[Senate Hearing 112-93]
[From the U.S. Government Publishing Office]
S. Hrg. 112-93
PROTECTING THE PROMISE TO OUR SENIORS: PRESERVING SENIOR PROGRAMS
=======================================================================
FIELD HEARING
BEFORE THE
SPECIAL COMMITTEE ON AGING
UNITED STATES SENATE
ONE HUNDRED TWELFTH CONGRESS
FIRST SESSION
__________
JOHNSTON, RI
__________
APRIL 27, 2011
__________
Serial No. 112-5
Printed for the use of the Special Committee on Aging
Available via the World Wide Web: http://www.fdsys.gov
U.S. GOVERNMENT PRINTING OFFICE
67-864 WASHINGTON : 2011
-----------------------------------------------------------------------
For sale by the Superintendent of Documents, U.S. Government Printing Office,
http://bookstore.gpo.gov. For more information, contact the GPO Customer Contact Center, U.S. Government Printing Office. Phone 202�09512�091800, or 866�09512�091800 (toll-free). E-mail, [email protected].
SPECIAL COMMITTEE ON AGING
HERB KOHL, Wisconsin, Chairman
RON WYDEN, Oregon BOB CORKER, Tennessee
BILL NELSON, Florida SUSAN COLLINS, Maine
BOB CASEY, Pennsylvania ORRIN HATCH, Utah
CLAIRE McCASKILL, Missouri MARK KIRK III, Illnois
SHELDON WHITEHOUSE, Rhode Island JERRY MORAN, Kansas
MARK UDAL, Colorado RONALD H. JOHNSON, Wisconsin
MICHAEL BENNET, Colorado KELLY AYOTTE, New Hampshire
KRISTEN GILLIBRAND, New York RICHARD SHELBY, Alabama
JOE MANCHIN III, West Virginia LINDSEY GRAHAM, South Carolina
RICHARD BLUMENTHAL, Connecticut SAXBY CHAMBLISS, Georgia
----------
Debra Whitman, Majority Staff Director
Michael Bassett, Ranking Member Staff Director
CONTENTS
----------
Page
Opening Statement of Senator Sheldon Whitehouse.................. 1
PANEL OF WITNESSES
Statement of Edwin Walker, Deputy Assistant Secretary for Program
Operations, Administration on Aging, U.S. Department of Health
and Human Services, Washington, DC............................. 4
Statement of Elizabeth Roberts, Lieutenant Governor, Providence,
RI............................................................. 6
Statement of Christopher F. Koller, Rhode Island Health Insurance
Commissioner, Cranston, RI..................................... 9
Statement of Kathleen Connell, Senior State Director, AARP-RI,
Providence, RI................................................. 19
Statement of Audrey Brett, private citizen, Middleton, RI........ 24
APPENDIX
Senator Sheldon Whitehouse (D-RI) prepared statement............. 30
Witness Statements for the Record:
Edwin Walker, Deputy Assistant Secretary for Program Operations,
Administration on Aging, U.S. Department of Health and Human
Services, Washington, DC....................................... 34
Elizabeth Roberts, Lieutenant Governor, Providence, RI........... 42
Christopher F. Koller, Rhode Island Health Insurance
Commissioner, Cranston, RI..................................... 46
Kathleen Connell, Senior State Director, AARP-RI, Providence, RI. 50
Audrey Brett, private citizen, Middleton, RI..................... 57
PROTECTING THE PROMISE TO OUR SENIORS: PRESERVING SENIOR PROGRAMS
----------
WEDNESDAY, APRIL 27, 2011
U.S. Senate,
Special Committee on Aging,
Johnston, RI.
The Committee met, pursuant to notice, at 10:00 a.m., at
Johnston Senior Center, 1291 Hartford Avenue, Johnston, Rhode
Island, Hon. Sheldon Whitehouse, presiding.
Present: Senator Whitehouse [presiding].
OPENING STATEMENT OF SENATOR SHELDON WHITEHOUSE
Senator Whitehouse. Alright. The hearing will come to
order.
Before we begin, let me thank everyone who is in attendance
here today. I want to extend my particular gratitude to the
staff of the Johnston Senior Center, to Tony Zompa and his team
for hosting us here today.
And I want to recognize the Mayor of Johnston, who is here
today, Mayor Polisena, who has been a friend for many years and
takes second place to no one in his support and advocacy for
Rhode Island's senior community. So I am very impressed that he
is here.
And I would also like to thank Deputy Assistant Secretary
Edwin Walker for rearranging his busy schedule and flying up to
Rhode Island to be with us here today, as well as Anne
Montgomery, who is staff to the Senate Aging Committee from
Washington, D.C. We appreciate very much their efforts, and we
look forward to Assistant Secretary Walker's testimony, as well
as that of all of the witnesses who are going to be testifying
today.
It may seem hard to imagine now, but there was a time
within the last century when more than half of our Nation's
seniors were living below the poverty level. It is really an
astounding statistic, and it should be a sobering reminder of
the challenges that seniors faced in our country's not-so-
distant past.
We should be very proud of how far we have come, and we
should defend that progress. The poverty rate among seniors
today is lower than any other age group. This is due in no
small part to the promises we have kept to make the well-being
of our seniors a national priority.
I think I have got too much microphone. I feel where I am
getting feedback. Thank you.
That promise began in earnest with the passage of the
Social Security Act in 1935, the most successful domestic
Government program in our Nation's history and a critical
safety net for seniors through good times and bad. Over 200,000
Rhode Islanders rely on Social Security to help them make ends
meet, and I am committed to ensuring that they can count on
these benefits.
The enactment of Medicare in 1965 built upon the promise
begun by Social Security. At the time, President Johnson said--
and I quote--``No longer will older Americans be denied the
healing miracle of modern medicine. No longer will illness
crush and destroy the savings that they have so carefully put
away over a lifetime so that they might enjoy dignity in their
later years. No longer will young families see their own
incomes and their own hopes eaten away simply because they are
carrying out their deep moral obligations to their parents.''
That is a promise that Medicare has kept and one that we
have fought to protect and strengthen. Most recently, under the
new healthcare law, seniors can receive lifesaving preventive
care services--like screenings for colon cancer, diabetes, and
breast cancer--with no copayment.
In addition, the Affordable Care Act fulfills a promise
that I made during my campaign in 2006 by moving to close the
dreaded Medicare prescription drug donut hole completely by
2020, finally bringing full prescription drug coverage to
Medicare recipients. This year, seniors who fall into the
coverage gap will receive a 50 percent discount on brand-name
drugs.
Since the beginning of the year, this new discount has
saved nearly 48,800 Medicare beneficiaries $38 million, an
average of $800 per person. For the thousands of Rhode
Islanders who hit the donut hole each year, these improvements
allow a little more peace of mind.
In July 1965, the same month that Medicare was created,
Congress also passed the Older Americans Act. Less well-known
than Medicare, the OAA has nonetheless supported a wealth of
services that improve quality of life for seniors--health and
wellness programs, transportation services, or Meals on Wheels
and other nutrition programs like the ones provided right here
at the Johnston Senior Center.
In Rhode Island, the Department of Elderly Affairs,
directed by Catherine Taylor, has done a great job leveraging
Federal funding to provide services that so many of our State's
seniors have come to rely on. I want to acknowledge Catherine,
who is here with us today, and thank her and her staff for
their important work for our Rhode Island community.
For all of the gains that Social Security, Medicare, and
the Older Americans Act have made in protecting seniors, each
of these critical programs is at a crossroads. The Older
Americans Act is set to expire later this year. From my
position on the Senate Aging Committee and on the Health,
Education, Labor, and Pensions Committee, I pledge to work hard
to make sure that the OAA is reauthorized and the services it
supports for seniors will continue.
As everyone here knows, Social Security has been a frequent
target of attack. In recent weeks, there has been talk about
the need to change Social Security, even to cut benefits, in
order to reduce our debt. Let me be very clear. Social Security
has paid out every dime owed to all eligible Americans without
contributing a thing to the Federal deficit or debt. It is
fully solvent today and is projected to remain so for another
quarter century.
If changes are desired to strengthen Social Security, those
changes should be considered independently from work to reduce
the deficit. As a founding member of the Defending Social
Security Caucus, I intend to work to maintain Social Security
as America's cornerstone of retirement security.
Medicare is just as critical. The House of Representatives
recently passed a Republican budget which proposes privatizing
Medicare and requiring seniors to pay the majority of their
health expenses with their own money.
In fact, estimates suggest that this proposal would end up
forcing a typical 65-year-old senior to pay on average $12,500
each year in out-of-pocket expenses, starting in 2022, just a
decade from now. Here in Rhode Island, where the average senior
only gets about $13,600 per year from Social Security, that
would be a prescription for poverty creation.
Under the Republican budget, seniors would lose the new
benefits provided by the healthcare reform law, those
preventive services I mentioned earlier. The Republican budget
would also reopen the Medicare prescription drug donut hole,
affecting nearly 17,000 Rhode Islanders who, in 2012, would pay
an additional $9.5 million for their prescriptions under the
House plan.
