[Congressional Record Volume 141, Number 121 (Tuesday, July 25, 1995)]
[Senate]
[Pages S10653-S10654]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


                    THE 30TH ANNIVERSARY OF MEDICARE


                      a turning point for medicare

  Mrs. FEINSTEIN. Mr. President, in 1965--30 years ago this week--in 
Independence, MO, Medicare was signed by President Lyndon Johnson, with 
Harry Truman looking on.
  Over the last 30 years, Medicare has become one of the largest public 
health insurance systems in the world, having grown from 19 million 
seniors at a cost of $3 billion to 37 billion seniors costing over $159 
billion last year.
  In 1995--30 years later--Medicare is at a turning point.
  In fact, some would say the Medicare is under attack, because 
Medicare is slated for $270 million in cuts over the next 7 years under 
plans which are scheduled to be enacted later this year.
  This proposed 14 percent cut in Medicare spending is the largest 
Medicare ever proposed and makes up over 20 percent of the $1.2 billion 
in cuts in the Republican resolution.


                        the benefits of medicare

  While there are many disagreements about which direction Medicare 
should go in the future, there is no doubt about the benefits and 
achievements of the current program.
  Before Medicare was enacted in 1965, health care for seniors was 
expensive and often unavailable, due to the lack of insurers willing to 
cover seniors and the fact that, even with Social Security, seniors 
have been one of the highest-poverty age groups in America.
  Only 50 percent of seniors had health insurance, and so an illness 
could quickly force a senior into a charity ward or consume a lifetime 
of family savings.
  In comparison, the benefits of the current Medicare program are clear 
to millions of individuals and the families of those who are enrolled; 
health coverage is provided for 37 million seniors--including 3.6 
million Californians.
  Ninety-nine percent of the elderly population is covered through 
Medicare, giving seniors the highest rate of health coverage for any 
age group in the United States;
  The average lifespan for older Americans has increased 3 years since 
Medicare began, and quality of life has been improved by procedures and 
treatments such as hip replacements developed through Medicare.


                        problems facing medicare

  Nonetheless, there are some clear problems with Medicare that must be 
addressed, including; the anticipated bankruptcy of the Medicare Part A 
Hospital Trust Fund, which is projected to occur in the year 2002 at 
current spending rates; high annual increases in spending of 10 
percent, which have helped cause the program to go from $3 billion in 
1965 to $160 billion in 1994; fraud and abuse that eat up $44 billion 
in total health care costs annually, according to a GAO report, and 
result in $140 million in excess charges paid by consumers each year; 
the lack of potentially cost-saving managed Medicare, which enrolls 
only 10 percent of Medicare participants even though additional dental 
and prescription drug benefits are sometimes
 available (the rate is 25 percent in California).

  In short, the current Medicare Program pays out much more in benefits 
than it is taking in from premiums and payroll contributions. Without 
reform, Medicare will continue to grow out of control. Costs for new 
technologies and procedures continue to increase rapidly, and about 1 
million additional Medicare participants each year will add to costs.


                      reasonable medicare reforms

  To address these problems and lower Federal spending, I support a 
number of tough-minded Medicare reforms, including tightening controls 
and preventing fraud in Medicare; using successful State and Federal 
models such as the California Public Employee Retirement System 
[CalPERS] and the Federal Employee Health Benefits Plan as a basis for 
cooperative, market-based systems. I support asking the wealthiest 
Medicare recipients to pay more into the system than they do now; 
making managed care plans more beneficial to the Federal Government and 
more easily available to seniors, only 10 percent of whom are currently 
enrolled in HMO's.
  To help solve these problems, I voted in favor of $54 billion in 
Medicare cuts and reforms contained in the 1993 budget reconciliation 
bill, and I supported national health care reform such as the 
mainstream coalition proposal.


       republican budget proposals cut medicare too far, too fast

  However, I strongly oppose destructive Medicare reform proposals that 
go too far, too fast, without any certainty as to the results, 
including those that would force all Medicare enrollees to change 
doctors, give up their choice of doctors, or join HMO's involuntarily; 
steeply raise Medicare cots to participants, who already spend a 
national average of 21 percent of their incomes on health costs; rely 
almost entirely on appealing but untested changes to the current 
Medicare system, such as private vouchers and medical savings accounts; 
target the 3.6 million Californians who participate in Medicare for an 
unfair share of the deficit-reduction burden.
  As a result, I voted against the Republican budget resolution, which 
cuts $270 billion from the current baseline for Medicare over the next 
7 years.


                    unknown effects of medicare cuts

  What exactly do health care cuts of this size really mean? Well, no 
one really knows, but health care experts tell us that the options for 
cuts of this size are few, and estimates by the Health Care Finance 
Agency, which runs these programs, have projected dramatic effects.
  Under the Republican budget proposal--and the initiatives that are 
being considered for enactment later this fall--more will be taken out 
of seniors' Social Security checks, because that is where the Medicare 
part B premium is deducted. Medicare premiums and Social Security 
checks are linked together because under the integrated Social Security 
check-issuing system, Medicare premiums are automatically taken out of 
Social Security checks.
  Cuts to Californians on Medicare would total over $36 billion over 
the next 7 years--13 percent of the $270 billion total cut despite the 
fact that California only has 9.5 percent of the total population--
Health Care Finance Administration.
  Costs to seniors will have to be steeply increased, even though over 
80 percent of Medicare goes to seniors with less than $25,000 in 
income, who already pay over 20 percent of their income for health 
costs.
  Managed care could be implemented on a large scale without any real 
assurance that there will be more benefits to seniors and increased 
savings to the Federal Government. The current demonstration of managed 
Medicare has not yielded savings to the Federal Government, according 
to recent studies.
  Popular but untested ideas such as private voucher systems and 
medical savings accounts, which have not been tried at anywhere near 
this scale, could once again allow insurance companies to discriminate 
against older, sicker seniors, or force families to spend their savings 
in order to provide care.
  Relatively small-scale purchasing pools, such as the Federal 
Employees Health Benefits Plan, which covers only 9 million people 
nationwise, will be expanded enormously without any clear knowledge of 
the potential effects on care for the elderly.


                               Conclusion

  There is no argument that Medicare needs to be strengthened and 
improved, and I have supported reasonable Medicare reform in the past. 
But cutting $270 billion out of the program and implementing reforms 
that have yet to be 

[[Page S 10654]]
tested is not really reform, it's dismantling the program.
  The effects of cuts on this scale may not be felt immediately, and 
the plans for how to achieve them are certainly being kept under wraps 
until the last minute, but sooner or later it will be clear that 
cutting $270 billion out of Medicare goes too far, too fast.
  I only hope it is not too late to save the program before the 
American people realize it, and that 30 years from now this Congress is 
known for having reformed but not reduced the Medicare Program that has 
gotten us so far.


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