▶ 0:20:47Chair Johnson: Good afternoon. This hearing will come to order. I do apologize for being late. Being late is rude. We got caught up in an interesting discussion at lunch. I do want to thank everyone for attending the hearing entitled defining our health care problem , and principles we should follow to solve it.
▶ 0:21:10Chair Johnson: The first step toward finding -- solving a problem is admitting you have one. Unfortunately, democrats are in denial about obamacare being a failure.
▶ 0:21:32Chair Johnson: Ranking member blumenthal stated at our last hearing that "I don't know anyone who has been harmed by obamacare." which was interesting considering one of his own witnesses was a victim of obamacare. Prior to obamacare his plan would have been called catastrophic coverage and those plans were dirt cheap.
▶ 0:21:59Chair Johnson: Medical bills not covered by the lower to your plan forced him to buy $18,000 through a home equity line of reddit. -- line of credit. Our first two witnesses are also victims of obamacare whose stories will help open the eyes of a ranking member and his democratic colleagues who refuse to acknowledge reality.
▶ 0:22:22Chair Johnson: Christopher briggs' story about his daughter with leukemia exposes president obama's lie about if you can -- like your daughter, you can keep it. Our third witness will demonstrate the magnitude of consolidation and health insurance and how that has weakened competition and lead to higher prices.
▶ 0:22:49Chair Johnson: He would describe the root causes related to government regulation that disempowers consumers from choosing the best for their needs. He will discuss increasing competition through consumerism and by reversing the consolidation that has occurred. Our fourth witness will discuss the massive fraud uncovered in minnesota in an eye-opening gao report and defined the problems created by medicaid expansion.
▶ 0:23:17Chair Johnson: He will focus on the 9-1 match access created and perpetuated multiple financing scams and incentivize states and health-care care providers destruction budgets relying on scams read he will discuss the principles of root -- work requirements, equal funding treatment and controls to determine that only eligible recipients receive coverage.
▶ 0:23:48Chair Johnson: This is about re-injecting consumerism and free-market into health insurance. Obamacare failed to reduce health care costs. Patients pay approximately $.10 of every dollar paid in health care. No one other than the clerks know what health insurances and products cost. Not doctors or nurses are patients the U.S.
▶ 0:24:13Chair Johnson: Spends 17.2% of gdp in health care versus the other top 10 oecd countries averaging 11.3%. At least 25% of health care spending is waste, fraud, that would not be possible in consumer driven competitive markets. It just wouldn't happen.
▶ 0:24:43Chair Johnson: The federal government is probably the worst consumer of all. Instead of lowering costs and improving quality and service it simply throws trillions of dollars hoping to mask its failures. The democrats denial will make it impossible to repair the damage done by obamacare and transition to a bipartisan basis. Republicans have to figure out how to do it on our own.
▶ 0:25:11Chair Johnson: This hearing is to accurately define the problem and develop the principles to guide solutions. I can testify that free-market competition guarantees three things. The best possible quality, the highest level of customer service, and the lowest possible cost and price. Isn't that what we want in health care? If we do, free-market competition is the primary principle we must strive for and adhere to. I will turn it over to our ranking member.
▶ 0:25:39Sen. Blumenthal: Thank you, Mr. chairman. If today's hearing sounds familiar or repetitive, that is because it is. It is repetitive of the last hearing we help and the chairman's opening statement repeats a lot of what has been the republican mantra.
▶ 0:26:08Sen. Blumenthal: I was inclined to say diatribe, but essentially to repeal the aca. It has been the republican mission since the passage of the aca and we have voted on it some 70 or more times. Fortunately every time defeating the repeal effort. And I want to make very clear, our health care system costs too much.
▶ 0:26:39Sen. Blumenthal: It has problems like fraud. It is far from perfect. So the chairman saying that I implied that there are no problems with our health care system I think somewhat misstates what I've said in the past. Anybody consuming health care knows how expensive it is.
▶ 0:27:06Sen. Blumenthal: More important than what I say here is what the reality is for american families right now in their small businesses, like dan jacobs. In their farms, like erin -- aa ron lehman. At the kitchen table sent in their living rooms.
▶ 0:27:31Sen. Blumenthal: Where they are going to buy health care coverage right now and they are confronting double and triple rates and they are climbing. It is sticker shock that is deadly. People will die, people will die if they can for health insurance. So far more important than what I say here is what the united states senate does tomorrow.
▶ 0:28:01Sen. Blumenthal: The question is whether it will extend the health care tax credits that made insurance affordable for millions of americans including for small businesses. Farmers, and others. Across the country more than 20 million americans are facing an average premium increase of 114%.
▶ 0:28:35Sen. Blumenthal: In my home state of connecticut and the german state of wisconsin -- the chairman paul state of wisconsin, where dan jacobs is from, a family of four earning $66,000 a year and hoping to hang onto some benchmark plan they have right now, will see their premiums more than triple. I could go through a variety of others.
▶ 0:29:05Sen. Blumenthal: I have done it in hearings we have had here and speeches we have made on the floor. Tomorrow's decision day. And we can talk all we want about defining the problem and concocting solutions and I agree we ought to look at reforms to make the costs of health care and insurance, but let's extend the health care subsidies so we
▶ 0:29:35Sen. Blumenthal: Can save millions of americans the awful fate of going without health care insurance. We don't have to let luxury of time, we don't have the leisure to delay.
▶ 0:29:56Sen. Blumenthal: I believe that we should recognize how the affordable care act serves our small businesses, our farmers, our individual people, millions who will go without health insurance if we decide wrongly tomorrow. I'm particularly thankful to dan jacobs, chef and small business owner from wisconsin, and aaron lehman, a farmer from iowa, who have agreed to testify today to share their stories.
▶ 0:30:26Sen. Blumenthal: They are two of the millions who rely on the affordable care act and his health insurance premiums are about to skyrocket or have already sent sticker shock through the american public.
▶ 0:30:43Sen. Blumenthal: There is no question that we need to crack down on the brokers engaging in fraudulent behavior and take action to constrain health-care costs, but let's resolve to come together, to do the right thing for the american people, and extend these health care subsidies. Thank you, Mr. chairman.
▶ 0:31:05Chair Johnson: Thank you, Mr. ranking member. Did you say a family of four making $67,000? What was the figure you used?
▶ 0:31:13Sen. Blumenthal: Family of four earning $66,000 would see their costs triple.
▶ 0:31:21Chair Johnson: Ok. I just got to point out things that are completely incorrect. A family of four dollars -- a family of four making $66,000 is between 200% in 225% of the poverty line so they will qualify under normal obamacare subsidies, they will have to pay 7% of their income before they get a subsidy. Under the enhanced premium they had to pay about 3%.
▶ 0:31:52Chair Johnson: That was a temporary covid subsidy. They are not losing their subsidies. It is going from about 3% of their income to 7% of their income for health care. Under no scenario, you can't do math where that family is going to have double or tripling premiums. That doesn't happen unless the overall gross premium is doubling or tripling.
▶ 0:32:19Chair Johnson: I will ask the ranking member in questions for the record to give me the detailed math. I have to point out to the people watching this what he said is completely wrong, completely false.
▶ 0:32:29Sen. Blumenthal: I beg to differ, Mr. chairman. Unfortunately I wish I were wrong.
▶ 0:32:36Chair Johnson: If you provided and put it in the record.
▶ 0:32:39Sen. Blumenthal: I will be happy to put it in the record. These numbers come from the center on budget and policy priorities. The current payment of that family is $1450. And it will rise to $4570 a month. Without the subsidy. $1450 to $4570.
▶ 0:33:10Chair Johnson: Per month. Family of four. I was buying health care.
▶ 0:33:15Sen. Blumenthal: You can say all you want. The family knows what is happening.
▶ 0:33:20Chair Johnson: I will try to get this in detail.
▶ 0:33:24Sen. Blumenthal: That is per year.
▶ 0:33:25Chair Johnson: We will try to get this squared away. >> [indiscernible] is that a dollar amount per year or month?
▶ 0:33:35Sen. Blumenthal: Per year. >> that does make a big difference.
▶ 0:33:39Sen. Blumenthal: It is per year. That does make a big --I misspoke.
▶ 0:33:44Chair Johnson: The ranking member and I approve of senator slotkin participating today. It is the tradition of the committee to swear in witnesses so if you will rise and raise your right hand. Do you swear to tell the testimony be the truth, the whole truth, and nothing but the truth, so help you god? >> [indiscernible]
▶ 0:34:08Chair Johnson: Our first witness is Mr. christopher briggs, the publications and public affairs council for the independent institute. He received his ba in arts and history from baldwin college and holds a master of arts in political theory from catholic university. Mr. briggs.
▶ 0:34:27Mr. Briggs: [indiscernible] sorry. Chairman johnson and raking member blumenthal and members of the subcommittee on investigations thank you for letting me testify about the harm obamacare has ever inflicted.
▶ 0:34:56Mr. Briggs: If no harm has ever come to anybody from obamacare, why are you not on it? In november 2015, my wife got the most dreadful calling parent can get. The doctor knew why her youngest daughter had not been feeling well. Bloodwork had revealed leukemia. We raced her to the hospital in northern virginia that treats pediatric cancer and got there just in time. Thanks to obamacare we were already in difficult straits.
▶ 0:35:23Mr. Briggs: Before the aca the market had offered us a wide variety of relatively inexpensive plans that covered specialist care even out-of-state. After obamacare there were fewer benefits and fewer hospitals. The health care experts among us will talk about now networks and that doesn't begin to describe the horror. Obamacare made us into medical serfs.
▶ 0:35:54Mr. Briggs: We are tied to the land, unable to leave it even to save a little girl battling cancer which is why when we tried to take her to johns hopkins in baltimore, we were denied. Under our pre-aca plan which didn't geo fence sick children she would have been admitted. Our predicament was made more painful by swelling premiums and skyrocketing deductible and maximum out-of-pocket expenses. Pre-aca are premiums were about $800 per month.
▶ 0:36:26Mr. Briggs: The maximum backend expenses were $3500 give or take. After the aca went into effect, our subsidies went to nearly $2000 per month. Max out-of-pocket expenses with subsidies $20,000 or nearly. Thanks to cancer, which my daughter came down with, we had those maximums many, many times.
▶ 0:36:51Mr. Briggs: So thick about that, in the 10 years since the democrats inflicted obama's health care on s, we had to pay for many, many years, almost $50,000 annually insurance payments on medical bills. That is money we did not have. No middle-class family can endure that kind of expense. The upshot of our decade of affordable health care under obamacare, our savings were gone.
▶ 0:37:16Mr. Briggs: We have virtually nothing left to retire on and to handle the remaining debt we are beginning to process taking out a home equity loan. This is to subsidize affordability that democrats persist congress perpetuate. During the dark early days of cancer, things got much worse than expected.
▶ 0:37:39Mr. Briggs: Obamacare offered us no plan in our zip code for any amount of money to cover colette's treatment at the one pediatric cancer ward in northern virginia. Our daughter was effectively without coverage for cancer. What kind of health care plan to inflicted on west that it can't handle childhood cancer? We went through another terrifying event in 2020.