The attack on Medicare also overlooks the most basic fact
of healthcare, which is that all healthcare costs are
skyrocketing, irrespective of who the insurer is. There is a
problem in healthcare, but attacking Medicare misdiagnoses the
problem.
As we get today's hearing underway, I hope that my message
is clear. We will protect our promises to our seniors. I look
forward to the testimony today and to working with you to
protect these important programs.
With that, it is my pleasure to begin the introductions of
the first panel of witnesses. Our first witness is Edwin
Walker, the Deputy Assistant Secretary for Program Operations
at the Department of Health and Human Services Administration
on Aging. In this role, he promotes the development of home-
and community-based long-term care programs, policies, and
services designed to improve the quality of life for older
people and improve effectiveness for caregivers.
Edwin is recognized as an expert on the Older Americans Act
legislation, and he serves as the primary liaison for the
Administration on Aging on legislation related to aging
services and programs. He has over 25 years of experience with
aging services and programs, previously serving as director of
the Missouri Division on Aging.
After Edwin, we will hear from our Lieutenant Governor
Elizabeth Roberts. Prior to taking office, Lieutenant Governor
Roberts spent over a decade distinguishing herself as an
advocate for quality affordable healthcare for every family and
built a State-wide reputation as a tireless leader on health
and medical issues.
I should add that years ago, when I was the policy chief
for Governor Sundlun, my two top staffers were Elizabeth
Roberts, who is now our Lieutenant Governor, and Keith Stokes,
who is now our director of economic development. So if you
wonder why I did a good job in that position, you have to look
no further than my staff.
[Laughter.]
Lieutenant Governor Roberts is the chair of the Long-Term
Care Coordinating Council, where she is pushing to expand
community-based care for seniors and for people with
disabilities. In addition, she has shown great leadership in
forming and heading the Healthy Rhode Island Implementation
Task Force and serving as chair of the Rhode Island Healthcare
Reform Commission, where she leads the State's health reform
efforts.
Lieutenant Governor Roberts served in the Rhode Island
State Senate from 1997 to 2007, is a graduate of Brown
University, and earned an MBA in healthcare management from
Boston University.
The first panel will conclude with testimony from Chris
Koller, Rhode Island's first health insurance commissioner. He
took over this role in 2005. The Office of the Health Insurance
Commissioner is responsible for health insurance consumer
protection, the financial solvency of Rhode Island's health
insurers, and directing policies that improve the
accessibility, affordability, and quality of Rhode Island's
healthcare system.
The office is nationally recognized for its rate review
process and its efforts at improving the primary care
infrastructure in the State and the readability of health
insurance contracts. Prior to taking this position, Mr. Koller
was the CEO of Neighborhood Health Plan of Rhode Island, a
nationally recognized community health center-based Medicaid
health plan. In this role, he was the founding chair of the
Association of Community-Affiliated Plans.
Mr. Koller has a bachelor's degree from Dartmouth College
and a master's degree in management and religion from Yale
University.
So it is a wonderful panel, and I ask Assistant Secretary
Walker to lead it off. Please, sir?
[The prepared statement of Senator Sheldon Whitehouse
appears in the Appendix on page 30.]
STATEMENT OF EDWIN WALKER, DEPUTY ASSISTANT SECRETARY FOR
PROGRAM OPERATIONS, ADMINISTRATION ON AGING, U.S. DEPARTMENT OF
HEALTH AND HUMAN SERVICES
Mr. Walker. Thank you so very much, Senator Whitehouse. It
is a pleasure to be here.
Over the past year, the Administration on Aging has
conducted the most open process for seeking input on the
reauthorization of the Older Americans Act in its history. I am
pleased to discuss the input we have received and to learn more
about the perspectives from Rhode Island.
At the outset, however, I would like to commend you for
your leadership as a member of the Senate Special Committee on
Aging and other key committees which have jurisdiction over
important senior issues, including the Older Americans Act. We
are grateful for the support you have provided, as well as your
strong leadership in improving the quality of care for
families, for protecting against consumer fraud, and supporting
elder rights.
I am very impressed by the level of commitment and
dedication of Rhode Island's Aging Services Network, and I had
the pleasure of meeting your director of the Department of
Elderly Affairs, Catherine Taylor, this morning. And I am
impressed by the interest and the enthusiasm of your older
citizens and their families.
Rhode Island is one of the highest per capita populations
of seniors in the country and plays a large role as a leader in
many aspects related to the health and well-being of seniors
and the soon-to-be seniors. By winning a number of competitive
Federal grant awards, the Department of Elderly Affairs has
taken full advantage of opportunities which seek to more
efficiently support the needs of frail seniors and their
families. We have much to learn from the insights and
perspectives of your citizens, and I am quite honored to be
here today.
As you indicated, Senator, in 1965, President Johnson
signed the Older Americans Act into law, followed by Medicare
and Medicaid. These three programs, along with Social Security,
have served as the foundation for economic, health, and social
support for millions of seniors, individuals with disabilities,
and their families.
For more than 45 years, the Older Americans Act has quietly
but effectively provided nutrition and community support to
millions of people across the Nation and here in Rhode Island.
It has also protected the rights of seniors and been a key to
their independence.
Annually, nearly 11 million, or 1 in 5, older Americans and
their family caregivers are supported through the Older
Americans Act network. These services complement medical and
healthcare systems, help prevent hospital readmissions, provide
transport to doctor's appointments, and support some of life's
most basic functions. The assistance is especially critical for
the nearly 3 million seniors who receive intensive in-home
services, half a million of whom meet the disability criteria
for nursing home admission, but who are able to remain in their
own homes due to these community supports.
What is more, the need for this support is growing very
rapidly. Every day the equivalent of a small town, or more than
9,000 babyboomers, turn 65. Also rapidly increasing is the
number of seniors with severe disabilities who are at greatest
risk of nursing home admission and Medicaid eligibility.
The reauthorization of the Older Americans Act provides us
with the opportunity to strengthen and to build upon a long
record of success in serving our families and communities and
to help meet that growing need. Over the past year, the
Administration on Aging received input and reports from
reauthorization listening sessions held throughout the country.
This input represented the interests of thousands of consumers.
During the process, we heard a number of themes, and I
would like to mention two of them today. First, improve program
outcomes and do this by embedding evidence-based interventions
in disease prevention programs, by encouraging comprehensive
person-centered approaches, by providing flexibility to respond
to local nutrition needs, and by increasing efforts to fight
fraud and abuse.
Second, we heard remove the barriers and enhance access by
extending caregiver supports to parents caring for their adult
children with disabilities; by providing ombudsman services to
all nursing facility residents, not just older residents; and
by utilizing aging and disability resource centers as single
access points for long-term care information and to public and
private services.
Senator Whitehouse, three brief examples of areas that we
would like to discuss with the Congress as you consider
legislation include the following. Number one, ensuring that
the best evidence-based interventions for helping older
individuals manage chronic diseases are utilized. These have
been effective in helping people adopt healthy behaviors,
improve their health status, and reduce their use of hospital
services and emergency room visits.
Number two, improving the Senior Community Service
Employment Program by integrating it with other seniors
programs. The President's 2012 budget proposes to move the
program from the Department of Labor to the Administration on
Aging. We would like to discuss adopting new models of
community service, including having seniors assist other
seniors so they can remain independent in their homes.
And number three, combating fraud and abuse in Medicare and
Medicaid by converting the Senior Medicare Patrol Program to an
ongoing consumer-based fraud prevention and detection program
and by continuing to use the skills of retired professionals as
volunteers to conduct community outreach and education so that
seniors and families are better able to recognize and report
fraud and abuse.
The Older Americans Act has historically enjoyed widespread
bipartisan support. Based in part upon this extensive public
input process, we think that reauthorization can strengthen the
Older Americans Act and put it on a solid footing to meet the
challenges of a growing population, as well as to carry out its
important mission of helping elderly individuals maintain their
health and independence in their own homes and communities.
Thank you again, Senator, for your leadership in these
important issues and for the invitation to be here today. I
would be happy to take any questions.
[The prepared statement of Edwin Walker appears in the
Appendix on page 34.]
Senator Whitehouse. Thank you, Deputy Assistant Secretary
Walker.
I appreciate that you are here, and I look forward to
working with you to reauthorize this important legislation. I
think what we will do is defer questions until all of the
witnesses have testified, and then we can do Q&A as a panel.
So that takes us to our exceptional Lieutenant Governor
Elizabeth Roberts.
STATEMENT OF ELIZABETH ROBERTS, LIEUTENANT GOVERNOR,
PROVIDENCE, RI
Ms. Roberts. Thank you very much, Senator, and good
morning.
I am here today in two capacities, as chair of both the
Rhode Island Healthcare Reform Commission and as chair of the
Rhode Island Long-Term Care Coordinating Council. These are
forums for Rhode Islanders to actively participate in health
policy and have a real impact on issues that will profoundly
affect seniors, those who are nearing retirement and, indeed,
all of us.
