Chapter[ Speech - Remarks on American Health Choices Plan
Section[ How the Plan Works
Now here's how this plan would work. If you have private insurance you like, nothing changes -- you can keep that insurance. If you like the doctor you have, you can keep seeing that doctor. If you like the hospital where you receive care, you can keep receiving care at that hospital. If, however, you don't have health insurance or you don't like the insurance you have, you can choose from the same wide variety of private plans that members of Congress choose from. I'm calling it a Health Choices Menu. So essentially the Congressional health care plan becomes the American health care plan. The idea here is simple. The American people should have access to the same array of health care choices and benefits as the Senators and Representatives they elect.
You will also have as one of those choices a public plan, just like Medicare is a public plan. You will have access to a public plan that will provide a stable, competitive alternative to private insurance if that is your choice. My plan does not create a single new government department, agency, or bureaucracy. It is not a government takeover of health care. It is a public-private partnership that provides more choices.
If you're an employer, you choose whichever plan is best for your business. If you're an individual, you choose whichever plan is best for you and your family and we will provide tax credit to ensure that you can pay for it. Now whether you keep the insurance you have, or you choose one of the options in the Health Choices Menu, you will have the following guaranteed:
First, you will never be denied coverage because of preexisting conditions or risk factors. Insurance companies will no longer be allowed to discriminate against high risk patients or charge exorbitant premiums to screen them out. So whether you were sick in the past or a genetic test shows you may get sick in the future, you will never again have to worry about finding affordable coverage.
Second, your coverage will be guaranteed. If you pay your premiums and follow the rules your insurance company will be required to renew your coverage each year at a price you can afford, even if you lose your job, even if you decide to start your own business or stay home with your children for a few years.
Third, your coverage will be affordable. My plan provides tax credits to make health care both universal and affordable for everyone. These new tax credits guarantee that you'll never pay more than a certain percentage of your income for your premium. No more worrying that one illness or one accident will lead to financial ruin.
Fourth, you will always have an option for coverage that is fully affordable. I will require insurance companies in the Health Choices Menu to let you take your plan with you as you move from job to job or even state to state. Now exactly, how will all of this be possible?
Well it's going to take shared responsibility. Everyone with a stake in our health care system will have to step forward and do their part. While I will be requiring all Americans to have health care, I will be calling on employers to do their part as well. Today, large American companies compete in a global economy against companies in countries that impose far lower health care burdens on employers and many of our manufacturers are struggling to pay for retiree health commitments that our foreign competitors simply don't have. Under my plan, large companies will be required to help pay for their employees' health care. Those that do so can simply maintain their current policy that they choose. Those that don't, will need to contribute towards the cost of covering their employees on a sliding scale based on their size and average wages.
My plan also helps American manufacturers become more competitive by providing a tax credit for those struggling with the high cost of retiree health benefits. These costs are making it virtually impossible for American manufacturers to compete with their foreign counterparts, who don't have these kinds of costs. How can we possibly compete if a car company like General Motors pays $1,635 in health care cost per car produced while Toyota is only paying $215 per car? And think about the retirees who rely on these benefits today. People have accepted lower wages over the years in return for the promise of a secure retirement. The tax credit I provide will help employers cover catastrophic costs above a certain threshold -- costs incurred by a few retirees with the most of your health problems, costs that can run hundreds of thousands of dollars for a single person. This relief will be a temporary measure designed to address the needs of the aging baby boomers and it will be available not just to qualifying private sector manufacturers but to states to help pay retiree costs for teachers, police officers, fire fighters, and others.
In return for this assistance, companies will have to modernize their plans with initiatives to cut waste and improve quality -- and they will have to show that they're using the tax credits to enhance their competitiveness and support their workers. We also know that health care costs are plaguing too many of our small businesses. That's a serious problem, because small businesses are now the engine of job creation in America. According to the Federal Reserve, since 1990, companies with fewer than 20 employees were responsible for 80% of the additional new jobs in America -- jobs that often cannot be outsourced. But at the same time, small businesses face higher premiums because of their limited purchasing power, and they tend to employ lower-income workers. As a result, they cover far fewer of their employees. And that coverage is eroding. Since 2000, the percentage of small businesses offering benefits has fallen from 57 percent to 45 percent.
Now, under my plan, we won't require small businesses to cover employees. Instead we will provide tax credits to ensure that many of them do. These tax credits will be based on size and average wages, so that small businesses can provide health care without destroying their bottom line. This credit could be as high as 50% of premiums for firms with fewer than 25 employees. It's a good start that small businesses are leading the way in creating new jobs. My goal is for them to create new jobs with good health care benefits as well.
