[Congressional Record Volume 141, Number 143 (Thursday, September 14, 1995)]
[House]
[Pages H8950-H8954]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


                           REPUBLICAN AGENDA

  The SPEAKER pro tempore (Mr. Miller of Florida). Under the Speaker's 
announced policy of May 12, 1995, the gentleman from Ohio [Mr. Hoke] is 
recognized for 60 minutes as a designee of the majority leader.
  Mr. HOKE. Mr. Speaker, I rise today to review some of the areas that 
we have been involved in the past couple of weeks that we have gotten 
back since the break, and particularly to look forward to what we are 
going to be doing during the next 2 months, because this is going to be 
an extraordinarily busy time, a very exciting time, and, frankly, and 
extremely challenging time for House Republicans on a number of fronts.
  I think, first of all, it is important to look at the big picture and 
to remind ourselves, and, of course, I am not speaking directly to the 
American people, but to you, Mr. Speaker, and perhaps they will hear 
also, but to remind ourselves that as we responsibly cut Government, 
which is what the American people want us to do, we also intend to grow 
America. Our plan is based on the principle that America's greatness is 
based on its people, not its bureaucracy, and that its greatest 
accomplishments lie in front of us and not behind us.
  We have essentially four things that we are going to continue to work 
on up until the end of this term of the first year of the 104th 
Congress. The first is to balance the budget in 7 years. As we all 
know, Mr. Speaker, we passed a budget resolution in late June that 
shows a roadmap to how we can get to a balanced budget by the year 
2002. We have worked assiduously passing appropriations bills that will 
do exactly that.
  First of all, in these appropriation bills, we have begun with the 
legislative branch itself and the conference report, because we all 
know that charity begins at home and so do the cuts. If we cannot take 
personal responsibility right here in this House, and if we cannot set 
an example and show how we Republicans ourselves are willing to make 
the sacrifices that are necessary, how on Earth can we possibly ask the 
American public to do the same thing.
  So, Mr. Speaker, we began with an 8 percent reduction in the 1996 
appropriation for legislative branch, and that is a $205 million cut 
below the 1995 levels. I think it is important to remember that when we 
are talking about this cut of $205 million, that is a real cut. That is 
not a phony smoke and mirrors Washington cut, that is actual real 
dollars: $205 million less than what we are spending in fiscal year 
1995, the year that is going to end on October 1.
  That is a remarkable difference, because in the past we have used 
this dark alchemy of baseline budgeting to confuse the American public. 
And it is the same dark alchemy that is being used right now by our 
liberal friends on the other side of the aisle to claim that we are 
decreasing, or cutting, slashing I think is the word that is used most 
frequently, slashing Medicare in order to pay for ``tax cuts for the 
rich''.
  The fact is, Mr. Speaker, that we are increasing in real dollars; not 
in inflated dollars, not in projected dollars, but in real dollars off 
of the 1995 actual amount. We are increasing the amount of money that 
will be spend on Medicare.
                              {time}  1745

  I am going to get to that in a minute, but I want to emphasize, as I 
go through some of these appropriation bills, that we have actually 
genuinely cut real dollars; in the case of leg branch, 205 million real 
dollars, from what we spent in 1995, not $205 million less than what 
somebody at CBO, an analyst who was never elected to anything at CBO 
projected we would be spending in 1996, but in fact $205 million less 
than we have spent in 1995.
  How about on the foreign operations side of it? We did slash foreign 
aid. We cut the foreign aid appropriation by $1.5 billion below the 
1995 levels. That is an 11\1/2\-percent reduction.
  In the Department of Interior appropriations bill we cut spending 
there by $1.6 billion over the 1995 levels.
  And we eliminated bureaucracies. We ended the funding for six Federal 
agencies, including the National Biological Survey, the Bureau of 
Mines, the Office of Indian Education, and the Office of Emergency 
Preparedness.
  Treasury-Postal Service; we delivered spending cuts that we promised. 
We reduced spending by more than $300 million below the fiscal year 
1995 levels.
  In the Department of Agriculture we have truly sown the seeds of 
deficit reduction. We have cut farm and food spending by $6.3 billion 
below the 1995 fiscal year budget. That is a 9-percent reduction.
  The American people have been saying for several decades we are 
subsidizing agricultural interests in a way that does not make any 
sense, and, if you listen to many, many farmers, they say exactly the 
same thing because what we do is we pay farmers to not grow crops that 
they probably would not have wanted to have grown anyway had the market 
been allowed to act as it should, and, as a result of that, we have a 
distorted marketplace in the agricultural industry in this country, and 
we are making those changes in real terms on a real-time basis.
  Also in the Department of Agriculture we have reduced welfare 
spending. We have cut the food stamp budget by $1.7 billion below 
fiscal year 1995, a 6-percent reduction going specifically after the 
waste, fraud, and abuse that exists in that area at the same time that 
we have increased nutrition funding. This is the WIC program for women, 
infants, and children, and also the school nutrition, school lunches, 
that we have increased substantially. WIC goes up 7\1/2\ percent. That 
is $260 

