[Congressional Record Volume 142, Number 100 (Tuesday, July 9, 1996)]
[House]
[Pages H7133-H7135]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          THE NEED TO PRESERVE MEDICARE AND MEDICAID PROGRAMS

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentleman from New Jersey [Mr. Pallone] is recognized for 60 minutes as 
the designee of the minority leader.
  Mr. PALLONE. Mr. Speaker, I want to address the House about the fact 
that increasingly and persistently we see efforts on the part of the 
Republican leadership, in the past in 1995, again this year, and I 
suspect, unfortunately, to continue through the rest of 1996, efforts 
to cut Medicare and Medicaid. I also want to remind my colleagues on 
the Republican side, and particularly the GOP leadership, about the 
need to pass health insurance reform.
  My colleagues on the Democratic side are aware of the fact that we 
have within our Caucus a Democratic health care task force. Part of our 
effort has been to try to preserve Medicare and Medicaid and to oppose 
the drastic cuts in Medicare and Medicaid that would negatively impact 
America's seniors if the Republican proposals were to go forth in the 
House of Representatives and in the Senate.
  Similarly, our Democratic health care task force has been supportive 
of legislation that was originally introduced by Senator Kassebaum, who 
is a Republican, and Senator Kennedy, who is a Democrat, and here in 
the House by one of my colleagues on the Republican side, the 
gentlewoman from New Jersey, Mrs. Roukema, that would try to reform the 
health care system to provide coverage, insurance coverage, for those 
people who lose their jobs or have to change jobs, and also those 
Americans who suffer from preexisting medical conditions, who are 
unable to get health insurance now because of restrictions in the 
private health insurance market.
  I just wanted to say very briefly, before I went into a few details 
about why it is necessary to keep up this battle against cuts in 
Medicare and Medicaid, to say very briefly that on the issue of 
Medicare, the Republican plans have basically been to eliminate 
provider choice to seniors, to allow doctors to overcharge seniors, to 
force seniors to pay more out of pocket and to get less under Medicare, 
and basically to cut Medicare and Medicare programs for seniors in 
order to use the money for tax breaks primarily for wealthy Americans.
  On the issue of Medicaid, most of the Republican plans have been to 
eliminate benefit guarantees to seniors for the disabled children and 
also many other American families, and to allow States to cut an 
additional $178 billion on top of the congressional Republican cut of 
$72 billion.

  I wanted to start out this evening, though, by talking about the 
Kennedy-Kassebaum bill and the effort to provide health insurance 
reform this year that has basically been spearheaded here in the House 
of Representatives not only by Democrats, but also some Republicans who 
feel that modest health insurance reform is the way to go in this 
Congress, before we adjourn.
  The President, President Clinton, pledged his support for the 
bipartisan Kennedy-Kassebaum bill in his State of the Union address 
earlier this year, and congressional Democrats have tried to work with 
moderate Republicans to get the bill on its way to the President's 
desk. The Senate passed the Kennedy-Kassebaum bill 100 to 0, 
unanimously. But what is holding up this bipartisan health insurance 
reform bill is the Republican leadership's insistence here in the House 
on adding medical savings accounts, a special perk for the healthy and 
wealthy, that lets them opt out of traditional health plans and drives 
up costs for everyone else who remains in traditional health plans.
  The Senate voted not to include the medical savings account perk in 
their version of the bill, but House Republicans and right-wing Senate 
Republicans still demand that it be included in the final version sent 
to the President. I am asked over and over again, why is that the 
Speaker, Speaker Gingrich, and his Republican colleagues in the 
leadership, are so determined to include MSA's or medical savings 
accounts in an otherwise bipartisan bill.
  The reason, I believe, is because of the $1.2 million in political 
contributions to the GOP over the past year, I should say over the past 
5 years, that have come from J. Patrick Rooney and other executives of 
the of the Golden Rule Insurance Co. which will reap massive profits if 
the Republican medical savings accounts plan becomes law.
  A few weeks ago the Consumers Union, which is a group that puts out 
reports from time to time on health care issues, issued a report, 
actually on June 26 of this year, that is entitled ``Medical Savings 
Accounts: A Growing Threat to Consumers' Health Care Security.'' I am 
not going to get into all the details of this Consumers Union report 
here this afternoon, but I just wanted to touch on the executive 
summary which begins the report and explains why MSA's or medical 
savings accounts are harmful to most consumers.

