I thank you for that kind introduction and for your interest in hearing what I have to say.

Just two years ago in April I had the privilege of meeting with you to discuss health care reform. Looking back, I'm reminded that the more things change, the more they remain the same. Or, in the immortal words of my friend from Michigan, our former President Gerald Ford, "Things are more like they are now than they have ever been."

I say that because we are still wrestling with the very same issues we tried to address in the context of broad health care reform.

One is the cost of Medicare and Medicaid.

Much was made of the Medicare Trustees' Report issued last week. The harsh fact of the matter is that we've known for some time that Part A of Medicare needs fixing. What it needs is more of an outpatient procedure, as opposed to the major surgery proposed by the House leadership. The majority proposes to go well beyond the savings needed to ensure Medicare's solvency in order to pay for a tax cut.

With respect to Medicaid, the majority is proposing to reduce the state contribution to Medicaid with no guarantees that the taxpayer's money will go to pay for health care. In short, the federal government share of the total tab will go up -- but the states will be able to use the money for roads or prisons or whatever other uses they see fit.

The second issue is the power of insurance companies, and the role of managed care. I've seen statistics that roughly 70 percent of Americans covered by employer-provided health insurance are now enrolled in managed care. And I know that you and all specialists have particular concerns about managed care.

We're now seeing a generation of Americans who have grown up without having the traditional relationship with a family doctor. These are people with a very different concept of the role of specialists in their health care.

Is managed care necessarily evil? No, but today it is a necessary evil, in the sense that it is a reality of the marketplace. Managed care should not mean lower quality of treatment, and it should not mean that insurance companies substitute their judgments for those of qualified health professionals and physicians.

Let me give you one simple example. I've heard from a number of my constituents that mothers and their newborn babies have been forced by their insurers to leave the hospital early, over the objections of their doctors. I've introduced a modest little bill that simply says that mothers and newborns can't be discharged without their consent and the consent of a qualified health professional. I hold the old-fashioned view that managed care should not be dictated care.

Managed care is also a larger and larger component of Medicaid. One look at this morning's Washington Post tells you what experiments like TennCare can mean to specialists in the medical profession.

The third issue we continue to confront is the most important to the broad American public: how do we make affordable health insurance more widely available to the American people?

This year, instead of looking at the whole health care system, we are looking at a small incremental health insurance reform bill. The Senate passed such a bill by a vote of 100 to 0. It has some fairly straightforward portability provisions including guaranteed access and renewal, limitations on pre-existing conditions, increased access to the individual market, and purchasing pools for small businesses.

Unfortunately, my friends in the House are not content to stop there. They have chosen to add several special interest provisions that weigh this bill down and may make it impossible to pass.

One of these provisions concerns MEWAs -- an acronym that means Multiple Employer Welfare Arrangements. These are devices designed to allow small businesses to form pools in order to group purchase health insurance.

Unfortunately, the these provisions are drafted in a way that would increase premiums for many small employers. They would allow these purchasing pools to be exempt from state laws that require policies to cover certain medical treatments; millions of consumers would suddenly discover their health plans no longer cover critical medical services. And they would weaken current regulation of the pooling arrangements for solvency and other consumer protections.

Another special provision involves Medical Savings Accounts (MSAs). MSAs would permit individuals and families with high deductible health care coverage to maintain tax-favored savings accounts.

MSAs present some fairly serious policy problems.

They have the potential to undermine and fragment the insurance market. Because the healthiest and wealthiest individuals would have incentives to choose the MSA option, less healthy or less wealthy individuals would be left to remain in plans faced with ever increasing premiums, while at the same time the premiums for the MSA plans would fall.

MSAs also create the wrong incentives for personal and family health. The high deductible coverage associated with MSAs may lead to delayed care and under-utilization of routine and preventive services. Although some argue that employers can put money into these accounts for employees to help them with these high deductible costs, there is no such requirement in this legislation.

Third, MSAs are a financial risk for everyone. MSAs would inevitably attract some healthy people who do not stay that way. A serious or catastrophic illness could easily drain the money put aside in the MSA, thus exposing the person who is ill, and his or her family, and perhaps ultimately the government, to major health care expenses.

If the House were to drop its insistence on these and other provisions, we could pass the bill and have it signed into law by the President tonight. My great fear is that the majority is more interested in crafting political documents than in drafting legislation.

I offer no predictions on how these disputes will be resolved. But I have a very strong hunch that we will be forced to deal with these issues once again in the next Congress. I know that you will continue to be an active and vital part of these debates, and I thank you for your time and attention.

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