[Congressional Record Volume 141, Number 175 (Tuesday, November 7, 1995)]
[Senate]
[Pages S16717-S16720]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                       AN AMERICAN SUCCESS STORY

  Mr. GRAHAM. Mr. President, on Friday of last week, November 3, I 
began a series of remarks about America's Medicaid Program. I plan to 
continue that series throughout this week.
  In my opening remarks on Friday, I debunked the myth that Medicaid 
has been a failure. In fact, Medicaid, the Federal-State partnership 
for health care for poor children and their mothers, for the disabled 
and for the elderly, has been an American success story. The Senate 
should be building upon that success story, not retreating from it.
  Thanks to Medicaid, the Nation's infant mortality rate dropped 21 
percent during the period 1984 to 1992. In 1985, the infant mortality 
rate in the United States was 10.6 per thousand live births. In 1992, 
that had dropped to 8.5. The number of babies who were alive in 1992 
who would not have been alive had we continued at the 1985 rate of 
infant mortality--8,000. That is an American success story.
  Thanks to Medicaid, 18 million children have access to hospital, 
physician care, and to prescriptions as well as immunization and other 
preventive programs.
  Thanks to Medicaid, senior citizens can live in dignity in a nursing 
home when their own private resources are no longer there and there is 
no family member to care for them.
  Thanks to Medicaid, nearly 5 million low-income Americans receive 
help through the qualified Medicare Beneficiary Program which pays 
things like their part B, physician's Medicare monthly premiums, 
copayments, and deductibles as well as paying for prescription 
medication for the Medicare population, which is also medically 
indigent. For these qualified Medicare beneficiaries, Medicaid means 
the difference between a visit to the doctor's office instead of the 
use of the emergency room.
  Thanks to Medicaid, this Nation has decreased its population of 
severely handicapped residents living in large State institutions from 
194,000 to today's less than 70,000. Today, 6 million disabled 
Americans are covered under Medicaid.
  Thanks to Medicaid, children with catastrophic health problems or 
other special needs get treatment and care. In Florida alone, $284 
million is spent a year through Children's Medical Service, a Medicaid 
public-private partnership of national renown which last year served 
128,000 Florida children. This Federal-State partnership, serving 37 
million Americans, has been an American success story.
  I have strained my ears to hear the justification, the policy basis, 
the rationale for the $176 billion that is being cut from the projected 
needs of the Medicaid Program which, until $11 billion was added back 
at the last minute, had been a $187 billion cut.
  Today I wish to examine why Federal spending on Medicaid has 
increased. In addition, I wish to look at the basis for the projected 
needs of those served under Medicaid as America enters the 21st 
century. Why has Medicaid grown? Why is Medicaid expected to continue 
to grow? Such an examination will debunk yet another myth. That myth is 
that you can cut $176 billion from Medicaid without risking the deaths 
of infants or the neglect of the elderly or the unnecessary 
institutionalization of the disabled.
  Wednesday and Thursday I wish to discuss how the Senate proposes to 
reward bad, manipulative behavior in the Medicaid Program and how the 
inappropriate plan to raid Social Security will be used as a means of 
paying for the reward in the plan that we sent to Congress. And, 
finally, I wish to suggest a better alternative, an alternative of 
genuine reform.
  The key argument against Medicaid is that they say Medicaid needs to 
rein in spending because it is growing out of control. That is the 
principal argument of the critics. Let us look at the overall figures.
  In 1988, Medicaid cost $51.3 billion in Federal and State funds. We 
know the Medicaid Program is a partnership between the Federal 
Government and the States, each contributing to the total cost. In 
1993, Medicaid costs had grown to $125.2 billion. That sounds alarming, 
and virtually everyone agrees we must restrain the rate of growth of 
Medicaid. But no one has done a very credible job of explaining the 
policy basis for cutting $176 billion.
  Today I wish to examine why Medicaid has grown. There are two main 
factors that drive the cost of the health care system. First, how many 
people are served, and, second, the cost of serving each one of those 
people. In the case of Medicaid, we should put the second factor, that 
is, the cost of providing services to individual Americans who are 
covered under Medicaid, in perspective.
  In the private sector, the growth rate and the cost per person served 
is estimated to be 7.1 percent per year. That is projected from the 
years 1996 

[[Page S 16718]]
through the year 2002. The source of this projection is the 
Congressional Budget Office. This is higher than the projected growth 
rate for Medicaid, says the same Congressional Budget Office, which 
calculates that the Medicaid annual growth rate is 7 percent.