Government also needs to do its part to promote shared responsibility. Under my plan, the government will provide tax-credits to insure that every single American can afford health insurance. The government will also invest in measures to improve health care quality and cut costs. This will result in dramatic savings which I will use to continue to make health care affordable. I outlined my cost-saving measures in a speech back in May. I proposed a seven-point plan to save $120 billion nationally each year by bringing our health care system into the twenty-first century: by transitioning from outdated paper records to an electronic medical records system; by getting our chronic disease management costs under control; by allowing companies to compete for Medicare's prescription drug business, and more.
Last month in New Hampshire, I laid out my agenda to improve health care quality: a plan to raise standards, educate patients and help our doctors and nurses provide world-class care. Taken together these policies could save hundreds of dollars a year for the average American family, and make Americans healthier.
Individuals will have to share the responsibility as well. Much like drivers in most states are required to purchase car insurance, all Americans will have a responsibility to get and keep health insurance in a system where insurance will now be affordable. The sad reality is that the uninsured don't just struggle with costs themselves, they impose costs on the rest of us. It's a hidden tax. The high cost of emergency room visits that could have been prevented by a much less expensive doctor's appointment, the cost of unpaid medical bills that lead insurance companies to raise rates on the rest of us. Covering these individuals is the only way to get rid of these hidden taxes. The only way to guarantee affordable coverage for everyone is to cover everyone, and that is the choice we need for America.
Finally, I'll call on drug companies and insurance companies to do their part as well. It is time that we put patients, not drug companies and insurance companies, first. That means changing the way they do business. Now clearly with drug companies we have to do more to get generic drugs to market, including the new biologics that are coming into the marketplace and are often extremely expensive. We do have to provide more negotiation to get drug prices down and to import from Canada and other countries that are similar to ours. Because ultimately, the American tax payer pays for the development of a lot of these drugs through NIH grants and other kinds of research grants; we pay for the clinical trials, and then we pay the highest prices in the world. And we're going to begin to rein that in.
It also means changing the way insurance companies do business in America. I will start by banning insurance company discrimination. Right now, insurance companies have free reign to cherry pick the healthiest patients and shut out anyone who seems to them like a bad risk. Insurance companies spend $50 billion a year on elaborate calculations and schemes to figure out how not to insure people. $50 billion trying to shut out those who need care the most. And everyday they deny people coverage because of pre-existing conditions or the result of genetic testing. Think about what this might mean down the road with advances in genetic testing. The vast majority of us could wind up being bad risks because genetically most of us will probably show we are susceptible to something and therefore we will become uninsurable.
So one of the urgencies behind this plan now is that the insurance industry as it has been constructed and executed over decades now will no longer be able to take care of increasing numbers of Americans if they stick with the policy that eliminates our fellow citizens. This legalized discrimination against the sickest of Americans is unfair and immoral and it defeats one of the central purposes of insurance, which is to share risk.
My plan puts an end to this. It forces insurance companies to compete based on cost and quality, not how skillfully they can weed out the sickest patients. My plan also has a prevention initiative, requiring the insurance industry and public programs like Medicare and Medicaid to promote wellness as well as treat illness and provide every American with comprehensive preventive care.
Today we pay doctors and hospitals to treat diseases and injuries but not to prevent them from occurring in the first place. In fact, we've made it increasingly difficult for doctors to do that because of the way insurance companies reimburse physicians. Diabetes care is a perfect example. Many insurance companies won't pay for a diabetic to see a nutritionist to learn how to eat properly or a podiatrist to get their feet checked, but if you wind up having to have your foot amputated from complications due to diabetes, the insurance company will pay for that. And if you ask why, the insurance company will tell you, they don't want to pay for preventive health care because the patient might switch to a different company and they will lose the benefit of the investment in prevention. But if a patient needs his foot amputated, the reason he goes, the insurance company is pretty much stuck with that on their watch. Now that is upside down and backwards and I'm going to change it because I think it's time we focused on keeping people healthy, not just on treating them when they become sick.
Now I know that these proposals will not make me the insurance industry woman of the year. But I don't think I've been in the running for that title since 1993. At the same time, I truly believe there are plenty of people in the insurance industry who wish their companies did not make a profit by excluding the woman who discovers she's genetically predisposed towards getting breast cancer, or by burdening the family whose child has autism with unmanageable premiums.
The idea is not to put the health insurance industry out of business, but to help it find a better way to make a living. Under my plan, insurance company employees will have a whole new set of incentives. They will wake up everyday and focus on making profits by providing the highest quality care at the lowest cost and they'll never again be torn between turning a profit and improving the health care of individuals who make sure of communities and our country.
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