Senate Democrats

Democrats are Investing in America’s Future: Health Care

Senate Democrats are committed to repairing the economic crisis inherited from Republicans, but to do so we must make critical investments in our nation’s future – including reform of our broken health care system.  

For our economy to truly recover and prosper we must help middle-class families and businesses cope with skyrocketing costs.  That is why Democrats are defending the priorities of the American people, passing significant legislation that will create American jobs, investing in America’s future, and working to provide affordable health coverage for all Americans that improves quality and value and makes common sense fixes to reduce costs.  These Democratic initiatives address inherited problems that have been neglected over the past eight years.

Eight Years of Inaction Contributed to High Costs and a Rising Number of Uninsured

Skyrocketing health care costs are contributing to the current economic crisis, weighing heavily on family, business and government budgets.  As highlighted in a report recently released at HealthReform.gov, “The Costs of Inaction,” inherited flaws in our health care system have led to higher health care costs, reduced access to care, and inconsistent quality of care throughout the country.[1] 

High health care costs.  In 2007, the United States spent approximately $2.2 trillion on health care, about $7,421 per person or 16.2 percent of the Gross Domestic Product (GDP).[2]  According to the Congressional Budget Office (CBO), federal spending on Medicare and Medicaid is projected to rise from 4 percent of GDP in 2007 to 19 percent of GDP in 2082.[3]

Rising health care costs are not only affecting federal health expenditures.  Health insurance premiums have doubled in the past eight years and, when combined with increasing out-of-pocket costs like co-payments and deductibles, more Americans than ever struggle to get the health care they need.[4]  Increasing medical costs contribute to bankruptcies, foreclosures, and burden American businesses trying to remain competitive in the global economy. [5],[6],[7]  

Reduced access to care.  In the past eight years, an additional 6.9 million Americans have lost their health insurance coverage, and 45.7 million Americans are now uninsured.[8]  During the past two years, approximately 87 million people were uninsured at some point.[9]  Furthermore, nearly 160 million Americans with employer-based health insurance are only a pink slip away from losing their coverage.  Every one percentage point increase in the unemployment rate is associated with an increase of more than one million uninsured.[10]  Yet, having a job does not guarantee access to health insurance, as more than 80 percent of the uninsured are in working families.[11]  And, being uninsured has direct, negative consequences on Americans’ health; according to a report by the Urban Institute, 22,000 uninsured adults die prematurely each year as a direct result of their lack of insurance.[12]

Inconsistent quality of care.  Even for those Americans fortunate to have health insurance, our health care system does not provide the consistent, quality care they need and deserve, nor does it accurately reflect the $2.2 trillion annual investment we make.  In 2004, the last year for which complete data are available, the United States ranked 29th in the world in infant mortality.[13]  Furthermore, the U.S. infant mortality rate remained essentially unchanged between 2000 – 2005, at approximately 6.86 infant deaths per 1,000 live births.[14]  Our health care system also leaves much to be desired in coordinating care for patients with chronic diseases.  For example, a recent report found that if every state achieved the diabetes control levels of the top four best performing states, at least 39,000 fewer patients would have been admitted to the hospital for uncontrolled diabetes, savings as much as $126.7 million annually.[15]

Senate Democrats are Improving America’s Health Care System

In the 111th Congress, Senate Democrats have already passed significant legislation that will create American jobs, invest in America’s future, and address the skyrocketing costs of health care.  These Democratic initiatives address inherited problems that have been neglected over the past eight years.

Children’s Health Insurance Program.  Earlier this year, Senate Democrats passed the Children’s Health Insurance Program Reauthorization Act of 2009 (CHIPRA), which reauthorized the Children’s Health Insurance Program (CHIP) to continue and expand access to health insurance for lower-income children. The legislation was signed into law by President Obama (P.L. 111-3) on February 4, 2009.  The CHIP legislation will allow 6.7 million children to continue to receive health care coverage and extends coverage to 4.1 million children who are currently uninsured.  The legislation also provides a new option for states to remove the 5-year waiting period for legal immigrant children and pregnant women, providing those who qualify with immediate access to Medicaid and CHIP.