  What is, therefore, causing this alarming growth in Medicaid? The 
rate of growth per person is commensurate with, even less than, the 
average of all Americans' health care cost increases, that in spite of 
the fact that Medicaid is serving one of the most vulnerable 
populations--the frail elderly, the disabled, poor children, and their 
mothers.
  There are several key factors that explain why Medicaid has grown so 
rapidly. First, a fundamental reason why Medicaid has grown is because 
Americans are living longer. This is a positive trend for America. 
Greater longevity means that more people are not only living longer and 
more qualitative lives, but it also means that more people are relying 
on Medicaid for longer periods.
  In 1970, life expectancy at birth in the United States was just over 
70 years. By the year 2010, the projected life expectancy in the United 
States will be almost 80 years. In a period of 40 years, the average 
life expectancy of an American will grow from 70 to 80. The segment of 
our population 65 years and older is also living longer, much longer. 
If you had reached age 65 at the beginning of this century, you could 
have expected to have lived another 11 years.
  Those who reached 65 in 1990 could expect to live an average of an 
additional 17.2 years, according to the U.S. census. Millions of 
Americans are living longer, and a higher proportion of our population 
is reaching senior status.
  In 1900, about 40 percent of the population could expect to reach the 
age of 65. By 1990, 8 out of 10 Americans lived to be 65 years or 
older.
  Why is this relevant? It is relevant because Medicaid pays for half 
of the total nursing home care in the United States. Nationally, 
Medicaid pays 35 percent of all long-term care services. In Florida, 70 
percent of our Medicaid spending goes to benefits for seniors and 
disabled.
  Mr. President, let me just insert one more set of statistics to 
underscore the fact that a principal reason why Medicaid is expanding 
in its expenditures is because Americans are extending their life 
expectancy.
  In 1980, 15 years ago, there were 15,000 Americans over the age of 
100. By 1990, that population had nearly doubled. Today, in 1995, there 
are 56,000 Americans of the age of 100 or older. No one can deny this 
longevity trend, not Democrats, not Republicans. So when we hear claims 
about the growth of Medicaid, let us remember one of the fundamental 
reasons for that growth, thankfully, is as a people we are enjoying the 
benefits of longer life.
  In addition to the aging of our population, there is a second main 
reason for the growth in Medicaid spending, and that is we have asked 
the Medicaid system to do more. As an example, we have tackled the 
infant mortality rate, which was unacceptably high. In my State of 
Florida in 1991, at the urging of Gov. Lawton Chiles, the Florida 
Legislature enacted Healthy Start to improve access to prenatal and 
infant care. As I mentioned in my floor statement on Friday, Healthy 
Start is an example of a Medicaid success story. In 5 years, Florida 
went from being above the national average in infant mortality, with an 
infant mortality rate of 9.6 per thousand live births, to below the 
national average, at a rate of 8.1 per thousand live births, and the 
most recent Florida statistic shows that rate continues to fall and is 
now 7.6 infant deaths per thousand live births. Nationally, the infant 
mortality rate has declined from 10.6 per thousand live births in 1985 
to 8.5 in 1992.
  By providing prenatal and postnatal care, we are saving lives, and we 
are confident that costly medical services will be prevented in later 
years.
  Mr. President, I would like to take just a moment to recall one of 
the giants of this institution who represented senior citizens across 
America, the late Hon. Claude Pepper, a Member of the U.S. Senate from 
1937 to 1951 and later served a distinguished career in the U.S. House 
of Representatives.
  When I was elected Governor of Florida in 1978, Senator Pepper, then 
serving in the U.S. House of Representatives, made one request of me. 
He asked me to expand the Medicaid program in Florida to cover an 
optional two services: eyeglasses and artificial limbs.
  I am proud that one of my first acts as Governor was to sign 
legislation, inspired by Senator Pepper, to achieve these goals. 
Senator Pepper said there were too many poor seniors without vision and 
without limbs. So, yes, Senator Pepper, we have expanded Medicaid so 
frail seniors can read and walk.
  I challenge those who would cut $176 billion to tell us if they are 
ready to dismantle this legacy of Senator Claude Pepper, if they are 
ready to take away the eyeglasses of poor seniors, if they are ready to 
deny coverage of artificial limbs or return to the infant mortality 
rates of yesterday.