▶ 0:38:08Mr. Briggs: With covid sweeping the country, the plan we had had that year announced that in two weeks that it would no longer cover my daughter's clinic where she received her care. We had to appeal to the author of our problems, the government, to all of you, and fortunately I was able to persuade, threaten senator warner's staff to bully
▶ 0:38:41Mr. Briggs: Insurance back into the marketplace. Perhaps to solve the instability, the government can take over medical facilities but then every hospital would be at the sake of -- at the mercy of brutalizing -- the system brutalizing my daughter and her family for years. We would have dying and lying waiting for care, such as they have an u.k. Are at the veterans administration closer to home.
▶ 0:39:12Mr. Briggs: And those administrations, the scarcity we experienced is no longer circumstantial, but deliberately meted out to patients and policy. We watched as the institutes of medicine colluded with a disease against our daughter and that would be a daily occurrence. There is one more harm that obamacare is inflicting. Obamacare is not insurance.
▶ 0:39:39Mr. Briggs: But a scheme, I would say a ponzi scheme to pay for medical skills. Since my daughter got very sick, she is now permanently uninsurable. It is impossible to buy car insurance after an accident. My daughter has had that accident and she is permanently uninsurable. If we ever restore real insurance to the country, it is unstable and will collapse on its own.
▶ 0:40:08Mr. Briggs: Single-payer is a disaster read my daughter will never be able to have one of those plans. If I was able to keep my pre-aca plan is president obama promised , it would have ensured durable access to medical care. In essence, obamacare turned an insurable air nest -- illness into permanent pre-existing conditions that my daughter will never escape. But my daughter is never alone.
▶ 0:40:39Mr. Briggs: Millions of persons of gotten sick under obamacare and more will do so every year. Obamacare is creating a nation of pre-existing conditions. Many say they are being helped by democrat health care including no doubt many at this table will say so later. As the democrats help you, because they are helping you, they are harming you permanently for the rest of your life.
▶ 0:41:03Mr. Briggs: If anybody is on obamacare right now, get out while you can. I'm asking that this body and the president provide us a way out. There is one correct long-term answer. Repeal and replace obamacare.
▶ 0:41:33Mr. Briggs: We need to repeal obama care and set up not single-payer but as my colleague at the independent institute who our president has said, what we need a single market across state lines in which millions of americans can buy real, actuarially sound, automatically renewable insurance products curated to individual needs.
▶ 0:41:52Chair Johnson: Thank you, Mr. briggs, we do need to move on. Our next witness is Mr. nick staley. He holds a bachelor of arts in political science. Mr. staley.
▶ 0:42:09Mr. Stehle: Chairman johnson, ranking member blumenthal and members of the committee, thank you for hosting this important hearing. In the vice president at the foundation -- the council for affordable health coverage -- but right now I'm here as a dad.
▶ 0:42:38Mr. Stehle: The medicaid program needs reform to root out waste, fraud and abuse. Medicaid's ballooning enrollment has left the most vulnerable behind. Across the nation, more than 700,000 individuals most of whom who have intellectual or develop mental disabilities are stuck on medicaid waiting lists for need or community-based services.
▶ 0:43:06Mr. Stehle: The average waiting list can last 16 years in some states. As you might imagine, many don't have that long. Remember, every dollar that goes to an able-bodied adult on medicaid who can and should be working is a dollar that doesn't go to the people the program was intended to help. These aren't just numbers on a sheet of paper. These are real people including kids with intellectual or developmental disabilities.
▶ 0:43:35Mr. Stehle: Real people like my 17-year-old son luke who wasn't able to make it here today but I think you will be able to see him on the screen. And I'm sure he will be able to watch the video later. Luke has severe autism and epilepsy. And though he probably had his first seizures in the womb, the first one we saw was just at seven weeks. I held my tiny newborn son as he seized.
▶ 0:44:04Mr. Stehle: It took my wife and me taking him to multiple hospitals before someone finally believed us. It turns out seven week old babies don't have seizures very often. It is always serious. 16 years later, we finally learn why. A rare gene mutation linked to profound intellectual disability and intractable epilepsy. Luke is a sweet and happy young man.
▶ 0:44:31Mr. Stehle: He enjoys video games, star wars, hunting for diamonds with his grandparents at crater of diamonds state park in arkansas and fiercely loves his siblings. A couple of years ago, we sought out help through a home and community based services waiver so he could get the critical medicaid services he needs to be a part of the community and so that he can receive in-home care when my wife and I can't be there. At the time, we were told the average wait for someone like him was 11 years.
▶ 0:45:04Mr. Stehle: He becomes an adult in 35 days. At this point, we don't know when you will ever move off that waitlist. It is easy to talk about medicaid reform, it is another thing entirely to live it. I see firsthand how able-bodied adults 62% of whom can work siphon off the services that should go to those who are disabled.
▶ 0:45:34Mr. Stehle: They go to the front of the line will kids like luke wait for years. It is not easy to talk about these things in front of the whole world. It is quite painful. The truth of the matter is our family is going to be ok. He has grandparents who live nearby and they are there to help him at the drop of a hat. He is cared for, he is loved, and he is safe. So why am I here?
▶ 0:46:06Mr. Stehle: It is because my family story is not unique. It is the story of people in our community they do not have the voice, financial, family, or otherwise. Imagine being a single mom to a son or daughter with epilepsy. You are working hard and you were told as we were that help is coming. In 11 years.
▶ 0:46:33Mr. Stehle: This kind of help may be the only thing keeping your child from being institutionalized, but waiver services are out of reach. Meanwhile, your state is spending hundreds of millions of dollars on able-bodied adults to move to the front of the line ahead of your child. Does that sound right? Reform is not a choice, it is a moral imperative.
▶ 0:46:56Mr. Stehle: Choosing not to act puts the needy last while taxpayers foot the bill for growing program that no longer meets its mission. Now is the time to set medicaid on a sustainable track and one that protects the individuals they were intended to serve. I'm grateful for this committee's work and for senator johnson's commitment to refocus resources on those who need them most and there is a lot of work to be done and the truly needy cannot afford to wait. Thank you.
▶ 0:47:25Chair Johnson: Thank you. Our next statement is a repeat witness. The first is assessing about the damage done so we can take the first step in solving the problem which is admitting we have one. We admit we've got one. The other side, not so much. This is all about defining the problem and laying out the principles for solving it.
▶ 0:47:49Chair Johnson: He is the president of the council for affordable health coverage and has led issue campaigns to lower health care costs. He holds a bachelor of science from american university. Mr. white.
▶ 0:48:07Mr. White: Thank you, chairman johnson and members of the subcommittee, I lead the council for affordable health coverage. These are sad stories about people who have been harmed by obamacare. I will tell you about the people who have benefited from obamacare. Big insurance and big health care.
▶ 0:48:32Mr. White: Insurance is becoming unaffordable for small businesses, taxpayers, not because of inflation but because of policy choices this body has made that has rewarded insurers when costs rise. I think we all know the results of the law. Deductibles often exceed $5,000 a year or more. Plans limit access to doctors and drugs. And fraud is rampant.
▶ 0:49:12Mr. White: Washington first defined a narrow set of expensive insurance products that consumers can only use their subsidies to buy. And costs are masked for those subsidized individuals and subsidies rise automatically as premiums go up. This design eliminated consumer choice and shifted power to big insurers and government bureaucrats. Without meaningful competition, insurers adapted to maximize revenue, not patient value.
▶ 0:49:44Mr. White: Just one example, the medical loss ratio. Those rules were supposed to limit profits, but insurers exploited it as a loophole to drive up costs. These rules require insurers to spend $.80 or $.85 of every dollar collected in premiums on medical costs.
▶ 0:50:03Mr. White: But by vertically integrating, buying physician groups, pharmacies, and pharmacy benefit managers, insurers discovered they could run premium dollars through their own subsidiaries and count those internal transfers as medical spending. In fact, four of the five largest pbm's are now owned by insurance companies and the top three process 80% of all prescription claims in america.
▶ 0:50:30Mr. White: Once those claims are routed to entities that they own, insurers can increase spending, satisfy aca's medical loss ratio rules and book profits and their subsidiaries well premiums rise and patients face fewer options. As competition collapsed in the individual and small group markets, insurer profits in the aca sword.
▶ 0:50:56Mr. White: That jump wasn't driven by efficiency, it was driven by higher premiums, rising enrollment, and expanding federal subsidies. When subsidies go up, insurer margins go up. You can see it reflected directly in gross margins and stock prices. For example, average health insurers stock prices are up 1000% since the aca was enacted in 2010. And 450% since plans came online in 2013.
▶ 0:51:28Mr. White: This is because the aca routes massive taxpayer subsidies straight to insurers, not consumers. This year alone, taxpayers will spend billions of dollars sending it to health plans through these subsidies and $1.3 trillion over the next 10 years. The fundamental problem is simple. The aca shifted the market center of gravity away from consumers and toward large health insurers and health systems.
▶ 0:52:07Mr. White: Layering more subsidies into this broken structure will do more harm than good. To fix this, we must restore the principles that make markets work. First, we should establish systemwide price transparency. This is foundational to competition, lower costs, and higher value read second, we should empower consumers. Patients should control their health care, not insurers or government bureaucrats.
▶ 0:52:36Mr. White: Subsidies should flow to people, not companies, and consumers should be allowed to choose the plan that best fits their needs. Third, we need to restore real choice. Families and small businesses need competing plans not a narrow set dictated by washington insurance designs. These principles will not just lower premiums, they will rebuild a system where the interests of consumers and taxpayers come first.
▶ 0:53:05Mr. White: Thank you, I look forward to answering your questions.
▶ 0:53:07Chair Johnson: The ranking member has and also repeat witness to is an expert on the subject and has first-hand experience in terms of maine, how they handle high-risk premiums. Obamacare does not cover premium -- pre-existing conditions. Mr.
▶ 0:53:33Chair Johnson: Tarren bragdon is the president and ceo of the foundation for government accountability. Mr. bragdon.
▶ 0:53:53Mr. Bragdon: Thank you for this opportunity. 15 years after it was signed into law, obamacare has not delivered the promise of affordable care that americans were sold. Instead, what it has produced is skyrocketing premiums, exploding fraud, and massive waste and a system that routinely puts able-bodied adults ahead of the truly needy and leaves many with pre-existing conditions worse off than they were before.
▶ 0:54:24Mr. Bragdon: The centerpiece of this failure is medicaid expansion. It was originally designed for poor children, the elderly, pregnant women, and the disabled. It was radically transformed into an entitlement for working age able-bodied adults. Most of whom have no dependent children and most of whom are men.
▶ 0:54:52Mr. Bragdon: Federal taxpayers spend more on able-bodied adults. In the first decade of medicaid expansion it cost more than trillion the estimate, well as you heard americans with severe disabilities have languished on waiting lists for home and community-based services. In addition, fraud has reached staggering levels.
