[Congressional Record Volume 141, Number 161 (Wednesday, October 18, 1995)]
[House]
[Pages H10288-H10289]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




         GOP PLAN WILL SAVE, STRENGTHEN, AND SIMPLIFY MEDICARE

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentlewoman from Idaho [Mrs. Chenoweth] is recognized for 5 minutes.
  Mrs. CHENOWETH. Mr. Speaker, tomorrow the House of Representatives 
will take a giant step toward putting Medicare back on sound fiscal 
footing and giving our seniors the same choices enjoyed by Federal 
employees, including Members of Congress, and citizens in the private 
sector when it passes the Medicare Preservation Act of 1995 [MPA]. The 
goal of the MPA is to preserve Medicare for current beneficiaries, 
protect it for future generations, and strengthen it through reforms 
that have been tested and proven in the private sector.
  On April 3, 1995, the Medicare trustees, including three members of 
President Clinton's cabinet, issued the following warning: Medicare 
begins going bankrupt next year and unless prompt and decisive action 
is taken, Medicare will be completely out of money by 2002.
  There is no reason to doubt the accuracy of the report or its 
conclusion. I urge you to obtain an official summary from my office 
(356-2010) and judge for yourself.
  The bottomline is that if Medicare is not reformed, either seniors 
will be forced to accept sharply curtailed medical services or working 
Americans will be forced to pay sharply increased payroll taxes, 
estimated by the Heritage Foundation to cost the average Idaho 
household an additional $1,200 per year.
  Under the MPA, total Medicare spending will increase 54 percent, from 
$161 billion in 1995 to $274 billion in 2002. On an annual per 
beneficiary basis, average spending will increase from $4,800 today to 
more than $6,700 in 2002. Obviously, not only is Medicare not being cut 
but at an average of about 6.5 percent per year, it will grow faster 
than the current 3.2 percent rate of private sector medical inflation 
and more than fast enough to accommodate all new entrants into the 
system. Only in the bizarre and convoluted world of Washington 
bookkeeping and partisan bickering can such an indisputable spending 
increase be called a cut.
  The MPA will give seniors the right to choose from these:
  First, if they want to, seniors can stay with the current Medicare 
system--exactly as it is today. And if they choose another option and 
decide later that they want to return to traditional Medicare, they can 
do that, too. No senior citizen will be forced to give up his or her 
current Medicare coverage, switch doctors, or be forced into a plan 
they don't want.
  Second, seniors can opt for managed care and join a health 
maintenance organization [HMO], in which beneficiaries agree to receive 
their medical care from a defined pool of providers in exchange for 
lower out-of-pocket expenses and broader coverage, which could include 
prescription drugs, dental care, and eyewear. Many seniors, 
particularly those whose private physicians are already associated with 
the HMO they choose, will find this an attractive alternative.
  Third, seniors can opt for a medical savings account [MSA] plan, 
which uses the beneficiary's Medicare stipend to fund both catastrophic 
health insurance plus an MSA, out of which seniors would pay for 
routine medical needs. Seniors choosing this plan would have complete 
control over the money they spend on medical care and any money left 
over in the MSA at the end of the year would belong to the senior, not 
the insurance company or the Government.

  Fourth, seniors can join provider service networks, similar to HMO's, 
that are organized by doctors and hospitals themselves.
  The Medicare Preservation Act also aggressively attacks the waste, 
fraud, and abuse that has contributed so much to Medicare's rising 
costs. Incredibly, the Congressional Budget Office has estimated that 
as much as 20 percent of Medicare spending is fraudulent.

[[Page H 10289]]

  The MPA requires the Department of Health and Human Services to 
identify and eliminate these huge losses, including financially 
rewarding Medicare recipients who report abuses. It makes doctors and 
hospitals accountable for their actions and imposes stiff new penalties 
on anyone caught defrauding Medicare.
  Another important point is that the portion of Medicare part B costs 
paid by seniors through premiums, currently 31.5 percent, will not 
change. Over the past 7 years, part B premiums have nearly doubled, 
rising from $24.80 in 1988 to $46.10 today. Current law, the MPA, and 
the president's plan all assume similar increases over the next 7 
years.
  Let me also emphasize that every additional premium paid by Medicare 
recipients will go directly to Medicare part B, not, as you may have 
heard, to pay for middle-class tax relief. It can't. It's impossible. 
It's illegal. Premiums and payroll taxes paid into the Medicare trust 
funds can only be used for the Medicare Program.
  Finally, the wealthiest 2.9 percent of seniors, those single 
taxpayers with incomes above $75,000 and couples with incomes above 
$125,000, will be required to pay higher part B premiums.
  That is the Republican plan. It is innovative, responsible, and cost-
effective. Unfortunately, the congressional minority and the president 
have embarked on a partisan mediscare campaign meant to frighten and 
exploit seniors for political gain. It appears they have their sights 
set more on the next election than the next generation. Not only is 
that bad policy, it's also bad politics.
  One of the major factors in last November's electoral sweep was that 
Americans want Representatives who aren't afraid to tackle the tough 
issues. With our Medicare preservation plan, we have shown that we are 
willing to do exactly that.
  This plan ends a decade-long habit of applying only band-aid 
solutions to Medicare's fiscal woes. It uses common sense and market 
forces to save Medicare and bring the program into the 21st century, 
giving seniors more choices and better care at lower costs. But just as 
important, it is one more confirmation that the era of politics as 
usual is over.

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