  It says in the executive summary of this Consumers Union report that 
the medical savings accounts would basically not only be a roadblock to 
congressional enactment of modest health insurance reform that 
addresses the issue of portability when people change jobs or when they 
have a preexisting medical condition, but basically would devastate 
consumers in the health care system.
  So here we have a situation where we are moving or we are trying to 
move, those of us who support this Kennedy-Kassebaum bill, in a way 
that would include more people who now do not have health insurance. We 
know that many Americans have no health insurance, and we are trying to 
get more of them coverage. So we are saying if you lose a job or you 
transfer a job or you have a preexisting medical condition, we want you 
to be able to get health insurance.

[[Page H7134]]

  But MSA's or the inclusion of MSA's in this bill would do just the 
opposite. It would drive up the costs of health insurance and make it 
more difficult for more Americans to get insured because of the 
increased costs that health insurance would have.
  A key conclusion of this Consumers Union report says, and there are 
three; one, that the proposed MSA's will mean severe financial 
hardships for families that use MSA's because they are devoid of 
essential consumer protections. Families with average income would have 
to pay 9 percent to 23 percent of annual income for health care before 
MSA coverage kicks in. Now, understand that when you talk about MSA's, 
it is a high deductible policy. It basically says when you have a 
catastrophic problem, that your health care needs would be taken care 
of. But if you have anything less than that, your ordinary daily 
medical needs, then you have to pay out of pocket. The Consumers Union 
report says, second, that millions of consumers will find that the 
health insurance that they want the most, the traditional low-
deductible comprehensive coverage, is no longer available to them, and 
third, that MSA's are likely to increase the already large number of 
uninsured and underinsured Americans, making it even harder for 
Congress to make health care affordable and accessible. I wanted to 
cite 10 ways that the Consumers Union mentions why MSA's harm 
consumers. They list them as follows.

  First, MSA's expose individuals to paying the first $5,000 for health 
care each year before insurance coverage kicks in. This is the high 
deductible. For families it is $7,500.
  Second, MSA's allow insurance companies to charge consumers 30 
percent on all covered expenses after the deductible is met. So even 
after you go beyond the deductible you are talking about a 30 percent 
out-of-pocket cost.
  Third, MSA's allow insurance companies to include low lifetime limits 
in their policies, leaving families unprotected against the cost of 
catastrophic illness.
  Fourth, MSA's do not provide a cap on out-of-pocket costs.
  Fifth, MSA's would lead to drastic premium increases for traditional 
comprehensive policies, ultimately promoting the elimination of these 
policies in some markets.
  What you are doing here, if you are healthy or you are wealthy, you 
buy this high deductible MSA, but because the healthy and wealthy 
people are now taken out of the insurance pool, the costs for those who 
are left in the insurance pool goes up, premiums go up, and a lot of 
people simply cannot afford traditional health insurance anymore.