▶ 0:55:23Mr. Bragdon: We read the headlines revealing billions stolen from medicaid in minnesota and some of the money funneled to terrorist groups. A $230 million obama broker scam. And a gao sting operation in which every single fake identity the auditors created was approved for fully subsidized coverage and 90% were still receiving those benefits a year later, often without any verification of identity, income, or citizenship.
▶ 0:55:53Mr. Bragdon: Gao found 21 billion dollars in unreconciled subsidies, tens of thousands of deceased or duplicate social security numbers. Health and human services confirmed 60% of subsidy recipients misreported their income. One out of five of every medicaid dollars is wasted the vast majority due to eligibility errors.
▶ 0:56:19Mr. Bragdon: The federal government matches nine dollars for every one dollar a state spends on able-bodied adults, but only about $1.30 for every dollar spent on the truly needy. Expansion roles state bloated well children, the elderly, and the disabled are first on the cup list because that is where states can save the most.
▶ 0:56:47Mr. Bragdon: Obamacare's promise to protect people with pre-existing conditions has collapsed. Individual market premiums have more than tripled, the average 40-year-old now pays over $7,700 a year before subsidies. Deductibles are more than $6,000. Out-of-pocket maximums exceed $9,000. Those with pre-existing conditions need the best providers.
▶ 0:57:12Mr. Bragdon: Yet obamacare insurers use narrow networks, often run by medicaid managed care companies that exclude most top physicians and nearly all national cancer institute design cancer centers. Drug formulas and cost-sharing are structured to discourage enrollment of high-cost patients. The rigid enrollment window in the biden administration's curtailing of short-term plans have stripped away affordable bridges to coverage.
▶ 0:57:51Mr. Bragdon: Maine and acted targeted re-a -- reinsurance and modest rate changes. Premiums and premiums with the largest insurers fell 70% in the first year and enrollment climbed 13%. That market remained stable even as obamacare premiums exploded nationwide over the next few years.
▶ 0:58:14Mr. Bragdon: All the while preserving guaranteed issue and the identical, lower premiums in the exact same benefits for people with or without pre-existing conditions. In short, obamacare is too expensive and very broken. Real reforms have shown that targeted help needs to be focused on the truly needy.
▶ 0:58:35Mr. Bragdon: We need to provide more health care options, not future -- fewer and provide full access to everyone and I look forward to your questions.
▶ 0:58:45Chair Johnson: Thank you. Our next witnesses Mr. jan -- dan jacobs, the chef and owner of two restaurants in wisconsin. We will have to go, my wife looked at the menu.
▶ 0:59:06Mr. Jacobs: Let's go.
▶ 0:59:09Chair Johnson: Do you do mushu pork?
▶ 0:59:15Mr. Jacobs: Not currently, but for you, let's talk.
▶ 0:59:19Chair Johnson: He was the runner-up on top chef.
▶ 0:59:22Mr. Jacobs: Thank you for the opportunity to speak with you today, I'm a small business owner from milwaukee, wisconsin. I own two restaurants. They employ dozens of hard-working people who rely on us not only for a paycheck, but for stability, dignity and a pathway to a sustainable career.
▶ 0:59:43Mr. Jacobs: I'm here today to express in the clearest possible terms, the affordable care act is essential to the survival of small businesses like mine and to the health and security of the people we employ. The playing field that has long been tilted against small employers. Before its passage, small businesses struggle to compete with large corporations for talent because we couldn't access the same insurance pools or negotiate the same affordable rates.
▶ 1:00:14Mr. Jacobs: When that happens, workers suffer, family suffer, and small businesses lose the ability to attract and retain the skilled, committed employees who are strong they are the craft, the culture, and the guest experience. To build and maintain this, we need health care that employees can rely on.
▶ 1:00:44Mr. Jacobs: Small businesses are not a niche part of the economy, they are the economy. Firms like mine employ 46% of the nations workforce and create more than 60% of all new jobs. The vast majority of employers lack the bargaining power or the scale to whether spikes in health care costs.
▶ 1:01:08Mr. Jacobs: In industries like restaurants were over 70% of establishments are independently owned and margins are narrow thin, the stability the aca provides isn't a luxury, it is necessary for survival. Everybody else talks about pre-existing conditions, let's talk about them. Not in theory, but in real life. I live with kennedy's disease, a rare neuromuscular condition similar to als. There is no cure, there is no treatment.
▶ 1:01:36Mr. Jacobs: Before the aca, this diagnosis would have made me effectively uninsurable in the private market. Insurance companies could and did deny coverage outright or price people like me out of the system entirely. As a business owner, that meant I would have been faced with an impossible choice, risk my health and well-being or give up my ability to own and operate a business.
▶ 1:01:58Mr. Jacobs: The aca is the reason I can continue to work in my small business, continue to contribute to my community as a small business owner and continue to employ the dozens of people who rely on me. It is not an abstract policy issue. It is the reason people like me can remain part of the workforce and the economy.
▶ 1:02:32Mr. Jacobs: It would be impossible for us without the aca to compete with larger companies because of their size. The aca is not just help us provide health care, it helps us provide opportunity. It gives entrepreneurs the confidence to start new businesses, hire employees, and grow responsibly.
▶ 1:03:00Mr. Jacobs: It creates fairness in a system that punishes players. Senators, I urge you to strengthen the affordable care act. Our employees and their families depend on it. The future of an equitable american workforce depends on it. I depend on it. Thank you for your time. I'm going to end early. Thank you.
▶ 1:03:26Chair Johnson: Our next witness is Mr. aaron lehman a family farmer from polk county, iowa and the president of the iowa farmers union. He and his wife receive health coverage through the aca marketplace. Mr. lehman.
▶ 1:03:43Mr. Lehman: Good afternoon. It is an honor to be invited to share the story of our family farm and the concerns of thousands of farmers and rural residents across the country. I'm a fifth generation family farmer from central iowa and with my wife, my son and the rest of my family we grow corn, soybeans, oats, and hay and we farm because we love to grow things that feed our community, our state, our country and the rest of the world.
▶ 1:04:15Mr. Lehman: I serve as the president of the iowa farmers union, a grassroots organization dedicated to family farming, sustainable agriculture, and thriving communities. Our farmers have been telling us that the affordable care act has been one of the best investments in rural health care in decades.
▶ 1:04:31Mr. Lehman: For farming families, entrepreneurs, and employees of small businesses who don't offer health insurance as a benefit, the aca has expanded coverage, lowered cost, and encouraged farmers and more -- rural residents to take more risks and make more investments in farms and communities. My family has benefited from having access to the aca and the affordability provided by the enhanced premium tax credits.
▶ 1:05:02Mr. Lehman: I have a lot of freedom to worry about what our passion is. I'm able to work full-time on the farm where I can concentrate on what is best for our farm, growing crops, maintaining equipment, exploring the best possible market opportunities, implementing new innovations to make us more efficient and to better build our soil health and preserve our resources. And taking smart steps to help our son joined the farming operation.
▶ 1:05:31Mr. Lehman: When my wife was laid off due to downsizing she went back to school to get another degree for her line of work. That could not have happened without our access to affordable coverage from the affordable care act marketplace. Now she works as a passionate care provider as a physician's assistant conducting in-home health assessments for elderly patients and other patients in need. She is doing this work as a contractor for a company unable to provide health insurance.
▶ 1:06:00Mr. Lehman: This position also allows for the flexibility to help out on the farm during our critical fieldwork times planting and harvesting. She is only able to do these things because she has the flexibility because we have access to affordable coverage. In fact, she might not have maintained any coverage at all if it were not for the affordable care act at all because of the pre-existing condition of being a breast cancer survivor. Affordable health care coverage has been a game changer.
▶ 1:06:32Mr. Lehman: But unfortunately my wife and I have learned that in order to keep a similar policy in 2026 are health insurance costs will more than double. This affordability issue comes at a time when farmers like me are facing enormous challenges, trade tensions have led to lower prices for what we grow and sell , at a time when we have higher costs for all of those inputs we purchase.
▶ 1:06:58Mr. Lehman: The strange labor market has driven up our costs even further and usda cuts have led to increased uncertainty about the programs we depend on. Farmers and farm landers alike report the increased challenges of financing next year's cop, mental health hotlines have increased from farmers under serious stress.
▶ 1:07:21Mr. Lehman: Without a doubt, a dramatic increase in the 2026 health care premiums for thousands of rural residents will crash individual family budgets. Our health care system will be the same.
▶ 1:07:41Mr. Lehman: Kff estimates that 27% of my sector, farmers, ranchers, and other agricultural managers rely on individually see market coverage. In 2023. Rural hospitals rural hospitals will face mounting uncompensated care when residents lose coverage.
▶ 1:08:06Mr. Lehman: This will only accelerate the financial strain that has already pushed many rural facilities to reduce service and to close entirely. Our world economy only grows when people are willing to take risks and make investments. The aca has provided uncertainty -- has provided certainty and affordability for working people without employer-sponsored health insurance. The success of the aca have meant people have been able to start their own businesses, change their jobs, and invest more in their own farming operations.
▶ 1:08:37Mr. Lehman: Extending the federal support for lowering the cost of health insurance is a true win for farmers and for all of rural america. Thank you, chairman johnson, thank you ranking member blumenthal. And thank you, members of the subcommittee.
▶ 1:08:52Chair Johnson: Thank you. Senator scott, I will let him go first in terms of questions.
▶ 1:08:59Senator Scott: Thank you. Let's remember when obamacare was passed they said you get to keep your doctor. A complete lie. Keep your plan. A complete lie. You will say funny $500 a family. Complete life. What we have seen since then is the cost of health care has skyrocketed. It has actually cost the government money.
▶ 1:09:30Senator Scott: It left many american families with fewer choices, higher costs and health care that doesn't fit their needs. Every story I hear in my state a people struggling with obamacare is they can't afford the premiums, they have to split their pills in half to make them last longer. I grew up in a poor family. We didn't have health care, we didn't have health care insurance. My brother had a significant disease.
▶ 1:09:58Senator Scott: My mom had to find a hospital four hours away because nobody back where I lived would take care of him. I think it is really important that people have access to health care. Actually access to health care they can afford. It is in a crisis. It has not worked under obamacare. I have a bill called the more affordable health care act. It fixes obamacare.
▶ 1:10:26Senator Scott: It's as if you like your obamacare you can keep your obamacare. My bill is going to drive down costs. Chairman pflueger of the republican health care committee has endorsed it and I'm hoping that over time we can bring everybody together to get something done. This drives the cost of health care down. It makes you a consumer of health care. Think about food stamps for a second.
▶ 1:10:52Senator Scott: When we say food stamps we don't say we are going to give it to the grocery store and they will decide what food you get. And health care what we are doing, we are giving money directly to the insurance companies and they get to make the decision or the government gets to make a decision. I guess if they were making the decision to have a seat more broccoli it would be good for us. What mine does is we will give the money to the consumer. At one of our lunches, we had a doctor come in that has a surgery center.
