Healthcare

Floor Speech

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Mr. CASSIDY. Madam President, I am going to try and envision a way forward for Democrats, Republicans, and Americans out of our current situation, with a different proposal than people have already thought of.

Now, the government has been shut down for 38 days, and tomorrow we are going to vote again, and tomorrow the vote will again fail. But Americans and Congress are frustrated.

We need to open the government. So if to open the government we need to talk about healthcare, let's talk about healthcare. Let's have a conversation in the family.

We have an affordability crisis, and health insurance is part of it. Now, this is personal to me. I am a doctor. I practiced in a hospital for the uninsured and the poorly insured for 20 years, and many of those people that came to see me were middle-income Americans who could not afford their medical bills and could not afford insurance. I want to see this solved.

But if we are going to solve it now, in this present circumstance, we need to move beyond entrenched ways of thinking that have settled us in our camps and refused to allow us to listen to the other person.

And I thank some of my Democratic colleagues for being here. We have got to be creative.

Now, the Affordable Care Act, ObamaCare--whatever you want to call it--tried to make healthcare affordable by giving insurance companies more money. The enhanced premium tax credit, EPTC, is the latest example. Next year, it would send $26 billion to insurers hoping families would see smaller bills.

But that doesn't actually make healthcare less expensive, and for some, it actually makes the health insurance more expensive if you are not getting subsidized care on the exchange.

So we can do better than just papering over the costs for subsidies. Instead of paying insurance companies to manage your money, let's trust Americans with a prefunded flexible savings account worth as much as the enhanced premium tax credit that they would receive.

Let me repeat that: a prefunded--not out of their salary but prefunded for the Federal taxpayer--equivalent in value to the enhanced premium tax credit that they would receive.

Now, let me make it clear. I am not speaking for the Republican caucus. I am not speaking for President Trump. I am not even speaking as the HELP Committee chairman. I am speaking as a Senator and as an American that sees us at an impasse and is trying to think differently about how we can move forward.

So I am going to present to my fellow Americans an idea that, hopefully, will move us out of this stalemate and go forward. And I want to try and speak as if I am speaking to the Americans back home.

Here is the problem. Under the enhanced premium tax credit, if your insurance premium goes up, if the insurance company decides to pay more, they just get more subsidy from the taxpayer.

Now, insurance companies get paid no matter what, and it doesn't matter how expensive the tab is. There is absolutely no incentive to bring the cost down. There is no transparency as to what the care really costs, and there is absolutely no reward for the family that goes to a place which is less expensive.

It is like putting a bandaid on a broken bone. You are hiding the fracture, but you are not fixing the broken bone. Let's fix the broken bone, which is high healthcare costs.

So put simply, the enhanced premium tax credit does not empower patients. It enriches insurance companies. By the way, they are important. We need them. But if I have a choice of empowering you, the American, or enriching an insurance company, I and we should pick our fellow American.

Now, imagine a different type of help, not paying the insurance company another subsidy but putting money, prefunded, not out of your salary, but roughly equal to the enhanced premium tax credit--put that into an account that you control. Every eligible American citizen on the exchange would receive this federally prefunded flexible spending account, and it would work like the prepaid health account you use for real world health expenses.

It would actually have more flexibility than your current insurance proposal. You go to the dentist; it can pay for dental care. You go to the orthodontist; it can pay for your orthodontal care. It can pay for eyeglasses, which typically insurance does not pay for. Prescriptions, drugs, medical supplies, your deductible, your copays--it can pay for it all.

Now, it wouldn't pay for insurance premiums. This is about you spending directly for your healthcare costs, not about enriching insurance companies.

It would pay for the care that families actually use. That is what a prefunded flexible spending account actually does.

I keep emphasizing ``pre'' because I mentioned this to people, and they say: Wait a second. This has to come out of my salary.

No, this would be the money that would go to an enhanced premium tax credit, and instead, it goes into this account that you control.

Now, it seems complicated for some. I go and I mention it to them, and they say: Oh, boy, this is something different, Bill. This is a great idea, but it is kind of like, it is just too different.

Seventy-two percent of Americans getting their healthcare through some government entity are offered flexible savings accounts. Forty- seven percent of people getting insurance through their employer are offered FSAs. This is something that is used by millions of Americans already.

So what I am proposing is just to give this option to people on the exchanges. And, by the way, the Federal Government already offers flexible savings accounts to people on the small business exchanges.

Members of Congress, we are on the ObamaCare small business exchange. We have the option of choosing an FSA. My family has one. And the Department of Treasury already has an office through which they funnel money to pay for these flexible spending accounts that I, as an individual, choose to get.

So what we are speaking of is just offering to people on the exchanges--on the individual exchange--that which is already offered to people on the small business exchange and paying for it by the same mechanism in which it is already done through that exchange.

Now, still, there is going to be some bureaucracy involved, but if there is any President that can overcome the inertia of the bureaucracy to make it happen by January 1, 2026, it is Donald J. Trump. Donald Trump is the man who, when it was told to him it would take 18 years, 10 years, 18 months to come up with a vaccine and a program to prevent COVID transmission, he did it in 10 to 11 months. This President can overcome the inertia, and we have a running start because the Federal Government is already doing this.

Now, let me make clear the key differences between enhanced premium tax credits and federally funded flexible spending accounts.

First, who gets the money? Under the enhanced premium tax credit, insurance companies; under this, it is patients and families.

