[Congressional Record Volume 142, Number 92 (Thursday, June 20, 1996)]
[Senate]
[Pages S6582-S6584]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




        NATIONAL DEFENSE AUTHORIZATION ACT FOR FISCAL YEAR 1997

  The PRESIDING OFFICER. Under the previous order, the Senate will 
resume consideration of the Defense authorization bill. The clerk will 
report S. 1745.
  The bill clerk read as follows:

       A bill (S. 1745) to authorize appropriations for fiscal 
     year 1997 for military activities of the Department of 
     Defense, for military construction, and for defense 
     activities of the Department of Energy, to prescribe 
     personnel strengths for such fiscal year for the Armed 
     Services, and for other purposes.

  The Senate resumed consideration of the bill.

       Pending:
       Kyl-Reid amendment No. 4049, to authorize underground 
     nuclear testing under limited conditions.

  The PRESIDING OFFICER. The pending amendment is the Kyl amendment.
  Mr. GRAMM. Mr. President, I ask unanimous consent to temporarily set 
aside the Kyl amendment.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                           Amendment No. 4083

(Purpose: To require plans for demonstration programs to determine the 
   advisability of permitting medicare-eligible military retirees to 
   enroll in the Tricare program and the Department of Defense to be 
reimbursed from the medicare program for the costs of care provided to 
                          retirees who enroll)

  Mr. GRAMM. Mr. President, I send an amendment to the desk and ask for 
its immediate consideration.
  The PRESIDING OFFICER. The clerk will report.
  The bill clerk read as follows:

       The Senator from Texas [Mr. Gramm], for himself, Mr. Roth, 
     Mr. Inouye, Mr. Lott, Mr. Craig, Mrs. Hutchison, Mr. 
     Thurmond, Mr. Reid, Mr. Inhofe, Mr. Robb, Mr. McConnell, and 
     Mr. Warner, proposes an amendment numbered 4083.

  Mr. GRAMM. Mr. President, I ask unanimous consent that reading of the 
amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:
       At the end of title VII, add the following:

     SEC. 708. PLANS FOR MEDICARE SUBVENTION DEMONSTRATION 
                   PROGRAMS.

       (a) Program for Enrollment in TRICARE Managed Care 
     Option.--(1) Not later than September 6, 1996, the Secretary 
     of Defense and the Secretary of Health and Human Services 
     shall jointly submit to Congress and the President a report 
     that sets forth a specific plan and the Secretaries' 
     recommendations regarding the establishment of a 
     demonstration program under which--
       (A) military retirees who are eligible for medicare are 
     permitted to enroll in the managed care option of the Tricare 
     program; and
       (B) the Secretary of Health and Human Services reimburses 
     the Secretary of Defense from the medicare program on a 
     capitated basis for the costs of providing health care 
     services to military retirees who enroll.
       (2) The report shall include the following:
       (A) The number of military retirees projected to 
     participate in the demonstration program and the minimum 
     number of such participants necessary to conduct the 
     demonstration program effectively.
       (B) A plan for notifying military retirees of their 
     eligibility for enrollment in the demonstration program and 
     for any other matters connected with enrollment.
       (C) A recommendation for the duration of the demonstration 
     program.
       (D) A recommendation for the geographic regions in which 
     the demonstration program should be conducted.
       (E) The appropriate level of capitated reimbursement, and a 
     schedule for such reimbursement, from the medicare program to 
     the Department of Defense for health care services provided 
     enrollees in the demonstration program.
       (F) An estimate of the amounts to be allocated by the 
     Department for the provision of