▶ 1:11:23Senator Scott: He charges less than medicaid, lesson medicare, great outcomes. People are coming from all over the world to buy health care cheaper then what obamacare pays. But when somebody sets up the system that they make all the rules, then there is no creativity. So the way mine is set up, the state gets to opt in or opt out. If the state likes the way it works, keep it.
▶ 1:11:47Senator Scott: If the state doesn't want to, they can still use healthcare.gov, we protect people with pre-existing conditions because I agree with Mr. jacobs, you have to make sure you take care of people with pre-existing and people have to take a safety net. You want to know what things cost. Transparency. An urgent care company that has a menu board like starbucks. We ought to be doing that in health care. Mr. brighton has talked about that and people will make good decisions.
▶ 1:12:16Senator Scott: And president trump has been right, we ought to stop giving money to the insurance companies, give it to the consumer to let them make a good choice. That is what this does. It sets up from freedom accounts and the money will go in there and can be used for direct health care, premiums, copayments, deductibles. What each family could decide what they needed.
▶ 1:12:40Senator Scott: We are not taking anyone's health care away, we are providing them the option to spend the money better. It lets people shop across state lines. If I want to buy something, I can buy product or services across state lines, why can't I buy health care across state lines? It doesn't make any sense. Americans deserve the ability to act like consumers. We have a safety net for food stamps, which we should.
▶ 1:13:08Senator Scott: A safety net for health care, we should let the consumer make these choices. Before part d I asked my parents, how much would it take for you to change it? They said less than a dollar per prescription. They knew that to the dollar. Today nobody knows what health-care costs, somebody else is paying for it, nobody is shopping.
▶ 1:13:37Senator Scott: You are running a health coalition that includes small businesses. >> 100% it is, your bill meets all the principles I talked about. It would go since obamacare was enacted, the small group market has collapsed.
▶ 1:14:05Senator Scott: It used to be most small businesses offer their employees coverage but today, it's about one third. And the exchange, obamacare is made up of 12 million small business workers. When the small business drops their coverage, those people went to obamacare where they face higher premiums, higher deductibles, less access to doctors and drugs.
▶ 1:14:29Senator Scott: If you keep people in their small business and give an incentive for the small business to offer coverage, they will get lower premiums, lower deductibles, more access to doctors and drugs, pretty simple. And they get to make their own choices. >> the foundation for government accountability has written about price concerns, the importance of making patients consumers, break into the health insurance market place.
▶ 1:14:56Senator Scott: Tell me what you think about hsa's for the patient rather than the large insurance companies. >> putting the patient in the driver's seat is trance formative and I will tell you a story about my oldest son that tries home this point. My oldest son is on an obama care plan. He is an adult now. He had spine surgery. We live in the same county as senator scott. Only one entrance carrier had miami children's hospital in network where he received spine surgery.
▶ 1:15:27Senator Scott: He had a prior authorization that I had to call their national head of government relations to push it through and part of his follow-up treatment also had prior authorization to a medical device that cost $3000, less than his entire deductible. We had approval for that but the suppliers said to us, we know that this is going to your son's deductible. If he pays cash, he doesn't have to pay three thousand dollars. We will sell it to him for 1500. It is a scam.
▶ 1:16:00Senator Scott: Literally, it was charging my son for a benefit that was meaningless, prior authorizing something that he could have got for half the price and did pay in cash so putting money in patient's pockets is transformative. >> to the point I have been making, this is true, there's not every incentive in our health care financing system is to drive up costs. Everyone is getting a cut of it.
▶ 1:16:30Senator Scott: You would rather sell that $100,000 house for $1 million rather than $100,000 to everybody try to drive up the cost to $1 million. That is what was happening across health care because of consolidation and I will turn it over to senator blumenthal. >> thank you, Mr. chairman. Mr.
▶ 1:16:53Senator Scott: Lehman, you testified that you keep your coverage, you have to pay health insurance premiums that will more than double. Maybe you can tell us how it felt to log on to the aca and see just how much more you are having to pay. -- were having to pay. >> thank you, senator. It is shocking.
▶ 1:17:21Senator Scott: It makes you think, where can we turn next to tighten our belts when we are already tightening our belts as hard as we possibly can? In rural america. Farmers don't have the privilege of passing our costs onto the consumer. We typically are in commodity markets that are highly concentrated and we don't have much choice about what we get so being in such a vulnerable pollutant -- position makes you think what can happen next?
▶ 1:17:49Senator Scott: The aca works for us when we can invest more. The aca works for us when we can think about bringing the next generation back to our farm. And it works for us when we can change jobs freely in rural america. So that is what I was feeling when I was learning about our premium increases. >> what kind of sacrifices will you have to make in order to pay for health insurance? >> like all farmers, I think you look everywhere.
▶ 1:18:21Senator Scott: For equipment that needs to be impaired or upgraded, you put that off. You figure out what you can get done in the short term rather than taking long-term decisions for your soil health on the farm. You have to start working with your input suppliers and landlords and lenders to try to find terms that you can reasonably put a crop in the ground this spring.
▶ 1:18:48Senator Scott: There's -- those decisions are very hard but they are not just one year decisions. Those decisions have implications long-term for our farm so that is the concern we have. >> based on your service with the iowa farmers union, are these challenges common to others in iowa and around the country and do these premium increases compound the escalating cost that you already face as farmers in today's
▶ 1:19:21Senator Scott: Economy? >> I think it's very, very clear that farmers around the state, farmers all around the country are facing some huge issues that deal with increased input prices , lower commodity prices, all these things, all those affordability issues come harder when you are trying to discover your family with affordable coverage. >> let me ask you, Mr.
▶ 1:19:49Senator Scott: Jacobs, as a small business person and most especially a small business that is rooted in your community, you interact with a lot of customers. What kind of premium increases have you and your employees in restaurants that you own and operate been seeing? Are other small businesses facing the same kinds of increased premiums?
▶ 1:20:18Senator Scott: >> I mean, I think -- are we talking about health care premiums or are we just talking about in general? Health care premiums, we are seeing -- I can tell you what I am seeing for myself and we are looking at like personally for my health care plan for next year, it is almost $6,000 a year, $5,000 a year rise and that is for the exact same health care that I already have, no change.
▶ 1:20:47Senator Scott: >> those and costs are added to other costs that are also increasing for your business? >> correct. We see cost of goods have gone up. You know, we have an american chinese restaurant in cost of goods from china right now are not exactly cheap so I think we are -- cost of goods, labor, ranch, I mean, everything continues to go up.
▶ 1:21:16Senator Scott: This is just another thing that continues to go up. >> and inevitably, some of those costs are passed on to your customers, correct? >> yes. We can pass costs on the customers but if they are facing the same problems we are facing as business owners, the first thing that is going to go is going to be outside spending, spending at restaurants and shop -- coffee shops, spending at bars that are predominantly independently owned and are the gateways to communities and how
▶ 1:21:47Senator Scott: We learn about each other. I mean, food is the way we learn and it is said to me to think that we are going to do so many independent, small restaurants around the country. >> you think we will lose small restaurants? >> without a doubt. First thing people are going to cut out of their spending is going to be going out to eat. >> how about other small businesses? Do you think they will be affected? >> I think all small -- I think you are looking at all small businesses. Retail is the same thing.
▶ 1:22:17Senator Scott: My wife has a small retail shop and I think, you know, you are going to see, you know, just people are not going to be spending that kind of money. >> Mr. lehman, thinking back to when your wife was diagnosed with breast cancer, what would have happened if she had been forced to wait a year for enrolling in coverage and what kind of expense is what your family have faced?
▶ 1:22:52Senator Scott: >> that is a really good question, senator. We feel very grateful that her situation was identified early and we were able to take quick action because we had affordable coverage. That left us with a lot of peace of mind in a very stressful time in our families life. So that is so important and something we value so much about the care she received.
▶ 1:23:23Senator Scott: >> Mr. jacobs, you have spoken about the pharmaceuticals that you take in as a result of your symptoms of the disease that you have come a kennedys disease.
▶ 1:23:39Senator Scott: How does the aca plan --them up to pay for any of my monthly prescriptions is 15 >> -- even the basic generics would be six times that.
▶ 1:23:58Senator Scott: I am just guessing because I have not had a chance to actually -- I have not had health insurance without kennedy's disease so I mean, I pay -- the maximum I pay right now is $15 in prescription and I have five different prescriptions. >> thank you very much. I appreciate your being here and I apologize to the panel. I may have to leave early. I have a veterans affairs committee hearing that coincides with this one.
▶ 1:24:27Senator Scott: So apologies if I have to leave early. >> senator blumenthal? >> the purpose of this hearing is to define the problem, ok? So Mr. jacobs, Mr. lehman, you both realize the enhanced subsidies is something democrats passed. It was supposed to be temporary for covid, correct? Democrats set them to expire at the end of this year. Mr. jacobs, do you realize that? Mr. lehman, do you realize that?
▶ 1:24:59Senator Scott: >> I see the reality in the website when I try to sign a framing policy, facing huge increases. >> what is going away are the temporary covid enhanced subsidies that the democrats set to expire at the end of 2025 because the pandemic is over. The vast majority of people on these changes don't lose subsidies. They just go back to the original obama subsidy rates.
▶ 1:25:28Senator Scott: There is a small group and you may be part of this group, that makes over 4% of the poverty line. They never got subsidies under the original obamacare. The cap subsidies -- gap subsidies, those are the people whose premiums are doubling and tripling. Those are the people I want to help, truthfully. Government caused these premiums to skyrocket and we are part of government.
▶ 1:25:55Senator Scott: We may do something to help people while we start fixing a current a broken system. I want to use west of your own experiences here. We will start with you, Mr. jacobs. This is with interviews with our staff. This year, we got a call plan and you paid $14,529 and you did not qualify for any subsidy whatsoever because your income level is high enough.
▶ 1:26:24Senator Scott: For a person not to have a qualified -- again, I will not place you in terms of what your income is but it's over 400% so next year, you are going to be paying 19,000, ok? That is not because the enhanced subsidies -- he did not qualify. That is because obamacare is causing the rates of insurance to go from 10 19,000. The plan you are saying you need is obamacare is a faulty design that is driving premiums, causing it to skyrocket.
▶ 1:26:55Senator Scott: >> I am not complaining about my lack of subsidies. I am here because I think it's important that my team members still have those subsidies. >> I started a small business in 1979. I am older than you so I have the experience that worked a whole lot better than obamacare and the reason I ran in 2010 was I knew that obamacare would literally not work. It would be destructive and it has been. 1979, I started a small business. We had a dozen employees. We had group coverage.
▶ 1:27:27Senator Scott: I changed insurance every year. I have the freedom to do that. We went from may be $100 deductible to someone who came in and said we will sell you the same insurance. No deductibles and then they raised our rates 40% the next year. We went to self with specific coverage. I bought it all. It was not perfect but it worked a whole lot better and I was able to provide insurance for my company.
