[Congressional Record Volume 142, Number 55 (Thursday, April 25, 1996)]
[Extensions of Remarks]
[Pages E638-E640]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




              HEALTH INSURANCE HELP FOR THOSE 55 AND OLDER

                                 ______


                        HON. FORTNEY PETE STARK

                             of california

                    in the house of representatives

                        Thursday, April 25, 1996

  Mr. STARK. Mr. Speaker, I am introducing today legislation to make 
the COBRA health continuation program available to anyone between age 
55 and the time they are eligible for Medicare.
  Restructuring, layoff, downsizing, cutback, retrenchment--these words 
are heard too often in the 1990's. Amid corporate struggles to maintain 
profitability or simply to stay afloat, something else is shrinking: 
the number of permanent, full-time jobs.
  As the level of employer-provided insurance declines and as hundreds 
of thousands of older workers face early retirement because of 
corporate downsizing, layoffs, and restructuring, the problem of health 
insurance for those not yet eligible for Medicare is becoming more and 
more serious.
  While corporate profits were surging to record levels in 1994, the 
number of job cuts approached those seen at the height of the 
recession, according to a May, 1995 Wall Street Journal article. 
Profits rose 11 percent in 1994, on top of a 13-percent increase in 
1993. Corporate America cut 516,069 jobs in 1994.
  International Business Machines Corp. [IBM] notified 1,200 employees 
last fall that they would no longer have jobs. Yet IBM's fourth-quarter 
profits were $2.03 billion.
  At AT&T, 40,000 jobs were recently cut. Workers will get a lump-sum 
payment based on years of service, up to 1 year of paid health benefits 
and cash to cover tuition costs or to start a new business--but what 
happens to health coverage after the 1 year?
  In Colorado, the Adolph Coors Co. announced plans in February to lay 
off as many as 150 of its 230 construction workers, despite profits of 
$5.3 million in the fourth quarter.
  Safety Stores undertook one of the most brutal corporate downsizing 
in history as a result of its leverage buyout in the mid 1980's. 
Safeway dumped 55,000 employees with no medical insurance, virtually no 
notice, and a maximum of 8 weeks severance.
  A 1994 Nationwide study of 2,395 employers by A. Foster Higgins & 
Co., a New York based benefits consulting firm showed that among large 
companies--those with 500 or more employees--46 percent provide some 
form of coverage for early retirees, while only 39 percent provide 
insurance for Medicare-eligible retirees. Fewer than one in five large 
employers are willing to pay the entire cost of health care for their 
retirees, while 40 percent of the companies that do offer some form of 
health care coverage require the retiree to pay all of the costs. Those 
companies that do provide health care coverage for their retirees are 
increasingly requiring them to pay a share of the cost, especially for 
dependents.
  Employee Benefit Research/Institute [EBRI] tabulations of the March 
1995 Current Population Survey reveal that almost 14 percent of the 
near elderly, consisting of persons aged 55-64, was uninsured in 1994. 
As the baby boom generation approaches near elderly and elderly status, 
the issue of health insurance coverage for this group becomes 
increasingly important, particularly if the proportion of individuals 
aged 55-64 with employment-based coverage continues to decline.
  Group health insurance is, of course, much less expensive than 
individual policy insurance, and that is why the COBRA benefit is so 
important and useful. The difference in cost can easily be several 
thousand dollars.
  Help with the cost of this insurance is particularly important for 
those in their 50's and 60's because most insurance premiums rise 
sharply with age. For example, in the Los Angeles market, Blue Cross of 
California offers a basic, barebones in-hospital $2000 deductible plan. 
This is a PPO plan where you are restricted to the hospitals you can 
use. For a couple under age 29, it costs $64 a month. For a couple 
between age 60 and 64, it costs $229 a month.
  To help ensure that the cost of COBRA continuation is not a burden to 
business, my bill calls for age-55+ enrollees to pay 110 percent of the 
group rate policy--compared to 102 percent for most current COBRA 
eligible individuals and 150 percent for disabled COBRA enrollees.
  I know that the cost of paying one's share of a group insurance 
policy will still be too much for many Americans and many of them will 
be forced into the uncertain mercies of State Medicaid policies. But 
for many others, this bill will provide an important bridge to age 65 
when they will be eligible for Medicare. I wish we could do more--I'd 
like to see the gradual expansion of Medicare to all age groups, for 
example--but in the current climate, this bill is our best hope.
  Over the years, I've received many letters from around the Nation on 
the need for national health insurance reform. Several of

[[Page E639]]

these letters describe lives which would be greatly helped by the 
passage of this legislation, and I include them at this point in the 
Record.

