[Congressional Record Volume 141, Number 124 (Friday, July 28, 1995)]
[Extensions of Remarks]
[Pages E1553-E1554]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


                  CELEBRATING MEDICARE'S 30TH BIRTHDAY

                                 ______


                          HON. BILL RICHARDSON

                             of new mexico

                    in the house of representatives

                         Friday, July 28, 1995
  Mr. RICHARDSON. Mr. Speaker, this week marks the 30th anniversary of 
Medicare, one of the Nation's most successful undertakings. Because of 
Medicare, America's seniors no longer choose between medicine and food 
or rent, and consequently their health has improved dramatically. 
Ironically, one of the reasons we are currently considering Medicare 
reform is due in large measure to its profound success. Americans are 
living longer, and many more reach an age where greater health problems 
emerge. This is a fortunate turn of events, and we must not use it to 
ransack a system that has served the Nation well.
  Medicare is a remarkable testament to the good that can come from 
deliberative, open, bipartisan efforts to solve an oncoming health 
crisis. The Medicare concept was debated in Washington for 13 years 
before finally being signed into law in 1965. Many skeptics predicted 
that it would bankrupt the United States, that the contributions 
seniors made prior to retirement would evaporate, and that our health 
care system would become substandard. In fact, none of these events 
occurred. Medicare has been overwhelmingly successful.

[[Page E 1554]]

  Currently, there are 37 million Americans enrolled in Medicare, and 
205,000 of them are New Mexicans. Today, 99.1 percent of all Americans 
over the age of 65 have health insurance coverage, primarily due to 
Medicare. The poverty rate for aged Americans has fallen by nearly 50 
percent since Medicare's inception, and this is largely attributable to 
the fact that seniors receive effective preventive and acute health 
care at reasonable costs.
  We must accomplish the difficult task of extending the life of 
Medicare, and it should not interfere with our commitment to balance 
the budget. But we also must examine the effects of current proposals 
carefully. In our rush to achieve ambitious goals, we cannot overlook 
the economic and social importance of adequate health care for seniors 
and the continued viability of local hospitals.
  I commend to you the following article, written by Dr. Lyle Hagan of 
my district, which outlines the serious impacts current proposals will 
bring about.
                       Storm Looming for Medicare

                         (By Dr. R. Lyle Hagan)

       On July 28, 1995 Medicare will celebrate its 30th birthday. 
     As we all know, Medicare is a U.S. Government program that 
     provides medical care for the nation's elderly. In addition 
     Medicaid--a government administered program, provides medical 
     services to the poor; financed jointly by Federal and State 
     governments.
       During the past several weeks, Congress has been deeply 
     involved in cutting costs in all areas of government 
     administration. Congress has established a Budget resolution 
     for the fiscal year 1996 (FY 96).
       The American Association of Retired Persons (AARP) fully 
     supports deficit reduction, but it also believes that deficit 
     reduction should be fair and balanced. The (FY 96) Budget 
     Resolution proposes to take nearly half of the deficit 
     reduction in the next seven years out of Medicare and 
     Medicaid. In both programs these are the largest cuts ever 
     proposed.
       In 1995, the average older beneficiary will spend about 
     $2,750 out-of-pocket to cover the cost of medicare premiums, 
     deductibles, coinsurance and the cost of services not covered 
     by Medicare.
       Under the Budget Resolution (FY 96), an average beneficiary 
     would end up spending a total of about $29,000 over seven 
     years--an increase of about $3,400. To achieve the medicare 
     spending reductions in these proposals, costs that are 
     currently paid by the Medicare program would probably be 
     shifted to Medicare beneficiaries in the form of higher 
     premiums, deductibles and coinsurance.
       These could include: a higher medicare Part B premium; an 
     increase in the annual Part B deductible to $150, indexed to 
     program growth; a new 20 percent home health insurance; a new 
     20 percent coinsurance for skilled nursing facility care; a 
     new 20 percent lab coinsurance and a new income-related 
     premium for higher-income beneficiaries.
       All of these options have been under review in the Congress 
     this year. Currently, the Part B premium intended to 
     approximate 25 percent of Part B costs. In 1995, the premium 
     is $46.10 per month, $553.20 annually. It is estimated to 
     grow to $60.80 per month, $729.60 annually by 2002. The 
     premium is deducted from most beneficiaries' social security 
     checks. The remaining 75 percent of Part B costs are paid 
     from general revenues.
       Under the proposal by FY 96, the Budget resolution could 
     substantially increase the Part B premium paid by medicare 
     beneficiaries thereby shifting higher health care costs to 
     medicare beneficiaries. Under the proposal, the premium is 
     estimated to jump to $97.70 per month, or $1,172.40 annually 
     by 2002. That is $442.80 more than the beneficiary would pay 
     under current law. Over the next seven years, most medicare 
     beneficiaries would pay an estimated additional $1,590 for 
     the Part B premium alone.
       The FY Budget resolution includes the largest Medicaid 
     reductions in the history of the program--$182 billion in 
     savings over the next seven years. In the year 2002 alone, 
     the budget proposal would reduce projected federal medicaid 
     spending by $54 billion, a reduction of about 30 percent 
     below what the government estimates it will cost to run the 
     program delivering the same services and benefits that it 
     does today.
       Medicaid is the health and long-term care safety net for 
     vulnerable children, older and disabled Americans. More than 
     four million older Americans depend on medicaid for coverage 
     of preventive care, prescription drugs, nursing home and home 
     community-based long-term care. In addition, more than 15 
     million low-income children are covered by Medicaid.
       How individual states would respond to the proposed cuts 
     would vary by state, but some things are clear. It is 
     unlikely that states would raise taxes or shift money to make 
     up for the federal reductions. According to estimates by the 
     urban institute, in the year 2002, more than eight million 
     Americans could lose their medicaid coverage as a result of 
     these proposed reductions.
       Senior citizens may ask their Senator or Representative in 
     Congress about Medicare and Medicaid cuts and how they will 
     affect their future health and medical care.
     

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