[[Page H 8951]]
million more than in 1995, and child nutrition funding jumped 6.7 
percent, $581 million over 1995.
  We have ended a lot of pork-barrel spending. This is also in the 
Agriculture appropriations bill. Its taxpayer support is terminated for 
80 special research and extension projects: The Rural Development Loan 
Fund, the Outreach for Socially Disadvantaged Farmers and Ranchers 
Program, the Honey Program, and university research buildings and 
facilities.
  In the Department of Transportation, Transportation appropriations 
bill, we have reduced funding by $1.4 billion. That is a 10-percent 
cut.
  And in the appropriations bill on Commerce, Justice, State, and 
Judiciary we have also had substantial cuts that include the beginning 
of tearing down and taking apart brick by brick the Commerce 
Department. Commerce funding is cut by $715 million in the first step 
toward eliminating that Department completely.
  What we have done is we have increased domestic-violence funding by 
fivefold to combat the appalling amount of violence that is committed, 
spousal violence and nonspousal violence, domestic violence, committed 
against women in the United States. We have $125 million provided for 
domestic-violence programs, which is a $100 million increase.
  In the VA-HUD bill we have cut spending by more than $10 billion 
below fiscal year 1995 levels. That is an 11-percent reduction.
  And on and on and on, and so those who say that we are not cutting 
the budget or that, if we are going to fix Medicare, we should be 
digging deeper into other parts of the budget, think again. We have 
been extraordinarily aggressive with respect to every area of the 
budget, including, to a certain extent, national defense, where there 
has been no increase, although that budget has remained flat, and I 
think, as you know, Mr. Speaker, I differ with some of my colleagues 
with respect to that because I think there is a lot more that we could 
be and should be doing with respect to streamlining and bringing best 
commercial practices and procurement practices into the Department of 
Defense.
  But I wanted to go on to the next area of the budget that I think is 
important and the next thing
 that we are going to be doing, as Republicans, in the coming 90 days, 
and that has to do with something I know is very close to your 
interests, Mr. Speaker, and that is to save Medicare. I think when we 
talk about Medicare we have to start out with the trustees' report of 
April 1995 and remind ourselves that there is actually a real problem, 
a genuine problem, and that if we do not do something to fix the 
problem, we run the danger, the real risk, of not having Medicare and 
that, if we do not go after this now, if we do not do something to make 
it solvent, what we are saying is we are not going to be responsible. 
We are just not going to take the advice of the Medicare trustees in 
their report to the President.

