[Congressional Record Volume 142, Number 82 (Thursday, June 6, 1996)]
[Senate]
[Pages S5928-S5929]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




               IMPLICATIONS OF MEDICARE TRUSTEES' REPORT

  Mr. ROCKEFELLER. Mr. President, first of all, I will not be able to 
finish, but I will do the best I can. I want to acknowledge the very 
serious implications of the Medicare trustees' report released 
yesterday. The Medicare part A trust fund, the part that pays the 
hospital bills of beneficiaries, is likely to be insolvent by 2001, a 
year earlier than predicted last year. This is a very serious issue. I 
take it as such, and it must be addressed.
  So the news is bad, Mr. President. Unfortunately, contrary to 
assertions made by my colleagues on the other side of the aisle, this 
is not a new problem, and unlike the Republicans, this is not a problem 
Democrats just discovered.
  The Republicans chose to ignore 20 previous trustees' reports that 
warned of future trust fund problems. But when they needed to come up 
with the money to pay for tax breaks, they decided to manufacture an 
impending crisis.
  Just 3 years ago, as the Senator from Massachusetts and I were 
discussing, the trustees projected the hospital trust fund was going to 
run out of money in 1999, which is 3 years hence. Democrats took 
immediate measures, and I know because I was responsible for putting 
some of those together, to add 3 more years of solvency by very 
carefully reducing Medicare spending by about $59 billion. And, Mr. 
President, Democrats have produced our own Medicare proposals that 
would postpone the date of trust insolvency for at least another 
decade. That is called 10 years. That is quite a lot of time.
  The CBO has certified that the President's Medicare plan would extend 
trust fund solvency until the year 2005. Here we are dealing with 9 or 
10 years.
  The big difference between Democrats and Republicans is that we have 
only proposed those reductions in spending that are necessary to 
achieve 10 more years of solvency. That is our only purpose. That is 
our only policy purpose. The Republicans continue to propose drastic 
Medicare cuts so that they can pay, again, for what has become a 
cliche--but a cliche is something that is said so often it is true--tax 
breaks for the wealthy.
  Mr. President, over the past decade, Congress has, and usually in a 
very bipartisan manner, taken repeated steps to rein in the costs of 
the Medicare Program. We do not have a bad record on this. We reformed 
the hospital payment system in 1983. We reformed the physician payment 
system in 1989. Senator Durenberger, a Republican from Minnesota, was 
instrumental in that. We did this together, Democrats and Republicans, 
with minor controversy, to shore up the hospital trust fund. That was 
the policy purpose, and to make the Medicare Program a prudent 
purchaser of health care services.
  Unfortunately, the bipartisanship to address the problems of Medicare 
ended--and ended completely--in 1993 when the Republicans refused to 
participate in what was an entirely serious effort to reduce the 
Federal deficit. Democrats were forced, therefore, to act alone. 
Because of the Democratic efforts, and without, as the Senator from 
Massachusetts said, a single Republican vote. This is really 
extraordinary when you think about it; there are usually a few people 
who will help on this--there was not a single one, not a single one.
  The deficit has fallen now for 4 straight years as a result of that 
action in 1993. That had not happened since either Harry Truman was 
President or the Civil War. I am not sure which, and there is a big 
difference. But, anyway, 4 years of budget deficit reduction has not 
happened in a long, long time.
  Bipartisanship also failed to materialize last year when the 
Democrats refused to engage in an exercise to carry out Speaker 
Gingrich's Contract With America, that handed out tax breaks for the 
wealthy at the expense of the Medicare and Medicaid Programs.
  Mr. President, there are billions of dollars in common Medicare 
savings that we could agree on tomorrow to strengthen the trust fund. 
But compromise is not something that many of my colleagues on the other 
side of the aisle, and particularly on the other side of the Capitol, 
have learned to do to this point.
  Last year, the public overwhelmingly rejected the massive health care 
cuts proposed by the Republicans. Instead, though, of coming up with a 
new plan, or even new numbers, the Republicans have not changed much at 
all.
  They say their plan is more moderate, but it is not. The total 
Medicare savings in their new plan are lower, but they are lower only 
because their new budget covers 6 years, not 7.
  That tends to make a difference. If you look at the year-by-year 
Medicare cuts in this year's Republican budget, you can see that the 
cuts are nearly identical to--identical to or larger--than the cuts in 
the vetoed budget reconciliation bill from last year.
  Kevin Phillips, a Republican political analyst, who Republicans do 
not like to hear quoted, said just a few weeks ago that the ``new'' 
Republican budget ``is no more than a routine expression''--this is 
interesting--``a routine expression of core GOP fiscal policy: never to 
ask the top 1 percent of Americans to sacrifice if Medicaid, Medicare, 
or education funds for ordinary people can be targeted instead.''
  The Republican budget resolution goes way too far in trying to reduce 
Medicare spending. The cuts are much more than is needed to extend 
short-term solvency for another decade. The Republicans know that.
  The Republican budget would hold Medicare to a much tougher standard 
on its health care costs than current projections for even private 
health insurance. That is an important point. Private health insurance 
is expected to grow by 7.1 percent on a per person basis over the next 
7 years. The Republican plan caps Medicare per person spending at 4.8 
percent over the next 7 years, even though Medicare generally serves an 
older and a sicker population. And Medicare, as a program, is even 
covering more people, while private health insurance is covering fewer 
and fewer Americans, as employers pull back from what I would consider 
their responsibility.
  So these very tight budget caps that the Republican plan would impose 
on Medicare spending will seriously harm the quality of care that 
seniors currently receive, or will significantly increase their out-of-
pocket expenses, or will do both.

