[Congressional Record Volume 141, Number 79 (Friday, May 12, 1995)]
[House]
[Pages H4907-H4911]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


                                MEDICARE

  The SPEAKER pro tempore (Mr. Fox of Pennsylvania). Under the 
Speaker's announced policy of January 4, 1995, the gentleman from New 
Jersey [Mr. Pallone] is recognized for 60 minutes as the designee of 
the minority leader.
  Mr. PALLONE. Mr. Speaker, I would like to spend my time today talking 
about Medicare. In light of what some of the previous speakers said 
today, I would point out that I am not really interested in the issue 
of whether or not we call the changes that the Republicans have talked 
about in their budget as cuts or modifications or whatever. I am 
satisfied to call them changes.
  The bottom line is, the Republicans in their budget proposals, both 
in the Senate as well as in this House, have suggested some major 
changes that are going to have major impacts on the Medicare program. 
Some of the previous speakers suggested today that perhaps seniors are 
not worried about it or that perhaps Democrats are making them worried 
unnecessarily.
  Let me tell you the reality is seniors are worried, and they are not 
worried because of anything that the Democrats have said to them. They 
are worried because they hear that some of these changes that are 
coming in the proposed Republican budget are going to have a major 
impact on Medicare, on Medicaid, which is also of importance to 
seniors, as well as on Social Security, which as you know was 
previously said to be off the table.
  I guess I was a little concerned when I heard the previous speaker, 
the gentleman from Georgia [Mr. Kingston], mention his mom. I guess it 
is that we are getting close to Mother's Day now. Different speakers 
talked about their moms. The gentleman from Georgia specifically said 
that in his case his mother or his family, I guess, was not really that 
worried about the Federal Government and Federal programs, that he felt 
that it was increasingly important for us to sort of not depend on 
Federal programs or forget about these Federal programs.
  The bottom line is, when you talk about these three Federal programs 
that I mentioned, Medicare, Medicaid, and Social Security, these are 
Federal programs that a lot of people in this country do depend on. 
They are watching very carefully, in my opinion, what we do here in the 
next few weeks or the next few months that might impact on those 
programs.
  If I could just use my own mom for an example, and I do not usually 
do that but, since it has already been stated by some of the others, 
she called me up just a couple of days ago and she was very worried. 
She just turned 65 a few weeks ago, is now eligible for Medicare for 
the first time, relied on the fact that when she became of age that she 
was going to have the benefits of Medicare. And now all of a sudden, 
when she first feels that she can take advantage of the program that 
she and my dad have been paying into all these years, realizes that 
there may be some major changes and she will not be able to benefit 
from what she expected in the program.
  This is of major concern to seniors. This is not something that is 
abstract. This is something that the average person is concerned about.
  In my district, when we held a number of forums for senior citizens 
during the April 3 weeks that were in the district, when we were not 
voting in Washington, I heard over and over again from senior citizens 
in my district, which is not a very poor district. I consider my 
congressional district very
 much the average. I have some wealthy seniors. I have poor seniors and 
most of my seniors are simply middle class. But they are very scared. 
When they hear about the changes in Medicare that might make them have 
to pay more out of their pocket for a copayment or a higher deductible 
before they get benefits or changes that might limit their options in 
terms of whether or not they go to a particular doctor or hospital, 
these are things they are concerned about.