                              {time}  1530

  The sixth point that Consumer Union makes is that MSA's leave benefit 
design up to insurance companies, allowing policies that exclude 
preventive care and conditions such as pregnancy.
  Seventh, MSA's do not require insurance companies to accept all 
individuals who apply for coverage or to charge them a fair price.
  Eighth, MSA's do not require employers to contribute to the high 
deductible insurance policy or the employee's MSA. In other words, 
contributions from your employer are voluntary.
  Ninth, MSA's do not require employers who offer them to also offer 
employees a choice of a traditional low deductible comprehensive health 
insurance plan, your traditional health insurance plan; and, lastly, 
tenth, MSA's do not require employers to continue to spend the same 
amount on health care coverage that they do today.
  Essentially the conclusion in brief that the Consumer Union report 
makes is that Congress should keep MSA's out of health insurance reform 
legislation. I could not have said it better. If we are going to see 
comprehensive health insurance reform passed this year in the House, in 
the Senate, and be signed by the President that addresses the issues of 
portability and makes it possible for people with preexisting 
conditions to get health insurance that they need, MSA's cannot be 
included. I have to hope that between the House and the Senate over the 
next few weeks or the next few months before we adjourn that an effort 
is made on a bipartisan basis to simply move the original Kennedy-
Kassebaum bill without MSA's. Otherwise there will be no health 
insurance reform passed in Congress and signed into law this year, 
which I think would be a tragedy for so many millions of Americans who 
need health insurance and cannot get it now because of the restrictions 
that exist under existing law.
  I wanted to spend a little time on the Medicare issue and also a 
little bit on the Medicaid issue, because Medicare and Medicaid are so 
important not only to senior citizens, not only to low-income people 
but also hospitals because so many of our hospitals and our health care 
institutions are heavily Medicare and Medicaid dependent and if we make 
the kind of drastic cuts in Medicare and Medicaid that the Republican 
leadership has been proposing for the last 18 months, our hospitals and 
our health care institutions in general will suffer, many of them will 
actually close, because they will not have sufficient funds to continue 
to operate.
  Medicare right now provides quality health care benefits for over 32 
million senior citizens. But again the Republican leadership wants to 
transform Medicare into a program of substandard care.
  The Republican leadership says that Medicare is in crisis. We hear 
that time and time again on the floor of this House. They say that that 
is because it is running a deficit. But I would argue that minor 
adjustments, not a major overhaul, could insure Medicare solvency.
  When Democrats were in the majority we made sure that Medicare was 
being adequately funded. In 1982 the Medicare trustees predicted that 
the Medicare trust fund would run out of money by 1986, but obviously 
that did not happen. Democrats protected Medicare and maintained a 
level of quality care for senior citizens into the 1990's. Now that the 
Republicans are in the majority, they are scaring senior citizens by 
saying that Medicare is again going to go bankrupt in the early part of 
the next decade and using words like ``reform'' to disguise their 
efforts to destroy the Medicare Program.

  If you listen to Speaker Newt Gingrich, I would maintain that his 
real motives lie in a speech he gave during last year's Medicare debate 
where the Speaker said he wanted to see Medicare wither on the vine. 
That is a sign, I would say, of the misguided Republican leadership 
that Medicare would be led to wither on the vine.
  So many of those who are now in the leadership, Speaker Gingrich, Mr. 
Dole, now the Republican Presidential candidate in particular, did not 
support Medicare when it was first voted on the floor here of the House 
of Representatives 30 some odd years ago.
  I think it is a sign of the misguided Republican leadership that 
Medicare has run its first ever deficit in its 31 years as a health 
care program for senior citizens now when the Republicans are in 
control of Congress.
  The Republican budget that was passed just a few weeks ago, or 
perhaps a month ago now, calls for over $168 billion in cuts, 
reductions or whatever you want to call them, in the Medicare Program. 
I do not want to get into this debate on whether it is a real cut or a 
cut in the growth of the program, but in any case it is a $168 billion 
cut. Basically the Republican leadership is proposing to take money out 
of the Medicare Program in order to pay for tax breaks for wealthy 
Americans. Although the amount of money being taken from Medicare is 
significant, I do not want to downplay that, the devil is really in the 
details because the Republican leadership is proposing a major overhaul 
of Medicare to make it less efficient and more costly for seniors.
  As much as we decry as Democrats the cuts in Medicare, more 
significant is what the Republicans are trying to do to restructure the 
Medicare Program. Basically their proposal calls for co-opting senior 
citizens into managed care. I do not have a problem with managed care 
per se, but I do not believe in Speaker Gingrich's attempts to force 
seniors into managed care and somehow say that that is giving senior 
citizens more choices.
  The only choice that the Republican leadership is giving to seniors 
under their Medicare plan is the choice to receive substandard health 
care. Where Medicare historically offered patients their own choice of 
doctors, protected against high out-of-pocket costs and

