[Congressional Record Volume 141, Number 156 (Tuesday, October 10, 1995)]
[Senate]
[Pages S14943-S14944]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          WE MUST SAVE MEDICARE--BUT WE MUST DO IT RESPONSIBLY

 Mr. DORGAN. Mr. President, if there is one thing that everyone 
seems to agree on in the debate over Medicare, it is that the future of 
the program must be guaranteed. Thanks to Medicare, 99 percent of older 
Americans now have health care coverage. It would be a tragedy for this 
program to become insolvent, and I am prepared to vote for the changes 
necessary to preserve it, just as I have done in the past.
  Where I differ with some congressional leaders, however, is over how 
much projected Medicare spending must be cut in order to save the 
program. The 7-year budget plan, which passed the Congress in June over 
my objections, cuts projected Medicare spending by a whopping $270 
billion. This same budget plan also cuts projected Medicaid spending by 
$182 billion while providing $245 billion in new tax breaks.
  I believe it is wrong to be making an unprecedented level of cuts to 
Medicare, Medicaid, and education while granting tax relief largely to 
taxpayers making over $100,000 per year and to large corporations that 
take advantage of tax loopholes.


                           MEDICARE SOLVENCY

  And according to Medicare experts, the amount needed to save the 
Trust Fund is $89 billion, not the $270 billion the budget would cut. 
Clearly, the vast majority of the Medicare cuts--$181 billion--have 
nothing to do with keeping Medicare solvent. The reason this budget 
cuts Medicare three times more than is necessary to save the Trust Fund 
is to pay for the one big cost item in the budget: new tax breaks.


             THE PLAN PROPOSED BY SENATE REPUBLICAN LEADERS

  Under the plan passed by the Senate Finance Committee, premiums for 
Medicare part B, which pays for physician services, would double and 
could exceed $100 per month in the year 2002. This premium would be 
deducted monthly from seniors' Social Security checks. On top of that, 
the part B deductible would also increase from $100 to $220.
  Beneficiaries would also be given three options for receiving care: 
First, seniors could choose to remain in the traditional, fee-for-
service plan; second, beneficiaries could choose to move into private 
managed care plans, like health maintenance organizations [HMO's]; or 
third, seniors could set up medical savings accounts [MSA's] to pay for 
their health care expenses. I believe Medicare should be expanded to 
give seniors more choices for coverage, but the same basic level and 
quality of care now available to beneficiaries must be assured. I would 
also oppose a proposal that would force seniors into health plans which 
restrict their choice of doctor.
  The wealthiest seniors--individuals with incomes over $75,000 and 
couples making more than $150,000--would be asked to pay more for their 
Medicare by reducing the part B premium subsidy they receive. I support 
this proposal as a part of an overall effort to control the rate of 
growth of Medicare spending.
  The Senate proposal would also increase the eligibility age for 
Medicare from 65 to 67 between the years 2003 and 2027. This would mean 
that people born since 1938 would have to wait longer for Medicare.
  Finally, the majority of savings would come through reducing payments 
to hospitals, physicians, and other health care professionals who 
provide Medicare services.


                           IMPACT ON SENIORS

  So what will these cuts mean to Medicare beneficiaries? I think the 
impact could be quite serious. Medicare premiums and deductibles will 
increase for North Dakota's 103,000 senior citizens, and quality and 
availability of care for all North Dakotans will be threatened.
  I am concerned that the premium and deductible increases could make 
Medicare coverage unaffordable for some seniors. Most older Americans 
have very modest incomes; 75 percent of seniors on Medicare live on 
less than $25,000 a year. And in North Dakota, older Americans get by 
on even less: 70 percent of our State's seniors have incomes of under 
$15,000. 

[[Page S 14944]]

  Already seniors spend 21 percent of their income on health care 
costs. In 1994, the average older American spent $2,500 for health care 
costs not covered by Medicare. Those over 75 pay even more, and these 
numbers don't even include the cost of long-term nursing home care, 
which averages nearly $40,000 per year.
  The portion of the cuts which do not fall on beneficiaries directly 
will be borne by the doctors, hospitals, and other health care 
providers who deliver Medicare services. Because of this, I am 
concerned that the proposed level of cuts could create a quality gap 
between Medicare and the rest of the health system.
  In effect, these cuts could create a second class health care system 
for the elderly on Medicare. Even now, Medicare reimburses health care 
providers at only 68 percent of the amount health providers get from 
private payors.
  Another serious consequence of this budget plan on seniors is the 
substantial, $182 billion cut in projected spending on Medicaid. On top 
of new Medicare costs, Medicaid cuts could force hundreds of thousands 
of middle class seniors and their families to assume the burden of 
nursing home costs as well.