American Recovery and Reinvestment Act and the Omnibus Appropriations Act of 2009.  In February, Congress enacted the American Recovery and Reinvestment Act of 2009(Recovery Act) (P.L . 111-5) to help our nation recover from the current recession and make long-term investments to strengthen our economy.  The Recovery Act provides crucial funding to states facing budget shortfalls due to the severe economic downturn.  Prior to the passage of this legislation, at least 34 states had begun to close their budget gaps by eliminating or reducing critical social services to citizens, including health care services.[16]  The funding provided by the Recovery Act has allowed states to maintain their programs, saved jobs, and created new opportunities for work.

In March, Senate Democrats passed the Omnibus Appropriations Act of 2009 (Omnibus), (P.L. 111-8), which provided the funding necessary to continue government services throughout Fiscal Year 2009, including for the Department of Health and Human Services.

Taken together, these legislative initiatives ensure continuity of care, expand health care coverage to Americans in need, and take steps towards making health care more affordable. Given the strain that health care costs place on American families and businesses, making critical investments in our nation’s health care system will strengthen the economy and help lead to long-term economic prosperity.

Senate Democrats have tried to meet the growing need for affordable health insurance with increased funding to provide health care to a wide-range of Americans, including:

·         The elderly.  Medicare was created in 1965 to provide health insurance for people age 65 and older.  The Omnibus provides $45 million for outreach to seniors to help these newly-eligible individuals understand which Medicare benefits are available to them.

·         The recently unemployed.  Sixty-one percent of the non-elderly population receives health insurance through an employer.[17]  The Recovery Act provides temporary subsidies to individuals recently laid off so that they can maintain their health coverage.  Some recently unemployed individuals will be eligible for a nine-month subsidy that will cover 65 percent of the cost of maintaining their employer-sponsored coverage (also known as COBRA).

·         High-risk individuals.  Some individuals are denied affordable health care coverage because of pre-existing medical conditions.  The Omnibus provides $75 million for state high-risk insurance pools to provide affordable health insurance to nearly 200,000 individuals with high-risk medical conditions.

·         Rural communities.  The Omnibus provides $289 million for programs designed to help rural communities address their unique health care challenges.  These funds will support more than 1,200 small, rural hospitals which will serve more than 700,000 rural residents in underserved communities.

·         Vulnerable communities.  The Omnibus provides $2.2 billion for the Community Health Centers program, which includes community health centers, migrant health centers, and health care centers for the homeless.  These organizations provide primary health care and social services for those without other access to care.  The Recovery Act included an additional $500 million for the operation of the nation’s Community Health Centers, and an additional $1.5 billion for construction and equipment at these vital centers.

Health information technology. Investments in health information technology (IT) have the potential to save billions of dollars by reducing health care costs and improving the quality of care for all Americans.  The Recovery Act includes $19 billion for the modernization and implementation of health IT.  This investment will provide long-term dividends including more efficient and effective care as additional health care providers utilize interoperable electronic health records.

Investments in critical research.  The Recovery Act and Omnibus directed a total of more than $40 billion to the National Institutes of Health for funding biomedical research in areas such as cancer, Alzheimer’s, heart disease, diabetes and stem cells.  These investments could lead to new cures and treatments, and will address debilitating health conditions that prevent our workforce from reaching optimal productivity. 

Training for health professionals. Medical professionals are in high demand and short supply.  This problem is likely to grow as medical personnel reach retirement age, and the aging population demands increased care.  The Recovery Act provides $500 million to address the workforce shortages in health professions.  The Omnibus directs $842 million to train doctors and other medical personnel providing improved access to critical health care services.

Preventive care to protect individuals from chronic disease. The Recovery Act includes over $650 million for prevention and wellness programs to keep our communities healthy and productive.  The Omnibus includes an additional $882 million, including $25 million to provide colorectal cancer screening and follow-up care.  An additional $63.4 million was included for efforts to prevent autism and support those families affected by autism.

Senate Democrats are Committed to Reforming Our Health Care System

This week, the Senate is considering the Fiscal Year 2010 Budget Resolution (S.Con.Res.13).  The Budget Resolution reflects the American people’s priorities for health care and lays the groundwork for our nation’s long-term economic security.  Our budget builds on investments already made during this Congress and sets the stage for reforming our health care system to ensure fiscal stability, economic strength, and the well-being of all Americans. 

