[Congressional Record Volume 141, Number 124 (Friday, July 28, 1995)]
[Senate]
[Pages S10902-S10903]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


                      MEDICARE'S 30TH ANNIVERSARY

   Mr. DODD. Mr. President, I rise both to salute the 30th 
anniversary of Medicare and to call on the Republicans to release their 
secret plan to overhaul the system.
   Medicare has been an American success story. It has provided health 
and financial security to millions of American seniors for three 
decades now. Along with Social Security, Medicare has transformed the 
retirement years from a time of fear to a time of confidence. Searing 
anxiety that the next illness would bankrupt you and your children has 
been replaced by the sure knowledge that a solemn contract will assure 
you of the care you need.
   But now, at a time when we should be celebrating Medicare and 
discussing how to make it stronger, we are instead discussing draconian 
cuts and a secret plan to turn the system on its head.
   During the last week, word has leaked out in the New York Times and 
the Washington Post about the Medicare cuts being cobbled together in a 
back room somewhere over on the House side. According to both reports, 
the House Republicans have a plan that would give seniors a devil's 
choice: face $1,000 a year in additional premiums, co-payments and 
deductibles or be forced into a health plan that could very well 
deprive them of the choice of their own doctor.


                                 Tax Cut

   Why are such wrenching changes being contemplated for Medicare? To 
pay for a tax cut for the wealthiest Americans. The $270 billion in 
Medicare cuts are roughly equivalent to the Republican budget's 
proposed $245 billion tax cut--more than half of which would flow to 
people earning more than $100,000 a year.
   The Republican Medicare cuts would not be reinvested back into the 
system to make it solvent. The majority is not cutting Medicare in 
order to strengthen it. Hardly one dime of the savings would be put 
back into the system. Nearly every bit of the savings would go right 
out the door as tax cuts for the wealthiest Americans.
  The Republicans also claim that all they want to do is hold Medicare 
cost increases to the same rate as private health care inflation. But 
such claims simply ignore the fact that the number of people on 
Medicare is increasing rapidly, as is the average age. The fastest 
growing population segment in the United States is people over 85, and 
these people need a great deal of medical care.
   The budget for Medicare must increase simply to keep up with these 
demographic trends. If it does not, benefits will decline and costs for 
recipients will increase.


                               Secret Plan

   According to press reports, that is exactly what the Republicans are 
planning: increased costs and reduced benefits. Unfortunately, we do 
not know all the details of the plan because it is being drafted in 
secret. I joined with a number of my colleagues on the Budget and 
Finance Committees yesterday in sending a letter to our distinguished 
Majority Leader asking him to release details of the Republican 
Medicare plan before the August recess.
   I am sympathetic to the occasional need for confidentiality in 
drafting legislation. I believe, however, that the Republicans have had 
ample time to come forward with a proposal. It has been nearly 9 months 
since the Republicans took the majority in Congress and nearly 7 months 
since they actually took power.
   But now we are told they will not unveil their plan for Medicare 
until September--nearly a full year after they were elected. By that 
time, there will be little time for hearings, committee consideration 
or public discussion of these sweeping proposals. The Medicare reforms 
will likely be folded into the reconciliation bill, which will be 
considered under special rules limiting debate. We will be under the 
gun to pass the bill by October 1 in order to keep the Government 
running.
   That is no way to consider the most radical overhaul of Medicare in 
30 years. The Republicans must come forward with their plan now so that 
seniors and their families will have time to digest the proposals and 
understand what they would mean to them personally and financially. We 
must have adequate time to weigh this legislation--a few hectic days in 
late September is not good enough.


                              Higher Costs

   As I said, we do not know the exact nature of the Republicans' 
Medicare cuts because they have not been released. What we do know from 
reports in the press, however, is quite discouraging.
   The Medicare budget would not keep up with medical inflation or the 
influx of new recipients, and as a result it would cover less and cost 
more for recipients with each passing year.
   The Republicans apparently contemplate transforming Medicare into a 

[[Page S 10903]]
  ``voucher'' system. Under this plan, seniors would face mounting 
financial pressures every year to move out of their fee-per-service 
system and into a managed care plan in which they would not be able to 
choose their own doctor.
   I am a supporter of managed care, and I believe it is a valuable 
tool for controlling costs and improving quality in our health care 
system. I believe that seniors should be able to choose to join a 
managed care plan if they want to, and in fact, more than 70 percent of 
Medicare enrollees already have that option today. But it must be a 
choice freely made, not one coerced by financial pressures.
   But it is exactly that kind of financial coercion that the House 
Republican plan would create. Seniors choosing to remain in the fee-
per-service part of Medicare would face more than $1,000 a year or more 
in added premiums, co-payments and deductibles. Even those 
beneficiaries who go into managed care will have their current benefits 
threatened as the proposed cuts squeeze harder and harder and the real 
value of the voucher declines.
   When we hear numbers like these, we must remember who we are talking 
about here. The median income for Medicare recipients is $17,000 a 
year. Seventy-five percent of all seniors make $25,000 a year or less.
   These are the people who would be pounded by a barrage of new 
expenses if they choose to stay in fee-per-service: higher copayments, 
higher premiums, higher deductibles.
   One Republican proposal would raise the amount seniors pay out-of-
pocket for their care from 20 to 25 percent.
   The AARP estimates that another of the proposals would increase out-
of-pocket deductibles--currently at $100--to $270 a year by the year 
2002.
   The average beneficiary receiving home health care services would 
pay $1,020 more in 2002 than they do now.
  Another provision of the Republican plan spells out exactly how the 
Republicans would attempt to stay within their extremely tight budget 
projections for Medicare. According to an internal memo leaked to the 
New York Times, ``If program spending exceeds growth rates set in law, 
then outlay reductions will be triggered.''
   Under the Republican plan, what if Medicare starts to run out of 
money at the end of the fiscal year? Will seniors needing medical care 
in September be told to come back after October 1st? If spending is 
projected to exceed budgeted amounts, will Medicare announce part way 
through the year that it will no longer cover mamograms or that 
recipient copays for doctor visits will double?
   The Republican plan would also reportedly include some means-testing 
to have more affluent seniors pay more for their coverage. I agree that 
some means-testing of Medicare benefits will probably be necessary in 
the long run.
   We should not kid ourselves, however, about how much savings could 
be achieved through means-testing. Eighty-three percent of all Medicare 
spending is for older Americans earning less than $25,000 a year. There 
simply is not that much Medicare spending on wealthy seniors from which 
we could extract major savings.


                               Conclusion

   The American people deserve to know about these changes. Seniors 
deserve to know. Their children, who could find themselves saddled with 
more and more of their parents' medical bills, deserve to know.
   Everyone deserves to know about these changes for the simple reason 
that the American people care about Medicare, and they care deeply. A 
recent poll commissioned by the American Association of Retired 
Persons, shows that 89 percent of Americans support this program. 
Ninety-two percent see it as the only way older Americans could 
possibly have adequate health care. And 9 in 10 older Americans said 
they do not want to be a burden on their families.
   In pushing for passage of Medicare 30 years ago, President Johnson 
said, ``the specter of catastrophic hospital bills can [now] be lifted 
from the lives of our older citizens.'' I hope we will do nothing in 
this Congress to let that specter again stalk older Americans. I urge 
the majority to release its Medicare plan to the public 
immediately.


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