  Let us see what they said. They said, quote, under all the sets of 
assumptions the trust fund, that is the Medicare trust fund, is 
projected to become exhausted even before the major demographic shift 
begins.
  Now what do they mean there? They are talking about when they are 
talking about the major demographic shift, talking about the shift of 
baby-boomers, people about my age, who become retirees. That will 
happen in about 20 or so years, and that is a shift that will mean 
that, instead of having 3.3 workers for every retiree, for every 
Medicare beneficiary, at that time, the year 2030 I believe it is, we 
will--or 2025--we go to the point where we have got two workers in this 
country for everybody Medicare beneficiary. Now, even well before that 
the trust fund is projected to become exhausted.
  The other thing that they say is, quote, the fact that exhaustion 
would occur under a broad range of future economic conditions and is 
expected to occur in the relatively new future indicates the urgency of 
addressing the health insurance trust fund's financial imbalance.
  Well, what does that mean? Who is supposed to address it? Well, 
presumably, and in fact if you read the entire report, it is very clear 
who they expect to address it. They expect people in positions of 
responsibility in the Federal Government, specifically the President 
and the Congress. That means the House and the Senate, we are expected 
to come up with these--first of all to take the problem seriously, and, 
second of all, to act on it.
  I see that I have been joined by my good friend from Maryland. I 
suspect he wanted to add something to this.
  Mr. BARTLETT of Maryland. I am happy to join the discussion of 
Medicare.
  I think to put this in perspective that one of the first things that 
we need to do is to chat for just a moment about how Medicare is 
related to balancing the budget. I notice a lot of columnists and a lot 
of Congressmen will directly or indirectly relate our problem with 
Medicare to balancing the budget.
  What we are talking about here and what the trustees were talking 
about is part A of Medicare. That has a trust fund just like Social 
Security. It really has nothing to do with the budget.
  We make the statement that, and it is a very correct statement, that 
if the budget were balanced today, we would still face exactly the same 
problems with most Social Security and with Medicare that we face now, 
and so this is not a problem which is related to balancing the budget. 
It is true that if the budget were balanced today that we still face a 
problem having to do something about Medicare or it is going to be 
bankrupt.
  Now I know that there are those who are saying that the Republicans 
are going to cut Medicare. That is not true, and we will come to that 
in a couple of moments. You need to go to school for some elementary 
math if you think the Republicans are cutting Medicare.
  Yes, sir; you had a comment?
  Mr. HOKE. I think it is worth explaining why specifically this trust 
fund or why specifically whether or not the budget was balanced today 
does not affect this, and I think it is fairly easy to understand once 
you understand where the money comes from that goes into this trust 
fund because the only money that goes into the Medicare trust fund is 
from the payroll tax, the 1.45 percent times two, 2.9 percent, because 
it is matched payroll tax that is due--I am sorry, the 1.4-percent tax 
that is paid by each person with earned income in the United States. 
And that money goes directly into this trust fund.
  The Federal Government is precluded, is forbidden, from using any 
other Federal funds to pay for the payments that are made by the Health 
Care Financing Administration [HCFA] to pay for medical services. They 
must use the Medicare trust fund for those services. They cannot use 
the general fund of the
 United States.

  Mr. BARTLETT of Maryland. That is for part A, and that is the one the 
trustees are talking about, that is the one that is in trouble, and 
that is the one that we are talking about that we must do something to 
strengthen it, and save it, and preserve it so it will be there for our 
children.
  By the way, I think in 23 out of the last 27 years we have increased 
the payroll deduction for Medicare, so it has gone up, and up, and up, 
and we obviously cannot continue to do that.
  By the way, if we doubled or tripled that withholding, Medicare is 
still in trouble. So we have got to do something beyond that.
  So the first point that we need to make is that Medicare is not 
related to the budget. It is off budget.
  Now I know that we have been taking the money from the Medicare trust 
fund. We take if from all trust funds. I do not agree that we ought to 
do that. I think we need to stop doing that. We need to enact 
legislation so that we can stop doing that because right now by law the 
surplus funds in these trust funds have to be invested in U.S. 
securities.
  So, it is the Congress' fault that these funds are not there. Every 
bin where there should be dollars, like the highway trust fund, and the 
Social Security trust fund, and the Medicare trust fund, and the list 
goes on and on for a large number of trust funds, in those bins where 
there should be money there are just IOU's, and the money is owed to 
the Government.
  But this is an accounting problem, and, as far as accounting is 
concerned, and I have a little graph here which shows the problem with 
the Medicare account, and what it says is that starting next year we 
will be spending more 