Supporting health care reform. The President’s budget and the Budget Resolution acknowledge that we have a moral imperative to accomplish fiscally-responsible health care reform this year, and recent economic events have demonstrated we also have an economic incentive to do so.  The Congressional Budget Office (CBO) estimates that, absent changes in federal law, total spending on health care will rise from 16 percent of gross domestic product (GDP) in 2007 to 25 percent in 2025, and close to 50 percent in 2082.[18]  The Budget Resolution recognizes that this course is not sustainable, and includes a deficit-neutral reserve fund to facilitate the passage of legislation that modernizes our health care system, mirroring the President’s eight principles for health reform and focusing on our common goals of constraining costs, expanding access, and improving quality.  Inclusion of this reserve fund provides flexibility for authorizing Committees to consider reform proposals and determine the appropriate spending level and offsets required to get control of runaway health care spending, restore fiscal sustainability to federal health programs, and make health care affordable for families, businesses, and governments.

Substantial improvements to our health care system may require upfront investments, and delivery system reforms may not yield immediate savings.  Recognizing this, the Budget Resolution provides necessary flexibility, allowing health reform legislation to be fully offset only over the 2009 to 2019 period, and provides that such legislation be fiscally sustainable over the long-term.

Promoting community health centers. Federally Qualified Health Centers (FQHCs), including community health centers, migrant health centers, and health care centers for the homeless, provide primary health care and social services for Americans who do not have other access to care.  In 2007, more than 16 million people received care through these health centers, 91 percent of whom have incomes below 200 percent of the federal poverty level.  The Budget Resolution recognizes the critical role these centers play in our health care safety net, and building on the $2.5 billion investment included in the American Recovery and Reinvestment Act (P.L. 111-5), provides $2.9 billion for FQHCs in 2010, a $798 million increase above the 2009 enacted level.

Investing in biomedical research.  The National Institutes of Health (NIH) are the leading source of biomedical research and play an essential role in improving human health and extending lives.  The 27 Institutes and Centers provide leadership and financial support to researchers in every state and throughout the world.  Despite the prominence and importance of the NIH, however, lack of sufficient funding during the previous Administration threatens the pace of biomedical research and, if not addressed, could delay cures and treatments now within reach.  The Budget Resolution builds on the $40 billion investment in the NIH included in the Recovery Act and the Omnibus by supporting funding for the NIH.

Improving access to health care professionals.  Health care professionals are in high demand and short supply, a problem that is likely to become worse due to an aging workforce and an aging population demanding increased care.  The Budget Resolution refocuses attention on this critical need by prioritizing programs to ensure Americans have access to health professionals.

·         The Budget Resolution supports the Health Professions program, which trains health professionals to respond to the needs of special and underserved populations as well as to increase the racial and ethnic diversity of the health care workforce.

·         The National Health Service Corps also plays an important role in maintaining our health care safety net by placing primary health care providers in our nation’s underserved communities, and the Budget Resolution prioritizes this important work.

·         Absent Executive or Congressional action, physicians face a substantial cut in Medicare reimbursement in 2010, which causes some physicians to questions their participation in this critical program.  The Budget Resolution provides a deficit-neutral reserve fund to avoid these scheduled cuts in physician reimbursement, and to encourage physicians to train in primary care, ensuring an adequate supply of primary care residents and physicians. 

Strengthening the Food and Drug Administration.  Members of Congress and the public have been increasingly concerned about the ability of the Food and Drug Administration (FDA) to ensure the safety of the food, prescription drugs, and medical devices sold in the United States.  The Budget Resolution includes a deficit-neutral reserve fund to facilitate the consideration of legislation giving the FDA authority to regulate products and to assess user fees on manufacturers or importers of those products, to cover the cost of FDA’s regulatory activities. 

Lowering prescription drug prices. American consumers pay the highest prices for prescription drugs in the world, and these high prices reduce access to life-saving medications, particularly for the millions of Americans who lack prescription drug coverage.  The Budget Resolution recognizes the need to help Americans access lower-cost prescription drugs, and allows use of a reserve fund for deficit-neutral legislation permitting the safe importation of prescription drugs approved by the FDA, from a specified list of countries. 

Investing in child nutrition.  The Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) provides grant funding to states to support healthy nutrition options for mothers and their children and infants.  In addition to WIC, the School Breakfast and the National School Lunch Programs, the Summer Food Service Program (SFSP), and the Child and Adult Care Food Program (CACFP) provide critical assistance to children and families in need.  Recognizing the importance of child nutrition and the WIC programs, particularly during times of economic distress, the Budget Resolution includes a reserve fund to allow for the reauthorization of these important programs. 

