[Congressional Record Volume 141, Number 183 (Friday, November 17, 1995)]
[Extensions of Remarks]
[Pages E2208-E2209]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                 THE MEDICARE PRESERVATION ACT OF 1995

                                 ______


                      HON. RODNEY P. FRELINGHUYSEN

                             of new jersey

                    in the house of representatives

                       Friday, November 17, 1995

  Mr. FRELINGHUYSEN. Mr. Speaker, I rise in support of passing this 
historic legislation to save Medicare from bankruptcy and preserve and 
protect the program for current and future beneficiaries.
  There is no issue more important to elderly Americans than their 
health care security. Medicare gives beneficiaries peace of mind every 
time they go to the doctor or spend a few days in the hospital.
  That is why, when I received the alarming news in April that Medicare 
was headed toward bankruptcy, I began meeting and corresponding with 
people throughout district 11.
  I held 14 town meetings to listen to constituents, met with senior 
citizen clubs in 5 counties, reached out to our health care providers, 
met with hundreds of individuals in my office, and reviewed thousands 
of letters and telephone messages on this matter.
  Our dialog enabled me to work constructively over the past eight 
months with my colleagues to ensure that the citizens of New Jersey 
will only benefit from modernizing the 30-year-old, government-run 
program.
  I am proud of what we have accomplished. The Medicare Preservation 
Act saves Medicare from bankruptcy and provides elderly Americans with 
the same choices as individuals in the private sector have to meet 
their health care needs. And make no mistake about it, spending on each 
beneficiaries will increase--from $4,800 today to $6,700 in 2002.
  I have read in the newspaper and heard on television some disturbing 
and often erroneous reports about our Medicare Preservation Act.
  I have been outraged by the tactics being employed by some 
politicians in Washington and by groups outside Washington that are 
funding their television and radio commercials. It is unconscionable 
that they would resort to distortions and half-truths in an attempt to 
frighten Medicare beneficiaries about the future of a program they have 
come to rely on to pay their doctor and hospital bills.
  Mr. Speaker, Medicare is teetering on bankruptcy, and it is important 
that we act now to preserve, protect and strengthen this vital program.

  Medicare costs have been soaring. Medicare alone now consumes 11 
percent of the entire Federal budget and is increasing at the rate of 
10.5 percent a year. That's more than three times the rate of inflation 
and seven time faster than the 65 and older population is growing.
  They've been paying taxes all their entire life to support the 
Medicare program. But the fact is that retirees are collecting far more 
in benefits from Medicare than they actually paid in taxes to support 
the system. An individual who turns 65 this year will, on average, 
receive $129,000 more in benefits from Medicare than he or she 
contributed to the system. Although this imbalance is certainly not the 
beneficiary's fault, it helps to explain why Medicare is in dire 
financial condition.
  Next year, for the first time in history, Medicare will pay out more 
money on seniors' hospital bills than it collected through payroll 
taxes.The reality is Medicare is teetering on bankruptcy.
  Unless some action is taken now to control skyrocketing costs the 
Medicare hospital insurance trust fund, which pays hospital expenses 
for America's seniors, will be bankrupt in just 7 years. It's important 
to know that is not a prediction made by Congress, it is the conclusion 
reached by the trustees responsible for maintaining the financial 
stability of the Medicare program--including three members of President 
Clinton's cabinet.
  And there is another, equally important crisis that must be 
addressed--the financial condition of Medicare part B, which covers 
doctor bills and lab tests.
  Spending on this portion of Medicare has increased by 53 percent in 
just the past 5 year. If nothing is done, spending on part B will 
actually double over the next 7 years from $37 billion to $74 billion. 
The Medicare trustees have called this rate of growth in spending on 
part B ``clearly unsustainable.'' Under our plan, part B spending still 
creases to $6,800, just a slower rate.
  Against this threat of imminent bankruptcy, our opponents want you to 
believe that our plan to save Medicare is actually aimed at paying for 
tax cuts. They're wrong.
  Enven if there were no plan in Congress to provide tax relief to 
middle-class families, the Medicare Board of Trustees confirm the need 
to take immediate action to preserve Medicare for today's seniors and 
those approaching retirement age.
  Remember, the Medicare trust fund is financed exclusively through 
every worker's payroll tax. There is no plan, not even a suggestion, to 
cut the payroll tax and thereby reduce the money available to Medicare. 
But even leaving the payroll tax alone, Medicare will be bankrupt in 
just seven years.

  As the Washington Post stated in a recent editorial:

       The Democrats have fabricated the Medicare-tax cut 
     connection because it is useful politically. It allows them 
     to attack and duck responsibility, both at the same time. We 
     think that's wrong.


