Madam Chairwoman, Ranking Member Dreier, and members of the Committee, thank you for the opportunity to testify today on this legislation.
The American people have spoken: they do not want the federal government involved in their personal health care and they do not want a bill that spends over a $1 trillion, raises more than one-half trillion dollars in new taxes, cuts Medicare by more than one-half trillion dollars and increases Americans’ health insurance premiums. Yet, that is exactly what will happen if the House passes the Senate Democrats’ health care bill and the Reconciliation Act tomorrow.
The American people have rejected this bill precisely because it taxes too much, spends too much and increases premiums too much. With a total of $569.2 billion in new taxes, these bills represent the single largest tax increase in American history. Just what are those taxes? They are:
- A first-time ever tax on health care benefits, commonly referred to as the “Cadillac tax,” which raises taxes on Americans by $32 billion but which will grow rapidly in the next decade.
- A new Medicare tax on wages, self-employment income and certain investment income that increases taxes by $210.2 billion.
- A new tax on health insurance providers, which will undoubtedly be passed onto consumers in the form of higher premiums, and totals $60.1 billion.
- A new employer mandate tax that will crush small businesses, reduce wages and kill American jobs by directly increasing taxes on employers by $52 billion and indirectly by much more, as employers are forced to spend even more than they do today on health benefits, even though unemployment is already nearly 10 percent.
- A new tax on drug manufacturers and importers of $27 billion, which will be passed on to consumers.
- A new tax on medical device manufacturers and importers of $20 billion, which also will be passed on to consumers.
- New requirements on information reporting on payments to corporations that raises $17.1 billion.
- A new, higher floor for medical expense deductions for people with high-medical bills that raises $15.2 billion in taxes.
- A new individual mandate tax, which forces Americans to purchase health care they don’t want and can’t afford or else pay this tax. This raises $17 billion and an earlier analysis of this provision by the Joint Committee on Taxation said nearly half of that will be paid for by Americans earning less than 300 percent of the federal poverty limit, which is $66,150 for a family of four. This, like so many of the other provisions I mentioned, clearly violates the President’s pledge that no family with an income of less than $250,000 would pay higher taxes.
- There are also new limits on Flexible Spending Accounts in cafeteria plans that raise $13 billion in new taxes.
- There is an elimination of the deduction for expenses allocable to Medicare Part D subsidy in order to raise tax revenues by $4.5 billion.
- Other restrictions on Health Savings Accounts, Health Reimbursement Arrangements and Flexible Spending Accounts increase taxes by $5 billion.
- There is even a new set of taxes on tanning services to the tune of $2.7 billion.
- A limit to the deductibility of compensation paid to employees of certain health insurance providers that increases taxes by $600 million. It is a small number, but I thought it was refreshing to mention one that is in the millions of dollars rather than billions.
- But that’s not all. There is a modification of section 833 treatment of certain health organizations that raises $400 million in new taxes.
- These bills deny the use of “black liquor” for the cellulosic bio-fuel producer credit, which raises $23.6 billion in tax revenues.
- Then there is codifying economic substance doctrine that increases taxes by $4.5 billion.
- And, JCT tells us there are other “revenue” effects of $60.3 billion.
Again, these 20 different categories of tax increase total $569.2 billion.
These bills cut Medicare by nearly the same amount – a whopping $523.5 billion in cuts to a program that provides health care to our nation’s elderly and the disabled. When the Senate proposed cuts that were 12 percent smaller, the President’s own Medicare Actuaries predicted that, “providers might end their participation in the program (possibly jeopardizing access to care for beneficiaries).” But today we are being asked to send to the floor a bill that cuts even deeper into Medicare and the benefits it provides. Just what are these cuts? They are:
- $202.3 billion in cuts to seniors’ Medicare health plans, including massive cuts targeting the extra benefits and reduced cost-sharing seniors receive through Medicare Advantage. CBO predicted a similar policy would result in 4.8 million fewer seniors will be enrolled in these plans in 2019, while the independent Medicare Payment Advisory Commission predicted a similar policy would result 1 in 5 seniors no longer being able to enroll in Medicare Advantage as a result of this policy.
- $156.6 billion in cuts to inpatient and outpatient hospital services, inpatient rehabilitation facilities, long-term care hospitals, inpatient psychiatric hospitals, skilled nursing facilities, Ambulatory Surgical Centers, hospice, ambulances, dialysis facilities, labs and durable medical equipment suppliers.
- $39.7 billion in cuts to the home health providers.
- $22.1 billion in additional cuts to hospitals by slashing reimbursements designed to assist hospitals that serve low-income patients.
- $20.7 billion in cuts to the Medicare Improvement Fund, which had been intended to fund improvements to seniors’ Medicare benefits, not to finance a new entitlement.
- $13.3 billion in yet-to-be-determined Medicare cuts from the hands of an unelected federal board.
- $2.3 billion in cuts to imaging reimbursements when seniors have MRIs, CT scans, and other procedures.
- $800 million in cuts to power wheelchair suppliers.
- $65.7 billion in money taken from seniors in the form of higher premiums and additional cuts to Medicare beneficiaries and providers.
The $569.2 billion in new taxes and the $523.5 billion in cuts to Medicare to fund a new entitlement program are unacceptable, especially when you consider these bills will increase the deficit – once the cost of the Medicare doctor fix is factored in – and increase the cost of health insurance for Americans.
Simply put, the Democrats’ bill will not only ruin our health care system, but the tax increases will ruin our economy.
Madame Chairman, I would like to close by making a few simple requests.
First, I urge you not to make these bills in order. They are deeply flawed and ought not to be brought to the Floor for a vote.
Second, if you insist on making them in order, I ask that you wait until we have missing but critical information about them, such as the impact on health insurance premiums and on national health spending.
With respect to both the Senate bill and the one the House passed, CBO agreed both would raise the cost of health insurance and the CMS actuary agreed both would increase national health spending.
Before we vote on these bills, then, I think we ought to know if the “fixes” to be passed by reconciliation have worked or if they had made the situation worse.
Third, if you insist on moving this to the Floor for possible consideration tomorrow, I request that you not use the so-called Slaughter Solution and instead allow a clear and clean vote on each measure; the American public deserves to know where there elected officials stand and not to have them hide behind a procedural vote.
Thank you for the opportunity to testify today.