▶ 1:27:55Senator Scott: I did notice in the interview, you said or I -- I think this is an article. You are paying for -- paying $7,000 a month for your roughly 75 employees which is great so you are -- so I do the math on that so as an employer, you are kicking in $100 per month per employee and that turns out to be 62.5 cents per hour. I appreciate you doing that.
▶ 1:28:22Senator Scott: 2013, I was providing 505,000 -- $.50 for our health care because I did not have the affordable care act to offload my employees into awful coverage. I had to compete with the small business. I could buy insurance and that was before obamacare so again, obamacare is the problem here. It screwed things up for you. You need to open up your eyes on that. Mr. lehman? So last year, you did get a subsidy. Correct?
▶ 1:28:55Senator Scott: This year, you are not getting a subsidy. Which would imply that with the enhanced subsidies, there was no income limit so you got -- he probably got -- he had to pay up to 8.5% of your wage and then you got a subsidy above that, correct? >> I am not sure of those exact figures, senator. I would have to dig through a little bit. >> that is what the enhanced subsidies did.
▶ 1:29:27Senator Scott: It made people pay at least half -- 8.5% of the income for premiums and then you got subsidies after that. You are over 400% of income so again, the reason the gear premiums are skyrocketing from your net premium, your net premium from 6000 to over 18,000 is because democrats scheduled that enhanced premium as a temporary subsidy that is going away.
▶ 1:29:55Senator Scott: Again, I have got some sympathy for people who are lured into retirement during the pandemic and now are stuck with these obamacare plans that you are actually lucky. You know, we have got people in wisconsin, people close to retirement and they don't qualify for medicare, paying $36,000 a year because of obamacare. When I was buying health care, you had an insurance policy as a 15,000 deductible, that is a catastrophic plan.
▶ 1:30:26Senator Scott: Those things were dirt cheap but you know, people are paying 25,000 because of obamacare. Why would you want to perpetuate that incredibly failed system other than I guess governments providing a lot of subsidies for people. I know people love running from the federal government which we can't afford, by the way. >> let me illustrate if I could, before obamacare, of course, we have lots of ups and downs in the farm economy, right?
▶ 1:30:56Senator Scott: And we wanted to very closely where we have bankruptcies and try to find out what is causing them through our universities, concern hotline, many sources trying to identify why do people go into bankruptcies? For so many of those farmers, before obamacare, the reason they went into bankruptcy might not have been because of prices or regulation. Those are serious issues.
▶ 1:31:24Senator Scott: But they had a catastrophic illness and it took everything they got just to try to get care in order to keep the farm going, and many times they could not and they had to take bankruptcy. >> what I am trying to convince you of, there is a far better solution to address our problem than obamacare. Obamacare does not cover that perfectly. If you do not sign up during the period and you have a pre-existing condition and you start having expenses for that, you cannot sign up until the next period.
▶ 1:31:55Senator Scott: You know, in maine, you got to sign up immediately and they cover that stuff. In wisconsin, again, I will use the high-risk pool. We would get people, by the way, like yourself that has a pre-existing condition. You cannot ask these questions. You hire them and put them on your insurance and they get lasered out. A high risk pool that would immediately qualify for the high-risk pool and we could structure the plan exactly -- almost exactly like our own coverage. Same premiums. The high-risk pool is funded by everybody who had insurance.
▶ 1:32:25Senator Scott: It worked. It worked beautifully until obamacare came and blew it all up. Now, we have got this awful system that has driven premiums on average 169% increase on the exchanges, state-by-state, 4.3 times the rate of inflation. I am probably not going to convince you today but I want you to look at the numbers. The ranking member have been right in terms of that one individual.
▶ 1:32:51Senator Scott: His net premium might have doubled or tripled because with the enhanced subsidies, probably only having to pay 2% of his income and when he goes back to obamacare's original subsidies, they are not going away. Of the 24 million people, about six of those are probably phantom. But the 24 million people, 22 million are going to continue to be subsidized under the original obamacare plan.
▶ 1:33:19Senator Scott: If you don't like that, if you think your insurance rates are too high, blame obamacare. Do not blame the fact that the enhanced subsidies are not continuing. People like you who are about 400%, facing $36,000, I want to help them but it does not have to cost a couple hundred billion dollars. It could cost a couple billion but we have to start fixing the system because this is unsustainable. Senator moreno. >> thank you, Mr. chairman.
▶ 1:33:45Senator Scott: I thought maybe we could use some props so we can keep the conversation on track. Imagine we are going to have this conversation first. This conversation, which I think is what you are voting on tomorrow, is a very narrow conversation. This is about the bride in an obamacare covid bonus subsidies. That is the boat tomorrow, correct? We are not voting on obamacare writ large.
▶ 1:34:09Senator Scott: We are voting on strictly -- >> voting to make sure we are still not on -- still on the same page. That is what we are voting on? Because it can be very confusing to be talking about. >> voting on extending the health care tax credit that were adopted in the covid era. A good idea. I wish we had not put a limit on it. >> just to be clear.
▶ 1:34:39Senator Scott: We are talking about this and I just want to make sure we level set for everybody here because I am about solving problems. I am not going to be somebody who says we should let americans , especially, suffer because of incompetence of politicians so we are going to talk about just these subsidies, ok? Nothing else, no other conversation. Mr. brandon, I asked you a question. Our veterans health care costs going to go down whether we do this or not? >> no.
▶ 1:35:09Senator Scott: >> so if you are a veteran in your co-pay is going up or your deductible is going up or your quality of service is going down, are you affected by this? >> not at all. >> if you are a union worker that makes great jeeps in toledo, ohio, are you affected by this? >> no. >> your union health plan goes up 15, 20%. Your co-pay goes up, your deductible goes up. If we do something about this, does that help the union working in toledo, ohio? >> no.
▶ 1:35:40Senator Scott: >> how about people who used to work for me in private companies? It's really hard. It is really hard. You want to do something and this world that is tough, start a small business. In my case, if I went out and got health care for my employees and those premiums, are they affected by this resolution of this issue? >> no. >> if I am on medicare, mi affected by this? >> no.
▶ 1:36:09Senator Scott: >> if I am with luke on medicaid , is he affected by this? Like no. >> so you are talking about a very narrow set of americans that are affected by this. The disappointing part is the only issue the democrats want to fix is for probably something that affects 5%, 6%, 7% of americans.
▶ 1:36:35Senator Scott: Why don't we, and I asked this to my democrat colleague because the rest of the colleagues are not here, why wouldn't we fix it for all americans? Americans deserve a government that fights for them every single day to deliver them affordable health care but we are only talking about a very narrow group of incentives. Let's shift the conversation over here. How do we get affordable health care? Mr.
▶ 1:37:03Senator Scott: White, who said the following? Premiums will drop in the average family will see premiums go down by $2500 a year in 2014. >> president obama. >> is that a lot? >> yes. >> if we ask this intrepid staff to go hunt down an american citizen, would we find an average family whose premiums have gone down in the last 11 years by $2500 a year? Works I cannot think of it.
▶ 1:37:34Senator Scott: Not in the individual market. Any market, by the way. >> probably any market. >> the ranking member mentioned a family making $66,000 a year. There is no scenario on earth where they saved $2500 a year. >> none. >> ok. You said something that was interesting, Mr. right. You said that obamacare has been fantastic for health insurance companies. I want to quantify that.
▶ 1:37:58Senator Scott: Would it surprise you to know that the stock price of the united health care in 2015 was $115 a share in last year, it croaked -- it closed at a record high? That is pretty good for a business guy, right? Five times the value of your business. Let me put that in further numbers. United health care used to be 108 billion dollars enterprise. Back in 2015. That is a big company. 100 plus billion dollars.
▶ 1:38:26Senator Scott: Would it surprise you that it is almost a 600 billion dollar company? >> not at all. >> now, those numbers are so outrageously high, it does not mean anything. Ford motor company is about a $50 billion company. It is 12 times the size of ford motor company. In fact, it is pretty much every car company, tesla excluded, combined. United health care in 10 years because of obamacare.
▶ 1:38:56Senator Scott: Never have we enriched companies the way that obamacare has enriched health insurance companies at the cost to the american people, and it is a disgrace so let's go through solutions. Mr. white, are people in this country illegally eligible for the obamacare exchange? They are not eligible.
▶ 1:39:22Senator Scott: They cannot go get obamacare premium -- they cannot get a medicaid card but they can go into it our hospitals and get treated at no charge, correct? >> correct. >> when you own a business and you give part of your services for free, is it really free or do you really charge everybody else? >> it gets charged to everyone else.
▶ 1:39:44Senator Scott: >> so 10, 12, 15 million people who enter this country illegally put -- presumably a lot less healthy than american citizens would have massively increase the cost of our health care, is that true? Works by billions and billions of dollars. >> a big transfer payment from american citizens to not americans. Would transparency make a difference? If you came into one of my dealerships and I did not tell you what the price of the car was until 16 days after he took the liberty, would you do that deal? >> no, sir.
▶ 1:40:16Senator Scott: >> do you think transparency matters, knowing, by the way, how much an mri is? In fact, you are a pretty good expert, Mr. bracken. I am going to play pickle ball tomorrow morning and there's pretty good odds that I could hurt my knee. I hope not. What would it cost me to get an mri? >> I just pay cash for an mri last year in naples, florida, and it was about 230 dollars. >> if I went to my health care plan that I get for the united state senate, my deductible I think is like 12 grand.
▶ 1:40:48Senator Scott: What would I pay for the mri at the hospital? I pay the full vote and pay my deductible which would be how much? >> I suspect they would have negotiated a really good deal for you. >> I paid $1200 and I could have gotten it for 300 dollars. Now, when will I know? Sorry about your knee. It's going to be $1200. >> they will ask for your insurance card first and that will dictate your price and then as you mention, you will get a letter in the mail after the fact my telling you what you owe after you have had the service.
▶ 1:41:19Senator Scott: >> I had a root canal which by the way, I do not recommend you do that as an elective surgery, and I got a bill for $4600 because again, they bill the insurance company and the insurance company declined it. For Mr. jacobs and Mr. lehman, would association health care plans work? Would you love to be able to go to costco or amazon or walmart and be able to buy competitive health care? Where you can empower yourself and your employees and businesses to shop?
▶ 1:41:50Senator Scott: Would that save money? Yes or no, real quick. >> 30% premium reduction. >> so why don't we do that? Why don't we do association health plan since all this problem for everybody? Should we do that? Why don't we do that? Let's make that happen and let's not shut down the government over this. Let's work together to solve the entire problem. Let's do that. Let's show the american people we are able to govern.
▶ 1:42:18Senator Scott: Can you imagine if tomorrow morning, the american people woke up and went, my god, the leaders and washington, D.C. are able to govern and solve our problems. Would having most favored nation status for drugs lower the cost of health care, yes or no? >> yes. Critics would that help? Reduce the administrative costs? Would that help? Tort reform? Why don't we do all these things ?
▶ 1:42:46Senator Scott: Instead what we do is we do performative outrage and manage failure of votes that we go on and say all kinds of nonsense knowing there's no chance your bill is passing tomorrow. Do you want it to pass or do you just want to have a political issue so you can continue to get reelected? It is disgusting what happens in this town.