  When they hear about Medicaid changes that might impact their ability 
to get long-term care, they are very concerned. And they are 
particularly concerned about what they consider a broken promise on the 
part of the Republicans when the budget, when the House Republican 
budget proposals talk about a change in the Consumer Price Index that 
will actually lower the COLA. Seniors worry about that COLA, that cost-
of-living adjustment.
  Mr. Speaker, many of them budget, and their budget depends on every 
dollar that they receive on a monthly basis from Social Security. And 
when you talk about changing the Consumer Price Index so that the 
amount of the COLA is reduced, that extra few dollars a month or 
annually that they receive makes a big difference to them.
  What I wanted to do today was to basically go through some of the 
suggested changes that are being discussed by the Republicans in the 
budget that affect Medicare. I think many have heard the last few days 
that the Senate Republican plan would pare about $250 billion from 
projected spending on Medicare and that the House plan ups that ante, 
if you will, to $270 billion.
  What does all this mean? What do these cuts or changes or 
modifications mean? How do the Republicans propose to go about 
implementing that? What does it mean for the average person?
  Well, we heard today, or at least I heard for the first time today 
that there was some detailed recommendations, about three dozen 
recommendations that were made on the House side by Republicans on the 
House Committee on the Budget to slow the growth of Federal Medicare 
cost; in other words, 
[[Page H4908]] to implement these so-called cuts or changes. And those 
proposals, I understand, have been put forward by a task force from 
some of the Republican Members, which was made available today, that 
was actually sent to the chairman of my Subcommittee on Health and 
Environment of the Committee on Commerce.
  I would like to go through some of those proposals by reference to an 
article that was in the New York Times today that sort of summarized 
some of them. If I could read from the New York Times article, it says 
that Republicans on the House Committee on the Budget recommended three 
dozen ways to slow the growth of federal Medicare costs. They include 
higher premium deductibles and copayment for beneficiaries and strong 
new incentives for them to join health maintenance organizations--we 
call them HMO's--which provide comprehensive care in return for a fixed 
monthly fee.
  The gentleman from Ohio [Mr. Kasich], the chairman of the Committee 
on the Budget, said the Republican proposals would expand health care 
choices for the elderly. But a Mr. Corey, who is the director of 
Federal affairs for the AARP, the American Association of Retired 
Persons, said the Republicans were creating a coercive environment in 
which Medicare beneficiaries will be herded into managed care and out 
of traditional fee-for-service arrangements.
  Under one of the leading options, Medicare beneficiaries would 
receive Federal vouchers worth a fixed amount, around $5,100 a year, to 
enroll in an HMO or other private health plan. They would have to use 
their own money to make up the difference if the cost exceeded the 
amount of vouchers, but they could keep most of the savings if they 
chose less expensive plans.
  Now, this voucher proposal is just one of the proposals that has been 
put forth by Republicans on the House Committee on the Budget to try to 
cut back, if you will, on Medicare.
  I would like to go through some of this and some of the others that 
are mentioned. When you talk about a voucher worth $5,100 to enroll in 
an HMO or other private health care plan, again, you have to make up 
your own money for the difference.
  One of the things that a lot of seniors are worried about is that 
right now Medicare is largely a fee-for-service program, which means 
that you can go out to the doctor of your choice or to the hospital of 
your choice, if you happen to live in an area where there are a number 
of hospitals, and that doctor or hospital performs a service and then 
they send a bill and Medicare pays for it on what we call a
 fee-for-service basis. The idea is choice. You have your own choice of 
doctors.