[[Page H 8952]]
money than we are taking in. There is a surplus in the fund now, on 
paper. We have borrowed it, we need to give it back.
  But this still has nothing to do with balancing the budget, and, if 
we keep on going the way we are now, by 2002, maybe a little earlier, 
maybe a little later, because you cannot be really a perfect prophet in 
predicting what is going to happen economically in the future, but they 
said under all circumstances, any circumstance they could look at it, 
it was going to go bankrupt, and a good guess is about 2002, and you 
can see here it goes through the zero line in 2002, and that would be a 
catastrophe that we absolutely cannot afford to happen.
  So, it is very appropriate now that we step up, and, by the way, I 
would just like to encourage those that are on the other side of the 
aisle----
  Mr. HOKE. Maybe I could ask a question because, if that is the case, 
if under all the sets of circumstances that have been, you know, 
examined by the Medicare trustees, and, as I understand it, three of 
these are Members of the President's Cabinet----
  Mr. BARTLETT of Maryland. And four of them he appointed, and three 
are Cabinet Members; that is correct.
  Mr. HOKE. So, if there is a partisan issue, I suppose you could argue 
that these are all Democrats and that there are not Republicans.
  Mr. BARTLETT of Maryland. A majority of them at least are, yes.
  Mr. HOKE. OK; so clearly this is not something that has been trumped 
up by the Republican Party to create some kind of a phony crisis.
  Mr. BARTLETT of Maryland. That is exactly right. This is not a 
Republican program. It was what, April 3, that the President's 
trustees, the ones he appointed--he appointed four of them. Three of 
them are Cabinet Members, and they are the ones that in their annual 
report point out that we have absolutely got to do something.
  Now all at once from the other side of the aisle and from many 
journalists this becomes a Republican problem. It is our problem, it is 
not a Republican problem, but it is a problem that Republicans are 
stepping up to, and it is a problem that those on the other side of the 
aisle have not been willing to step up to. They have been very willing 
to be the source of disseminating false information to the American 
people. We will have a chance to chat about that as we go on here.
  Mr. HOKE. This is what I am sort of driving at. You know, it seems to 
me that the responsible thing to do here is look at the problem, and 
then posit solutions for the problem itself, ask the American people 
what they think, seek their advice, seek their input, which is what we 
have obviously been doing for some time now, have hearings on it. We 
have had over 10 hearings, thousands and thousands of pages of 
testimony. This is certainly not a problem that just started this year. 
Obviously we have been concerned about Medicare for some time.