▶ 1:43:12Senator Scott: It's why I ran for office and I hope we can find it in our hearts to actually solve this problem for the american people but the lack of seriousness as displayed by the fact that you called a hearing and not one democrat other than the ranking member is even here to listen to this testimony, I empathize. I am a small business owner. That's solve this problem. Let's make that happen. >> thank you, senator. On pbm reform, I am all for it.
▶ 1:43:43Senator Scott: We come up with reform that did promise not pushing and there is something wrong there that I have not quite figured out. We will start a second round and I will go first. Do we have the chart? >> I am going to have to leave but I would like to just enter into the record a couple of documents. >> did you want to ask a couple of questions? >> I have just a very brief explanation. >> I will let you go first. >> ok, thank you.
▶ 1:44:12Senator Scott: >> I would like to enter into the record two studies, one of them and analysis. The other is internal from -- an article from the journal of american medical association. Essentially, they show that insurance premiums and out-of-pocket health care spending were growing even faster in the years leading up to the aca than they are today.
▶ 1:44:38Senator Scott: So I would like to put into the record the kfs analysis in the article on out-of-pocket medical expenses from the journal of the american medical association indicating the rise in health care prices has slowed in fact since the aca's enactment and you know, I might just say I noticed the senator is gone. He asked me a bunch of questions but evidently, they don't want to hear the answers.
▶ 1:45:09Senator Scott: Yes, we can do a lot to improve the health care system and yes, I would love to do it. We face a deadline for the aca health care tax credits and in the homes of americans and in the small businesses, they have to deal with reality.
▶ 1:45:31Senator Scott: They cannot pay for health care with a speech from the united states senators. They need these health care tax subsidies extended and a note that as much as we have heard about how bad the aca is, no one has talked about the other bill that we are going to vote on tomorrow.
▶ 1:45:59Senator Scott: Which would provide for health savings accounts as a substitute for extending the subsidies. Which do nothing to make health care affordable for people who face kennedys disease or cancer, and whose expenses are going to go away beyond the 2000 or some other number of dollars that
▶ 1:46:32Senator Scott: Would be put up -- put into these hsa's. So regrettably, we do not have time to overhaul the american health care system in the next two weeks before americans face the sticker shock of these rising prices. I think the chairman for his courtesy in allowing me to enter these articles. >> without objection.
▶ 1:46:59Senator Scott: I will say again, what we are talking about of the subsidies, extending those for 22 million of the 24 million, those people just go to obamacare's original subsidy schedule. They are not going away.
▶ 1:47:13Senator Scott: They go back to the way obamacare was originally designed, talking about 1.6 million people and I got a feeling he is one of them that enjoyed a subsidy during the pandemic that is going away and that has got to be some real sticker shock and I agree with senator moreno. Mr. jacobs is completely unaffected by that person. I understand his business but he has high enough income. He does not have the subsidy. He does not like the 5000 dollar increases previously and I agree.
▶ 1:47:43Senator Scott: That is not because of the enhanced subsidies going away. That is because of the awful design of obamacare driving up these premiums. But we will enter those things into the record. So enjoy your next hearing. >> do we have that thing on the screen? The insurance companies? Ok. Mr. white, this is a chart I wish I would have used last year. This confirms what you're talking about.
▶ 1:48:14Senator Scott: The stock price increase for march 2010 through november 2025 of the seven largest health companies pretty well proves your point. Do you want to comment on this? >> yes, sir. I think if you start looking at the numbers, what is happening here, again, the government created a very expensive product and then said to people like christopher, we will help you subsidize it.
▶ 1:48:40Senator Scott: We will give you a subsidy and we will pay the insurance company for your access to that plan and the subsidy increases dollar for dollar when the premium goes up so the incentive is to increase the premium to get more subsidies and that is what happened. So when you look at the gross margin precis a enrollee, it's about $1800 this year.
▶ 1:49:06Senator Scott: That increase from $60 in 2014 -- it went straight through the roof as the subsidies increased and that gets reflected in the stock price. Some of those stock prices are up by 1500, 1600, 1800, 2000 percent. >> they are not going to drive up the stock price if their earnings potential is now growing because of obamacare.
▶ 1:49:29Senator Scott: Can you think in the current system, can you think of any incentive throughout health care to actually drive costs down? Again, of the players in there, the insurance companies, quite honestly, there should be incentive for government but as you can see, they just want to throw a few hundred billion dollars more at a failed system. Is there any incentive? >> the insurers are driving costs up across the board.
▶ 1:49:59Senator Scott: They make more money when the costs are higher because you have learned subsidies directly to the premiums so everyone has an interest in colluding to get the costs as high as possible. >> everyone is getting a cut and you're better off getting a cut of something like a house. He would rather sell in a one million-dollar house than a 100,000 dollar house. >> it's like getting a commission.
▶ 1:50:20Senator Scott: >> I was on cnbc yesterday morning and right before me, they had the -- the retiring ceo of walmart and it's a perfect segue to me because I am seeing the solution here is consumerism. Mr. jacobs, I mean, you are competing in the marketplace, right? If you could be a monopoly and if you are a business person, you would love to be a monopoly. You can charge a lot higher prices. Your customer service won't have to be that good. Your food is not even had to taste that good.
▶ 1:50:49Senator Scott: But because of competition, you have to be really good. You cannot afford to charge more than what customers will pay. These customers will look into all different kinds of restaurants. Your quality has to be good. People will show up and you better have some pretty pleasant waiters and waitresses, too. That is what a free market system does. That is what we have driven out of health care. You have $.10 of every dollar spent on health care being paid by patients.
▶ 1:51:18Senator Scott: The rest is through third-party payer, insurance carrier with the government. That is basically a, right? So I hear colleagues say we have to pass laws for your price transparency and they have. It has not worked because, ok, you see we don't care. You are going in there and your insurance coverage is going to cover that mri and quite honestly, you would rather have it costs a lot so you burn through your deductible so you get in the actual insurance sometimes.
▶ 1:51:50Senator Scott: Again, there is no incentive to lower costs and I cannot think -- I don't think you can drive competition through a government law. The only way to do it is bring consumerism back. I will defend the baby step, the republican alternative will be tomorrow -- I would like to have something far more robust but it's at least moving in the direction of bringing consumerism back in. Would you kind of agree that consumerism is really what we need here?
▶ 1:52:22Senator Scott: >> I think if you don't have consumerism, then nobody has to be responsive to the patient. Right now, health care under obamacare is between the insurance company and the federal government. In the patient is left off to the side. If your denial rate is 35% like it is with united health care, it doesn't matter because government is still going to shovel money into your big business. If you only have one choice for that specialist, you need a network? Too bad.
▶ 1:52:51Senator Scott: You cannot go anywhere else so if you don't have consumerism, you are left out in the cold and that is what is happening to millions of americans. >> I wanted you to talk about because I don't think in this debate, we talk about enough. The match. In particular, talk about how that has driven scams, things like provider taxes and fees, it is not health care. The federal government has to spend.
▶ 1:53:17Senator Scott: But it's also doing something pretty nasty about incentivizing providers to focus more on those able-bodied adults at the expense of a autistic child. To talk about that -- but then also, just talk about because of that how hospitals, how states have literally structured their budgets around that which is why we could not really fix that in the one to beautiful bill.
▶ 1:53:41Senator Scott: I mean, there was just too many constituencies, too many states, republican states hammering on republican senators saying we need that match. We need those scam dollars flowing out of the federal government. >> so I think a great example of this is in arkansas, using the story of Mr. staley. In arkansas, the state share for kids with disabilities is the state has to put up about $.30 and then the federal government will match $.70.
▶ 1:54:14Senator Scott: But for a bebop -- able-bodied expansion adults, the state put that $.10 in the federal government matches it nine cents. So Mr. staley's son is on a waiting list -- $.90, sorry. Mr. staley's son is on a waiting list for 11 years but it costs the same total cost of the taxpayer for two able-bodied adults as one severely disabled child.
▶ 1:54:40Senator Scott: So that one severely disabled child waits 11 years but the same taxpayer cost, the two able-bodied adults go to the front of the line every time. It is incredibly perverse. >> isn't part of the problem particularly the biden administration allowed providers to charge commercial rates for medicaid patients so we are paying double and triple sometime versus even medicare rates. Just talk about that dynamic. >> absolutely.
▶ 1:55:06Senator Scott: Understate directed payments, you could have politically favored providers that got permission from the state and federal government to charge exorbitant rates far above commercial rates, far above medicare rates so what that effectively said was to that provider was it's better for you to treat a medicaid patient than it is to treat an elderly person on medicare or sometimes even to treat somebody with commercial insurance so again, the federal government is picking winners and losers but medicaid expansion under obamacare has
▶ 1:55:37Senator Scott: Made everyone else a loser including the truly needy. >> when did you first really discover this perverse incentive? I would imagine you kind of signed up for home health care and you probably were somewhat -- why can't we get on it? When did this dawn on you? What medicaid expansion was doing and how it impacted your family?
▶ 1:55:57Senator Scott: >> so when we first expanded medicaid in arkansas, I called my state senator and I said I want to know that when you guys do this, you are not going to do anything to harm these populations. At the time, I did not know anything about it. I never worked on health care policy. So all I wanted to know about was the waiver program which was just basic medicaid services and my state senator said, don't worry. We got that covered. You are going to be fine.
▶ 1:56:28Senator Scott: Well, that part was fine but what I did not know at the time and what I did not really know until some number of years shortly before we applied for a waiver was that the waiver -- that the waiting list had grown and that there were folks who had been on it as long as 13 years. In our state.
▶ 1:56:48Senator Scott: And in fact, there is one case of a young woman named skyler who had a traumatic brain injury that resulted in neurological damage and she spent almost her entire life on that waiting list and very nearly died on it, passed away when she was 18 years old, sadly, but we see this time and time again where people are literally dying on this waiting lists. Quotes are single adults on the waiting list?
▶ 1:57:18Senator Scott: Do they get to the front of the line? >> they go to the front of the line. >> able-bodied adults go to the front of the line as disabled children languish without those services for a decade or more? >> that is accurate. >> and I want to delve a little bit more in terms of what you had -- when was your daughter diagnosed with leukemia? >> november 2015. 2015.
▶ 1:57:45Senator Scott: So this was already obamacare in place kid what kind of insurance did you have before obamacare? >> yes, so when I jumped out of my corporate job to my consulting firm, we did a lot of searching in the pre-aca marketplace to make sure I could afford to take care of my family as I did this and what we found was a tremendous number of plans were available.
▶ 1:58:07Senator Scott: So many in fact, I had to bring in consultants to tell me what would be best for my family and we settled on a plan that charges may be $800 a month in premiums and the max amount was -- max amount out of pocket. They said -- I said they are going to socialize the product market and this thing is going to explode. There is no way we are going to keep our doctor.