  Seniors traditionally had their choice of doctors both when they were 
working and now as part of the Medicare Program. In many parts of the 
country, including my own, the seniors do not feel that the HMO's or 
managed care systems are as good or do not include some of the 
physicians or hospitals that they may want to go to. But now all of a 
sudden under this proposal, if it is implemented, they would not have a 
choice. They basically get a voucher for $5,100 and they can find an 
HMO that will take them, or they can find another private health plan 
that operates on the traditional fee-for-service basis.
  But think about it a minute. Most of these managed care systems or 
other private health care plans that operate on a fee-for-service basis 
are not going to be particularly interested in someone who is older, 
who might have disabilities, who might have some previous condition 
that is going to make them a high risk individual. How likely is it 
that they are going to be able to find a plan that satisfies them for 
that $5,100?
  Ultimately, many of them are going to have to basically take that 
additional money out of their pocket if they have it to pay for a plan. 
And I have to tell you, and I think most people understand that a lot 
of seniors simply do not have the money. So this idea of the voucher is 
a serious change, that is being talked about, that would have a major 
implication and for many seniors might result in them not having health 
care at all.
  The next proposal that comes from the Republicans on the Committee on 
the Budget, and again reading now from the New York Times summary, the 
Republicans also recommend a stiff financial penalty for new Medicare 
beneficiaries who refuse to join HMO's. Beginning in 1999, all new 
enrollees choosing Medicare fee for service would pay a premium $20 
higher than that of current Medicare beneficiaries one of the 
Republican recommendations says. The premium is now $46 a month.
  So basically what they are saying is that if you enter, for example--
this is not until 1999, but I will use my mom as an example again; she 
just entered the system within the last month. But let us say she was 
entering in 1999. If she basically decides that she does not want to go 
to an HMO or managed care system that limits the doctors or the 
hospitals, then she has to pay more to continue in a fee-for-service 
system out of her own pocket.
  The amount that they are talking about here, $20 higher than that of 
the current beneficiaries, which is now $46 a month, is significant. 
But I would maintain that as time goes on, that differential between 
what the senior is going to be charged if they enter the managed care 
system versus the fee-for-service system will grow. And the greatest 
fear that many of the seniors have in my district, the greatest fear 
that they have is that ultimately, if they are given a choice, which is 
not really a choice, between a managed care HMO and a fee-for-service 
system, that if the cost of the fee for service becomes so prohibitive 
that they cannot pay for it, they are essentially forced into an HMO or 
managed care system. That is what we are talking about here with this 
second Republican recommendation.
  Ultimately the cost of the fee-for-service system would be so 
expensive that seniors would be forced into an HMO where they would 
not, given the choice, have their choice of doctors or even hospitals 
in many cases.
  The third proposal that comes from the House Republican budget group 
task force is they would reduce payments to doctors and hospitals, 
especially teaching hospitals and those that serve large numbers of 
low-income patients. Well, this is what I would call a reduction in the 
reimbursement rate. Many of you know that in terms of Medicare, a rate 
is established to pay for doctors or hospitals by Medicare, and that is 
what they get reimbursed for the different services that are provided.
  Some people and some of you, my own seniors, have said to me: So 
what, the doctors get a lot of money. The hospitals make too much 
money. So you reduce their reimbursement rate. What do I care, maybe it 
is good.
  The bottom line is maybe it is not good, because many hospitals, 
particularly those who have a high number of seniors, as is the case 
with my district in New Jersey, are basically dependent on Medicare 
reimbursement and are just basically managing with the budget they 
have, because they have so many senior citizens or they have so many 
poor people.
  If you reduce the reimbursement rate to hospitals, some hospitals 
will simply close. Others will not be able to provide the level of 
service or the quality of service that they are providing now. What 
happens if you reduce the reimbursement rate to doctors? Some may say 
``So what, the doctors make too much money''. The reality is that 
doctors do not have to take Medicare patients. If the reimbursement 
rate becomes significantly lower or does not increase as much as it 
should to keep up with inflation, then a lot of doctors will just say 
``I'm not going to take Medicare patients.'' Seniors have already 
complained to me about how, in many cases, they cannot find a doctor 
who will take Medicare. If more doctors do not take Medicare, fewer 
doctors are going to be available to senior citizens.
  ``The fourth thing that was recommended by the Republicans on the 
House Committee on the Budget,'' and again I am reading from the New 
York Times article, ``was to double the amount that beneficiaries must 
pay for doctors' services before Medicare coverage begins. This is the 
deductible.''
  The annual deductible, now $100, would be raised to $200 and then 
increased automatically to keep pace with the growth of the program. 
The deductible has been raised only three times in the 30-year history 
of Medicare.
  [[Page H4909]] Here we get to the real nub of the question. This 
option increased the deductible. Of course, everyone knows what that 
means. The deductible goes up, the senior has to pay more out of pocket 
before they are actually able to take advantage of Medicare. It may 
sound nice, but most or many seniors simply cannot afford it. What they 
will do is they will simply forego care, because they know that that 
care will be less than the deductible that they have to pay out, the 
last thing in the world that we could possibly want.
  The fifth thing that was mentioned by this Republican Committee on 
the Budget, or by Members recommending how to deal with Medicare, is to 
``increase the monthly $46 premium by $5 in each of the next 4 years, 
and then by $6 in 2000 and in each of the following 2 years.'' I assume 
that what we are talking about here probably is the part B premium that 
seniors pay for doctors, so again, we are talking about an increased 
amount of money out of seniors' pockets if they can afford it.