And I want to thank you for bringing this hearing here
today. These issues are very much on the minds of the people in
this room and the minds of the people you and I talk to every
day in our work.
I want to thank the Mayor for this exceptional senior
center and an exceptional community. I said to the Mayor every
time I come to Johnston there are several hundred people here
to greet me, and it really says something about this community.
And I will commend to you that Rhode Island is one big
community, and we look after our seniors and recognize and
respect the needs of our seniors and will not leave them
behind.
I want to recognize Director Catherine Taylor, and I want
to take a moment to recognize Tony Zompa, who is the director
of this very good senior center, where it is our privilege to
come so often.
And particularly Senator Whitehouse, he commented that I
had the privilege to work for him many years ago. He certainly
had more dark hair. I had a little more dark hair.
[Laughter.]
But that I think we in Rhode Island are remarkably
fortunate at this time in the debate going on in Washington to
have someone with the depth of understanding of healthcare, of
Medicare, of the needs of seniors, but also the depth of
commitment, and we are going to be very well served during what
will be a very tough budget fight. And I am glad he has brought
this discussion here to Rhode Island to hear directly from the
people of this community.
As changes to vital programs like Medicare, Medicaid, and
Social Security are being discussed at the national level, it
is important that Rhode Islanders are here today to contribute
to this dialogue. And I want to thank you again for this
opportunity.
Let me first talk about national health reform, the
Affordable Care Act, because there has been so much
misinformation about this law and its impact on Medicare and
seniors. And I want to take a moment to set that record
straight.
First of all, health reform, national health reform does
not cut benefits for seniors. In fact, it improves those
benefits, and I want to reiterate something that Senator
Whitehouse said a few minutes ago. The donut hole--and believe
me, when I am campaigning, when I am working with seniors, I
hear about the donut hole all the time. It will be gradually
filled in over time so that we will never again have seniors
who cannot afford their medications.
There will now be free annual wellness visits. As somebody
who is a--and you will hear more from our health insurance
commissioner--but have a deep belief in the importance of
maintaining our health and preventing illness and managing
chronic illness, having those wellness visits and a strong
relationship with a family physician is vital.
And that they will no longer have to pay deductibles and
copayments, things that keep people from getting important
preventive care. These reforms are part of an effort to focus
on keeping people healthy instead of waiting until they get
sick. Now, none of us wants to get sick, but it is also more
expensive for all of us if we do get ill.
The health reform law also provides incentives for
healthcare providers to work together to improve the quality of
care and reduce costs. There is no doubt that we need to reduce
healthcare costs so that the Government can afford its promises
to seniors, as well as invest in other priorities like
education. But we now face a stark choice as to how to do that,
and that choice will have a profound effect on seniors today,
but also the seniors of tomorrow.
And I looked across the breakfast table at my husband, who
I will confess is a little older than I am, and I said, ``Well,
if the Republicans win, you are going to have a good Medicare
program, but not me.'' And I don't think there is any resident
of Rhode Island who wants to have one family member have the
protection and good care that Medicare has provided and have
another deprived of that.
Instead, do we reform the way we pay for healthcare to
encourage better care instead of more care, or do we radically
restructure programs to simply make seniors pay more out of
their pockets? And do we tie our hands by fragmenting insurance
even further by privatizing Medicare, hampering reform, making
effective cost containment very difficult, and also making
consumer protection very difficult?
As chair of the Rhode Island Healthcare Reform Commission,
I can assure you we are working hard to reform the way we pay
for and deliver healthcare in this State. We are looking hard
at how to be cost effective and cost conscious, but while
maintaining quality and access to care. We have been a national
leader in improving the care of chronic disease by developing
patient-centered medical homes here, primary care providers
that know you and help coordinate your care.
And as we move forward in implementing the health reform
law, I want to continue to encourage all Rhode Islanders to
participate in the dialogue about how do we improve care and do
it in a cost-effective way? Real change cannot happen unless
everyone in this room, along with physicians, hospitals,
nurses, small business owners, and patients are involved, just
as we are here today.
My other role that brings me here is as chair of the Long-
Term Care Coordinating Council, a group of policymakers and
providers of services to the elderly and persons with
disabilities and also consumers of those services. Many of the
people who participate in that council are here in this room
today.
We meet monthly to discuss State policies, as well as the
impact of Federal programs and the impact of budget. A small
change in how Medicare pays for certain services can have a
large impact on all of the people who sit at that table, trying
to do the best for Rhode Islanders. And one of the most
important reasons for us to all work together to safeguard and
strengthen Medicare is that some of the most important reforms
will be possible through the significant purchasing power and
benefit coverage of Medicare and its ability to work
effectively with our Medicaid programs, which provide so much
care to seniors in long-term care, both in the community and in
nursing homes.
The value of the Long-Term Care Council is that it
represents an open forum for some of the most well-informed and
knowledgeable participants in the long-term care arena. It is
the forum where all facets of the long-term care system are at
the same table discussing the common areas of interest and
concern.
This coordinated approach allows for thoughtful dialogue
and creates an environment that fosters the use of best
practices and information sharing. It makes sure that the
services for aging, that the services of Medicaid, that the
services of Medicare fit together to serve the people of our
State.
So that is a lot about Government policy and how we need to
coordinate Government policy, but one of the pleasures of being
an elected official is I am also out every day in so many
different ways talking to people in the community. And there
isn't a person that I talk to who doesn't care deeply about the
future of our State and our country, who doesn't want to be
responsible with taxes and taxation and with fraud and abuse,
but who also wants to make sure that our family members, our
parents, our husbands and wives, and our children are going to
benefit from the very strong Social Security and Medicare
programs that we have in our country today.
You know, it seems a long time ago those days when half of
our seniors lived in poverty. You know, it was when my father
was born, for example, was that time. But I have no doubt that
it would not take us very long to go back there, and I do not
see a State or a country that is willing to do that to the
people that we share a community with.
So the Republican budget that was put out for discussion a
few weeks ago, to me, absolutely breaks that promise for the
future, and I, as a public official, will fight as hard as I
can and certainly support Senator Whitehouse in his effort to
fight that so that all of us, looking forward, can have a
security for our family, for those we love, and for ourselves
that we can stay independent, healthy, in our communities
throughout our lives.
Thank you very much.
[The prepared statement of Elizabeth Roberts appears in the
Appendix on page 42.]
Senator Whitehouse. Thank you, Lieutenant Governor.
And before we switch to Chris Koller, I just want to say
that the Affordable Care Act provided very significant tools to
States to improve the quality of care and to save money not by
cutting people's benefits or taking things away from them, but
by improving the quality of care, by coordinating the care
better, by eliminating some of the waste and some of the
foolishness that is now endemic in our healthcare system.
But we can't do that if there aren't local leaders who are
willing to step up and wield those tools and figure out how to
make this work in their local communities. And Lieutenant
Governor Roberts' leadership on this, recognized by Governor
Chafee, is really significant and worthy of note before I turn
to our health insurance commissioner, Chris Koller.
Chris, please proceed.
STATEMENT OF CHRISTOPHER F. KOLLER, RHODE ISLAND HEALTH
INSURANCE COMMISSIONER
Mr. Koller. Great. Thank you very much, Senator Whitehouse
and honored guests.
I have to add to the chorus. I want to particularly
recognize my colleague Catherine Taylor and all the great work
that she and her staff do at the Department of Elderly Affairs.
And Mayor Polisena, I want to note this is a great senior
center, and this crowd is a little bit different from one of
the last times I was here, which is when we were debating the
Affordable Care Act. And what a difference a few years makes is
what I would say.
But regardless, it is important to have these community
resources where people can come and be informed and engage in
discussions as a part of what makes our country what we are.
And it is because of, as Lieutenant Governor said, communities
that can come together to work on these things.
So in my role, I am responsible for overseeing the actions
of commercial health insurance companies, including the rates
they charge. And I believe that Senator Whitehouse wanted me to
speak to that a little bit and this issue of rising costs. So I
am going to take lessons from my religion background and tell
you what I am going to say and then say it and then tell you
what I said.
The messages are rising medical costs are not unique to
Medicare. They are a problem across the entire system. And the
reasons for these increases are because of the way we organize
and pay for our care.
And the third point is that the Affordable Care Act, as
Senator Whitehouse and the Lieutenant Governor said, gives us
some great tools to address these costs, and the urgency is
only going to increase in the coming years. Because if we get
this wrong, then we have no choice but to take the options that
are being put forward by other folks around vouchers and things
like that. So the onus is on us to use these tools and make
them work.
The first part with rising costs, there are lots of ways to
state this problem as it goes to Medicare. The Medicare trust
fund is scheduled to go bankrupt in 2029. Medicare now consumes
a full 15 percent of the budget, and Medicare costs are
increasing at two or three times rates of inflation. We can't
afford to keep paying taxes--we don't want our taxes to go up
two or three times what our Social Security, our wages are
going up.
This isn't sustainable for the Federal Government, but this
is not unique to Medicare. In Rhode Island, commercial
insurance rates, in spite of our office's activities, are
rising the last few years at an average of 9 percent a year.