                              {time}  1800

  The President has made it very clear as well, and comes up with, in 
terms of numbers, with proposals with respect to the actual percentage 
of increase, reducing the amount of the increase in Medicare that is 
quite similar to the numbers that we have come up with, and yet in this 
House, we have not heard any positive alternative plans, or even the 
admission that maybe there is a problem here that we ought to address.
  How do you read that? Why? What is going on? Why has this become such 
a partisan issue?
  Mr. BARTLETT of Maryland. Well, as the gentleman knows, it should not 
be a partisan issue. It is everybody's problem. It is my mother's 
problem. I am 69 years old, it is going to be my problem. But more 
important than that, it is my children's problem and my grandchildren's 
problem. Because what we are going to do if we do not do something 
responsible now is to require them to take care of our health care, and 
that just is not fair. They are going to have their own problems in 
spades.
  Mr. Speaker, as the gentleman from Ohio pointed out, this demographic 
shift, which is all the baby boomers coming on board; if we think we 
have problems now with Medicare, just look down the road at where we 
are going to be when the baby boomers come on board. So we really need 
to be responsible now and to solve the problem now so that we can build 
the foundation so that we can solve the bigger problem that we are 
going to have when the baby boomers start coming on board. Then it is 
not going to be two-to-one, it is going to be a ratio of less than two-
to-one.
  Mr. Speaker, I just wanted to get back for a moment to nail down this 
budget thing. This has nothing to do with the budget. When you hear 
someone say that Republicans are cutting Medicare, the first untruth is 
we are not cutting Medicare. It is now $4,800 per recipient per year. 
That is going to go up 40 percent or so to $6,700 per recipient, and 
nobody's math is going to consider $4,800 to $6,700 a cut.
  So that is the first problem with the statement. But they go on to 
say that Republicans are cutting Medicare, which is not true, so that 
they can give a tax break to the rich. That is silly. That is like the 
gentleman from Ohio saying that if your neighbor would stop having such 
expensive vacations, you could buy a new car.
  Mr. Speaker, our problems with balancing the budget have absolutely 
nothing to do with Medicare. It has its own trust fund. There is a 
problem there. We have to solve the problem. Again, I would just 
implore those at the other end of Pennsylvania Avenue and on the other 
side of the aisle here to please join us.
  What they are promoting is Medicare. They are trying to frighten our 
senior citizens. That is not fair, that is not right. We have a problem 
and they can do productive if they join us in trying to solve that 
problem.
  We have been engaged now over the break and for more than a month, 
and in our office for much more than a month, in a continuing dialog 
with the American people. They now know that there is a problem, they 
know that they must be a part of the solution to this problem, and when 
they look at it honestly and face it fairly, you know, they have faced 
bigger problems in their lives, and if they are business people, they 
face bigger problems in their business.
  I do not find our senior citizens frightened that we cannot solve 
this problem. I see some of them confused because they are getting 
different information. So let us just nail down the fact that this has 
absolutely nothing to do with balancing the budget, it is a totally 
separate area, totally separate problem, and then we can go on to talk 
about what the problem is and what we can do about it.
  Mr. HOKE. Well, I would like to suggest an answer to the question 
that I asked I suppose rhetorically earlier, and that is why is this 
being portrayed the way it is by the other side of the aisle? I believe 
that it is because for some reason, the liberals particularly, and not 
all of the members of the minority party in the Congress are doing 
this. But there is a strident and ugly strain that is brought out on 
this floor every day by people who have an extraordinarily great vested 
interest in keeping the system the way that it is. And what you find 
out is that what is really going on here is that this is about politics 
and politics is about power.
  Certain Members of the minority party in the Congress believe that 
this is the golden spike, this is what they need. This is the issue 
that is going to bring them back the House in 1996. To the extent that 
they are successful in confusing the public, perhaps they are right 
about that.
  Mr. Speaker, I thought there was an extraordinarily refreshing breath 
of fresh air that came from, of all places, the liberal journal of 
record in this country, the Washington Post this year, because they 
recognize exactly what is going on in terms of this partisan battle, 
and that there is no place for it if we are in fact going to take 
advantage of the opportunity, which it is a small window of opportunity 
to fix this, to make it right and to move forward in a way that is fair 
to all Americans. I want to read this to you, because I think it is 
very instructive.
  They said, and this is from just Tuesday, the day before yesterday in 
their lead editorial, they said, ``The Republicans are in control of 
the health care debate because this year they have forcefully taken the 
right position on the basic issue of controlling costs. The 

[[Page H 8953]]
Democrats denounced the Republicans for proposing to gut the programs, 
but they have no serious counterproposal. Not the Democrats in 
Congress, and not the President either. Last year it was they who 
proposed health care reform. This year they lie in the weeds. Why if 
the thing was urgent then is it not so now? They risk squandering for 
political reasons a chance to tame these programs that everyone agrees 
need to be tamed. They think they gain from this. We think they lose. 
They think it is clever, we think it is dumb. The problem for the 
Republicans is not that they are squeezing the health
 care problems, it is that they are trying to squeeze them too hard. 
What if,'' and it goes on, ``all the more reason for the Democrats to 
play a constructive part. What if they chose to help instead of using 
the issue to score political points?''