  There are two more options that I wanted to talk about today that 
have been suggested by the Republicans on the Committee on the Budget 
to deal with these changes they have suggested in Medicare. This next 
one says that ``They would charge higher premiums for beneficiaries 
with incomes exceeding $70,000 a year. The premium would more than 
triple, to $164 a month for individuals with more than $95,000 a year, 
and couples with more than $115,000.''
  Here we are talking about means testing. I think many of you know 
that historically, and certainly when the Medicare program was started 
under President Lyndon Johnson, that Medicare was not going to be 
income-based. You paid into it. When you reached the age of 65, you 
took advantage of it. It did not matter what your income was, it was 
not meant to be a welfare program. It was for all senior citizens.
  Now we are talking, under this proposal, of turning Medicare 
basically into an income-based program, I will call it a welfare 
program, and basically reneging on the contract that was made with 
those Americans, that was made 30 years ago by the President then and 
this Congress, that this was not going to be an income-based program.
  Some may say ``So what? Changing times, we have to change the reality 
of things.'' Let me assure you that in those States, and I will use my 
State as an example, which have a very high cost of living, some of 
these income categories that are being used, for example, $70,000 a 
year, I would maintain that as time goes on we will see that level be 
reduced. If it is now 70, it will go to 60, then to 50, then to 30.
  Think about people who live in States where the cost of living is 
very high. These arbitrary numbers that are going to be used, in my 
opinion, are going to make a lot of people who can really ill afford 
it, based on this means testing plan, have to pay out of their pocket 
more money for their health care, when they happen to be senior 
citizens. It goes against the contract that was made with seniors by 
this original enacting legislation, and ultimately, I think it will 
have more and more impact on middle-class seniors.
  The last thing, and there are many others, I am only citing 6 but I 
think there are something like 35 recommendations that were put forward 
by these 4 members of the Committee on the Budget in the letter they 
sent to the chairman of my Subcommittee on Health and Commerce, but the 
seventh and last one that I want to mention says ``They will charge 
patients for a portion of the cost of home health care provided to 
elderly people residing in their homes. Republicans said such a change 
would discourage overuse of home health services.''
  Again, one of the most serious problems we face now is the need for 
long-term care for seniors. I think everyone knows that if you can 
provide seniors with home-based health care, where someone comes into 
the home to help them get out of bed, to help them clean up, or to help 
them with the various disabilities that they have, that is a very 
cheap, preventive way of dealing with health care problems that face 
the elderly, much better than having to go to the hospital and the 
costs entailed with a hospital, or a nursing home, or other kinds of 
institutions.
  Why in the world would we want to discourage home health care or 
build in an extra charge for home health care? All that is going to do 
is discourage seniors from using home health care, or not use it at all 
if they cannot afford it, and the ultimate cost of that is that people 
become institutionalized and it costs even more money to the Federal 
Government.
  Mr. Speaker, the point I am trying to make here today is very simple. 
Whether we call it a cut, whether we call it a modification, whatever 
we call it, of the changes that are being discussed by the House 
Republicans on the Committee on the Budget, and they are going to be 
coming before this Congress, this House, next week, they are major 
changes in the Medicare Program. They have a direct impact on seniors.
  The bottom line is that they are probably going to result in a lot 
more money that seniors are going to have to pay out of their pocket, 
and if they cannot afford it, which many cannot, they are simply not 
going to have the quality and level of services, or in some cases, may 
not have any health care at all.
  I do not think, Mr. Speaker, that the costs of balancing the budget 
should be so heavily forced on the elderly within this country. We all 
know that we have to balance the budget, and I certainly advocate that, 
but this budget, this budget resolution that is being proposed depends 
too much on hurting and making it more difficult for seniors, 
particularly with regard to their health care needs. That is not the 
way to go about balancing the budget.
  Mr. Speaker, I wanted to talk a little bit about some of the Medicaid 
cuts and respond a little bit to some of the statements that were made 
about President Clinton's health care proposal.
  Mr. Speaker, I talked initially about the Medicare program. I want to 
also talk a little bit about the Medicaid cuts or changes that are 
being discussed. Before I do that, though, I want just to take 5 
minutes or less to just give some statements that have been made by 
some of the associations that deal with senior citizens about what 
these Medicare and Medicaid cuts or changes are going to mean for the 
elderly.
  I just want to highlight a few of these things, because sometimes I 
feel if I make a statement, maybe some people will believe it, but it 
comes from some of the associations that represent senior citizens, 
perhaps it will be more believable.
  The American Association of Retired Persons, which, of course, has 
been, I guess, the leading opponent of some of these changes, they have 
said that Medicare was hardly discussed in the last election, and there 
was certainly no mandate from the electorate to change the system. I 
think that is obvious. This is not something that was part of any 
political discussion that I know of in terms of anyone running for 
office last year.
  ``Medicare cuts would mean that over the next 5 years, older 
Americans would pay at least $2,000 more out of pocket than they would 
pay under current law, and over the next 7 years they would pay $3,489 
more out of pocket. The total number of Medicaid beneficiaries who 
would use long-term care services could reach $1.7 million in the year 
2000.'' That is from the AARP.
  The National Council of Senior Citizens says ``The levels of the cuts 
in Medicare contemplated by the Senate and House Budget Committees will 
not just devastate the finances of millions of older citizens, but more 
importantly, they will devastate the hopes for a secure and healthy old 
age for all Americans.''
  The Older Women's League says:

       We receive hundreds of letters from women who are already 
     forced to choose between paying for food and rent and buying 
     much needed medicine that is not covered by their Medicare. 
     Substantial cuts in Medicare will literally take food out of 
     the mouths of these older women.

  I could not agree with that more. When I have my forums in my 
district, the overwhelming majority of the seniors who show up are 
women. Most of the people that are particularly scared are women. Many 
of them are just making ends meet. If you talk about additional 
deductibles or copayments or out-of-pocket expenses, they are 
[[Page H4910]] making choices between food and rent and needed medical 
care.
  Last, Mr. Speaker, and I mention it because I happen to be a Roman 
Catholic, the Catholic Health Association says that ``Budget cuts of 
such magnitude in Medicare and Medicaid would attack the very fiber of 
these programs, and in fact, decimate them.'' As I think many know, 
Catholic Charities is one of many nonprofits that provides medical care 
to people who do not otherwise have it, and anyone who has visited a 
Catholic Charities knows that a lot of the people, really significant 
numbers of the people that are serviced by them are senior citizens, as 
well as children.
  I would like to now go into Medicaid, which I guess has not gotten as 
much attention as the proposed changes in Medicare, but the Medicaid 
program, which is the program for poor people in this country, mostly 
people who are receiving some sort of welfare of assistance, is also 
severely cut, some would say more severely challenged, in terms of the 
amount of money that is going to be available over their next few years 
than Medicare under this Republican budget proposal.
  A lot of people think that Medicaid is just, you know, a program for 
people under 65, and that somehow seniors do not take advantage of 
Medicaid because they are covered by Medicare. The reality is that for 
many seniors who do not have the assets to pay for long-term health 
care, if they are poor enough, or if they become poor because they have 
to spend money on health care, Medicaid ends up financing much of their 
long-term care, particularly nursing home care, as well as home health 
care, because that is not provided or covered by Medicare.
  The cuts in Medicaid will also severely impact seniors who need long-
term care. I don't think anybody needs to be reminded of the nursing 
home crisis we have in this country. Again, if you significantly cut 
back on the amount of money that is available, I would argue that the 
quality of care is certainly going to decrease.
  Medicaid is basically a combined Federal-State health insurance 
program, primarily for poor women and children, the blind, and the 
disabled. It is the largest provider of long-term care coverage for the 
elderly and the disabled. Two-thirds of the costs of the Medicaid 
Program go to provide both acute and long-term care to the blind, the 
disabled, and the elderly.
  Most Medicaid beneficiaries are children, and children have the 
lowest rate of health insurance in the country. so therefore, being 
without Medicaid insurance among children would be catastrophic. The 
cuts proposed in the Medicaid Program are massive. They are 
substantially larger than the total annual Federal costs of the 
Medicaid Program. The elderly and disabled will bear the brunt of these 
cuts, because that is where most of the money is spent.
  Many senior citizens who have spent their life savings on long-term 
care are enrolled in the Medicaid Program, which assures that their 
long-term care can continue. With the proposed Medicaid cuts, these 
seniors will either be forced out of absolutely vital long-term care, 
or their families will have to pick up the costs of maintaining care. 
These cuts amount to a huge hidden tax increase on the families of 
those who need or may need long-term care.
  Where are we shifting these costs? We are shifting these costs to the 
families that have to care, in many cases, for the elderly. We are 
going to shift these costs to the States, because some States will 
decide that they cannot let people just go without health care, 
particularly seniors, so they will have to kick in their tax dollars, 
ultimately resulting in higher costs and taxes on the State level, or 
ultimately, also, the burden goes to the local communities and the 
local property taxpayers. Because Medicaid costs are shared with the 
States, cuts of the magnitude that are being talked about here will 
force States to bear even larger Medicaid costs, leading to substantial 
increases in State taxes. If States are unable to meet that, people 
will lose coverage. The uninsurance rate, particularly among children, 
will explode, forcing up costs for everyone else. Cost shifting will 
get much worse.
  I think we have to understand that the Medicaid Program has basically 
brought primary and preventive care to people who would not otherwise 
get health care, and without the Medicaid Program, or with some of the 
changes that are being proposed, we are going to see a lot of people 
who are poor simply not getting coverage.
  Mr. WISE. Mr. Speaker, will the gentleman yield?
  Mr. PALLONE. I am happy to yield to the gentleman from West Virginia.
  Mr. WISE. I just want to thank the gentleman, not only for the 
special order, but making the point on Medicaid, because so much is 
focused, and rightly so, on the cuts in Medicare, which is basically 
health care for the senior citizen. Medicaid, 50 percent of Medicaid 
dollars go to senior citizens, basically for nursing homes.
  I do not think that a lot of people appreciate the fact that there is 
no nursing home care under Medicare. Medicare does not provide for the 
long-term nursing home care that so many families require, so they have 
to turn, instead, middle-income families, turn instead to Medicaid.
                              {time}  1430

