[Congressional Record Volume 142, Number 67 (Tuesday, May 14, 1996)]
[House]
[Pages H5036-H5039]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                     COMMENTS ON REPUBLICAN BUDGET

  The SPEAKER pro tempore. Under the Speaker's announced policy of May 
12, 1995, the gentleman from New Jersey [Mr. Pallone] is recognized for 
30 minutes as the designee of the minority leader.
  Mr. PALLONE. Mr. Speaker, tonight I would like to once again talk 
about the proposed Republican cuts in Medicare and Medicaid that are 
included in the budget, which we are most likely going to be voting on 
this Thursday in the House of Representatives.
  I had the opportunity on Monday of this week, just this past Monday 
in fact, to speak before the Edison Senior Center. Edison is the 
largest municipality in my district in New Jersey, and there must have 
been 100 senior citizens at the Edison Senior Center when I was there.
  I talked to them about what the Republican leadership was proposing 
to do with Medicare and Medicaid once again, and how similar the 
proposals in this budget we will be voting on are to the cuts and 
fundamental changes in Medicare and Medicaid that the Republican 
leadership proposed last year, and which the President and which the 
Democrats in the House of Representatives fought so hard to keep from 
becoming law.
  We were successful. We were successful in stopping those changes to 
Medicare and Medicaid last year, and many of the seniors at the Edison 
Senior Center, I indicated to them I felt very strongly that they and 
the seniors throughout the country were a big part in our effort to try 
to stop those changes in Medicare, because many of them wrote to their 
Congressmen or Congresswomen and wrote to their Senators and said they 
did not like the changes that the Republicans were proposing.
  So I asked them to once again start a writing campaign, and talk to 
other seniors that they know and their family members to say we do not 
want these radical changes being proposed by the Republicans.
  Now, as we know, this current budget plan, this current Republican 
plan would cut Medicare by $168 billion over the next 6 or 7 years, and 
cut Medicaid by $72 billion. Most of the Medicare cuts this time would 
be in hospital care. That is particularly important to the State of New 
Jersey, because many of the hospitals in New Jersey, particularly in 
urban areas, but also in suburban and rural areas, are having a very 
difficult time making ends meet. Many of them are more than 50 percent, 
sometimes 60 percent dependent on Medicare and Medicaid, to keep their 
operations going. A significant cut in either of those programs really 
could cause many of those hospitals to close, particularly in the urban 
areas.

  The whole reason we started the Medicare program that was started 
under President Johnson back in 1963 is because many seniors did not 
have health insurance, and found it difficult because of lack of funds 
or because of their condition, their physical condition, to buy health 
insurance. I think a lot of times we forget what it was like prior to 
Medicare coming into existence, how many senior citizens did not have 
health insurance, how many basically were so poor and had to pay money 
out of their pocket if they wanted health care, so they just basically 
delayed it, did not go to the hospital or the doctor.
  We do not want to go back to that era, the era when seniors were 
impoverished in order to provide health care for themselves, or when so 
many of them did not have any health insurance coverage.
  One of the things that I told the seniors in my district on Monday is 
that we are not just talking about money here. I think the money aspect 
is important, because essentially these large cuts in Medicare and 
Medicaid are being used to finance tax breaks for mostly wealthy 
Americans. So the money is an important part of this.
  But there are also some fundamental changes in the Medicare program 
and the Medicaid program that are being proposed here by the Republican 
leadership that go way beyond the monetary aspect. Essentially what it 
amounts to is choice, the fact that senior citizens are going to have 
less choices of doctors and less choices of hospitals. Because what is 
happening is the way that Republicans have structured these changes in 
Medicare and Medicaid, they are pushing more and more seniors into 
HMO's or managed care, where often times they do not have the choice of 
doctors. They cannot go to the doctor, the specialist they 
traditionally go to, or sometimes cannot even go to the hospital that 
they traditionally go to that may be nearby.
  I guess one of the things that really bothers me about the Republican 
rhetoric on the Medicare issue is they keep stressing what they are 
doing with Medicare is providing more choices. That somehow choice is 
sort of the linchpin, if you will, of their recommendation. And I would 
maintain that just the opposite is true, that the way the reimbursement 
rate is set up is so that seniors, basically a higher reimbursement 
rate goes to managed and HMO's, and less to traditional fee for 
service, where you have your choice of doctors or hospitals. That means 
seniors are going to have less choices as more and more are pushed into 
managed care.
  I am being joined here tonight by the gentlewoman from Connecticut 
[Ms. DeLauro] and I wanted to yield some time to her. But I did want to 
mention, because there was one thing before I do yield, that there was 
an article in the New York Times this Sunday, that although it did not 
mention what was happening here in the House with regard to Medicare 
and Medicaid per se, I think is relevant, and I mention it because they 
specifically mention our two States, New Jersey and Connecticut.
  The article is entitled ``The high cost of plugging the gaps in 
Medicare.'' Basically what the article says is that Medigap insurance, 
which is the insurance that seniors buy in order to cover the health 
care programs or the health care costs that are not covered by 
Medicare, and about 50 percent of the seniors in this country have 
Medigap because they want additional coverage, that the cost of Medigap 
insurance is skyrocketing.