▶ 1:58:34Senator Scott: Within a matter of weeks in 2014 when it went into effect -- >> do you remember what you are paying for that? >> 3500 on the backend and with obamacare, it went almost $2000 right away and this is before cancer. The backend was about 17 thousand. I mean, it was really high. Fortunately, we did not have that because we did not have cancer in the house.
▶ 1:58:54Senator Scott: When the cancer hit my daughter, things just went totally crazy and then as I said twice -- >> you did not have a real narrow network. >> we were able to take -- we could go almost anywhere. And afterwards, no way. We could not go anywhere. >> we started getting in never come out of network. The thing was definitely evolving. I'm not saying the whole thing was perfect but you could always go out of network.
▶ 1:59:23Senator Scott: You had a higher out-of-pocket maximum but you could go. Did you have that option with obamacare? >> no. >> he could not even go outside a network and pay more. You were just not using that. >> right. Johns hopkins said no. We thought, well, maybe we'll go to children's hospital in philadelphia and they said no. We been tried at one point to -- because we knew we were going to get less care than we wanted, we said, well, let's move to texas.
▶ 1:59:53Senator Scott: No state income tax. Texas children's hospital, maybe we can do that. We found out there was not a single obamacare plan to buy that covered pediatric cancer care at texas children's hospital and that is the same way, pretty much to this day. >> you talked about that obamacare was famous for squeezing out or not allowing cancer centers into networks which I actually find pretty shocking. I did not realize that.
▶ 2:00:25Senator Scott: Cracks absolutely. When he think about providing access to people who need it most like his daughter, you have the best quality providers shut out of network. In my written testimony, I cite an example where 97% of local doctors are out of network in some chicago obamacare plans. >> senator. >> thank you. And thanks for our witnesses. Hopefully, if I am here, that means you are at the end of your time here and it is almost over and we are at the end of the dais.
▶ 2:00:56Senator Scott: I wanted to ask a little bit, Mr. lehman, you know, I understand you are a farmer, fellow midwesterner. I am from michigan and I understand that you depend on the aca or obamacare. 25% of farmers across the country depend on it because they don't have, you know, employer-provided insurance. And I also understand that your wife dealt with breast cancer.
▶ 2:01:24Senator Scott: And I'm glad to hear she got past that. My mother had breast cancer. When I was a young child and I think the thing that people miss with the aca and the fundamental thing that he did, no one would say it was perfect. I don't know a single person who thinks it is perfect. It is a band-aid on a broken system, but it required coverage for people with pre-existing conditions.
▶ 2:01:51Senator Scott: For my own family, my mom had the cancer, breast cancer, double miss empty me at 31 years old so when she did not have employer-provided insurance and needed to go on the marketplace before obamacare, they could just charge her or whatever they wanted because she happens to have had this cancer. So my brother and I were in school. We did not know she went 5.5 years with no insurance.
▶ 2:02:18Senator Scott: And then ultimately walked into an er years later and was diagnosed with stage four ovarian cancer and I think about what kind of preventive care, you know, a doctor saying, hey, you had breast cancer really young. You should get genetic testing or have a hysterectomy. These are real issues that affect real people in real ways.
▶ 2:02:40Senator Scott: Again, obamacare is far from perfect but that guarantee that they cannot gouge you because of what you happen to be born with or have I think was a fundamental thing I think most americans believe in today. I understand that your plan, you have got to notice that your plan is going to go up precipitously here. Can you tell us about what is about to happen? We are in december. January 1, this all changes, and that I want to just ask you how it affects like you get notice of this bill.
▶ 2:03:13Senator Scott: How is it changing your own thinking about your own life and what you can and cannot do? >> yes. As best as we can tell in order to get a similar plan that we had in 2025, the cost for us to have that same plan in 2026 is going to more than double. That is an incredible cost for our family budget, for our farm budget.
▶ 2:03:39Senator Scott: Performance right now are trying to make all sorts of decisions because commodity prices are low, because of chaotic trade situation we are in, higher input prices. We have experienced usda services that have been curtailed at our local level and other places. All of these things have made a real crisis for a lot of our farmers so finding ways to deal with that, we don't have too many options.
▶ 2:04:07Senator Scott: Farmers will buy less equipment will not make the necessary upgrades in equipment that they need to. They will look at their input suppliers and they will decide what can we do to get through just this year even though that means long-term soil health issues on our farm? It means negotiating with landlords and bankers to try to find the best terms to deal with all of this, just to get a plan to put it in the ground.
▶ 2:04:36Senator Scott: >> I am on the ag committee and farmers are under incredible stress. We have a big, you know, bailout package that is now being approved and you do not bail out farmers when things are going right, right? It is a problem. I would note that michigan farmers, we do specialty crops. We are not like iowa and we are excluded from that deal so our farmers are really small and medium-size farmers are really suffering. I understand you are fifth-generation or fourth-generation farmer.
▶ 2:05:04Senator Scott: What does it mean, you know, like you know, for your kid? Your family? Are they thinking about farming and how does health care, you know, since you are not going to get employer-provided insurance if you are a farmer, how does that factor into a decision to have the next generation on the farm? >> I am lucky enough that my son is taking steps in helping out on the farm a lot in the sixth generation on our farm.
▶ 2:05:33Senator Scott: You have to be very smart to figure out the plan that can bring the next generation on the farm and I am not alone. I am 57 years old. Sorry, 58 years old and 57 is the average age of the iowa farmer. We desperately need young and beginning farmers to come back to the ground and we have a lot of innovative, driven, smart folks who want to farm.
▶ 2:06:07Senator Scott: Making this investment so that there can be some security for young farmers, taking that risk to come to their farm, whether it is to feed their community or through local and regional foods, or whether it is to grow commodities on their family operation, that is an investment worth making.
▶ 2:06:29Senator Scott: And that's where these making affordable health care available to that generation makes all the difference, whether you can encourage the next generation to come back to the farm. >> I think, you know, we obviously have a big vote this week and obviously, it is a point of contention between democrats and republicans but I have never seen an issue like health care where I don't know a single person who thinks it is going right. Right?
▶ 2:07:02Senator Scott: Every single person feels like we are paying too much for our health care. And it is screaming out for just some real significant change in again, obamacare was a band-aid on an open wound of millions and millions of people not having care and I think it helped a lot of people get care but it is not the long-term plan.
▶ 2:07:27Senator Scott: And in enough time, if washington was healthy and we were engaging with each other, we would say it doesn't matter what state we are from. Democrats and republicans are hearing on both sides of this dais are hearing like it is not working for people and instead of just kind of what we would say at the pentagon, admiring the problem and talking about the problem from every different angle, we would lock ourselves in a room, kick out the media and twitter and whatever and just figure out how we do health care in a way that is worthy of
▶ 2:07:59Senator Scott: The country that we all represent. So I'm ready to do that with anybody. Literally anyone who wants to work on that. But in the meantime, I am not going to take the band-aid away and say to people, sure, go ahead, just double your price of health care next year. So thank you for being here and thank you to all the witnesses.
▶ 2:08:19Senator Scott: I hope in another time, we can actually, you know, have a conversation, not admiring the problem of health care and talking about how bad it is, because it is bad, but actually doing our jobs and figuring out a solution so thank you for your time for everybody. Appreciate it. I yelled back. >> thanks for attending the hearing, for requesting to be on it. The title of this hearing is to define the problem and the principles used to solve it, ok?
▶ 2:08:46Senator Scott: Just so you are aware in terms of your witnesses here, both are about 400% of the poverty line. Mr. jacobs never got an enhanced subsidy. His premiums going up from 14,005 hundred to 19,000, not because we are not experiencing subsidies but because of the underlying problem how the exchange premiums are skyrocketing. Mr. lehman did get a subsidy last year. He will not get this one this year because it is about 400%. I completely agree.
▶ 2:09:20Senator Scott: These premiums are being caused by the faulty design of obamacare and that is being caused by government. People who got lured into retirement. A lot of people were during the pandemic. We are going to help you with health care. The rug is being pulled out from under. It's not 340 million people. It is not even 24 million people on the exchange. It's about 1.6 million people.
▶ 2:09:42Senator Scott: And I am more than willing -- I got a plan scored of providing subsidies for those people but here's my question for you, Mr. lehman. What percent of your income do you think you ought to be required to pay for health insurance before a subsidy will kick in? To help you out a little bit, the enhanced subsidies allowed for that she only had to pay 8.5%.
▶ 2:10:13Senator Scott: Obamacare's original design was 9.5%. Obamacare -- if you are at 400% of the enhanced subsidies, you had to pay 8.5% and then he bought a subsidy under the original design. Most of those people in the exchange are going to just go back to the original obamacare design at 9.5% so what would be a fair rate for people who under obamacare -- 400%, you got to fend for yourself.
▶ 2:10:39Senator Scott: What percent of your income do you think you and your wife ought to pay before you get a subsidy from the american taxpayer? >> senator johnson, it is a good question. Like a lot of farms, ours is complicated. Our situation is complicated. My wife when she got laid off decided to go back to school so she could provide care to people in their homes. Now, we agreed to take on some student debt because of that.
▶ 2:11:07Senator Scott: Because we knew that there would be the benefits of being employed in serving people in that regard so it is a little bit complicated when you bring in all these factors about student loans. Chris everybody has got a situation. >> I agree. >> in terms of policymaking, when obamacare did it, they say, ok, we are not going to subsidize you.
▶ 2:11:32Senator Scott: 400% or below, 9.5% so again, you have got to simplify this stuff so I'm going, if you are about 400%, we are not going to get a subsidy. I want to help you folks out and transition when we can hopefully fix the problem here. I would love to do it in good faith. What would be the percentage -- I need something. What do you think would be a fair percentage for you and your wife to pay of your income? I know it is not that easy. It is complicated as it can get with the farm.
▶ 2:12:00Senator Scott: By the way, my parents grew up on farms. I realize -- there is a great book, by the way. Land rich, cash poor. Read that. It is depressing. It is showing -- so listen, I am completely sympathetic that way. But again, I am looking for kind of a ballpark percentage. What do you think?
▶ 2:12:27Senator Scott: Once I do not have an exact figure and I know that these issues are very complicated. We know that there are real issues in concentration in our rural areas, whether it is fertilizer or meatpacking or our health care system and we do need to work on those things in order to create more fairness for our farmers out there but my conversation tomorrow is with a health care advisor who is going to help me choose what is the best plan for us and our farm, what is most economic for my
▶ 2:12:59Senator Scott: Farm and I am afraid that conversation will be pretty simple and I will not be able to get into all of the other issues about why I am here. I got to figure out how to pay for this thing. >> again, all I am trying to convince you of is the reason premiums are so skyhigh is just -- I can describe it to a certain extent. Prior to obamacare, we have things like high risk pools. And by the way, pre-existing conditions were not covered perfectly under obamacare.
▶ 2:13:30Senator Scott: We talked about that earlier. In wisconsin, you had to wait six months and buy insurance or everything else but that condition was exempted until a six month waiting period and then picked it up so again, it wasn't perfect. Like it's kind of lost in the conversation here. But everybody had insurance. Every insurance plan kicked in a little percentage to fund that. It's a better system.
