If you are a small business that can afford to pay good health and dental benefits for your employees and those benefits amount to $8,500 per individual or $23,000 per family, in a high-cost State such as Alaska, you look to be hit with a 40-percent excise tax because you basically want to provide your employees with good benefits.

Again, according to ISER: Alaska is a high cost state and thus, roughly 50 percent of health plans in Alaska will be subject to the tax by 2016, compared to only 19 percent average in the Lower 48.  Again, by 2016, 50 percent of the plans in my State will be subject to this 40-percent excise tax.

I ask unanimous consent to have printed in the Record a letter we received from the municipality of Anchorage, Police and Fire Retiree Medical Trust.

The city of Anchorage is the largest city in Alaska. We received this letter last week. In the letter, they cite specifically three provisions in the bill that are of particular concern--No. 1, inclusion of health care benefits as taxable income to employees.

It states:  'Not only will this increase the employee's taxable income but the [Municipality of Anchorage's] payroll tax will also increase.' The second point is the taxation of the municipality's health care plans. This tax will be imposed on the employer. The current [municipality] health plan design is apt to be considered to have ''an excess benefit.'' This would make it subject to a 40% excise tax.

They go on to say: 'There is also an aggregation rule for the value of employee coverage with multiple employers or retiree medical. If a retiree would purchase [the municipality's] Health Insurance that is considered excessive, the 40% excise tax would be incurred.'

One may argue that the tax is a tax to the employer. The argument can also be made that the Trust is an integral part of the Municipality. Thus the tax would be payable from the Trust general fund assets.

Their third point is: 'Current municipal employees are able to be reimbursed tax free from money they have placed in their flexible spending account for over the counter medicine. Retired police officers and firefighters also currently are allowed this reimbursement as part of their medical benefit. Under the rules of this bill, these reimbursements would no longer be allowed. This is a reduction in employee benefits. It is also likely to encourage an increase [in] the utilization of more expensive non-OTC prescriptions, as they are a covered expense.'

There are about 400 members that are part of the Police and Fire Retiree Medical Trust. When they find out, as I am sure they will, that essentially they are going to be taxed on their plan--I think most of these firefighters and police officers don't view themselves as having access to a Cadillac plan. They are just firefighters and police officers. But this is coming from their trust fund, expressing great concern over what we have in front of us.

I have mentioned that we have received a copy of an opinion piece from a primary care provider in Anchorage who has outlined why she is opting out of the Medicare system in Alaska.

I ask unanimous consent to have her letter printed in the Record.

One of the things we don't have in this legislation is a provision that relates to medical malpractice. It has been stated that, in Alaska, you tried medical malpractice reform and we haven't seen the positive impacts.

The bottom line is from the Alaska State Medical Association: The cumulative result of Alaska physicians' advocacy has been a success for physicians and their patients.

Again, we have seen the positive impact in Alaska because of the laws we have passed. It is unfortunate that we didn't take that opportunity as we dealt with health care reform these past many months.

I yield the floor.

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