  The average family, this was a few years ago, but the statistic was 
that if somebody had to pay the cost out of pocket of a nursing home 
for their loved one, the average family would be impoverished in 13 
weeks.
  Medicaid is what has kept many, many middle-income families able 
first to meet the responsibility to their loved one and at the same 
time to avoid bankruptcy.
  Cutting back on this program, as well, goes right at the heart of not 
only providing health care but I think also middle-income families.
  Mr. PALLONE. I appreciate what the gentleman from West Virginia said 
and it is very true.
  The average cost of a nursing home now, the last I looked, was 
something like $30,000 to $40,000 a year, at least in my area. It might 
be less elsewhere. How many middle-income people can afford that?
  Essentially what they do as you described is that they will pay 
private maybe for a year or two, depending on how much money they have, 
and then will go on Medicaid because they won't have any money left. 
They will end up being in a nursing home paid for by Medicaid a lot 
longer than that year or two that they happen to be paying out of their 
pocket.
  I don't particularly like that spend-down system that exists right 
now, but the bottom line is it depends heavily on Medicaid.
  From the information that I actually had here before me, the bottom 
line is that most of the Medicaid dollars actually are going to pay for 
programs like that for the elderly.
  We are talking about middle-income people, if you will, that become 
impoverished because of the cost of nursing home care. I appreciate 
those comments.
  The last thing that I wanted to talk about today, and again this is 
partially in response to some of my Republican colleagues who spoke 
earlier today, and were somewhat critical, I thought, of President 
Clinton and his response to the issue of changes in Medicare that have 
been proposed by the Republicans on the budget committees.
  The reason that I have to take issue with some of the statements that 
were made is because the President's position has been very clear for 
several years now. It is essentially that changes in Medicare and any 
savings that could be achieved in Medicare costs basically should only 
be made in the context of an overall health care reform.
  I totally agree with that premise that the President has put forth. 
The idea is, and he basically expounded on it the last year or two when 
he put forth his health care reform proposals, is that in the overall 
context of health care reform, we could probably save some money on 
Medicare costs, but at the same time we would expand Medicare to 
provide more services.
  The President actually talked about expanding Medicare to cover 
prescription drugs, to cover certain long-term care in certain 
circumstances.
  His idea was not to cut or modify Medicare and take that money and 
use it for other things. His idea was that the Medicare dollars that 
are saved would be used to expand Medicare, particularly for 
preventative services like 
[[Page H4911]] prescription drugs, like long-term care for the elderly, 
and to try to basically save some money as part of the overall reform 
that he was making for all Americans.
  I think it is very, very unfair for some of the Republicans to 
suggest that somehow the President is not being responsive on the 
Medicare issue. He has been, he was, and when he was, he did not 
receive
 cooperation from the Republicans.