  They mentioned the AARP, which has a policy sold by Prudential, that 
will go up an average of 26 percent more this year. They specifically 
mention that in New York, the average premium of the five largest 
Medigap insurers soared 11 percent in a year, a rate equalled or topped 
in Connecticut or New Jersey. In both our States, we are talking about 
increases in Medigap insurance that are at least 11 percent in 1 year.
  I think that this is directly related to what is happening in 
Washington with Medicare, because as you make cuts in Medicare, and, of 
course, the Republicans are talking about much deeper cuts than the 
President or anything that the Democrats have put forward, as you make 
these huge cuts in Medicare, and also in Medicaid, what is going to 
happen is that you are going to find less services that are covered or 
quality of services that are covered, more out-of-pocket expenses for 
senior citizens, and I think that that is going to be reflected more 
and more in higher Medigap premiums.
  The other thing it will result in is that more and more people again 
will be pushed into managed care or HMO's, where they do not have a lot 
of choices because they will opt for that, rather than have to pay for 
the large premium increases in the Medigap program.

[[Page H5037]]

  I would like to yield at this time to Ms. DeLauro, who has been an 
outspoken advocate of protecting the Medicare program, and I believe 
has had a lot of impact over the last year when we were fighting these 
terrible Republican leadership proposals to try to significantly change 
the Medicare program.
  Ms. DeLAURO. I would like to say thank you to my good friend, the 
gentleman from New Jersey [Mr. Pallone], who continues to demonstrate 
tireless, and I mean tireless, leadership on the health care issue, and 
obviously as it affects America's seniors. I think we ought to be 
having this debate and discussion, and I am sure we will continue it.
  But May is Older Americans Month. I think it is a very fitting time 
for us to be talking about how what we do here in a budget can truly 
impact the lives in a very profound way of America's seniors. We saw 
that from last year's budget. There was an enormous outcry across this 
country as to what was happing to seniors.
  I am a little perplexed that given the outcry that we saw and the 
public's feelings, if you recall, the public said to the President, 
veto the budget. Sixty percent of the public said veto the budget that 
was proposed last year, because of the severe cuts in Medicare and in 
Medicaid, education and the environment as well, but Medicare and 
Medicaid, and what that meant for the lives of seniors.
  You are absolutely right about the article that was in the New York 
Times. MediGap was supposed to help to supplement Medicare. And what we 
are beginning to look at is the beginning, if you will. I mean, there 
are gaps in Medicare, therefore Medigap is to assist people. What we 
are looking at, instead of trying to figure out a way in which to make 
the Medicare system stronger, because people know that no system is 
perfect. And what we need to do is to make changes, to make it a better 
program, which we have said all along. Let us fix what is wrong with 
it, and let us build on it, in the sense that it has truly been a 
lifesaver for seniors in this country, who not too many years ago, less 
than half of our seniors had any kind of health care or protection at 
all. Today 99 percent of seniors have health care coverage, and the 
difference has been Medicare.
  Instead of taking a look at that system, where you can build on the 
opportunity for long-term care, for home health care, for prescription 
drug assistance, which we all know is truly one of the areas that 
affects everyone, but it affects seniors particularly, because many 
times what seniors do is they do not get the prescription filled. They 
get it half filled, or they fill it and then they go without eating for 
a couple of days. But in any of those circumstances, it clearly is not 
good for their health.
  So that we are now going to embark on a new budget proposal that will 
in fact erode this health care system that we have for seniors today, 
and I think we both agree and all of us who are engaged in this debate 
agree that the United States has the best quality health care in the 
world.