What can it be used for? Here, the premium tax credit goes for insurance premiums--period, stop, full stop. The money goes to the insurance company. Here, real care, your doctor visit, your deductible, your copay, your dentist, your glasses, your prescriptions, that sort of thing.

Who makes the decision? The insurance company. Just wait and fight with them about a preauthorization. Under the flexible spending account, you make the decision. You have the power.

And, lastly, does it lower costs? No. It is pretty clear. If we continue to fund insurance companies no matter what they pay, it drives up the costs. In contrast, if you empower the patient, that mother is going to find the most affordable option. It has been studied.

If you give people something that they perceive as their own money, they hunt for that bargain. By the way, if they go and they find out that the cash price is cheaper than what the insurance company would charge them, they will have the option of using this for the cash price.

So we have reforms in here that give the patient even more power. The good thing about that, as the patient saves money, so does the taxpayer, and that is a good thing.

So the prefunded--prefunded, prefunded--flexible spending account doesn't treat people like dependents of the government, as do the enhanced premium tax credits. It treats you like a capable consumer who knows what is best for your family.

You decide where to go for dental work. You decide your pharmacy. You decide whether to pay the cash price or the negotiated price that the insurance company offers you, and instead of Washington paying insurance companies to manage your day-to-day care, you manage it with fairness, transparency, and flexibility.

Now, some will ask: Won't this cost money? Of course. In the first year, it will be about the same amount as the enhanced premium tax credit, and my Democratic colleagues should like that. But the individual would be getting better value through the federally prefunded FSA because she is spending it on that which she actually needs, as opposed to up to 20 percent of it going for overhead profit and administrative costs.

It isn't just fiscally responsible. It is common sense. Who wouldn't rather have their money in their own pocket than for the insurance company to dictate how they spend it?

So here is the choice before us: In conclusion, we can keep paying insurance companies to pay for over the higher costs, behind confusing bills, in a system which actually raises the cost for some, or we can give Americans the tools--we can trust our fellow Americans to pay for their care directly, at fair prices, with transparency.

If you will, it puts patients first, not insurers. It encourages competition. It rewards smart choices, and it begins to make healthcare truly affordable, not by inflating subsidies but by unleashing the power of the consumer.

Let's stop writing blank checks to insurance companies. Let's invest in our fellow Americans.

I say this: We have to first open the government. This takes writing some legislation. We have to open the government.

But we have to be willing to take a risk to solve a problem and not be afraid to do something different. I have seen in our Chamber right now a hunkering down. We have not been able to solve it. So we are not going to try anything different. We are just going to wear the other side down until they wave the white flag.

Now is the time to be creative. I am a rock-ribbed Republican, but I will just say what I just offered is not a Republican solution; it is not a Democratic solution. It is an American solution.

Let's open the government. Let's work together. Let's fix healthcare and give the American more power than the insurance company.

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Mr. CASSIDY. Absolutely.

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Mr. CASSIDY. That is the goal, to have this ready for next year.

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Mr. CASSIDY. One other question first, this is a flexible savings account, not a health savings account. There is a legal distinction, and I want to make that.

When the enhanced premium tax credits are not renewed--we know the insurance companies have already set up their rates--and so the consumer, our fellow American, will be choosing from the offerings that have been made by the insurance company for them to choose from.

The difference would be--and they will see, by the way, that the policy for someone at 400 percent of Federal poverty levels costs about $2,500 more a year than it otherwise would have with the enhanced premium tax credit.

This would be supplemental. We would say to that individual: You are at 400 percent of Federal poverty level. Your policy is $2,500 more a year. You will get a flexible spending account prefunded to offset the cost of this.

Now, if it is my family, I would say: Hmm, I have got $2,500. Maybe, instead of going for a silver plan, I will go for a bronze plan, because now I can offset the higher deductible with my flexible savings account. And because I am going for a bronze plan, my premium will be lower.

But that is trust in the American people. We are plugging into the current insurance market. We are actually not changing at all how it functions.

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Mr. CASSIDY. That is a wonderful question. No.

The Federal Government knows--or put it this way. Many States have calculated what the insurance rate would be with an enhanced premium tax credit and what will the insurance rate be without the enhanced premium tax credit. It has been calculated for our fellow Americans what the value of enhanced premium tax credits would be if they signed up for a certain policy in their State, given their age and their health condition. They know that. The question is whether they get the credit or not.

Well, they are not going to get it, so their policy is going to be higher. And this, under the plan--if we could agree to it--they would then get the FSA in an amount equivalent to that which they did not receive as a payment to the insurance company. Instead, it would be a payment to the flexible savings account they would have and that they would then use it for these services.

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Mr. CASSIDY. That is correct.

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Mr. CASSIDY. Thank you for the questions, and let me just respond very quickly.

I think the beauty of what I am proposing is it fits in very nicely with the insurance markets as they currently are. It doesn't require anything to change between now and January 1. It is too late to change those plans and those rates. It is just too late.

This does not require those rates to change. This would be something which could benefit our fellow Americans next year and could be implemented by then.

Yes, the bureaucracy is going to have to work hard. President Trump can get them to work hard.

You mentioned several other reforms. I am in total agreement. We should be working together--Democrats and Republicans, that is what we need do to get something done--in order to come together for a set of proposals that will lower healthcare costs.

And both as a member of the Committee on Finance as well as the chairman of the HELP Committee, it is my intent do that. We have got to do that.

But this can work this year for Americans who are going to be on the exchanges, and that is my hope.

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