  In the same vein, from the Wall Street Journal just yesterday 
morning, and this is kind of remarkable when you have the Wall Street 
Journal, probably the most conservative major distribution newspaper in 
this country and the Washington Post, the most liberal distribution 
newspaper in this country, agreeing.
  The Wall Street Journal says:

       It is hard to tell among the fog of political war, but 
     Republicans are about to propose their most important reform 
     of the 104th Congress. They want to reestablish a private 
     market for medical care for the elderly, thereby rescuing 
     Medicare from what would otherwise be an inevitable crash. 
     This is the ball to keep your eye on as the Medicare debate 
     shrieks ahead amid the TV ads with tearful grandmas and 
     reporters writing the budgetese. All the verbiage about $270 
     billion Medicare cuts or cuts in the growth of spending, or 
     managed care is beltway smoke. The only way to save Medicare 
     now is to reintroduce the very American concepts of choice in 
     competition. Our understanding is that this is precisely the 
     core of the GOP proposal, at least in the House. Instead of 
     today's one-size-fits-all plan, the elderly would begin to 
     have a choice of insurance plans, just as most younger 
     Americans do.

  Well, God bless the Washington Post and the Wall Street Journal for 
coming to agreement on this that, first of all, there is a real 
problem. Second of all, that Republicans, particularly in the House, 
have decided to aggressively and forthrightly and creatively and 
courageously come up with solutions to those problems and propose them 
in the light of day; and third, that it is time for the Democrats to 
get off of this political partisanship where they are going to try to 
make hay in a way that clearly has not stuck, if you look at all of the 
poll results, but that they should get off of that and join the debate 
and join with us to make and craft solutions that will genuinely 
benefit the American people.
  Mr. BARTLETT of Maryland. Those are great editorials, and I think 
that they are saying what most Americans, when they have had a chance 
to look at the facts and think about it, what they are saying, too.
  I think that it is perhaps well to look at what the problem is. We 
can divide our health care into four segments. They are not of equal 
size, as you will see, but they have very disparate percentages of 
increases per year. Medicaid I think is increasing at about 14, 15 
percent a year. That is a government-run program. Medicare is 
increasing at about 10, 11 percent a year. That is a government-run 
program.
  If we go into the private sector, the major part of the private 
sector, the rate is increasing there about 4.5 percent a year. Now, 
that is too much, that is above the inflation level, that has got to be 
brought down. That is a whole lot better than it was a couple of years 
ago, and it is a whole lot better than 14 or 15 percent. It is a whole 
lot better than 10.5 or 11 percent.
  The fourth category I want to mention is a unique part of the private 
sector, and these are large corporations, large companies, that self-
insure. Now, nobody is quarreling that the quality of health care has 
gone down in the private sector, that they have less than half the rate 
of increase per year as in these government-run programs. Nobody is 
quarreling that the quality of health care is down. It is not down in 
these big companies. And you know what their experience has been? Last 
year they had a decrease of 1.1 percent in health care costs. So this 
tells us what the potential is.
  The article from the Wall Street Journal, that was particularly 
illustrative, because it points out that what our program is aiming at 
is to bring competition to the marketplace. There is no competition in 
Medicaid, there is no competition in Medicare, there is some 