                              {time}  2145

  That is not at issue. The question is its affordability and a variety 
of other questions. If we continue to erode the Medicare System, as is 
being proposed by the Republican majority in this House, we will then 
create a second-rate health care system for our seniors. That is not 
what we ought to be about.
  I think there are a couple of interesting things. Over this past 
weekend the Speaker of the House, Newt Gingrich, attacked the Democrats 
on Medicare, and he told the Republican Convention that the battle over 
how much money should be spent on Medicare is the most important 
question facing voters in 1996.
  I think that that is probably right, because Medicare is not just a 
program. Medicare is not just a program. Medicare symbolizes a decent 
and a dignified retirement to people who have spent a lifetime playing 
by the rules, working hard, doing all that they can for their family, 
paying into a system, wanting to make sure that at the end of their 
lives, in the remaining years of their lives, if they need health care 
coverage, that they will have it, and that they are not going to get 
crippled financially by a particular illness. No one decides to get 
sick. It happens.
  I think that the Speaker's partisan attack is unfortunate. We 
disagree about Medicare but I do think, as I said, that the question of 
funding Medicare is a critical one. Again, this is part of our value 
system. Medicare is a priority, and how we define our priorities is how 
our values are defined and what kind of a Nation we want to try to be.
  That is why this issue is so critical and so important, and why we 
have to continue to focus our time and attention on it.
  If we go back to what the Speaker is talking about, it was not too 
many months ago where he said, and the quote is clear, that the 
Medicare system should wither on the vine. The majority leader in the 
Senate bragged about how pleased he was and how proud he was of a vote 
that he cast in 1965, voting against the Medicare system because it is 
a system that does not work.
  This is recent evidence of people who are in leadership positions in 
the House of Representatives and in the Senate, who would like to 
convey to the public that what they want to try to do is to slow the 
growth of Medicare, when in essence they do not truly believe in a 
Medicare system and its value and what it means in terms of a decent 
and secure and safe environment for seniors in this country. That is 
what the issue is about. That is what the debate is about.
  We can deal with numbers, but numbers are not at issue. With this 
second budget proposal that has been made, to quote Yogi Berra, it is 
deja vu all over again. We are going back essentially to where we were 
in last year's debate, and that is what the public needs to know about. 
We are talking about $168 billion in Medicare cuts. We are talking 
about roughly, once again, in terms of the debate that we had over the 
last year and a half almost, it is $168 billion in Medicare cuts, it is 
now $176 billion in a tax break for the wealthiest Americans.
  It is the very same debate, and that is why we have to continue to 
focus our time and attention on the issue. The question is, will we put 
hard-working families first or are we going to put special interests 
first? That is what the debate ultimately comes down to.
  Let me say to my colleague, and I know he feels the same way, if we 
were assured that the money that was being cut was going to go into the 
solvency, as they talk about, of the Medicare trust fund, we could make 
an argument for this. But that is not the case. That is not the case at 
all.

  The danger is that we are going to see funds for hospitals cut. In 
some rural parts of our country we will see that hospitals will close. 
Once again, deductibles will go up, premiums will go up, the choice of 
doctor is at risk again. So it is, in fact, the same debate all over 
again.
  We have to be tireless, in my view, as my colleague from New Jersey 
has said, in continuing to make the case and raising once again the 
profile of this issue. I compliment my colleague in visiting a senior 
center over the weekend and getting people to come out once again, to 
do the writing, to do the calling, to be engaged in signing the 
questionnaires, et cetera. I will be doing the same thing myself to let 
the people that I represent know that the battle is on once again.
  We have to be indefatigable. We have to be tireless, and the American 
public needs to speak up all over again on this issue.
  Mr. PALLONE. I agree, and I appreciate the remarks the gentlewoman 
has made, if I could just follow up on two points that she made.
  One is when I was at the senior center in Edison on Monday, one of 
the very first things the gentlewoman discussed was prescription drugs 
and the cost of prescription drugs, and how some seniors simply cannot 
afford to buy them or they will not get a refill if they need it. It is 
amazing to me, because when we talk to seniors when we are in our 
districts, these issues in many ways are very plain to them.
  Many of the seniors in the audience in Edison said to me, ``Well, 
Congressman Pallone, I don't understand. What Medicare should do,'' and 
this is almost a direct quote from one of the individuals, ``what 
Medicare should do is to be expanded to include preventive care.'' He 
talked about prescription