[[Page S6583]]

     health care services to military retirees eligible for 
     medicare in the regions in which the demonstration program is 
     proposed to be conducted in the absence of the program and an 
     assessment of revisions to such allocation that would result 
     from the conduct of the program.
       (G) An estimate of the cost to the Department and to the 
     medicare program of providing health care services to 
     medicare eligible military retirees who enroll in the 
     demonstration program.
       (H) An assessment of the likelihood of cost shifting among 
     the Department and the medicare program under the 
     demonstration program.
       (I) A proposal for mechanisms for reconciling and 
     reimbursing any improper payments among the Department and 
     the medicare program under the demonstration program.
       (J) A methodology for evaluating the demonstration program, 
     including cost analyses.
       (K) As assessment of the extent to which the Tricare 
     program is prepared to meet requirements of the medicare 
     program for purposes of the demonstration program and the 
     provisions of law or regulation that would have to be waived 
     in order to facilitate the carrying out of the demonstration 
     program.
       (L) An assessment of the impact of the demonstration 
     program on military readiness.
       (M) Contingency plans for the provision of health care 
     services under the demonstration program in the event of the 
     mobilization of health care personnel.
       (N) A recommendation of the reports that the Department and 
     the Department of Health and the Department of Health and 
     Human Services should submit to Congress describing the 
     conduct of the demonstration program.
       (b) Feasibility Study for Program for Enrollment in Tricare 
     Fee-For-Service Option.--Not later than January 3, 1997, the 
     Secretary of Defense and the Secretary of Health and Human 
     Services shall jointly submit to Congress and the President a 
     report on the feasibility and advisability of expanding the 
     demonstration program referred to in subsection (a) so as to 
     provide the Department with reimbursement from the medicare 
     program on a fee-for-service basis for health care services 
     provided medicare-eligible military retirees who enrolled in 
     the demonstration program. The report shall include a 
     proposal for the expansion of the program if the expansion is 
     determined to be advisable.
       (c) Authorization of Appropriations.--Of the amounts 
     authorized to be appropriated in section 301, $75,000,000 
     shall be made available to carry out the demonstration 
     program referred to in subsection (a) if Congress authorizes 
     the program by the end of the Second Session of the 104th 
     Congress.

  Mr. GRAMM. Mr. President, let me define what I am trying to do here 
in basic terms and then outline very briefly the amendment and how it 
will work. I want to be brief because when you are winning, it is best 
to accept the victory and not do a lot of talking about it. But let me 
define the problem.
  Twenty and 30 years ago, young Americans took up the country's call 
by joining the military. What they were promised when they joined the 
military is that, if they served out to retirement--20 or 30 years--
among the benefits they would have is the ability to go into military 
medicine in retirement and, on a space-available basis, continue the 
same military medicine that they were accustomed to while they wore the 
uniform of the country. All over America hundreds of thousands of 
retirees are in a position today where that commitment was made 20 or 
30 years ago. Interestingly enough, it is fulfilled from the moment 
they retire until they turn 65. But the moment they turn 65, they are 
now being excluded from the military medical system that they were 
promised they would have available to them.
  The incredible paradox is that they are among the few Americans who 
have earned not one system of medical care in their retirement but two. 
They earned access to medical care by serving 20 or 30 years in the 
uniform of the country. In the middle of their career, Congress decided 
to have them pay the Medicare payroll tax and qualify for Medicare. So 
our military retirees now find themselves in a very select group of 
people where they have earned not one medical benefit but two.
  What is now being done is they are being forced to opt to go on 
Medicare when many of them have grown accustomed to the military 
medical system and want to stay in it. We have also created two classes 
of retirees--those below 65 who qualify for military medicine and those 
65 and above who lose it. At the very moment when people are turning 
65, feeling more vulnerable about their health care, they are being 
uprooted from a system that they have grown accustomed to.
  In addition to that, there is the fundamental fairness issue, it 
seems to me. Our military retirees serve 20 or 30 years to earn their 
benefit. We promised it to them, and now we are not living up to our 
word.
  I submit that, if we want others to take up the cause of the country 
and to wear its uniform, it is very important that we live up to the 
commitments that we have made to those who have served in the past.
  The right thing to do is to give people a choice; to say to every 
military retiree that when you turn 65 you can opt for the Medicare 
which you paid for and have Medicare reimburse your medical care 
through the private medical system of the country, or on a space-
available basis, you can continue to use military medicine as you did 
before you turned 65. Then an agreement should be worked out between 
Medicare and the Defense Department as to who is going to pay for this 
medicine. My view is we should have subvention, and Medicare should 
reimburse our military hospitals. That is what I want. That is what is 
fair. That is what we promised people. We are living up to our word 
when we do that.
  I have tried for the last 6 months to work out a bill to try to set 
up an experiment to prove that it does not cost more to give people the 
right to stay in military medicine, to have a test in three regions of 
the country--the south-central United States, Pacific Northwest, and 
Alaska--where we could take States that are quite different and see 
whether it costs more to have people stay in military medicine, if they 
choose to, or to simply go into Medicare and be reimbursed.
  I thought we might be able to work that out. But with the session 
getting short, we have worked out a compromise that I believe is 
generally supported and is going to be accepted, I believe, on both 
sides. Our compromise will require the administration to submit, by 
September 6 of this year, a detailed subvention demonstration 
implementation plan. This will give the administration 2 months to make 
up their mind how they want to do it and still gives Congress time to 
act before we adjourn to set up the program this year. We also 
authorize $75 million of funding, based on Congressional Budget Office 
scoring, that would be available if in fact the program does cost more 
than conventional Medicare, which I doubt. This will allow us to move 
ahead but, on the other hand, not impose on Health and Human Services 
and the Defense Department a program that they are not fully 
comfortable with.