  I just wanted to highlight that if I could by a letter that was sent 
to Speaker Gingrich I believe last week from Leon Panetta, the Chief of 
Staff for President Clinton, and just to read a couple of paragraphs if 
I could:

       Last year, the President spoke directly to the nation about 
     the need to reform our health care system and made clear that 
     further federal health savings needed to take place in the 
     context of serious health care reform. In December 1994, the 
     President wrote the Congressional leadership and made clear 
     that he would work with Republicans to control Health care 
     spending in the context of serious health care reform. The 
     President repeated this offer in his 1995 State of the Union 
     speech.
       The President has long stated that making significant cuts 
     in Medicare and Medicaid outside the context of health care 
     reform will not work. Such dramatic cuts could lead to less 
     coverage and lower quality, much higher costs to poor and 
     middle income Medicare recipients who cannot afford them, a 
     coercive Medicare program, and cost-shifting that could lead 
     to a hidden tax on the health premiums of average Americans. 
     That is why it is essential to deal with the Medicare Trust 
     Fund in the context of health care reform that protects the 
     integrity of the program, expands not reduces coverage, and 
     protects choice as well as quality and affordability.

  I could not agree more with what the President suggests, that 
whenever changes we make and whatever costs are saved in Medicare have 
to be looked at in the context of overall health care reform.
  Incidentally and importantly for me because I happen to live in the 
State of New Jersey and represent part of New Jersey, there was an 
editorial in the Star Ledger, New Jersey's largest daily, on May 3 that 
basically criticized the Republican budget proposals and was critical 
of the fact that the Republicans did not want to deal with Medicare in 
the context of overall health care reform.
  Mr. Speaker, if I could just read parts of this because I think it is 
so telling in terms of the debate we are about to engage in:
  The editorial is entitled, ``Messin' With Medicare.'' About halfway 
down it says:

       The Republicans say President Clinton wants to hold 
     Medicare reform ``hostage'' to a broader plan for national 
     health care reform.
       Which would be the wise thing to do.
       You can't mess with Medicare without affecting other parts 
     of health care and spending, certainly not in New Jersey 
     where Medicare spends $5.2 billion a year on 1.1 million 
     beneficiaries, ninth highest in both categories. Consider the 
     proposal to raise the age of eligibility for Medicare to 70 
     so the program can save about five years on each persons' 
     medical bills.

  I did not even mention that. That is another option, I suppose, that 
you just raise the age before you get Medicare benefits.

       That means shifting some of the $5.2 billion to employer-
     paid health plans to cover all the years Medicare doesn't. If 
     not, retirees will either have to pay their own way or go 
     without coverage and care as they enter the stage of life 
     when they are likely to need both most. Think of how many 
     would come of age for Medicare just in time for the program 
     to pay the consequences of years of government neglect of 
     problems they've had since they were young but which went 
     untreated for lack of health care insurance.
       Hospitals and doctors can treat them during those years and 
     try to recover their own cost by dropping it into everybody 
     else's bill.

  If I could just interject. What the Star Ledger editorial is saying, 
that if you make these changes, cost shiftings are going to occur 
essentially for everyone else in the private sector.

       Private insurance is switching to managed care. Health 
     maintenance organizations and other insurance plans send 
     their members to the doctors and hospitals which give big 
     discounts, discounts that leave no margin to cover what 
     Medicare does not.
       Shifting senior citizens into managed care is another 
     reform proposal. The HMOs say they can do more for less 
     because they hunt for discounts and manage how many tests and 
     procedures and hospitalizations are ordered.
       If the U.S. government doesn't have enough muscle to force 
     prices down through Medicare, it's hard to imagine a private 
     plan that would at least not without cutting benefits 
     drastically.
       We face the prospect that Washington may give seniors the 
     ``choice'' of switching to ill-defined managed care or 
     staying with traditional Medicare at an increased out-of-
     pocket cost too onerous to make it a real choice.

  That is really what my seniors are most afraid of which is, are they 
going to be given the option of some kind of managed care system which 
basically is ill-defined and which does not provide the coverage that 
they need, or, which is more likely, they are going to be staying in 
Medicare and paying more and more out of their own pocket in order to 
continue as part of the program.
  Of course that really begs the ultimate question, which is, if you 
are not in a position because you are too poor or lower middle class 
that you simply can't pay those additional out-of-pocket costs that are 
the consequence of these Republicans proposals, you are going to go 
without medical care or preventative care, get sicker and not be cared 
for. That, I think, is the ultimate result of these Republican 
proposals.
  I hope that as we go into the debate over the next week or so that 
this comes out and that the American public is able to realize what 
these changes, if you will, in the Medicare program that the 
Republicans are talking about really mean. I think the changes are 
major and I think we have to do whatever we can in this House to 
prevent them from becoming law.


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