competition, we need more, but to the extent we have competition in the 
private sector, and even more in these large companies that can shop 
around, competition has done what it always does in a free economy. It 
has increased the quality and it has decreased the price. So the Wall 
Street Journal is exactly correct. The solution to the problem, I 
think, is providing senior citizens options so that they can choose.
  Now, two things about this that will make this more important for 
senior citizens than for other people: I think we are smarter than 
other people, because we have lived longer and we have more experience 
and we can trade on that experience. I do not have more time, but you 
know, many senior citizens are retired and they have time.
  I can remember when I was in the workplace and this open season came 
once a year and we could change to another policy, I did not have an 
opportunity to look at those and study them. If I was reasonably happy 
with the one I was in, I stayed there. But this is not the case for 
senior citizens. They are very bright people, they have time, they will 
study, they will make great choices that are to their benefit.
  What that is going to require is competition in the marketplace, 
because we hope we are going to make available to them a wide menu, a 
wide menu of plans that they can choose from. They can stay right in 
Medicare, by the way, if they want to. Nobody has to leave if they are 
happy with where they are; They can stay there. But I think many 
people, most of the people, will opt to go to one of the other plans 
which will better fit their peculiar or personal or family situation. 
What this is going to do is to make for competition. It is going to do 
for Medicare exactly what it has done in the private sector and what it 
has done for these large companies, and the cost of health care is 
going to come down.
  Now, it does not even need to come down to 4.5 percent in Medicare, 
what is it, 6.5 percent or something, if we bring it down only that 
much, we are okay. I think we are kind of pessimistic. I think the 
senior citizens are smarter than that. I think they are going to do 
better than that, and I think that once they have this menu of 
opportunities that they are going to make great choices, the 
marketplace is going to respond, I think, in much less time than one 
would suspect, that we are going to be looking back at the Medicare 
problem and not looking at the Medicare problem.
  Mr. HOKE. Well, let us boil it down so that the senior citizens that, 
Mr. Speaker, may be watching these proceedings could get a specific 
example, and I just want to give one. That is so that people can have a 
sense of exactly what will be available. For example, a 75-year-old 
with an average income, what are the options that will be available?
  No. 1, the first option is that senior citizen can stay in the 
traditional Medicare program. That means no additional deductible or 
copayment. It means a continued 31.5 percent premium rate for the part 
B premium, and in other words, anybody that is in the program right now 
can stay in it with exactly the same benefits and the same levels and 
the same co-pay with no increases whatsoever except what are already 
scheduled. That is No. 1.
  No. 2 is that they can choose a managed care option with prescription 
drug coverage, and this is an option that is available now to many 
people in the private sector and will be available to seniors.
  Third, and this is the one that is most attractive to me, is that 
they can choose a medical savings account plan, a Medisave plan, that 
will offer them the protection of catastrophic umbrella coverage while 
giving them specific incentives to rationalize their own care in the 
same way that consumers rationalize the purchase of other products in 
our economy.
  It seems to me that it is only common sense. It should be only too 
obvious that having these kinds of choices will be much more attractive 
to senior citizens.