Medicaid is the fastest-growing part of the State budget, and
that is in spite of the work that Secretary Costantino and his
staff continue to do around reducing those costs. And soon,
Medicaid is going to be even larger than Medicare nationally.
Now you would think that if we spend 75 percent more per
person than any other country that we would get better
healthcare as a result, but we don't. Anyone who says that we
have the greatest healthcare system in the world I think isn't
looking at the numbers that says that we have people who die
earlier. We have poor infant mortality. We have more obese
people.
We can do better. We don't get a whole lot for all this
money that we spend, but it is not a problem that is unique to
Medicare.
So where does all this money go? If you look at some of the
data, really what we are getting is a lot more services, but
particularly, we are paying more people for those services. If
you look, compared to other countries, we pay more to our
hospitals, to our specialists, to almost every provider at the
high end per unit of service.
We actually use less services, I was surprised to find out,
than some of the other countries. But we pay more for them. But
I want to point out that we don't have to look overseas for
solutions. There actually are communities that do better, where
costs are 40, 50 percent lower than the averages. It is not
just in Medicare. It is across Medicare, commercial, Medicaid.
There are communities that get it right.
And the researchers say that those communities that get it
right across everybody--Medicare, Medicaid, commercial,
uninsured--they have lots of primary care. They have physicians
who are organized as groups rather than individuals.
You know, one of our proudest things that we have
nationally, and it is sort of one of our best hidden secrets is
the Veterans Administration care system, which actually
delivers better outcomes and lower costs because the physicians
work together as a group. And that is run by the Government.
Can you imagine that?
[Laughter.]
These communities have nonprofit hospitals that both
compete, but they collaborate. They don't advertise for their
latest toy. They advertise for how they are working to reduce
costs of care and keep people healthy. These communities have a
strong public focus on improving quality, like some of what the
Lieutenant Governor has done with flu vaccinations, something
that we are very good at in Rhode Island. And they have
employers who care and who are willing to go to hospitals and
providers and say this is what we want.
So we can become a community like that, through the
leadership of Senator Whitehouse, Lieutenant Governor, and
other folks working in the State, if we are willing to look at
the community as a whole. And how do we put these things
together? How do we have lots of good primary care? How do we
have medical homes where people can go to get all their
services? How do we have community supports that keep people
out of hospitals, keep people out of nursing homes unless they
have to be there, keep people from being readmitted to the
hospitals?
This sort of looking at broader than medical care but
thinking about it as healthcare. If we can get our medical
providers to work together through things like health
information technology and the way that we pay our providers.
So what I want to close with is what the implications are
for Medicare because--bring this back down to Medicare. First
of all, we have to acknowledge that change is going to have to
happen, that the status quo, it is bad for private industry.
They can't afford these medical care costs. And it is bad for
the Federal Government, as it pays for Medicare.
But we have control over how that change happens, and I
think what we are saying is that change can be different than
just handing individuals a check and say, ``Good luck and God
bless, and navigate the system.'' But the onus is on us.
The second thing is that if we are going to do this, the
Federal Government and the State governments have to use the
power, the leverage that they have. If you combine Medicare and
Medicaid that means $1 out of every $2 that gets spent in this
country is spent by public folks. They can pay for what works
and not pay for what doesn't work.
And I want to recognize the work that Senator Whitehouse
has been doing consistently to try to get Medicare and Medicaid
to be better purchasers of things like health information
technology, of primary care, the things that we know work, as
opposed to paying for things that don't work.
And the last thing I want to say is that the Federal
Government has this leverage where it is really on us if we
don't want to have the kind of choice that the Lieutenant
Governor is talking about is that the Federal Government has to
learn how to have the independence to make these sorts of
decisions. And I want to call something--it might be really
detailed, but it is a good example.
Buried within--and Senator Whitehouse worked hard for this.
Buried within the Affordable Care Act was something called the
Independent Payment Advisory Board that was a panel of
independent experts, not part of Congress, not part of Health
and Human Services. They would make recommendations to Medicare
and Medicaid to pay for the things that work.
Why is it that we in Rhode Island have more MRIs than in
the entire country of Canada? Why is it that children's
psychiatrists are scarce as hen's teeth? Well, it is because of
the way Medicare pays. And Medicare makes MRIs really, really
profitable.
And why does it do that? Because the radiology folks have
very good lobbyists who lobby Congress about how MRIs should be
paid, and therefore, we are advertising for them in the New
England Patriots games. ``Come, get your MRI.''
[Laughter.]
That isn't going to help keep us healthy, but if we want to
change that, we have to make those decisions independently from
political interference.
And the Independent Payment Advisory Board was not a death
panel. It is not about rationing care. It is about making some
decisions about what it--it is frankly doing the kind of things
that we are doing here, trying to pay more for primary care,
trying not to pay for hospitals to get you sick and then to pay
to cure you, which is the way that Medicare pays right now.
So, and if we don't figure out politically how to set up
those things, the Senator knows politics is not a bad word. If
we don't figure out politically how to set up those things,
then we are left with vouchers. We are left with all the
Government can do is give you a check and say, ``Good luck,
navigate out there.'' And I think we can expect more from
ourselves. I think we can expect more from the Government than
simply to do that for our seniors, for our parents, for us.
I think it is only through the hard work of people here,
the citizens, that we can put this sort of thing together.
Because if we don't this is the kind of future that we are
talking about. And as I said, I think we can do better.
Thank you very much.
[The prepared statement of Christopher F. Koller appears in
the Appendix on page 46.]
Senator Whitehouse. Thank you very much, Chris.
Let me start with a question for Deputy Assistant Secretary
Walker. You made an interesting point in your testimony that a
great number of seniors are able to remain in their own homes
despite meeting the disability requirements for entry into a
nursing home.
Now, presumably, that is better for the seniors because
they are more independent. Presumably, it is also less
expensive for the system.
Before we got underway here, Director Taylor told me that
they have information at the Department of Elderly Affairs that
seniors who engage with the Department of Elderly Affairs on a
regular basis and get involved in their programs actually, on
average, last 17 months longer before they end up in a nursing
home. They have much longer periods of independence.
So could you talk a little bit about what the things are
that seem to be most effective in supporting people to make--
first of all, is it a win-win? It looks like it. Is it, in your
experience, really a win-win? And if so, how can we get more of
it?
Mr. Walker. Thank you for the question, and the answer is
absolutely.
That is really the beauty of the Older Americans Act as the
complement to the other systems we have. The mission of the
Older Americans Act is very simple. It is to help older people,
by giving them supports, do what they want to do, do what they
prefer to do, which is to remain independent, to live with
dignity, to maintain their health, and to keep them at home and
in their own communities for as long as possible.
We clearly understand that, at some point, many seniors
will have to go to a nursing facility because they may not have
the supports in the community. They may not have family
caregivers to provide them support in their own homes. And at
that point, the Older Americans Act provides an array of
protections to speak on their behalf, to look after their
interests, to ensure that the facility is providing the highest
quality of care for that older individual.
But our services are low-cost services, nonmedical services
that complement the services in a facility, and I have to,
again, publicly applaud Rhode Island. What we have done at the
Administration on Aging is we have studied what works, what are
the things that really are the most effective and the most
efficient solutions. And then we have put out discretionary
grants--because the Congress has enabled us to do that--
encouraging States to try new things, to test new models, to
find out what really works within the State and within each
community.
And Rhode Island has actively sought those grants,
positively competed and won, and has put in place a number of
innovative approaches, working with hospitals to reduce
readmissions, ensuring that individuals know what the doctor
said at the point of discharge, know what supports can be put
together within the community so that you avoid having to
return to the hospital.
I recently saw a statistic, and I will have to get you the
exact figure, but it was startling. It was something like
within 30 days of a hospital discharge, 24 percent or 2.6
million of Medicare beneficiaries are readmitted--it was
incredible. And the costs are startling--in excess of $2.6
billion each year.
And so, as part of coordinating care, using the Older
Americans Act premise of we don't have to fund everything
through the Older Americans Act, but the responsibility of a
State unit on aging and an area agency on aging and a tribal
organization is to coordinate the services in the community on
behalf of the older individual, making it easy for them to
access those services, making it effective and efficient.
Senator Whitehouse. So the role of States and particularly
of State officials like Lieutenant Governor Roberts and
Director Taylor and Commissioner Koller in working together to
have a coordinated strategy on this is really central to the
success of this program and to allowing seniors these
opportunities?
Mr. Walker. Absolutely. And we look to common sense
solutions. The Older Americans Act also has the beauty of
ensuring that consumers, older people themselves, are active
participants in designing systems, in providing input in terms
of what works, what doesn't work well.
You have a number of coordinating councils here in Rhode
Island--the Lieutenant Governor is heading those--in terms of
how do we constantly look at improving what we have, ensuring
that it works well? Living within our means, but making sure
that we can do the best we can for the citizens of this State
and of this country.
Senator Whitehouse. Let me ask the Lieutenant Governor or
the commissioner, both of you used the term ``patient-centered
medical homes.'' That is a known piece of terminology in
healthcare jargon.