[[Page S5929]]

  Last year Dr. June O'Neill, the Republican-appointed head of the 
Congressional Budget Office, testified before the Senate Finance 
Committee that seniors would in fact have to pay more, pay more to keep 
the same level of quality that they have today under the Republican 
plan. She is their appointee. That is what she said.
  I asked her how much more? She said she did not know. I sent her a 
letter soon after the specifics of the Republican plan were finally 
unveiled by the Finance Committee. That was not only signed by myself, 
but also by the minority leader, asking her again, how much more would 
seniors have to pay under the Republican proposal?
  I never got a response. I am a U.S. Senator. I assume that after a 
while somebody in that position would eventually get a response. I did 
not. I still do not know exactly how much more seniors would have to 
pay. All I know is that they will have to pay a lot more.
  Mr. President, in West Virginia, which I represent, the average 
senior's income is $10,700 a year. We talk of seniors making $25,000, 
$17,000, $18,000. In West Virginia the average is $10,700 a year. They 
are already spending 21 percent of their income on health care. They do 
not have a margin. They do not have room for more.
  People always assume that somehow the Democrats are just being silly 
and soft because they assume that seniors can pay more. Some seniors 
should pay more, and high-income seniors probably should. That should 
be worked out as a package, dealing with the whole Medicare Program, in 
exactly the kind of Medicare commission that Senator Dole proposes and 
which I support.
  Mr. President, for my constituents in West Virginia, ``more'' is a 
very scary word. Last year I talked about Geno Maynard, Sue Lemaster, 
and John and Betty Shumate.
  Geno Maynard is 78 years old and lives in Kenova, WV; Sue Lemaster, 
is a 83 year old who lives in Follansbee; and John and Betty Shumate 
are Medicare beneficiaries who live in Beckley. They're 4 of the 
330,000 West Virginians who depend on the Medicare Program for health 
care, and they all told me that they were worried. They quite flatly 
told me, they do not have any more money to spend on health care. It's 
a big worry for millions of other seniors all over America. On average, 
seniors already spend 21 percent of their incomes on health care 
expenses.
  Mr. President, it is a year later and I still cannot tell my 
constituents how much more they would have to pay under the Republican 
plan. I can only say that according to reliable health experts and the 
Republican-appointed head of the Congressional Budget Office, they are 
going to have to pay more for their health care.
  Mr. President, in addition to tight budget caps, the Republican plan 
also assumes enactment of some very dangerous programmatic changes. For 
example, Mr. President, the Republican plan assumes elimination of 
current law balance billing protections for senior citizens. Medicare 
currently prohibits health care providers from price gouging. Health 
care providers are banned from charging Medicare patients more than 15 
percent above what Medicare pays them. This is an incredibly important 
financial protection that we enacted in 1989--on a bipartisan basis--as 
a part of physician payment reform. Prior to enactment of balance 
billing protections, seniors spent over $2 billion a year on out-of-
pocket balance billing charges.
  Last year, I offered an amendment during the Finance Committee's 
mark-up of the Republican Medicare bill that would make sure 
beneficiaries would continue to have the same financial protections 
that they have under current Medicare law. My amendment was defeated on 
a strict party line vote. This is just one more example of how the 
Republican plan will insidiously destroy the Medicare Program.
  Mr. President, there are plenty of other examples. To name just one 
more: A Medicare medical savings account proposal that actually costs 
the Medicare Program $4 billion a year; and will further weaken the 
Medicare trust fund. The New York Times reported that according to 
``many experts'' MSA's would lead to the ``balkanization of healthy and 
sick.''
  Let us not forget that the Medicare Program is an incredible success 
when it comes to access. Seniors are the only group of Americans who 
enjoy universal coverage. If Medicare is cut by unprecedented amounts 
of money to pay for anything but Medicare, the consequences will be 
disastrous for health care providers and beneficiaries.
  Mr. President, the bigger problem that we all continue to skirt 
around is the long-term solvency of the Medicare trust fund. When the 
baby boomers begin to retire in 2011, the Medicare Program will be 
severely, severely strained. I proposed a Greenspan-like commission 
last year to try to take this debate out of the political arena. The 
American Hospital Association also thinks a commission is necessary to 
force action to improve the short-term and long-term solvency of the 
trust fund.
  Hospitals have plenty of reason to worry. Not only are their bills 
paid from the part A trust fund, but the American Hospital Association 
estimates that the new Republican budget cuts hospital payments 20 
percent more than last year's Republican budget. As a result of these 
larger hits to hospitals, ``hospitals are likely to experience actual 
reductions in payment rates,'' not just reductions in the rate of 
Medicare revenue growth.
  The Prospective Payment Review Commission [ProPAC]--a nonpartisan 
commission that advises Congress on hospital payment issues--has issued 
a stern warning about the severe negative effect massive Medicare 
reductions will have on hospitals. In my own State, over 50 percent of 
all our senior citizens live in rural areas. How far are they going to 
have to travel to get basic hospital care if their local, rural 
hospital is forced to shut its doors?
  Mr. President, the solvency of the Medicare trust fund is too 
important of an issue to be left to politics-as-usual. Thirty-seven 
million Americans rely on the Medicare Program to pay for their health 
care services. The Republicans' suggestion that the Democrats are 
uninterested in doing what is necessary to put Medicare on sound 
financial footing is preposterous. It was Republicans in Congress who 
voted against Medicare's creation in 1965--and it is now Republicans in 
this Congress who pose a real threat to Medicare's future. They will 
keep on saying they are saving Medicare, but raiding Medicare is no way 
to rescue it.
  The PRESIDING OFFICER. The Senator's 10 minutes has expired.
  Mr. ROCKEFELLER. I thank the Presiding Officer.
  Mr. SPECTER addressed the Chair.
  The PRESIDING OFFICER. The Senator from Pennsylvania.

                          ____________________