       I am attaching a copy of a letter that I sent to several 
     people earlier this year. I have to amend one inference in 
     that letter--that I would have no health coverage after the 
     expiration of the COBRA coverage. I would have coverage if I 
     could afford the ridiculous $12,000 or $14,000 figures I 
     quoted previously.
                                       Man From Illinois, Age 55+.
                                 ______

       Dear Representative Stark: I am 60 years old and I have 
     been employed as a publishers representative for many years 
     with a large company, Harcourt Brace Jovanovich. They became 
     victims of a hostile take-over and I watched a distinguished 
     company break down under the weight of excessive debt.
       About four years ago I developed a heart condition, which 
     was being treated for medically and I was able to function 
     without any handicap in my work. Three years ago, a smaller 
     firm, ``XYZ'', made me the proverbial ``offer that can't be 
     refused'' and I joined them with their full knowledge of my 
     heart problem.
       A year later, my doctor advised a by-pass operation which 
     went well and after about a month I was back at work. One 
     year later I was laid off due to ``a slowdown in the 
     economy.'' I can only speculate on the real reason but, it 
     followed a letter explaining that the company's self-
     insurance plan would not allow additional expenses for my 
     heart condition. Thank all of you for COBRA, which now covers 
     me until March, 1993, (at a cost of over $6000/year). I can 
     only hope the by-pass will last until some other coverage can 
     be found.
       The point of all this is: what happens now? As a sixty year 
     old ``cardiac case'', I have had not one job offer, although 
     many people want me to work for them as a ``per-diem'' or 
     independent sales representative. I'll probably resort to 
     this, but having talked to many insurance companies, 
     including the company which offers the group policy for the 
     National Association for the Self-Employed, they all say I'm 
     uninsurable. This means that regardless of whether I can 
     afford insurance or not, I can't get it and that leaves me 
     and my family vulnerable for years, until I reach 65 and 
     Medicare becomes available, (assuming you can keep the wolves 
     away from it and it still exists in 1996).
       After talking with neighbors and colleagues, I find I am 
     not alone in this problem. There seems to be an increasing 
     number of 55 to 65 year olds, who are laid off for weak 
     reasons, and find themselves very much alone and without a 
     spokesman.
                                                 A Man From Texas.
                                 ______

       I recently turned 62 years of age and have become the 
     recipient of Social Security benefits. During my 48 years of 
     working life (yes, I began at 14 in Idaho at the Farragut 
     Naval training Station), I have paid my way through the 
     various taxing bodies and reaped the harvest and the bounty 
     created by living in this great nation (California since 
     1948). The major portion of my career was spent with the Bank 
     of America where I was employed for 27 years reaching the 
     highest position of branch manager. After leaving them in 
     1981, I was in a management position with a local yacht club 
     and following this I worked as a private contractor doing 
     research work for a computer company and an architectural 
     supply firm. The reason I chose to apply for Social Security 
     at age 62 was because I found (over the past year) no 
     interest in my years of experience in any kind of a 
     employment. I applied to a number of employers including the 
     local County School Districts and Administrative offices to 
     no avail! That's enough for background.
       Now for the help I hope my State or National government can 
     provide. I recently discovered I had to apply for health 
     insurance. The coverage I now have, which I obtained from my 
     last employer under COBRA and for which I have been paying 
     $136.27 a month (out of the $911.00 a month I receive under 
     SS and BofA retirement plans) will soon run out. I applied to 
     Kaiser Permanente which I felt has representative coverage 
     with a comparable cost (I really can't afford to pay more the 
     15% of my gross income for health care). Because I was honest 
     in answering the application questions I received a letter 
     denying me coverage. I haven't yet applied elsewhere and will 
     not until I get some kind of response to this plea. I suspect 
     I will be further denied or be offered something beyond my 
     economic abilities. I might point out (which I did to Kaiser) 
     that beyond normal physical exams I have had good enough 
     health that I have not had to consult a physician in over 15 
     years and that was for some minor surgery.
                                              Man From California.
                                 ______

       Dear Representative Stark: Terrorism. From my mailbox.
       Monthly major medical premiums to Washington National 
     Insurance Company were raised to $408. per month ($5000/year) 
     from $247. per month ($3000/year), with a $1500 deductible! 
     Writing about it even terrifies me.
       I am 62 years old now; minimum costs by age 65 will be 
     $15,000 without considering the usual yearly or 6 months 
     premium increases. I live on a modest fixed income. Premiums 
     have risen over 900% in 11 years.
       There are millions like me who will go without insurance 
     and even minimum health care, I know some already. We do not 
     live in the ghetto. We have worked hard, raised families and 
     contributed to our communities.
       Who is proposing a way to stop this obscene, outrageous 
     extortion? Please don't write to me reciting the usual 
     cliches about health care. The problem has been defined and 
     redefined already. Action is needed!
                                            A Woman From Illinois.
                                 ______