But I think it would be good for the people here in the
room and for the record of the hearing, describe that in kind
of human terms. What is the experience of a patient who gets
into one, and what does it mean in somebody's own life when
they have a good operating, patient-centered medical home?
Ms. Roberts. Senator, I was going to suggest--I just
suggested to the health insurance commissioner that he describe
the structure, and then I will actually tell a personal story
about how it has worked.
Mr. Koller. So if you look at a typical insurer's costs,
and the same would be true for Medicare, 5 percent of the
people drive 50 percent of the costs in the system. And if you
think about who that 5 percent are, they are people with
chronic illnesses. They are probably people who are too sick or
too disengaged to come to a day like today.
And how do those people get their medical care? They get it
all over the place. They go see a foot doctor. They go see a
lung doctor. Because they don't have a single disease, they
have a bunch of diseases. They have diabetes, and with their
diabetes, they are overweight. And that starts to affect their
heart. And so, what they are seeing is a bunch of doctors with
no one coordinating it.
And the best example is they have got a huge bag of pills,
and they don't quite know what to do with it. But every doctor
said, ``Take this. I think it will be good, and give me a call
back in a few weeks and see how it goes.''
No one is looking to say, ``Well, do those pills interact
with one another?'' No one is calling up to say, ``Did the
pills work? Did you finish them?'' And chances are they might
be sitting on a medicine cabinet or something like that. And it
is not just that those pills are expensive. They are. But it is
that there is no quarterback.
So the idea, Senator, you are right. It is kind of jargon.
But the idea of a patient-centered medical home is pretty
simple. It is to have a medical care provider, a place where
you can go who can coordinate your care. And often, it is not
the Marcus Welby doctor. It is actually a nurse working for the
Marcus Welby doctor.
And the nurse is the one who knows what is going on, who
calls you up afterwards and say, ``Did you go to your visit?
How did it feel? Did it work for you? Let us try something
else.'' And then she goes, or he, and puzzles through with the
doc to say what is happening with that, and when should we try
something different?
And the problem is that, once again, Medicare, Medicaid,
the commercial insurers, they don't pay for that. They don't
pay the doc to spend 45 minutes with you or your parent to
figure out what is going on and put together a plan, or a
nurse. They don't pay for the nurses at all.
They pay for the docs to do a 15-minute visit. Next, next,
next, next. Prescribe a pill. Let us go on.
And so, to change that requires public action. Believe me
insurers aren't going to do it. The market isn't going to do
it. It takes Medicare and the local insurance regulators to sit
down and say, hey, you know what? Pay for something different.
If a primary care doc has a nurse care manager, if a
primary care doc has an electronic health record, if they work
as a team, then we want you to pay for them differently. Pay
for them to coordinate that care. That is the principle behind
a patient-centered medical home.
Before the Lieutenant Governor talks about it, I have got
to say something we are very proud of in Rhode Island. We
actually have more of those per capita than any other State in
the country because of the really hard work that the primary
care docs have been doing for a while with the insurers.
So that is sort of it in theory. But in practice----
Ms. Roberts. So it is a little bit of back to the future, I
like to say. You know, it is about having an office where they
know you, where they have a range of people--because I think
about it, you know, most of us take this for granted with our
pediatricians.
If your kids are well, I remember even when I was a kid,
but with my kids, they would see the nurse for their shots and
this and that. I think my children, who are now slightly above
the pediatrician, didn't see the pediatrician for the last 5
years because they weren't sick. They just needed somebody to
check in, did their physical. And the doctor would see them if
they needed to.
But let me tell you a story about my dad. And my dad has a
number of chronic illnesses, but my dad has a doctor who he has
had for 30 years, who coordinates his care and who also knows
him and knows his personality, knows his medical history, and
has that information background that helps make a difference.
And my dad had a serious health crisis. Of course, there
was a big snowstorm when it happened. So they were having
trouble getting to the hospital. His doctor had trouble getting
to the hospital. And his doctor came to see him and looked at
my dad and said, you know, you are not a candidate for surgery,
which, if you were younger, we would do. And I am not going to
admit you to the hospital. I am going to send you home.
And we are then going to have people come, and this goes
back to that continuum of care, people are going to come and
help care for you at home. And he said to my dad, honestly, I
can't tell you you are going to live. You may not live. But he
knew my dad to know to send him home because I don't think my
dad would have lived if he had stayed in the hospital.
So my dad went home. He is living with my brother because
he is a widower, and they coordinated hospice services. And you
know what? It is a year and half later. My dad is living with
my brother, doing quite well. You know, he has still got
chronic conditions, but it is what the potential is on a very
practical level, on a personal level.
And when you think about it and you are not his daughter,
you also think about the fact that that just saved Medicare
tens of thousands of dollars and did the right thing for my
father.
So medical homes have the ability to know you, know your
living situation, have a range of providers integrated in. If
you maybe need some mental health counseling as part of
recovering, they have access to those services. It helps you
navigate.
And for those of us who are children of people who are ill,
that bag of pills and that list of 10 doctors is just as
overwhelming, and how do we help our seniors and all of us
navigate this complex system? That medical home can be our
partner and a very powerful partner.
Senator Whitehouse. Let me ask one final question before we
go on to the second panel. We have talked about the so-called
medical home, which is really something as simple and human and
practical as a go-to person who knows you and who knows what
care you are receiving and can help you organize what is going
on, understand what is going on, and navigate your way through
the system. That is the most kind of low-tech possible thing.
At the other end is the high-tech aspect of health
information technology. And when I first started looking into
this, I was astounded to read that there had been fortunes
saved in retail, in banking, in financial services, and all
these different American industries, but it hadn't really
penetrated into healthcare in any significant way. Indeed, the
article said that the healthcare industry had about as much
information technology going on in it as the mining industry.
And then I ran into--the human stories started to come out.
I remember a person I know whose daughter was so ill that she
had to be basically medically evacuated up to a Boston
hospital. And in the rush to get her into the ambulance and up
to the Boston hospital where the specialists were waiting to
treat her, her paper records got left behind at the Rhode
Island hospital.
And so, they got up there, and they didn't know what to do.
And they couldn't go the way you could go in every other aspect
of your lives and find it electronically. They had to send a
car, take a call down there, and send a car up with the
records.
In the meantime, she was in real extremis, and they started
needing to redo the tests that had already been done on her so
they could know what to do up there while the car was racing up
with the records, put her life at risk, cost an absolute
fortune in unnecessary tests.
And you can imagine the fear of the father with his
daughter going through all this. ``You are kidding me. You
forgot the records, and there is no way to--''
So could you just comment for a bit, Lieutenant Governor
and then Commissioner, on what you think the value is down the
road if we can get a really robust health information
infrastructure going here in Rhode Island?
Ms. Roberts. Well, this is a great example of where reform
does exactly what it should. It improves quality and lowers
cost and lowers inefficiency.
It is amazing that we don't even have to go to Boston. I
work at the State House. So if you think about it, if I fell
down the stairs at the State House and really badly hurt
myself, I would probably go to the Miriam Hospital emergency
room--it is sort of the closest one--to get whatever care I
needed.
And if I then went home, and I live about 4 miles from
there in Cranston, and things weren't going right and I ended
up at Kent Hospital, they would have no idea what had happened.
And heaven forbid I was ill enough that I couldn't tell them. I
didn't have my husband with me who could tell them about me.
They have to start from scratch.
And it is amazing to me that I can go anywhere in the world
and look at every single banking transaction in the last 12
months of my Citizens Bank account here in Rhode Island, but I
can't go into a doctor's office that is not my doctor's office
and have them know anything about me. It just makes sense in
terms of quality, in terms of cost, in terms of simplifying.
Like that human navigator we want to have help us with the
system, to have our information travel through the system--our
history, our medications, all of those things--so that people
aren't duplicating services, but they also know quickly about
your medical history.
For those of you who don't know--and I am going to give
Senator Whitehouse, we will have a little mutual admiration
society here--we are really leading the country in many
respects in this effort. And there have been big Federal grant
opportunities to help us invest in this system and creating
that network so that medical information can be privately and
safely shared between our different physicians and a hospital
if we walk in the door.
We have benefited from all three of the--we are a three-
for-three State in terms of Federal investment here. And you
now have the opportunity to sign up as an individual in what is
called currentcare, where your medical information, your lab
reports--think about it, MRIs. How many people--as the head of
health purchasing for IBM said, ``My goal in buying health
insurance for my employees is never to pay for an MRI twice in
one day.''
And how many people have had a problem and had a test
duplicated because you went someplace else because they sent
you somewhere else or they couldn't get access to your past? It
is really an exciting thing. It is a great opportunity, and we
have to do it.
Now when Senator Whitehouse says we were behind, it was
partly because so much of healthcare we have been struggling
with each other. We fight with our health insurance company.
Our health insurance companies fight with the doctors and
physician offices. We haven't been on the same page.