[[Page E 2209]]

  And as for the tax cuts, they have already been paid for with savings 
achieved by reducing the bloated Federal bureaucracy, targeting waste 
and inefficiency, and transferring money and responsibility for 
programs back to the States.
  While our opponents accuse us of cutting Medicare, the truth is 
Medicare spending will increase.
  There will be no cut in Medicare spending. Under our plan, spending 
for each Medicare beneficiary will increase from $4,800 this year to 
$6,700 in 7 years. That's a 54-percent increase in Medicare spending! 
In total, we'll be spending $700 billion more on Medicare over the next 
7 years than we did during the past 7 years.
  Let me discuss the key elements in our plan to save Medicare and make 
it better.
  Traditional Medicare will be preserved. Any beneficiary wishing to 
stay in the existing Medicare program can do so. There will be no 
increase in copayments and no increase in deductibles. They have an 
absolute right under this plan to stay in the existing Medicare 
program. That right cannot be taken away, and no beneficiary will be 
required to change their health care coverage. Most importantly, for 
those who choose to stay in traditional Medicare, they can continue to 
be able to choose any doctor and hospital they wish.
  In addition to preserving the right to remain in traditional 
Medicare, our plan offers new, additional choices for elderly 
Americans. These options will include an opportunity to choose from a 
number of different coordinated care plans, ranging from health 
maintenance organizations to preferred provider organizations to 
medical savings accounts.
  In New Jersey there are very few choices of health care plans for 
older people such as coordinated care plans. But in some States, 
coordinated care has become a popular alternative to traditional 
Medicare. In California, for example, fully 34 percent of seniors have 
chosen some form of coordinated care. These seniors have found that 
coordinated care greatly reduces their out-of-pocket expenses. 
Enrollment in one of these plans has enabled many retirees to stop 
purchasing expensive private MediGap insurance, which currently costs 
around $1,200 a year. In addition, coordinated care plans usually 
provide services not available under traditional Medicare including 
prescription drugs, dental care and eye glasses.

  Let me emphasize that no one will be forced to join any of these 
coordinated care plans, but they will be available to those who prefer 
this kind of health care protection. Remember, the existing Medicare 
coverage beneficiaries now have, will continue to be available.
  One question repeatedly raised at my town meetings was why not save 
Medicare by combating fraud and abuse. The Medicare Preservation Act 
contains strong measures in the fraud and abuse area, including 
stricter penalties on Medicare providers who defraud the system. 
Unfortunately, these savings alone are not enough to avert financial 
calamity.
  Our plan aggressively attacks waste, fraud, and abuse, which is 
robbing the Medicare system of at least $18 billion a year. The 
beneficiaries of Medicare, are the best weapon we have in combatting 
this waste. But the current system makes it extremely difficult to 
uncover excessive or unnecessary hospital or medical charges. That's 
because right now there is no requirement that the beneficiary receive 
a detailed explanation of all the hospital, doctor and lab expenses 
billed to Medicare on your behalf. Under our plan, they will have a new 
tool to detect waste, fraud and abuse. Our plan requires every health 
care provider to give a copy of all bills they send to Medicare for 
payment. The beneficiaries will finally have a legal right to examine 
every doctor and hospital bill.
  In addition, our plan offers a financial reward to any senior who 
uncovers any unnecessary or excessive Medicare charge. Finally, we will 
be imposing tough, new criminal penalties on anyone who defrauds the 
Medicare system.
  Health care providers will also make a contribution. Our plan 
requires doctors and hospitals, as well as older people, to help us 
save and preserve Medicare. Doctors and hospitals will be asked to 
accept smaller increases in reimbursement for the services they provide 
to Medicare patients.
  Opponents of our plan contend that reducing reimbursement rates for 
health care providers will lead to less quality care and hospital 
closings.
  They are not telling the truth. We're not giving doctors or hospitals 
less money. Over the next 7 years, Medicare will be paying out $1.6 
trillion to health care provides for the treatment of Medicare 
patients--a substantial increase. But we are putting the brakes on 
uncontrollable double-digit annual increases in health care costs under 
Medicare that are driving the program toward bankruptcy. Doctors and 
hospitals are already being forced to control costs for their patients 
covered by private health insurance, how they will have to do the same 
for their Medicare patients.

  Finally, we are asking our wealthiest seniors--individuals with 
annual incomes over $60,000 and couples with yearly incomes of more 
than $90,000--to make a special contribution. Our plan calls for 
phasing out the government subsidy for Medicare part B that our most 
affluent seniors currently receive.
  But the share of premium costs stay the same. Our critics have 
charged that there will be exorbitant increases in premiums, as much as 
$3,000 per year.
  Once again, they are not telling the truth. Right now, premiums paid 
by seniors cover 31 percent of Medicare part B costs, while general tax 
revenues pay the remaining 69 percent. Our plan preserves the 31 
percent commitment from seniors and the 69 percent commitment from the 
Federal Government.
  Under the Medicare plan proposed by President Clinton, in 7 years 
seniors will be paying monthly premiums of $83. Under the House plan 
monthly premiums will be only $4 higher in seven years than under the 
President's proposal. And while the President's plan will keep Medicare 
part A financially secure for only an additional 3 years, our plan will 
save both Medicare part A and part B for the next 19 years.
  Our plan to preserve, protect and strengthen Medicare is the result 
of months of study and hearings and listening to our constituents in 
town meetings in each of our districts. It is the only long-term plan 
that will guarantee that Medicare is preserved for current 
beneficiaries and those approaching retirement age, our children.

                          ____________________