       Dear Representative Stark: My husband is a retiree and is 
     now covered by Medicare. I am still covered under COBRA; this 
     coverage will last until the end of the year. This is a 
     problem for me.
       Over five years ago, I had breast cancer and underwent a 
     mastectomy. There has been no recurrence of malignancy since; 
     however, I am unable to purchase health insurance unless the 
     ``cancer clause'' is eliminated. I am 61 years old. My 
     insurance will end when I am 62 . . . three years away from 
     Medicare.
       Although we are retired and have saved for such a 
     retirement, a recurrence of cancer would ``wipe out'' all 
     that we have saved for, would endanger our son's college 
     education as well as threaten my own life.
       You cannot save my life; but you can save the future that 
     we have planned for our entire lives.
                                            A Woman From Illinois.
                                 ______

       Dear Rep. Stark: Although I am not part of your California 
     constituency, this letter is written to commend and encouage 
     you on your efforts to enact national health insurance for 
     spouses of retirees over 62 years of age. A small packet of 
     information is enclosed to supply additional information in 
     this regard.
       I've been out of work for five years due to ``corporate 
     downsizing'' (or restructuring). I was 59 years of age with 
     9+ years of service at the time. Since then, I have paid 
     constantly escalating Ohio Blue Cross payments while eagerly 
     looking forward to the day when I would be covered by 
     Medicare. I recently reached that age and invite you to look 
     at my ``big savings''. My wife is 61.
       Before 65: $723.62. After 65: Wife's bill, $491.24; my 
     bill, $156.40; Medicare bill, $59.80; (2 months at $29.90) 
     $707.44.
       These oppressive costs are being taken out of savings 
     accumulated way back from my first job paying 32 cents per 
     hour. I have no pension nor paid benefits. I probably hold 
     the record working for companies going out of business.
       My basic plea: Grant Medicare coverage to spouses over 62 
     years of age wedded to present Social Security recipients.
       Want to pull the country out of the recession? Relieve us 
     of this medical cost burden and we'll spend like drunken 
     sailors. . . . I drive a 10 year old car and haven't bought 
     any new appliances in over 15 years.
                                                    Man From Ohio.
                                 ______

       Dear Congressman Pete Stark: My left leg was amputated 
     because of diabetes on 2-6-89. While I was still in the 
     hospital, just after surgery, I was dropped from Travelers 
     Insurance Lifetime and Fifty Thousand Dollar Coverage and 
     Union Pacific Railroad Health Systems. The latter being a 
     Supplemental Coverage. I have no coverage at all now, and 
     can't get any. I have tried to sign up with any and all 
     companies, but was turned down, because no Insurance Company 
     will cover my disabilities (Diabetes and Heart). Have also 
     tried to get Social Security, Medicare and Midicare for 
     Railroad Retirement Beneficiaries because of my disabilities. 
     I do not qualify for any of these, because I am 62 years old 
     and do not have enough quarters in for Social Security. I was 
     told to get in touch with you, and maybe you might be able to 
     help me get some coverage.
                                            Woman From California.
                                 ______

       I urgently need help in obtaining information on any health 
     insurance plans that might be available for non-employed 
     persons who have been turned down by other providers.
       My mother is 60 years old and the health insurance provided 
     through my father's employment will soon expire (he retired 
     in August 1987). The provider advised her that she will no 
     longer be covered after this July. She has never filed a 
     claim against this company; her coverage is being terminated 
     because her eligibility through my father is expiring. She 
     will not be eligible for Medicare until she is 65, and she 
     has been unable to find other health insurance due to her age 
     and poor health.
                                            Woman From California.
                                 ______

       As I am sitting here and collecting my thoughts before 
     writing to you, I find myself becoming more incensed at my 
     health insurance situation or the future lack of it.
       At the present time, I have group health coverage for 
     myself and my wife because of the COBRA Law. This coverage is 
     good for another approximately 8 months. At the expiration of 
     that coverage, I can apply for group conversion. Sounds 
     rather civil, doesn't it?
       At only $12,769 or $14,031 annually for myself and 
     dependent coverage. Needless to say, I cannot afford that. 
     What are my alternatives?
       Apply for the Illinois Comprehensive Health Insurance Plan 
     under which our insurance costs would be $9,768 or $8,928 
     annually?

[[Page E640]]

       Ignore health coverage completely and wait for some illness 
     to eat up my assets and then go on state aid?
       Change employers and hope that its group insurance is more 
     benevolent?
       Or try to convince some responsible person or persons that 
     our bottom line insurance industry is just that and nothing 
     more. Our society has gone through its revolution and 
     evolutions and deregulations. Perhaps it is time to go 
     through a period of regulation (another form of evolution)--
     regulation of the insurance industry. Or if that is not 
     possible, then I think that the Federal government must step 
     in to fill the void that private industry will not handle--we 
     cannot leave it to Beaver or private industry.

                          ____________________