  My objective here is not to impose a plan that I have written. My 
objective is to simply provide equity. It seems to me that equity is 
giving people the right to choose. My goal is that through this 
amendment, which hopefully we will adopt today, we will plant the seed 
whereby on September 6 the administration will give us a concrete 
program that we can adopt to begin the process of living up to the 
commitments we made to our military retirees. In addition, we also 
mandate that by January 3 the administration present a feasibility 
study to allow military retirees to consume medicine in our military 
hospitals on a fee-for-service basis.
  With the combination of these two requirements I think we are making 
a major step toward living up to the commitments we gave to our 
military retirees.
  I am hopeful that we will be successful with this amendment. I think 
it is a very important amendment. My view is, when you tell people you 
are going to do something, you have an obligation to try to live up to 
it. We can do that with this amendment and with a follow up that will 
be required from it.
  I am delighted to know that the amendment is going to be accepted.
  I thank the distinguished chairman of the committee.
  I yield the floor.
  Mr. THURMOND. Mr. President, I wish to commend the able Senator from 
Texas for offering this amendment. I think he is doing a great service 
to the people, in the military establishment especially.
  Mr. President, I rise in support of this amendment. Legislation which 
would enable Medicare eligible military retirees to enroll in the 
military health care system is the issue about which I receive the most 
mail from South Carolina.

[[Page S6584]]

  Military retirees and their families become very comfortable with the 
military health care system during their many years of service. In many 
cases, these veterans first experience with health care as adults came 
at the hands of an Army, Navy, or Air Force physician. Their children 
were born in military hospitals, untold numbers of colds, bouts of flu, 
broken bones, and other medical maladies have been treated within the 
military health care system.
  Once these retired personnel reach age 65 and become eligible for 
Medicare, their status in the military system changes dramatically. 
Suddenly, through no fault of their own, they are no longer welcome 
except on a space-available basis. When these veterans of 20 or more 
years of dedicated, selfless service to the Nation discover that they 
are not welcome in the military health care system, it is a terrible 
shock. When servicemembers are recruited, they are told that one of the 
benefits of their service is health care for life. Throughout their 
career, when they reenlist, this benefit is reinforced by the career 
counselors. Whether or not these statements are true or even authorized 
by the military departments, they are made. Clearly, military personnel 
believe that health care for life is a benefit of their service.
  As Members of Congress, we are accustomed to reading the details of 
the statutes. We know that there is no statuatory basis for a promise 
of health care for life if someone serves a full career in the 
military. We also know that when every American reaches age 65, 
Medicare becomes the primary health care provider. All of these laws 
notwithstanding, recruiters, career counselors, commanders, first 
sergeants, and the military support associations continue to lead 
servicemembers to believe that they can receive medical care within the 
military system forever. We have a commitment to live up to the 
promises made by representatives of the Nation. This amendment goes a 
long way toward accomplishing that goal.
  Mr. President, I want to acknowledge the leadership, vision, and 
energy that Senator Dole brought to the issue of Medicare subvention. 
Senator Dole clearly took the lead within the Senate to make Medicare 
subvention a reality. If he were here today, this would be his 
amendment. He would be the champion leading the effort not only in the 
Senate but in discussions with our colleagues in the House of 
Representatives. I wish he could be here to share his passion for our 
veterans and to see the amendment move forward. I am sure he is 
following the issue where ever he is. I am proud to have worked with 
him to achieve the progress we have. I promise him and our veterans to 
continue the effort to get Medicare subvention fully implemented.
  Mr. President, let me be clear. This amendment is not the end game. I 
had hoped that we could pass legislation which would have directed 
implementation of a Medicare subvention demonstration within 90 days of 
enactment. Unfortunately, the details could not be worked out to the 
satisfaction of all parties who must agree. We will get there and this 
amendment moves the effort forward. I congratuate Senator Gramm again 
for his persistence in pushing his amendment. I thank Senator Roth, 
chairman of the Finance Committee, for his cooperation and commitment 
to work with us to achieve Medicare subvention. I am confident that, 
together, we will pass Medicare subvention that will permit the 
Secretary of Defense and the Secretary of Health and Human Services to 
fully implement this important program. Only then will we have 
fulfilled our commitment to our retired military personnel and their 
families. I urge my colleagues to support this important amendment.