Building on Success, Committed to Reform

Senate Democrats are committed to repairing the economy through long-term investments, including in health care, in order to address inherited problems that have been neglected over the past eight years.  Senate Democrats will build on the success of the Children’s Health Insurance Program Reauthorization Act of 2009 (P.L. 111-3), American Recovery and Reinvestment Act of 2009 (P.L . 111-5), and the Omnibus Appropriations Act of 2009,(P.L. 111-8) by passing a fiscally responsible budget plan that addresses the fiscal and economic crises inherited from the Bush Administration and lays the foundation for the long-term economic security of the United States.  The Budget Resolution sets the stage for future legislation to be considered by the 111th Congress, and it is built on the belief that quality, affordable, accessible health care is necessary for all Americans and is critical to our long-term economic recovery. 



[1]      HealthReform.gov, “The Costs of Inaction: the Urgent Need for Health Reform” (March 2009), available at http://www.healthreform.gov/reports/inaction/inactionreportprintmarch2009.pdf.

[2]      Office of the Actuary, Centers for Medicare and Medicaid Service, National Health Expenditures 2007 Highlights.  U.S. Department of Health and Human Services, available at http://www.cms.hhs.gov/NationalHealthExpendData/downloads/highlights.pdf.

[3]      P.R. Orzag, “Growth in Health Care Costs: Statement before the Committee on the Budget” January 31, 2008, available at http://www.cbo.gov/doc.cfm?index=8948.

[4]      The average annual premium cost for family health coverage in 2008 was $12,608, compared with $6,438 in 200. Kaiser Family Foundation and Health Research and Educational Trust, “Employer Health Benefits 2008″(Menlo Park, CA), Kaiser Family Foundation (2008), available at http://ehbs.kff.org/pdf/7790.pdf.

[5]      C.T. Robertson, R. Egelhof, and M. Hoke, “Get Sick, Get Out: The Medical Causes of Home Foreclosures,” Health Matrix, 18 (2008): 65-105, available at http://works.bepress.com/christopher_robertson/2.

[6]      Elizabeth Warren, “Sick and Broke,” Washington Post, February 9, 2005.

[7]      Len M. Nichols and Sarah Axeen, “Employer Health Costs in a Global Economy: A Competitive Disadvantage for U.S. Firms,” New American Foundation (May 2008).

[8]     U.S. Census Bureau, Health Insurance Coverage: 2007, available at http://www.census.gov/hhes/www/hlthins/hlthin07/hlth07asc.html.

[9]      Families USA, “Americans at Risk: One in Three Uninsured,” (March 2009), available at http://www.familiesusa.org/assets/pdfs/americans-at-risk.pdf).

[10]   Stan Dorn et al., “Medicaid, SCHIP, and Economic Downturn: Policy Challenges and Policy Responses,” Kaiser Commission on Medicaid and the Uninsured (April 2008), available at http://www.kff.org/medicaid/upload/7770.pdf.

[11]    Kaiser Family Foundation, “The Uninsured:  A Primer, Key Facts About Americans Without Health Insurance,” (October 2008) available at http://www.kff.org/uninsured/upload/7451-04.pdf

[12]    Stan Dorn, “Uninsured and Dying Because of It: Updating the Institute of Medicine Analysis on the Impact of Uninsured on Mortality,” (January 2008) available at http://www.urban.org/UploadedPDF/411588_uninsured_dying.pdf.

[13]    Marian F. MacDorman and T.J. Mathews, “Recent Trends in Infant Mortality in the United States,” (October 2008) available at http://www.cdc.gov/nchs/data/databriefs/db09.htm#ref5.

[14]    Ibid.

[15]    Agency for Healthcare Research and Quality, “2007 National Healthcare Quality Report” (February 2008) available at http://www.ahrq.gov/qual/nhqr07/nhqr07.pdf.  

[16]    Center to Budget and Policy Priorities, “An Update on State Budget Cuts,” (March 13, 2009) available at http://www.cbpp.org/cms/?fa=view&id=1214.

[17]    Kaiser Commission on Medicaid and the Uninsured, “The COBRA Subsidy and Health Insurance for the Unemployed,” (March 2009) available at http://www.kff.org/uninsured/upload/7875.pdf.

[18]   Congressional Budget Office, “Budget Options Volume I: Health Care” (December 2008), available at http://cbo.gov/ftpdocs/99xx/doc9925/12-18-HealthOptions.pdf

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