And in order to make investments like that, which sometimes
benefit one group financially and sometimes another, you don't
want to invest. It is like, ``Oh, it is his benefit. He needs
to pay for it.'' We need to be focused on the common good of
the health of our community, and then we invest.
And I really give a lot of credit to our Federal leaders
for giving us the resources to move this issue forward in our
State, and we need to really make it work well for the broad
community.
Mr. Koller. You took all my lines.
[Laughter.]
I think I would just add a couple of things. One, most of
the research indicates that 20 to 30 percent of medical care is
duplicative, just of absolutely no value. And the best example
is what happens when someone goes to the emergency room. The
emergency room is kind of like our symbol for everything that
is messed up in our healthcare system because we are asking
highly trained docs to take care of kids with earaches, as well
as trauma victims.
It makes no sense, and they have no information. It is like
they are being asked to fly an airplane with the shades down
over it because they have to invent everything all over again
because they have no information on you when you come in.
What I want to--and the other point I would make is after
Hurricane Katrina, the patients who were evacuated, the
citizens who were evacuated, the ones who were the most
medically secure were the veterans because they could land at
any place, walk into any VA facility, and someone would look
and say, ``Oh, here is your problem list.''
Imagine having to recreate that if you were coming out of
Katrina or someplace. The last thing you are going to pick up
is your chart on your way out. And yet, for the VA, it was all
there.
So what I would--so making this real is real hard in Rhode
Island. Money helps, but it is also kind of personal change. So
I would encourage every one of you to have a conversation with
your primary care physician, your medical home, to say how do I
sign up for currentcare? To ask yourself what would it take for
me to feel comfortable signing in for this?
And if you are not comfortable because you are concerned
about security of information, if you are concerned about
someone having access to it, then you have to tell us what it
would take to make you comfortable. Because until each of us
makes that commitment to change, to be part of the system or to
say what it is going to take for them to do it, then we are
going to be left with ER docs who are giving us tons of tests
and two MRIs a day.
And so, that is how we move from talking about it in theory
to getting the money to making it actually happen so that we
have got--our clinicians have the information so they can make
the right decisions for us at each point.
Senator Whitehouse. It is a little bit out of the
traditional order for an official Senate hearing. But this is
Rhode Island. So I get to do it my way, not the Washington way.
And what I would like to do is to ask for our Lieutenant
Governor, for Assistant Secretary Walker, and for our
healthcare commissioner a round of applause for their wonderful
testimony, for the great work that they do.
[Applause.]
And we will take just a moment while we call up the second
panel. So if you want to stretch for a second?
[Pause.]
Alright. The hearing will come back to order.
I hope that the first panel helped demonstrate how
important and how realistic some of the practical alternatives
are to simply throwing people off of Medicare or throwing
people off of Social Security because of cost issues. Whether
it was Deputy Assistant Secretary Walker talking about the ways
you can keep seniors at home longer by working with the
Department of Elderly Affairs and with Director Taylor and save
money that way or whether you are talking about having a
medical home that coordinates your care with a nurse who knows
who you are and what you are doing, what your situation is, to
having an electronic record that follows you wherever you go,
there are things that can be done that can improve our system
and make it less expensive.
And we now have witnesses who can talk a little bit about
the personal cost and the problems that can ensue if we don't
choose to go that way, but instead choose just to cut and take
things away from people.
And first, we will hear from Kathleen Connell. She is the
senior State director of AARP Rhode Island. Kathy joined AARP
Rhode Island in 2001, following a long and distinguished career
in public service, education, and healthcare. Her career in
public service included three terms as Rhode Island Secretary
of State, a term in the Rhode Island Senate, and 16 years
elected to local town offices in Middletown.
During that time, she was also a leader in numerous
education and healthcare issues and in issues affecting women.
She currently serves on the board of directors of Quality
Partners of Rhode Island. Kathleen holds a master's degree in
international relations and a bachelor's degree in nursing,
both from Salve Regina University in Newport, Rhode Island.
Our final witness will be Audrey Brett, who is a senior
living in Middletown, Rhode Island, where she has retired after
a career in State and local government in nearby Connecticut.
She currently receives Social Security and Medicare benefits.
She has two sons, seven grandchildren, and two great-
granddaughters.
We will begin with Kathy Connell.
STATEMENT OF KATHLEEN CONNELL, SENIOR STATE DIRECTOR, AARP
RHODE ISLAND
Ms. Connell. Thank you, Senator, and it is a pleasure and
an honor to be here and a challenge to follow the previous
panel.
All of them have shown and I am sure, Deputy Assistant
Secretary Walker, that you observe that Rhode Island has a
tradition of leadership in healthcare that exists today more
strongly than ever. It is a tradition that we take great pride
in, beginning with our Congressmen Fogarty and Forand and the
OAA and Medicare. And we are pleased, more than pleased, that
our Senator is taking a leadership role in the challenges in
this particular area.
I am here today as the State director of AARP. And as I
said, it is a challenge to follow that panel. In fact, Audrey
said as we were called up, ``Okay, we are the also-rans.''
[Laughter.]
So she clearly has a sense of humor about this, and I am
looking forward to hearing her testimony, too.
But it is as a representative of AARP that I am here, and
let me address that. AARP is a nonprofit, nonpartisan, social
mission organization representing some 37 million members age
50 and older across the country. Here in Rhode Island, we serve
some 135,000 members, which is a significant number in a State
this size.
This morning, AARP Rhode Island had an executive council
meeting scheduled, but when the Senator's office called, the
executive council agreed that there is nothing more important
on our plates than the issues we discuss today. So we changed
the meeting, and the executive council are here with us today.
Would you people all raise your hands, please?
And these are dedicated individuals that are out there,
working on the issues AARP takes positions on and backs up with
research and efforts in the field.
Our members are Democrats, Republicans, moderates,
independents, people who align with other parties, and some who
aren't sure where they stand politically. But what they have in
common is that they seek a healthy, secure future, a life of
independence, dignity, and purpose. In short, the American
dream. Among the ways AARP helps to fulfill this expectation
here in Rhode Island and across the country is through
education and information, advocacy, and community service.
So let me begin by addressing concerns about Social
Security. Seniors, along with just about everyone else, are
nervous about potential changes in Social Security and what the
debate in Congress holds for their future. I want to assure you
that AARP on both the national and State levels will be a
strong and tireless participant in this watershed discussion,
and we know you will be, too.
First, let me tell you where we stand. Social Security must
be protected for current beneficiaries and strengthened so
future generations get the benefits they have earned. But
Social Security changes should only be considered if these
changes make retirement more secure, not less. And it is
important to understand some key points.
Social Security is strong and can pay Americans 100 percent
of the benefits they have earned for the next 25 years and
approximately 75 percent of promised benefits thereafter
without any changes at all. But to make sure the program will
be strong for future generations, we need to make gradual,
modest changes sooner rather than later.
Social Security is not only a lifeline for the most
vulnerable. It is a critical source of income for the middle
class. Do not let it be turned into a welfare program. In other
words, if Social Security is fundamentally altered so that it
is no longer an earned benefit for all who contribute, then the
long-term result will be many middle-class wage earners
retiring without the critical income support provided by Social
Security. For most middle-income earners, Social Security
remains their largest source of income in retirement.
Americans have earned their Social Security benefits by
paying into the system their whole working lives. Social
Security is earned by the money you contribute from your
paycheck and what your employer contributes on your behalf.
Social Security has not contributed to the Nation's debt
and should not be used to balance the budget. Instead of
putting our children and grandchildren's retirement in
jeopardy, Congress should find ways to solve our Nation's
budget problems without making damaging cuts to Social
Security.
We believe Social Security is a guarantee. When you pay in,
you get the benefit you earned when you retire. Social Security
benefits should keep up with inflation so seniors, many of whom
are kept out of poverty by Social Security, can continue to
afford basic necessities when costs rise. We believe that
Social Security benefits were always intended to be there in
both good times and bad.
It is also important to note that the next generation has
paid into Social Security for decades and deserves to get the
retirement benefits they have already earned. With shrinking
pensions, dwindling savings, diminished assets, and longer life
expectancies, future generations will depend on Social Security
even more. It goes without saying your urgent attention to
strengthening Social Security for the long term is necessary
and greatly appreciated.
Let me next mention the Medicare program and some recent
proposals being considered by Congress. Medicare was created in
1965 and plays a vital role in ensuring health and retirement
security of older Americans and people with disabilities in
current and future generations.
Medicare covers persons age 65 and older, regardless of
their income or medical history, and now covers 47 million
Americans, helping individuals pay for needed healthcare
services. Nearly half of all people on Medicare, 47 percent,
live on incomes below $21,600 as individuals and $29,140 for
couples.
According to the most recent data available, Medicare
beneficiaries spent a median of $3,103 a year of their own
money on healthcare in 2006. Ten percent of beneficiaries, more
than 4 million people, spent more than $8,300 a year. The
oldest and poorest beneficiaries spent about one-quarter of
their incomes on healthcare.