[[Page H5038]]

drugs, because he said, ``A lot of times I go to the doctor and he 
prescribes a drug to me, and Medicare is covering the cost of the 
doctor visit but it is not covering the drug. So I get the prescription 
but I go home and I never fill it.''
  What good is that? The point is that if Medicare were expanded to 
cover certain kinds of preventive care, like prescription drugs or like 
home health care visits, we would actually save a lot of money. We 
should be thinking of creative ways to expand Medicare, deal with 
prevention, and then save money in the long run.
  That is what I was kind of hoping we were going to be doing when we 
started to talk about Medicare in the beginning of this Congress. But, 
obviously, I was very naive, and I think I was naive because I did not 
understand what the gentlewoman brought up, the basic idea, which is 
that this Republican leadership, both in the Senate and here in the 
House, really does not like the Medicare program. They have an 
ideological problem with the Medicare program, and that is why we are 
getting these quotes from Speaker Gingrich saying that we will deal 
with it piece by piece and it will wither on the vine, or from the 
Republican presidential candidate saying that he is proud of the fact 
that when he was in the House of Representatives he did not vote for 
Medicare. They are not really interested in creative ways of trying to 
save money and expanding the money to help seniors. They just basically 
want it to go away.
  The other thing the gentlewoman mentioned and I thought was so 
important, she talked about the dangers of Medicare becoming a second 
rate health care system, and I think we have talked about that a 
little tonight. But there is also sort of a corollary to that, the 
notion of a divided system, sort of a class battle, if you will, 
between the wealthier seniors and the middle class or poorer seniors.

  I see that happening, for example, with Medigap. We mentioned that 
about half the seniors have Medigap and half do not. That means that a 
lot of seniors, even those who are on Medicare now, increasingly are 
not able to get certain kinds of health care services because they 
cannot pay out-of-pocket, because they do not have Medigap. So already 
we have a two-tiered system.
  Now, in this Republican budget, one of the things we did not mention 
tonight, but I think we should, is that they have brought up again the 
Medical Savings Accounts, the so-called MSA's, which I call the tax 
break for the healthy and wealthy. Basically what they are suggesting, 
and the gentlewoman knows is the case, is that seniors opt into a 
situation where they get catastrophic coverage. If something really 
terrible happens to them and they have to go to the hospital for a long 
stay, they are covered, but they are not covered for anything else.
  The money that the Federal Government puts up for Medicare, like a 
voucher, is put into some sort of savings account, and if they have to 
go to a doctor or they have something that only takes a relatively 
small degree of care, then they have to pay all that out-of-pocket.
  But if an individual has a very high deductible, or are essentially 
only covered for catastrophic care, the only people that will be able 
to afford that are the healthy and wealthy, so to speak, because they 
will say, ``Well, that is fine, I will opt for that.''
  So what do we do? Once these medical savings accounts become part of 
the Medicare system, we will have a two-tiered system, in essence. The 
cost for those who do not have the MSA's will probably go up, because 
they will be the ones that have less money and are more of a burden on 
the system. So the cost of the system will go up.
  I know the gentlewoman has been very concerned about that issue, so 
if the gentlewoman wants to talk about that I would yield to her.
  Ms. DeLAURO. It is incredible, and this is a corollary, if you will, 
because we have the budget proposal now that once again makes this 
tremendous hit on the Medicare system, juxtaposed with the tax break 
for the wealthiest Americans; and then we have had an opportunity in 
this body over the last several months, in a bipartisan way, to look at 
health care reform or some first steps in terms of health care reform 
through the Kennedy-Kassebaum bill, and the Roukema bill on the House 
side that deals with two important issues, the prohibition on 
preexisting condition and the ability for people to change jobs and 
still maintain health insurance; things that people would very, very 
much like.
  There again, rather than taking good pieces of legislation and trying 
to get them passed, and the President said he would sign the bill, and 
the authors of the bill said let us move forward, again very 
bipartisan, they add this concept that the gentleman has talked about, 
the medical savings account, which creams the healthy off the top, 
leaves the most frail, the most ill in the traditional health insurance 
policies, thereby taking the opportunity to bring some relief to people 
on health care, helping to try to then even lower the cost of health 
care, and what happens? More people uninsured, we drive the premiums 
up, and we completely reverse the intent of what we are trying to do by 
this concept of these savings accounts that healthy people will take 
advantage of. But the more sick an individual is, the more frail an 
individual is, they will wind up in the traditional systems.