[[Page H 8954]]


                              {time}  1815

  Mr. BARTLETT. Absolutely. I would like to come back to the Medisave 
for just a moment. I had the privilege of being briefed by Pat Rooney 
from the Golden Rule Insurance Co., who first came up with this plan. 
He explained that on the basis of a person who was working for an 
employer, where the employer owned the policy, it is made available as 
a benefit to the employee. I do not think that is the best idea. I 
think if you owned it, then a lot of problems we now have like 
portability and preexisting conditions go away, and I think this is a 
great success. But that is an item for another discussion.
  But if you took a working family at that time, where the employer 
paid about $4,500 a year for their health care, and imagine if he took 
$1,500 of that and bought a catastrophic policy with a $3,000 
deductible, he now took that $3,000 and put it in an account for the 
employee, the employee would, anytime they thought they needed health 
care, they could go get it. They would not have to ask if it was 
covered. There was no deductible other than this $3,000 deductible, and 
then they brought the receipt from that and they got the money. If at 
the end of the year they had not spent
 the $3,000, it was their's.

  But since it was before tax dollars, this is where the medical IRA 
comes from. Since it was before tax dollars, if they wanted to take it 
out, they would pay the usual 10-percent penalty. But they could roll 
it over into an IRA. It would not have to be for their retirement, it 
could be for their children's education, or for any purpose in the 
future.
  It has been estimated that making the consumer a careful shopper 
could save up to a third of health care costs. If you think about it, 
Martin, the only thing that we shop for in our society and never ask 
the price of is health care. You never ask the doctor, ``Doctor, you 
have ordered 10 tests for me. Do I really need those 10 tests?''
  If your doctor were going to be perfectly honest with you, he would 
say ``No, Martin, you need 4, but I need 6 of them to protect me 
against malpractice.'' We need to solve his problem, and we have some 
good legislation that starts down that road. I am not sure it has gone 
quite far enough. We have started down the right road, anyway, and we 
are hoping to solve that problem. This would be an enormous incentive 
to be a good shopper, and there is a benefit for being a good shopper.
  Another area where I had one of our constituents who came to one of 
our open door sessions, who told about a Medicare billing for his 
mother for the 2 months after she was dead. These were just for drugs 
for her. But he is a very responsible citizen, Mr. Hardy from up in 
Allegany County, up in Maryland, and he went to the hospital to find 
out why that happened.
  Well, very few people do what Mr. Hardy did. He got it corrected, and 
there are three other nursing homes, four other nursing homes, that are 
now not using the billing service that that nursing home was using. So 
he really solved the problem. But very few of our people have his 
commitment.
  Mr. HOKE. You are absolutely right. I will give you two examples 
where the insurance industry has not really taken over payment of bills 
that are medically related, so you do not have third party payment, you 
actually have the consumer directly involved. Those two areas are 
dental and optical. And I will just give the optical example.
  What happened there is really quite instructive and very impressive 
in terms of what a free market can do. You found two things: No. 1 is 
that the number of choices in and the avenues that Americans have with 
respect to getting eye care and eye wear are really quite varied. You 
can go to an optometrist, and optician, or you can go to an 
ophthalmologist. There are three levels of care and training. All of 
those are available, and three different prices.
  You can go to almost any mall in this country and have a pair of 
glasses made in an afternoon. The price of glasses has on an inflation-
adjusted basis remained flat for several decades. The price of contact 
lenses has dropped dramatically over that same period of time.
  This is an area that has not been picked up by and large as a benefit 
because clearly it does not have really any insurance function. The 
truth is that insurance is supposed to protect people against 
catastrophic losses due to unforeseen circumstances.
  But that is not what our health insurance does. What our health 
insurance does is it is actually a prepaid health care plan. It is 
though we were paying insurance for oil changes and brake relinings and 
realignments and things like that, things that we know will go wrong 
with a car we would never insure
 against. The kind of routine things that need to be done medically 
that we can predict are also not really appropriate for insurance. But 
the fact is that because we, that is, the U.S. Congress, had made it 
much more advantageous to purchase insurance, because you do that with 
pretax dollars as opposed to buying health care which you do with after 
tax dollars, because of that we have encouraged this tremendous growth 
of health care insurance in this country. That really is at the very, 
very basis of the problem that we face today.

  I see that our time is about expired. I need to catch a flight. But 
if you want to take some additional time, I think we can do that under 
the leader's rule for the leader's hour. I know we can. Would you like 
to do that?
  Mr. BARTLETT of Maryland. Martin, I am happy to chat for a little 
more with the American people about Medicare. Martin just mentioned a 
very significant thing, and that is when competition came in, prices 
came down. He was mentioning the optical and the eyeglasses and so 
forth. This is exactly the kind of thing that is going to happen in 
health care if we give it a chance.
  I want to mention before we quit, Martin, one other thing you brought 
up. You mentioned health care and you mentioned sick care. We 
euphemistically call what we have in this country a health care system. 
Most of it is a sick care system, is it not, if you think about it.
  What we need is the philosophy and kind of insurance that moves 
people to genuine health care. It is like a warranty on your car, but 
they do not care whether you put oil in it or not.
  I do not understand why the insurance companies would not insist that 
we have a physical every year, because that is kind of the equivalent 
of putting oil in your car, and they would detect problems. There are 
old adages like ``a stitch in time saves nine'' and ``an ounce of 
prevention is worth a pound of cure.'' We seem to have forgotten all of 
those things in health care.
  By the way, sometimes when we have another opportunity, it would be 
very fruitful to talk about how we got here. How in the world did we 
ever get in a country which has been the envy of the world for our 
economic prowess, largely because we have a free market economy with 
competition, how did we ever get here, when we have essentially no 
competition with health care?
  Just to whet your appetite, the villain here is where the villain 
usually is when our country has problems, the Federal Government.
  Mr. HOKE. I thank you for coming down to the floor and joining me on 
this. I look forward to that discussion.
  Mr. BARTLETT of Maryland. We will meet again and have a further 
discussion.


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