  Mr. President, I thank the Chair and yield the floor.
  Mr. COATS. Mr. President, I rise in support of this amendment which 
addresses Medicare subvention, a key issue to the military health care 
program and Medicare-eligible military retirees and their families.
  To understand why Medicare subvention is so vital to the military 
health care system, it is necessary to understand how Medicare-eligible 
retirees are treated under the current system. Under Medicare everyone 
over the age of 65 receives medical coverage through Medicare. 
Therefore, when military retirees reach the age of 65 they lose their 
eligibility for CHAMPUS and may only use military medical facilities on 
a limited space-available basis. This care is delivered on a 
nonreimbursable basis, which means that Medicare does not pay for the 
health care which the Department of Defense provides to Medicare-
eligible beneficiaries. The Department of Defense estimates that this 
cost exceeds $1 billion annually.
  As defense downsizing progresses, and TRICARE, the managed care 
support initiative of the military health system moves toward full 
implementation, there will be less and less space available in military 
treatment facilities to provide care to retirees. This means that 
Medicare-eligibles will be forced out of a system which they understand 
and have come to rely on.
  Medicare subvention would ensure Medicare-eligible military retirees 
health care by allowing them to enroll in TRICARE. Our military 
retirees have made great sacrifices for the defense of this Nation and 
have dedicated many years to military service. Medicare subvention 
would prevent military retirees and their families from being locked 
out of a system which they trust, which they understand, and which has 
been promised to them.
  The amendment before us today does not provide authorization for 
Medicare subvention. It does, however display a commitment to this 
important initiative. While I am encouraged by the progress that has 
been made in this area, I also believe that it is necessary to 
incorporate Medicare subvention into an overall Medicare reform 
package.
  I urge your support of this support amendment.
  Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. THURMOND. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. THURMOND. Mr. President, we have cleared the Gramm amendment now 
on both sides, and we are ready to vote on it. I call for a vote.
  The PRESIDING OFFICER. Is there further debate on the Gramm amendment 
No. 4083?
  Mr. THURMOND. I suggest we have a voice vote.
  The PRESIDING OFFICER. If not there is no further debate, the 
question is on agreeing to the amendment.
  The amendment (No. 4083) was agreed to.
  Mr. THURMOND. Mr. President, I move to reconsider the vote by which 
the amendment was agreed to, and I move to lay that motion on the 
table.
  The motion to lay on the table was agreed to.


                         Privilege of the Floor

  Mr. THURMOND. Mr. President, I ask unanimous consent that a staff 
member of Senator Kyl, Kim Wold, be granted the privilege of the floor 
this afternoon.
  The PRESIDING OFFICER. Is there objection? Without objection, it is 
so ordered.

                          ____________________