                      IMPACT ON HEALTH CARE SYSTEM

  Cuts of this magnitude could have devastating consequences for our 
health care system, particularly in rural areas.
  These cuts would take $537 million out of North Dakota over the next 
7 years. That's $5,213 per Medicare beneficiary in North Dakota.
  According to the North Dakota Hospital Association, as many as 12 to 
20 rural hospitals in North Dakota are in danger of being shut down by 
these cuts. Rural hospitals rely heavily on Medicare patients, and many 
are already in very precarious financial condition. Other rural health 
care providers are similarly dependent on Medicare patients for their 
livelihood. These cuts will make access to health care even more of a 
problem for all North Dakotans living in those areas.
  Teaching hospitals are also in jeopardy. We need teaching hospitals 
to educate our health care professionals and to conduct invaluable 
medical research which saves lives.
  Another concern I have is that cuts of this magnitude cannot be 
absorbed within the Medicare system alone and that health care 
providers will have no choice but to shift their uncompensated costs 
onto their other patients in the form of higher fees. This means higher 
medical bills and higher health insurance costs for the rest of the 
population.


                          MEDICARE COST GROWTH

  Are Medicare costs growing too fast? Do Medicare costs need to be 
brought under control? Yes, absolutely.
  Medicare Program costs are growing at a little over 10 percent per 
year. But roughly one-half of this growth is caused by the increasing 
number of seniors in our country who become eligible for Medicare each 
month and the increased utilization of health care services that 
results from people living longer.
  This year, 37 million Americans are covered by the Medicare Program. 
Every month over 200,000 older Americans enroll in Medicare for the 
first time. Just within the time frame of this budget, Medicare will 
cover 3.7 million more people than it does today.
  A better measure of Medicare cost growth is to look at per person 
costs. Currently the cost of health care per person is increasing in 
Medicare at about the same rate it is increasing in the private 
sector--roughly 7.6 percent per year. The budget cuts would limit per 
person Medicare growth to 4.9 percent, while the private sector health 
care would stay at 7.6 percent.


                          WHAT SHOULD BE DONE

  I believe it is possible to balance the budget and protect Medicare 
at the same time. But it will take the new leadership in Congress 
compromising on their tax cuts and being straight about the Medicare 
Trust Fund. It will also mean that Democrats must acknowledge that the 
current growth in Medicare spending is not sustainable and must be 
slowed.
  We know that the amount needed to save the trust fund is $89 billion, 
not the $270 billion cut in the budget plan. This level of savings is 
achievable without any new increases in costs for beneficiaries and 
without hurting our world class health care system.
  The first thing we must do is crack down on the waste, fraud, and 
abuse in the Medicare system. The General Accounting Office has found 
that as much as 10 cents of every dollar spent by Medicare goes to 
fraud and abuse. I regularly get letters from my constituents in North 
Dakota describing the wasteful duplication of services and paperwork 
that occur under Medicare. I have cosponsored legislation to address 
this problem once and for all.
  We must also modernize Medicare so that it has the same management 
tools as the private sector to control costs. Case management services, 
for example, can improve the coordination and quality of care for 
beneficiaries and save money for Medicare at the same time. New 
computer technology can help prevent Medicare from making duplicative 
or improper payments. Adopting a single claims form for providers can 
cut down on paperwork.
  I believe Medicare must also place greater emphasis on preventive 
care. Only a fraction of beneficiaries take advantage of the mammogram 
and flu shots covered by Medicare. We should improve these benefits and 
take steps to promote their use.
  Removing barriers to practice for qualified non-physician providers 
will help Medicare save money and also help bring needed caregivers 
into more of rural North Dakota.
  Finally, modest reductions in the rate of growth of Medicare 
spending--only what's needed to reach $89 billion--will ensure that 
Medicare remains solvent while protecting benefits so that Medicare 
remains a program worth saving.
  With a little good faith all around, I am hopeful Congress can pass 
this kind of a plan later this year. It may take a Presidential veto 
before we get there, but I believe we can provide the fiscal discipline 
the American people want from the Federal Government without 
sacrificing the health security that they deserve.

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