▶ 2:13:59Senator Scott: They took eight different conditions and you got put into and you got your care paid for but it was spread over everybody. Obamacare has a very small percentage of americans and prior to the pandemic, it was 12 million americans on the exchanges. That small group of americans were forced to pay the costs of people with pre-existing conditions.
▶ 2:14:22Senator Scott: It was an enormous cost and it cost premiums to skyrocket plus when government is your customer , you know you can charge them just about anything that is what happened. I know I am probably not going to convince you. If I do, let us know. Announce it to the media. We have to repair the damage done by obamacare and transition to a system that actually works and does put consumers in charge.
▶ 2:14:46Senator Scott: That is -- there is no government program, no government law you can pass that is going to force transparency and going to make people actually bring down their prices and improve their quality of service. That is what consumers do. Adam smith, wealth of nations. That is what a free market system does and obamacare is not that much anyway, I will ask Mr. jacobs, what do you think would be a fair percentage? I guess we are not closing this thing out. >> I am not a policymaker.
▶ 2:15:17Senator Scott: >> but you are a business guy. >> sure, but I am also a chef. It's not necessarily -- we are not necessarily the smartest men in the room all the time. >> obamacare said you had to pay 9.5%, 84%, 400% poverty line. Obamacare said you have to pay 9.5% of your salary so if you are about 400% and never contemplated to get a subsidy on obamacare, if we decide to give you a subsidy, what do you think? >> I think I am the wrong person to ask this question.
▶ 2:15:47Senator Scott: I am going to be -- I would rather pay more so people who make less can have better health care. Looks ok. >> I am the wrong person to ask that question two. >> thanks for coming. >> thank you. Interesting to say. Thank you, Mr. chairman and thanks for waiting for me. I am coming from another briefing. >> I did not. I kept droning on. >> it worked. I know the panel has been here for a long time. I will give each of you some questions for the record but I just want to ask you, Mr.
▶ 2:16:15Senator Scott: White, nice to see you again. I think I saw you recently and another hearing and you got the question I am about to give to the panel but let me just ask you this. Here's an idea to lower health care costs. What do you think about exempting health care spending, consumer spending from taxes? What if we just said no taxes on health care spending? You premiums, tax free. Your deductible, tax-free. Your out-of-pocket expenses, tax-free. We already have, as Mr.
▶ 2:16:43Senator Scott: White pointed out in the hearing recently, we have in place an approximation of this if you itemize as an individual, if you itemize taxes and spend more than 7.5% of your adjusted gross input -- income on out-of-pocket expenses, you can deduct everything above 7.5 percent if you itemize.
▶ 2:17:04Senator Scott: Of course, businesses and big corporations get to deduct all of their spending so why not allow individuals to deduct everything? What do you think? Let's just go down the panel and then I will give you questions for the record. Go ahead. Do you want to pay less taxes on your health care? That is the question. Say yes to that. Maybe somebody will. >> I am afraid I do not have the expertise of the tax in front of me.
▶ 2:17:35Senator Scott: Thank you. >> ok, Mr. jacobs. >> I'm going to follow this gentleman right here. I am not the guy to ask this question two. Quick's senator hawley, I think it is a great idea because then you are providing fairness to everyone, whether I pay out of pocket or a premium or have some alternative, you are treating at the same and government should be fair. It should not pick winners and losers. Great idea. >> Mr.
▶ 2:17:58Senator Scott: White, you said the other day, and I thought this was a great point, taxes make everything more expensive so if you want to reduce costs, why not the working taxes on health care which are exorbitant? But go ahead. I will let you fill in. >> my answer has not changed. Great idea. We should do it. >> great. Quick to senator, I have four kids so I am in favor of lower taxes. >> very good. >> it would have made a big difference in my life. >> all right.
▶ 2:18:26Senator Scott: Well, thank you all for being here and for your testimony and expertise. I will have questions for the record but I am sure you are eager to catch your breath. Thank you for waiting for me. >> you want to take a shot at getting $20 from senator hawley just by saying yes, it's a great idea? Apparently not. I think what that -- there's more ways to skin a cat here. I think republicans have a lot of good ideas on how to do this.
▶ 2:18:53Senator Scott: The question is how do you implement it when you have obamacare's structure still there and he start bleeding people off of obamacare? That will make it even worse for those exchanges. You kind of got to start from the ground up, truthfully but also understand we are really talking about a pretty narrow percentage of the american public on the exchanges which has screwed so many things up. How do you bust up some of these? Truthfully, we got to figure out antitrust. They consolidated.
▶ 2:19:23Senator Scott: We need to restore competition again. That is my main point. The main principle, you need competitive markets. You need consumers worried about how much they are paying for things and I think you just -- the senator mentioned the surgeon of oklahoma, cash on the barrel head. His rates for surgery were 10% over what hospitals were charging. That is remarkable. That is what is possible if we can bring consumers back into this.
▶ 2:19:50Senator Scott: I appreciate the fact that senator slotkin wants to work with us. If that is true, happy to do it but we really do need the other side to admit they have a problem. Not saying this is the greatest thing since sliced bread. Just throw hundreds of billions of dollars at it. That is not a solution and not something I can support. But I truly do appreciate all your witnesses. I will give you, if you do it briefly, we will start with Mr. briggs.
▶ 2:20:16Senator Scott: Do you have a final comment that is bringing that you got to get out there? >> I do and it comes down to this question of fairness. I was training to -- trying to claim to my family, -- I say, well, imagine you go to the grocery store last week and bought your favorite candy bar, snickers bar and you have been doing this for a while and this week like every other time he went, you went there and it would cost $1.50. Go to the cash register and you pay for it.
▶ 2:20:46Senator Scott: Elon musk is behind you and he buys a candy bar. Someone from the lower middle class -- the way we saw health care in this country at least under obama care is as follows. You go to the grocery store and there are no prices on anything. You take the candy bar to the cash register and say, look, there's no prices. What happened? What are you going to charge me for this? The cash -- the cashier said show me your tax income. Here taxable income. That will tell you how much I am going to charge you for it.
▶ 2:21:16Senator Scott: So for me, it is five dollars. For the guy behind me, it is 1000. For someone behind me, two dollars. What you no longer can suffer under anymore is the equity of fair cost. What we really need is the equality of real prices and that is the huge difference. I have no idea how much I am going to be charged when I bring my cancer ridden daughter in for any treatments, big or small and this is the problem. Equity of fair cost will destroy us.
▶ 2:21:45Senator Scott: Equality of pricing is the answer. >> having consumers to do this that literally solves the problems. >> thank you, senator. I would say that every dollar that is spent on an able-bodied adult is a dollar that cannot be spent on the truly needy so as congress looks to address this, one of the most important things that has to be looked at is the fact that we have these perverse incentives that were created by obamacare.
▶ 2:22:14Senator Scott: And unless that is taking care of, the truly needy will continue to be at the back of the line. >> states wanted to bring in an able-bodied adults? Fine. You will get paid the same amount as you will give her a disabled child.
▶ 2:22:35Senator Scott: Unfortunately because hospitals and states have based their budget around that, the scam -- we could get that done so we still have that in equity and perverse incentive where able-bodied adults are at the front of the line rather than the back of the line. >> this bill that you will vote on tomorrow, the legislation, it's a step in the right direction and I would blow it out and make it massive.
▶ 2:23:01Senator Scott: It would change significantly the dynamic in play right now where we are empowering insurers over consumers. If you give the money to consumers, you change the dynamic in the market and force insurers, doctors, hospitals, everyone else to compete for the money that the consumer controls. If you do that, prices come down, access opens up, people start getting better care.
▶ 2:23:30Senator Scott: That would be the biggest change he could make that changes this dynamic, the unsustainable trajectory we are on where costs are ever-increasing and subsidies are going through the roof, insurers are empowered, and consumers are at the back of the line. >> because that is the solution, the medical establishment and cartel, they would hate that. They are going to do everything they can to lobby against it because the system that we have right now is working beautifully for them, not working so good for american people.
▶ 2:24:01Senator Scott: >> I think it is really important to look at what are solutions that help everyone? Right now, we are talking about a vote on these covid credits that really empowers insurers to improve their stock price and put a bunch of money in the bank but leaves folks with pre-existing conditions with massive deductibles, massive out-of-pocket limits, and no access to providers who can actually help them tonight and what we need to focus on is how do we help the truly needy?
▶ 2:24:31Senator Scott: How do we have more choice and empowerment of patient so they can get the care they want and need to get healthy? >> Mr. jacobs? >> first of all, thank you for having us here. I think this is incredibly important and I think you are right. I think it is broken. But while you are trying to fix it, don't take away the things that are helping americans. Don't take away the subsidies. >> let me just quickly -- I will let you. Chris I thought this was my final -- >> are not taking away the subsidies.
▶ 2:25:02Senator Scott: For the vast majority of people, those subsidies remain in place. The enhanced subsidies would go away, you are right, but do not mislead people about all the subsidies are going away. The vast majority are staying in place. I apologize for interrupting but I think it is important. >> I know you are talking about a narrow population but that is still 24 million people, a lot of people. I think those people truly need the help. Thank you.
▶ 2:25:26Senator Scott: >> a huge thank you to the chairperson and the ranking member on the entire committee for letting us share about our farm and about our communities. We do want to work together to address concentration and consolidation that really impacts our rural areas. That is an important area for us to continue to work together on.
▶ 2:25:47Senator Scott: I just want to emphasize that the affordable care act works when I can invest more in my neighbors can invest more of their time and resources on the farm. It works when we can bring the next generation onto the farm and it works when we can improve and change jobs in rural america freely. So again, that does not happen when health care is not affordable. So making affordable options for folks is externally important.
▶ 2:26:15Senator Scott: A huge thank you to the committee. Thank you, senator johnson. >> I really appreciate all of you coming here and enjoying the exchange. This was kind of the abnormal hearing. I appreciate that. I agree with you. We have to make health care more affordable. Obamacare did not do that. It just did not do that.
▶ 2:26:36Senator Scott: Again, 24 million people, six of them are probably phantoms so that is costing us, according to the pentagon, $27 billion per year of fraudulent payments into the insurance companies. That's one of the reasons the stock price is so high. People are being prosecuted. This is an make-believe. Probably about 18 million on the exchange. 16 million plus will go into the old obamacare subsidies. You don't like that, don't complain to obama.
▶ 2:27:05Senator Scott: We are talking about 1.6 million people and I would like to help those people. I wish we could have got that into the republican alternative here but I am already talking to democrat senators about working on that. It is going to fail tomorrow, unfortunately. We know the result. I don't like this place either. But again, truly appreciate it. I hope you enjoy the testimony. The record for this hearing will remain.
▶ 2:27:35Senator Scott: -- remain open for 15 days for submission of statements to the record. I will say we will be here under summer 25th to take it. Get in there before that. This hearing is adjourned. [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. Visit ncicap.org]