As you know, AARP supported the Affordable Care Act last
year because it will improve and strengthen Medicare and
provide Americans who currently lack health insurance access to
affordable comprehensive health insurance. President Obama
recently suggested that the Independent Payment Advisory Board,
IPAB, established under the new law, be expanded. AARP agrees
with many of the Independent Payment Advisory Board's original
goals, that being extending Medicare solvency, slowing cost
growth, and improving quality without reducing benefits or
increasing cost sharing for people in Medicare.
However, we remain concerned about the spending targets the
IPAB must meet in its second 10 years and the unintended impact
these savings targets might have on beneficiaries' access to or
quality of care. We have strong concerns with expanding the
role of this unelected, unaccountable board. We will carefully
monitor how these proposals move forward to ensure that
Medicare is protected and strengthened for the millions of
people who depend on it.
Other proposals being considered in Congress that would
greatly expand the cost sharing on beneficiaries, significantly
increasing their out-of-pocket cost for Medicare, we do not
believe the answer is to simply shift costs onto Medicare
beneficiaries and increase the health and economic insecurity
of millions of Americans. Increasing the out-of-pocket costs
for people on Medicare would especially penalize the sick.
The House-passed Fiscal Year 2012 budget resolution. Before
it left for recess, the House passed this resolution, which,
among other things, would eliminate the current Medicare
program for those turning 65 in the year 2022 and after and
replace it with a defined contribution premium support program,
with the Government's contribution growing each year by the
rate of inflation. We find the direction of this House-passed
budget disturbing and in some cases misguided.
First, we are concerned that a premium support system would
dramatically increase costs for Medicare beneficiaries while
removing the promise of secure health coverage, a guarantee
that future seniors have contributed to through a lifetime of
hard work. Under this proposal, premium payments to private
plans would be sharply reduced, capped at levels well below
medical inflation.
Therefore, Medicare beneficiaries would bear a larger and
larger share of the high cost of medical inflation. According
to the calculations based on the Congressional Budget Office
analysis, the House-passed budget would more than double the
beneficiary costs in 2022 from about $5,500 to $12,500, an
increase of roughly $7,000 per year in beneficiary premiums and
coinsurance.
The legislation would also increase the age of Medicare
eligibility from 65 to 67 by 2033. Those who enter Medicare
before 2022 would continue under the current program, with the
option to switch to the new program. AARP opposes raising the
age of eligibility for the Medicare program because, according
to research, it would increase the cost burden for 65- to 66-
year-olds; increase premiums and cost sharing for Medicare
enrollees; raise costs for States, employers, and for people
under 67 purchasing coverage; and produce relatively little in
savings to the Federal Government.
And the House-passed budget repeals key improvements in the
Affordable Care Act. The two I would like to speak to today are
closure of the coverage gap or donut hole in Medicare Part D
and eliminating the Community Living Assistance Services and
Supports, CLASS, program.
AARP fought to close the donut hole because it provides
millions of seniors with access to lower out-of-pocket costs
for their prescription drugs. Repealing the donut hole
provision would immediately increase the prescription drug
costs for nearly 4 million Medicare beneficiaries.
The CLASS program is a national voluntary insurance program
to help individuals pay for some of the costs of services and
supports to help them live in their homes and communities. It
has the potential to provide savings in Medicaid, support
family caregivers in their caregiving roles, and help to give
eligible consumers choice and control and a flexible benefit to
help them meet their needs.
Abandoning relief from the donut hole and taking away an
option to help people live in their homes does not bode well
for older adults. The added burden of higher health costs would
put more seniors at risk, especially those who are most
vulnerable.
As for Medicaid, under the House-passed budget resolution,
all Federal Medicaid payments to States would be converted to a
block grant, beginning in 2013, with constrained annual growth.
Now Rhode Island is operating in a special environment when it
comes to Medicaid because we have what is known as the global
waiver that puts more money to work here, creating some
flexibility in how the State allocates Federal funds and, we
hope, helping us to rebalance the health and long-term services
and support system toward more community-based care, which
research shows over and over again is the preference of the
people who use it.
We are watching this closely because oversight is
absolutely critical and because it remains to be seen what
happens down the road when we are apt to see a reduction in the
original Federal contribution. What we do know is that the
notion of replacing Medicaid as it is presently constituted
with a block grant system is a move in the wrong direction.
There are limited financing options currently available to
pay for long-term services and supports, and individuals
typically exhaust their own assets before turning to Medicaid.
Block granting Medicaid would put both current and future
seniors in need of these services at risk. For those who are
already in nursing homes or receiving home- and community-based
services, cutbacks could lead to reduced access and inadequate
care.
For those who do not yet need long-term services and
supports or can still pay for those services themselves, if the
time comes and they have exhausted their savings, may be turned
away or offered insufficient care that neither meets their
needs nor maintains their dignity.
While AARP appreciates that the budget resolution
recognizes the importance of Social Security to older
Americans, we remain concerned that across-the-board cuts to
Medicare, Medicaid, and other critical Federal programs could
also have a detrimental impact to the lives of many seniors who
depend on these programs for their health and retirement
security. We urge you to consider the impact of these proposed
cuts on real people here in Rhode Island and across the country
and to look to less draconian ways to achieve savings.
Across-the-board cuts could include reductions in Medicare
and Medicaid and other healthcare spending. The House-passed
budget resolution proposes enacting this hard spending cap as a
law, and it could not be waived regardless of need or economic
circumstances, even by a supermajority of votes in Congress.
The budget contemplates enacting this spending cap as part
of the debt ceiling debate that will begin when you return to
Congress next week. This is a frightening scenario for
everyone.
The Older Americans Act provides essential programs,
information, and services to meet the needs of a growing older
population. These programs provide vital support for those
older adults who are at significant risk of losing their
ability to remain in their own homes and communities who need
support and protection in long-term care facilities.
Pending formal legislative language, our interest is to
ensure that the act maintains critical service and information
roles and promotes greater responsiveness to the needs of
mature and older Americans. In this period of economic
downturn, AARP is most concerned that programs, authorities,
and partnerships that have already proven effective in meeting
the needs of vulnerable older Americans be maintained and
strengthened.
We believe that the most important legislative objective to
better serve older persons is to promote and improve efficiency
in the delivery of core services. Better coordination of
existing OAA programs with other Federal programs holds great
promise and merits the support of the Administration and
Congress.
AARP's 135,000 members in Rhode Island hope that the
Special Committee on Aging is listening. We hope you will not
turn away from the great needs of a generation that has made
America great and millions of others who have paid into a
system based on the promise of greater health and financial
security in retirement.
We know that creative solutions are necessary. All we ask
is that you carefully measure the human consequences of your
decisions and that you remember the greatest wealth of this
Nation is the way we show the world the respect we have for our
older citizens.
Thank you.
[The prepared statement of Kathleen Connell appears in the
Appendix on page 50.]
Senator Whitehouse. Thank you very much, Kathy, and thank
you to AARP.
And now we will turn to our final witness, Audrey Brett.
Please proceed.
STATEMENT OF AUDREY BRETT
Ms. Brett. Hi. I don't know how to use this. Is this right?
Okay.
I really don't know why I am here. I feel very flattered,
and I thank you for having me. I am not of the caliber of the
professional people who are speaking. I am just an old Yankee
tobacco farmer from Connecticut.
[Laughter.]
But us Yankees have pretty good logic, I want you to know
that. Also, speaking last, I don't have to speak long, and I
can be comic relief.
[Laughter.]
It delights me to hear all this talk about 65-year-olds. I
have a son that age. He is very old for my age.
[Laughter.]
As a young woman, I worked full time. And during my years,
I paid payroll taxes, and when I retired, I applied for Social
Security. Women's wages at that time were a small percentage of
what men earned, another one of my women's rights things. And
so, my Social Security check was quite minimal.
And I never thought much about it until my husband died and
my check stopped. His was transferred to me, and that was
really a godsend. He died suddenly. I not only lost him, I lost
one check, the supplemental income he brought in as a
manufacturer's rep.
I still had the same rent, maintenance, medical costs, car
maintenance, food, and no income except for the Social Security
check, which enabled me to go on living simply, but adequately,
and without being a burden on my sons and losing my dignity as
well. Like me, many friends are experiencing the same Social
Security that has succeeded in keeping millions of widows,
senior citizens, children, and disabled out of poverty.
I am reminded of an old political saying, as I listen and
read a lot. Because I spent all of my adult years in
Connecticut in the political arena and 50 years in the
vineyard, I learned a lot of good stuff. And one thing I
learned was, ``Figures don't lie, but liars figure.''
The Preamble of our Constitution describes that document as
providing for the common defense and promoting the general
welfare. We go all the way back to that. And I am disturbed and
troubled that there are those who would destroy our basic
democratic principles for their own political aggrandizement. I
worry for me. I worry for my children.
That grand old lady standing in New York Harbor who
welcomed all of those who came to this country, the land of the
free, where all men are created equal, to find a good life, she
stands in the harbor and weeps.
When I crossed the border into Rhode Island, one of the
first things I did was to establish myself with a medical
provider. That is my old Girl Scout training, ``Be prepared.''