[[Page H7135]]

offered a guaranteed level of coverage, the Republican leadership 
proposal would essentially take that all away.
  In addition, and this goes back to what I was saying before, the 
Republicans are proposing to incorporate the medical savings accounts, 
what we discussed before in the context of health care reform, they 
want to incorporate the MSA's also into the Medicare overhaul.
  Last year the nonpartisan Congressional Budget Office stated that 
these tax breaks, the MSA tax breaks, would actually cost Medicare 
several billion dollars. Again an effort to restructure Medicare and, I 
would maintain, overhaul it in a way that has a very negative impact on 
America's senior citizens.
  I would urge really that senior citizens again take notice of what is 
happening here and what is being proposed by the Republicans and call 
on Congress to protect Medicare from any further raids by Speaker 
Gingrich and the Republican leadership.
  Lastly this afternoon I want to talk a little bit about Medicaid. 
Medicaid many people think of as the program for poor people. But it 
also pays about 50 percent of all nursing home care for senior 
citizens. The Republican budget makes extreme cuts, $72 billion over 6 
years, to the Medicaid program and allows States to cut an additional 
$178 billion for a grand total of $250 billion in Medicaid cuts. These 
Medicaid cuts are over and above the Medicare cuts I discussed before.

  Without Medicaid, many middle-class adult children of nursing home 
parents will have to pay for their parents' expensive care while trying 
to send their own children through college. So keep in mind, and I say 
that to those Americans who would have parents or grandparents that are 
in nursing homes, if you have to end up paying for a lot of their care, 
that means less money out of your pocket that you might not have 
available to pay for your own children, your own children's education 
or other programs.
  Recently the Commerce Committee voted on the Medicaid Repeal Act, the 
Republican Medicaid proposal. I am a member of the Committee on 
Commerce and I fought very hard against this bill when it came to our 
committee. The Republican Medicaid Repeal Act will eliminate all 
current guarantees of health care coverage and eliminate current 
guarantees of nursing home benefits to the elderly.
  I offered an amendment during the markup in the Committee on Commerce 
that would return these guarantees in this terrible legislation, but it 
was rejected by every Republican on the committee. Other Democrats 
offered similar amendments to continue health care coverage for the 
disabled, for children, for pregnant women. Again, all of these were 
defeated by the Republican members of the committee. On top of all 
this, the GOP Medical Repeal Act will sharply reduce payments to 
hospitals for care.
  I said before, I do not think a lot of people realize how dependent 
many of America's hospitals and health care institutions are on 
Medicare and Medicaid. In New Jersey, my State, a lot of hospitals have 
the majority of their income from those two Federal and State programs. 
What I am concerned about is with these steep cuts that are being 
proposed in both programs, a lot of hospitals in New Jersey and 
throughout the country will simply have to close their doors. I think 
at a time when Congress should be seeking ways to decrease the number 
of uninsured and underinsured, the Republican leadership's answers will 
make these problems worse. What we are talking about here is an effort 
to try to provide quality health care for seniors and for all 
Americans.
  The bottom line is that more and more Americans today, and you can 
make a comparison with last year, 2 years ago, 5 years, 10 years ago, 
every year more and more Americans and the percentage of Americans are 
uninsured and have no health insurance. If we make these drastic 
changes in Medicare and Medicaid, if we do not do what is necessary to 
reform health care insurance along the lines of what Senators Kassebaum 
and Kennedy have proposed, then we are going to see more and more 
Americans be uninsured and not have health care. The consequences to 
our society are severe not only today but certainly tomorrow.
  The irony really, too, of the Republican budget which was passed in 
this House not too long ago is that in addition to making these cuts in 
Medicare and Medicaid, it also increases the deficit. In the past 
Democrats were able to decrease the deficit and still preserve Medicare 
and Medicaid. I think that this is just a strong indication of the 
misplaced priorities and values of the Republican leadership, if they 
find it necessary to cut Medicare and Medicaid and in the same context 
are actually increasing the deficit.
  I remain committed to fighting these Republican efforts that would 
raise the deficit while slashing Medicare and Medicaid, and I know that 
myself and many of my Democratic colleagues will continue to speak out 
over the next few weeks and the next few months until this session ends 
to remind American seniors that we cannot make these drastic changes in 
the Medicare and the Medicaid program and that we need to pass health 
insurance reform now and certainly before the end of this session of 
Congress.

                          ____________________