  There is a third reason, in addition to the aging of the population 
and the additional demands that we have asked of the Medicaid program, 
and that is that there have been expansions that we have made 
legislatively. There are, in addition, more and more children who used 
to get health coverage through their parents' jobs who have now lost 
their private sector insurance.
  Consider this trend line, Mr. President. In 1977, the Census Bureau 
says that the proportion of children with private health insurance 
coverage was 71 percent; 71 percent of American children had health 
insurance coverage through private coverage primarily through their 
parents' place of employment. By 1987, that percentage had dropped to 
63 percent; by 1993, to 57 percent; and the projection for the year 
2002, which happens to be the seventh year of the budget plan upon 
which we are currently deliberating, is that it will be 47.6 percent. 
Less than half of the American children will be covered by insurance at 
the point of their parents' employment.
  The cumulative result of these factors--the aging of the population, 
the increased expectations of Medicaid and the decline of the 
percentage of children covered by private insurance plans and, 
therefore, who are now eligible for and are being covered by Medicaid--
has contributed to the expansion of the Medicaid program.
  In my State of Florida, as an example, in 1970, shortly after 
Medicaid was available, 4.3 percent of Florida's population received 
Medicaid, those recipients who are eligible for Medicaid based on those 
who were eligible for aid to families with dependent children or 
supplemental security income. You had to be at one of those two classes 
in order to be eligible for Medicaid. The percentage of Floridians 
receiving Medicaid was fairly constant, in the range of 4 to 6 percent, 
from its inception in 1970 until the program began its expansion in the 
mid-1980's.
  By the 1993 fiscal year, 11.6 percent of Floridians were eligible for 
Medicaid. Today, that has grown to 12 percent, compared to the national 
figure of 14 percent of Americans being covered by the Medicaid 
Program.
  In sum, the percentage of Floridians eligible for Medicaid has nearly 
tripled since the program started a quarter of a century ago. It has 
tripled primarily because of the aging of the population, because of 
policy decisions, such as the decision to attack infant mortality, and 
by the dramatic decline in children covered by private insurance 
programs and, therefore, becoming eligible for Medicaid and receiving 
benefits through that program.
  Before I move on to my next point, I want to underscore that there 
are also some adverse reasons why Medicaid is growing. First, we must 
do a better job of suppressing fraud. Our colleague from Maine, Senator 
Cohen, estimates that Medicare and Medicaid suffer a combined loss of 
$33 billion a year due to fraud and abuse. At last week's hearing 
before the Senate Select Committee on Aging, the senior Senator from 
Maine said something that we all know is true. Senator Cohen said: ``It 
is appallingly easy to commit health care fraud.''
  In Florida, the Florida Supreme Court has just impaneled a grand jury 
for a year as part of our attack on Medicaid fraud.
  In addition to fraud and abuse, there is another adverse reason why 
Medicaid is expanding. There has been abuse 

[[Page S 16719]]
in the provision known as disproportionate share hospitals, sometimes 
referred to by the acronym DSH. Today, one out of seven Medicaid 
dollars is spent on disproportionate share hospitals. The proposal that 
this Senate adopted 11 days ago will make those payments virtually 
permanent within our Medicaid system. I will talk more about this 
phenomenon on Wednesday.

  Mr. President, having discussed some of the principal reasons why the 
Medicaid Program has grown dramatically over the last few years, let us 
now talk about the basis of projections for Medicaid. We are being 
asked to cut $176 billion from Medicaid's projection over the next 7 
years. What is the medical rationale for the $176 billion cut? What is 
the policy rationale?
  Mr. President, I have been seeking a good answer to those questions, 
and until I get one, I will have to assume that there is no sound 
rationale for $176 billion of cuts in Medicaid. I will have to assume 
that there are other reasons and that those reasons are to fund huge 
tax breaks, which will go, disproportionately, to the wealthiest 
Americans.
  Mr. President, we are not at a loss because our experts, the 
Congressional Budget Office, has looked ahead. It has projected an 
annual rate of increase for Medicaid spending at 10.2 percent through 
the year 2002.