I quickly learned that although Medicare is always accepted,
certain Medigap insurances are not. I have never had a
complaint with Medicare. It has always been available and
always delivers what it has committed to do.
In the privatized area, however, actions are very
different. In the private sector, companies have used the
process known as rescission for many years. It is well
documented that tens of thousands of Americans lose their
health insurance after being diagnosed with life-threatening,
expensive medical conditions. And once you lose it and have an
existing condition, you can't get insurance.
Again, political expediency, I greatly fear the change for
Medicare to privatization. The Federal Medicare program has
changed the lives of millions of Americans, but our roots of
Medicare go back to our Nation's early efforts to achieve
health coverage for its elderly and poor citizens.
For all those Americans who worked, paid their taxes, added
to the betterment of this country, served in the military and
civil service, we cannot let them live and die in poverty. We
owe them the final days of security and dignity.
If I had to move out of Connecticut, I think I am glad I
came to Rhode Island because I am impressed with the gentleman
of intelligence, understanding, and caring who represents this
State in the Senate. And Senator Whitehouse, for your tireless
efforts in resisting the actions that threaten the good and
welfare of your constituents in the Nation, I thank you very
much.
[The prepared statement of Audrey Brett appears in the
Appendix on page 57.]
Senator Whitehouse. Thank you, Audrey, very much.
It is always good to have some testimony that keeps it
real, and you have more than accomplished that goal. And I
really appreciate that you testified here today.
I want to note one thing in Audrey's testimony that I
thought was particularly significant, and it is a very touching
phrase that she used. And that was, ``My Social Security check
enabled me to go on living simply, but adequately without being
a burden on my sons.'' And it reminds me of the statement that
President Johnson made way back when Medicare was founded.
He said, ``No longer will young families see their own
incomes and their own hopes eaten away simply because they are
carrying out their deep moral obligations to their parents.''
And I think that testimony helps remind us that Medicare and
Social Security is not just about the seniors who are the
immediate beneficiaries.
Franklin Roosevelt talked about freedom from want, freedom
from fear, and the freedom from want and fear that these
programs provide, knowing that people can have a secure and
dignified old age, isn't just a freedom that seniors enjoy. It
is a freedom that all Americans enjoy. It is a worry that
regular working families out there now, going to the second or
third job, Americans have a lot to worry about.
And knowing that they are not going to be--what was
President Johnson's phrase here? They are not going to see
their own incomes and their own hopes eaten away because of
their moral obligation to their parents, that they are not
going to have to prepare to take on that burden, that risk,
that chance that something terrible goes wrong in their
parents' healthcare, and suddenly, they have to stop
everything. Suddenly, they have to lose everything in order to
support them. That is an important freedom that allows our
children to pursue their own dreams, to travel if necessary to
where jobs are for them, to have a sense of what--I mean, that
is really part of what America has been about.
And I think that was a very important point that you made.
I just wanted to recognize that.
The other thing I would like to do is to ask Kathy Connell
about the question of the prescription costs in Medicare and
Medicaid. We had testimony from the earlier panel about the
buying power that Medicare and Medicaid have, that $1 out of
every $2 goes through those systems.
As you know, when the prescription drug Part D plan was put
together, a group of people, I assume driven by the interests
of the pharmaceutical industry, insisted on a requirement in
the bill that the Federal Government is not allowed to
negotiate for the price of the pharmaceuticals that it pays for
through these programs. And we have all heard the stories about
the drugs that are $88 in the United States, and you go up over
the Canadian border, and there they are for $22.
We have all seen the difference between what the VA can buy
drugs for because they are not limited by that restriction.
They can use the lesser buying power that they have. What is
the position of AARP on trying to particularly in an
environment in which potentially slashing Medicare benefits,
giving it up as a benefits program and having it just be a
voucher that goes to an insurance industry, and as for the
rest, ``You are on your own, pal.''
In that context, does it make it even more important that
we fight to try to make sure that the buying power of Medicare
and Medicaid are brought to bear on the increasing costs of
prescription drugs? What is AARP's position here?
Ms. Connell. Our position is to do whatever is necessary to
help to contain costs, and we did support buying power for the
negotiation in Medicare for cost of drugs. That part of the
issue has not been on the front burner recently that I have
noticed, but it certainly is one that warrants the attention of
those who want to make sure that this program does serve.
We know that the costs of drugs have been increasing far
beyond the rate of inflation. And oftentimes, there are new and
wonderful drugs coming on the market, but there are also old
ones that have been kicking around forever whose costs have
gone up exponentially.
So that is a whole area that needs to be carefully looked
at and addressed. And hopefully, that is part of what will
happen as they seek to get these costs under control.
Senator Whitehouse. Well, let me thank both of you for your
testimony, and let me thank everyone for staying through this
hearing. I want to particularly acknowledge again Mayor
Polisena, who, despite the very, very busy schedule of a Mayor
in a Rhode Island city, has taken the time to stay through the
entire hearing and to hear all the testimony.
As I said, I have never met anybody in Rhode Island
government or politics who is a stronger fighter for seniors,
particularly for his Johnston seniors, than Mayor Polisena. And
that is shown in the quality of this wonderful senior center
that we are here.
[Applause.]
It is shown in the wonderful work of Tony Zompa and the
staff who are here. And I appreciate it very much.
I think the witnesses have been very helpful and
instructive. And if there is a single point that I think we can
take away from this hearing, it is that there is a terrible
cost to real Rhode Islanders and to real Americans if we
degrade Social Security and Medicare, if we change them from
being cornerstones of what it means to be an American and to
have that security and dignity and hand it over to, in
particular in Medicare's case, the insurance industry. But in
the Social Security case, if we are going to go back to
privatizing that as was tried a few years ago, hand that over
to Wall Street.
So there are powerful interests here, and there are real
harms that could take place. But what was important to me in
today's hearing was to hear so many different solutions that
can be brought to hear in a win-win way to improve these
programs, to lower the costs, particularly in healthcare, in
ways that actually improve our experience of the healthcare
system, how well the healthcare system serves us, our safety
while we are in the hands of the healthcare system, and the
results that we, as a society, get from our healthcare system.
And I will do one last recognition. She probably doesn't
want me to do it, but I see in the back of the room a friend
and former State senator who served in public life with great
distinction for many years, Catherine Graziano. And so, I want
to make sure I recognize her as well.
[Applause.]
So do we keep the hearing open for a week? Okay. So under
the Senate rules, the record of this hearing can stay open for
2 weeks, if anybody wishes to add any further testimony. So we
will keep it open for the full 2 weeks. If anybody has any
additional comment or testimony that they would like to add,
then that will go into the official Senate record of this
hearing.
And I will thank again the wonderful panel of witnesses who
came out. The wonderful panels, both panels of witnesses were
really extraordinary, and thank all of you for attending.
And let you know that we are at the beginning of a very
long and active discussion about these programs, but I think it
is pretty clear where I stand, and I can assure you that the
entire Rhode Island congressional delegation stands with me in
this area.
So, again, thanks to those who are here, recognition again
to our Department of Elderly Affairs director Catherine Taylor,
and thank you all so very much.
The hearing will be adjourned.
[Whereupon, at 11:36 a.m., the hearing was adjourned.]
APPENDIX
[GRAPHIC] [TIFF OMITTED] T7864.001
[GRAPHIC] [TIFF OMITTED] T7864.002
[GRAPHIC] [TIFF OMITTED] T7864.003
[GRAPHIC] [TIFF OMITTED] T7864.004
[GRAPHIC] [TIFF OMITTED] T7864.005
[GRAPHIC] [TIFF OMITTED] T7864.006
[GRAPHIC] [TIFF OMITTED] T7864.007
[GRAPHIC] [TIFF OMITTED] T7864.008
[GRAPHIC] [TIFF OMITTED] T7864.009
[GRAPHIC] [TIFF OMITTED] T7864.010
[GRAPHIC] [TIFF OMITTED] T7864.011
[GRAPHIC] [TIFF OMITTED] T7864.012
[GRAPHIC] [TIFF OMITTED] T7864.013
[GRAPHIC] [TIFF OMITTED] T7864.014
[GRAPHIC] [TIFF OMITTED] T7864.015
[GRAPHIC] [TIFF OMITTED] T7864.016
[GRAPHIC] [TIFF OMITTED] T7864.017
[GRAPHIC] [TIFF OMITTED] T7864.018
[GRAPHIC] [TIFF OMITTED] T7864.019
[GRAPHIC] [TIFF OMITTED] T7864.020
[GRAPHIC] [TIFF OMITTED] T7864.021
[GRAPHIC] [TIFF OMITTED] T7864.022
[GRAPHIC] [TIFF OMITTED] T7864.023
[GRAPHIC] [TIFF OMITTED] T7864.024
[GRAPHIC] [TIFF OMITTED] T7864.025
[GRAPHIC] [TIFF OMITTED] T7864.026
[GRAPHIC] [TIFF OMITTED] T7864.027
[GRAPHIC] [TIFF OMITTED] T7864.028
[GRAPHIC] [TIFF OMITTED] T7864.029