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Olympia Snowe

Senate Health Reform Reconciliation
By U.S. Senator Olympia J. Snowe (R-Maine)
Mar 26, 2010 - 12:30:03 AM

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"Having been fully immersed in advancing the issue of health care reform for more than a year, I cannot help but arrive at the culmination of this vital debate with a sense of profound disappointment in considering what might have been, rather than what has actually occurred with respect to one of the foremost domestic matters of our time.

Since the Senate Finance Committee vote on October 13, I have expressed very real and substantial concerns regarding the provisions included in the Senate-passed bill that became law this week, and the reconciliation package that we voted on today regrettably only further deepens these concerns. In fact, at a time when our nation is struggling to emerge from the deepest and greatest recession since World War II, it makes no sense that this bill will force small businesses with more than 50 workers to pay $2,000 per employee in penalties if they do not offer health insurance coverage - that's a 167 percent increase over the $750 penalty in the bill that was just signed into law.

Moreover, while the Finance bill did not increase any Medicare taxes, the Senate bill that is now law included $87 billion in Medicare taxes that disproportionately harm small businesses because they apply to the income those businesses would normally reinvest. Plain and simple, this 0.9 percentage point increase in Medicare payroll taxes is a job killer as it essentially takes away one percentage point of capital from the very small business owners who are the most likely to employ between 20 and 250 employees -- all at a moment when we should be looking for ways to help bring capital into small businesses.

And if that weren't bad enough, reconciliation compounds that mistake with a 3.8 percent Medicare tax that is unprecedented because it is imposing a payroll tax on investment income. Ultimately, reform will impose a grand total of $210 billion in new Medicare taxes, which will actually grow worse over time as the income thresholds set in this bill aren't indexed for inflation. That's a ticking time bomb that, like the AMT, will ensnare more people as incomes rise over the next decade. Do we seriously believe this is the time to be instituting these breathtaking increases on the backs of our small businesses, and without even so much as a single hearing in the House or Senate? The National Federation of Independent Businesses doesn't think so, saying on March 21, 'We couldn't have been clearer how damaging this bill will be to America's small businesses and the economic recovery of this country.'

And perhaps most disturbingly, we don't even have answers from the Congressional Budget Office (CBO) to many of the most fundamental questions on the minds of the American people, which I posed to CBO back in December - such as, what would be the true impact for small businesses? What provisions would justify and facilitate premium increases, and to what extent would other provisions limit that outcome?

We don't even have substantiation whether the provisions of this reform will make health care costs higher, or lower. In fact, there is actually a presumption in the bill that costs may well go up. It is telling that the excise tax on high cost insurance in this reconciliation contains a failsafe provision referred to as a 'health cost adjustment percentage' that automatically raises the thresholds to higher numbers if, as a House Democratic summary of reconciliation puts it, '...CBO is wrong in its forecast of the premium inflation rate between now and 2018.' “But given the bill already provides for thresholds as high as $13,890 for individuals and $36,450 excluding vision and dental benefits before triggering the tax and those thresholds are significantly more generous than in the Senate-passed bill, why exactly would we still require a medical inflator adjuster for 2018 - eight years from now? What exactly does that say about reformers' confidence in reining in future medical costs? It says that they simply don't know.

As I have said, clearly the status quo is unacceptable. That is why it is all the more unfortunate that somehow the hard work of legislating and deliberating our differences was cast aside in favor of either-or propositions - when we could have instead risen to meet this monumental challenge with the best possible solution to strengthening America's health security today, and for the generations to come. I profoundly regret this process provided far too few opportunities to forge legislation that would stand not just the test of our time, but for all time. We could have done better and we should have done better."

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