  How did CBO arrive at that figure? The key factors driving the CBO 
projections were these:
  About 45 percent of the CBO-projected increases over the 7-year 
period are due to additional caseload; 45 percent of the reason why 
Medicaid is supposed to grow is because it will serve an increasing 
number of Americans--basically, the same Americans that have led to its 
growth in the last 10 years, the increasingly elderly population in 
need of nursing home care, the number of poor children who no longer 
have health insurance at the point of their parent's employment, and 
through policy directions to attack the issue of infant mortality.
  Do those who want to cut $176 billion from the Medicaid dispute this 
projection? Do they claim that we will be serving fewer people? If so, 
who will we not be serving? Shall we say to that frail senior citizen 
with poor eyesight who needs glasses that their glasses should be taken 
away? Will their neighbor who needs an artificial limb be denied? Will 
the preschooler who needs to be immunized tell us who will not be 
covered so that we can pay for the tax breaks?
  Medicaid serves multiple clienteles. One of the most costly groups 
served by Medicaid is the disabled. The chronically ill cost at least 
seven times what it costs to provide for nondisabled children per year. 
It costs the Medicaid Program seven times per person to serve a 
disabled person than it does the poor child.
  CBO says the projected rate of growth in the number of disabled 
children to be served is expected to rise 4.1 percent a year, which is 
higher than the growth rate for all other Medicaid categories. The most 
expensive category of Medicaid service is the category that is growing 
the most rapidly. Do those who want to cut $176 billion for Medicaid 
suggest that the needs of the numbers of the disabled will not grow at 
this rate? If they have some basis for that, we look forward to them 
presenting that to us.
  A second reason for the projection of Medicaid increase is that some 
30 percent of the projected increase in Medicaid outlays would be 
caused by increased costs, including national medical inflation--a 
factor that no individual State can control.
  Mr. President, one of the independent expert groups that has explored 
these tough questions of the future of Medicaid is the Kaiser 
Commission on the future of Medicaid. The Kaiser Commission issued a 
report in May 1995 based on Congressional Budget Office data that 
indicates what Medicaid will look like in the year 2002. The report 
assumes that States would first do the following things in order to 
achieve savings: They would enroll individuals in managed care plans; 
they would reduce provider payment rates; they would cut optional 
services. The States would do all of those before they would take the 
next step, which is to reduce enrollment in the program.
  Based on these assumptions--enrolling individuals in managed care, 
reducing provider payment rates, and cutting optional services--Kaiser 
has projected the changes in covered beneficiaries. Under the most 
optimistic scenario, States would somehow reduce growth in spending per 
beneficiary to the rate of overall inflation.
  Under another slightly less optimistic scenario, States would reduce 
real spending to the rate of inflation plus 1.9 percent per year per 
beneficiary. That number happens to be half the historical rate of 
growth for Medicaid. Either way, cost control would be more successful 
than that achieved by the private sector or by any public program, Mr. 
President, including the program that we have adopted for Federal 
employees. We are asking Medicaid, under these two scenarios, to be 
significantly more efficient than either the private sector or the 
public sector, including the judgment that we have made about our own 
health insurance program.
  Even with such a faith in State government's ability to cut health 
care costs, let us look at what we can expect in just one State--
California. What will the Medicaid landscape look like in the year 2002 
in the largest of America's States? California is currently projected 
to receive $95.7 billion in Medicaid funds from the Federal Government 
between the years 1996 and the year 2002.
  The Senate reconciliation bill would limit California to $77.7 
billion, which is an $18 billion reduction over that 7-year period. In 
the year 2002 alone, California would have been expected to have 
received $18 billion. The Senate bill would limit California to $13.1 
billion, a $4.9 billion reduction from current projections of need in 
the 1 year of 2002.
  Now, let us make some assumptions. Assume that California holds 
expenditure growth to inflation--a remarkable achievement. Having done 
so, and having also met the other assumptions, including moving all of 
those potentially into managed care and reducing the rates to 
providers, California would have to remove 320,548 people from the 
expected 6\1/2\ million Medicaid beneficiaries; 320,000 people would be 
removed from the Medicaid rolls.
  Suppose California was not quite as successful, and instead of being 
able to hold health care costs to the rate of inflation, California was 
able to hold health care costs to the rate of inflation plus 1.9 
percent. In that event, California would have to remove 1,065,823 of 
its 6\1/2\ million Medicaid beneficiaries.