  Those premiums will go up. Less people will be able to afford them. 
More people will be uninsured. It is quite remarkable.
  Then we take that and look at a budget, another one coming in where 
we have fought this battle and now we have to refight it, or it is just 
a continuation, quite honestly. It is just a continuation where we are 
going to see once again the medical savings accounts introduced and 
Medicare on the chopping block again.
  Again, we need to mention over and over again, people need to 
understand, Medicaid, a $72 billion cut. Less than what it was, no 
question. Nevertheless, this is a system that helps to ensure the 
health of seniors in nursing homes. We are going to find people who are 
in nursing homes now, whose families will have to make a decision to 
take them in or do something else in order to provide health care for 
them.
  I wanted to make one point, because our colleagues on the other side 
of the aisle will talk about how they want to slow the rate of growth. 
A noble cause; one that I support, and I know my colleague from New 
Jersey supports. However, what they do not talk about is how many more 
people are going into the system every year. No accounting for that and 
what the increased costs are; no accounting for inflation at all. It is 
as if the system is dead in the water, stagnant, does not move, is not 
dynamic, is not fluid, and it is just where it will be today.

                              {time}  2200

  We know that is not the case. It is not the case on anything that we 
deal with. It is changing. It is changing. But they try to say that 
they are lowering the rate of growth.
  We need to lower that rate of growth. I just need to make the point 
on this that we made in the past. Where are you and where are my 
Republican colleagues on lowering the rate of growth in private 
insurance, as we were talking about Medigap policies? Those premiums 
are going up. Where are we lowering the rate of growth in the cost of 
prescription drugs? Where are we lowering the rate of growth in other 
parts of the health system? Why is it that we only want to attack 
seniors in this process? That is, I think, a question that our 
colleagues have got to answer.
  Mr. PALLONE. If I could reclaim my time, I just want to follow up on 
what you said about Medicaid, particularly this issue of the rate of 
growth and not taking into consideration what is actually happening out 
there in the real world.
  What they are proposing for Medicaid, which, as you mentioned, the 
majority of the people think Medicaid is just for poor people, the 
reality is the majority of Medicaid funds are used for senior citizens 
in nursing homes.
  One of the things that I mentioned in the past, going back to last 
year, was that we are going to have a crisis. There was an article in 
the New York Times back in November that says, ``Critics say Republican 
budget will create shortage of nursing home beds for elderly. The 
reason for that is exactly what you said, which is that the number of 
people who are over 85, the over 85 population is growing dramatically 
and will be over the next 10 or 20 years.''

[[Page H5039]]

  So the numbers that the Republicans are using for Medicaid, and they 
are going to block grant them to the States, do not take into account 
how many more seniors are going to be out there that are going to need 
nursing home care. It completely ignores it. So we know there is going 
to be a shortage of beds in nursing homes.
  The same thing with regard to children. Medicaid historically over 
the last 5 or 10 years has been able to absorb the number of children 
who are no longer covered by private health insurance. In other words, 
ever since the late 1980's, with all the downsizing and we had large 
unemployment then and we continue to have an unemployment problem, a 
lot of parents, when they lost their health insurance, their children 
were not covered. Because the Congress, under the Democratic 
leadership, had actually expanded the opportunities where Federal money 
went to the States, particularly to cover children, and States were 
encouraged to match those funds on a one-to-one basis, most of the 
children who were taken off health insurance, because their parents 
lost it when they lost their jobs or changed jobs, were actually 
covered by Medicaid. Because as those numbers of children without 
health insurance grew, Medicaid took up the slack and expanded.
  This is a survey that was done by the Journal of the American Medical 
Association, published again in November's Washington Post, at a time 
when we were having the big budget battle here. They point out again 
that that is going to be completely reversed.
  If you block grant this money to the States and give them leeway and 
you cut the rate of growth, so to speak, as the Republicans put it, a 
lots of States will just cut back on the number of children that are 
covered. And we will see a lot of children that are simply not covered 
by Medicaid or by any kind of health insurance whatsoever.
  I know that we want to yield the rest of our time to one of our other 
colleagues. I appreciate the fact that you came, that Ms. DeLauro is on 
the floor here joining me on this. I know that she and I share the 
concern about what would happen with Medicare and Medicaid if this 
Republican budget goes through. Even though it is coming up Thursday 
and is going to be voted on, we will continue to fight this battle to 
the end.
  Ms. DeLAURO. I thank my colleague from New Jersey.

                          ____________________