  Are we saying that in the year 2002, assuming that California has 
done a better job of reducing costs than the private sector, the public 
sector, including the Federal Government, that we are willing to allow 
between a third of a million to over 1 million people to lose their 
health care coverage in the year 2002 in the State of California? What 
happens if California is not able to reduce its costs? Is the Governor 
of California ready to accept responsibility for allowing perhaps 
millions of our country's most needy people to go without health care 
coverage?
  Mr. President, my comments this morning boil down to some simple 
mathematics. Take the projected need in the Medicaid Program to the 
year 2002, which is $954 billion, and then subtract the amount of the 
proposed cuts, $176 billion; that amount of money that is left, $778 
billion is now going to pay for $954 billion in projected needs.
  Mr. President, the simple math tells us that the block grants will 
come up short, that they do not add up, that States will not have a 
sufficient amount of resources in order to meet the projected needs of 
the frail elderly, the disabled, poor children, and their mothers.
  This brings me, perhaps, to the most repugnant feature of the 
Medicaid block grant proposal--the  unmitigated cowardice of Congress 
for failing to admit, on the record, that these cuts will mean real 
suffering in the lives of real Americans.

  It is as if the U.S. Senate has adopted a policy of ``Don't ask, 
don't care.''
  The fact is, Mr. President, that the designers of these massive 
Medicaid cuts do not want to know who is really going to have to pay 
for the tax breaks that this $176 billion will, in part, fund. Leave 
those messy details to the States. Take the high road. Take the cake 
and ice cream of doling out $245 billion in tax breaks.
  The truth is that the price for these tax breaks for the wealthy will 
be paid 

[[Page S 16720]]
for in the currency of suffering, preventable illness, inadequate or 
unavailable care, and, yes, even the death of infants.
  What we saw orchestrated on the Senate floor 11 days ago was an 
elaborate ritual of plausible deniability. No hearings or debate on how 
many infants could die because of slackened prenatal care efforts. No 
hearings or debate on how many elderly will languish in nursing home 
warehouses because of deregulation and lower provider payments.
  Mr. President, that is precisely what happened when the 20 hours of 
debate ran out on a 1,500-page bill with no discussion, no 
accountability, no honest admission that cutting $176 billion from the 
projected needs of human beings that millions of Americans would 
suffer.
  In effect, the Senate sent to the States and county governments the 
dirty work, the painful decisions. That is what we do when we embrace 
the don't-ask, don't-care standard for the formulation of public 
policy.
  Mr. President, I ask unanimous consent for an additional 2 minutes.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. GRAHAM. Mr. President, the standard for formulation of public 
policy seems to be ``let the States and counties figure out who gets 
care and who does not. Their fingerprints will be on those decisions, 
not ours.''
  Make no mistake about it, these Medicaid cuts will cost infants and 
frail elderly and the disabled. Congress cannot wash its hands so 
easily with the pathetic refrain that ``We didn't know.'' Congress did 
not know because it did not ask. It did not ask because it did not want 
to know. That is cowardice.
  I never cease to be amazed how quickly the hands of Congress reach 
out to give tax breaks and favors and how quickly the same hands hide 
when it comes time to assume responsibility.
  The record, Mr. President, is clear. The majority of both Houses of 
Congress, with callous aforethought, siphoned $176 billion in health 
and long-term care of needy Americans without even a cursory concern 
for the human consequences.
  Mr. President, I am sure that no Member wants to leave that kind of 
mark on America. There is still time to reform Medicaid without hurting 
people. There is still time to deliberate the actual effects of cutting 
$176 billion in health and long-term care services for millions of 
Americans.
  Such a deliberation will bring us face to face with the families, 
with the children, with the frail elderly, and with the disabled who 
will pay the price of this tax break.
  Up to this point, Mr. President, the Senate has denied accountability 
and responsibility. That denial is not plausible.
  The PRESIDING OFFICER. The Senator from Minnesota, under the order, 
will have 10 minutes.
  Mr. McCONNELL. Will the Senator yield for a unanimous-consent 
request?
  Mr. WELLSTONE. Of course.
  Mr. McCONNELL. I ask unanimous consent I be allowed to proceed after 
the Senator from Minnesota.
  The PRESIDING OFFICER. Under the order the Senator from North Dakota 
follows the Senator from Minnesota.
  Mr. McCONNELL. After the Senator from North Dakota, I ask unanimous 
consent that I may proceed.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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