[Congressional Record Volume 143, Number 86 (Thursday, June 19, 1997)]
[Senate]
[Pages S5960-S5962]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




              OUR GOAL IS TO SAVE MEDICARE, NOT DESTROY IT

  Mr. KENNEDY. Mr. President, the Finance Committee yesterday reported 
a bill that will tragically undermine Medicare as we know it. I'm sure 
that some will tell the American people that these changes are needed 
to preserve Medicare for future generations. I say, hogwash. The 
assault on Medicare that began in the last Congress is continuing with 
full force, and Congress should reject it this year, just as we 
rejected it last year.
  There is no justification--none whatever--for Congress to rush 
forward with ill-considered changes in Medicare under the thinly veiled 
pretext of balancing the Federal budget. None of these basic changes in 
Medicare were part of the budget agreement. It is the height of 
hypocrisy for these who voted against including the Hatch-Kennedy 
children's health plan in the agreement last month to make this assault 
on Medicare part of the agreement this month.
  In the last Congress, the assault on Medicare came in two steps. The 
first step was to make deep cuts in Medicare--$270 billion over 7 
years, three times the amount necessary to restore the solvency of 
Medicare. The second step was to inflict enough damage to Medicare that 
it would wither away over time.
  This year, the amount of cuts in Medicare is lower--$115 billion over 
5 years--and was locked-in by the budget agreement. But the budget 
agreement was not strong enough to prevent the second part of the anti-
Medicare strategy.
  Medicare is still one of the most successful social programs ever 
enacted. It has brought health care and health security to tens of 
millions of senior citizens. We can deal with the financial problems of 
Medicare, but we must do it the right way, not the wrong way. Our goal 
is to save Medicare, not destroy it.
  The proposal coming to the floor next week will raise the age of 
eligibility for Medicare from 65 to 67. If this increase passes, we 
will be breaking a compact made with millions of working Americans. 
Despite what supporters of this proposal claim, Medicare is not the 
same as Social Security on the age of eligibility.
  A delay in eligibility for Social Security may result in delayed 
benefits or lower benefits, but people can still retire when they 
choose. By contrast, a delay in eligibility for Medicare will throw 
millions of seniors into the ranks of the uninsured. Unless we are 
willing to enact simultaneous insurance reforms to guarantee access to 
affordable and comprehensive coverage

[[Page S5961]]

for this group, these senior citizens will be forced to go without the 
health security promised to them for the past 32 years.
  The age of eligibility is precisely the type of issue that ought to 
be considered by the National Bipartisan Commission on the Future of 
Medicare. To change the age of eligibility suddenly, on the spur of the 
moment, in this reconciliation bill, is an unnecessary slap in the face 
of future beneficiaries. This shift should also concern big business, 
since the serious problems created by this dangerous policy will 
undoubtedly rest in part on its shoulders.
  We must not undermine the foundation and structure of Medicare. Yet 
this bill would turn Medicare over to private sector insurers and 
managed care companies, pushing millions of elderly Americans into 
giving up their own doctors and joining private insurance plans.
  If just half of all seniors leave Medicare and join private plans, 
insurance company premium revenues will increase by over $625 billion 
in 7 years. The increased profits for insurance companies will amount 
to almost $20 billion. The motive for the craven change is clear--to 
pad the profits of private insurance companies at the expense of the 
health security of millions of elderly Americans.
  The claim is made that the plan offers seniors more choice. But the 
plan tips the scales heavily in favor of private insurers. It reduces 
payments to doctors under traditional Medicare, inducing them to either 
limit the number of Medicare patients they treat or leave the program. 
At the same time, it allows doctors in some private plans to charge 
fees far above what current law allows.
  During the budget negotiations, Republicans and Democrats jointly 
agreed to set aside $1.5 billion to provide premium assistance for 
senior citizens with annual incomes between $9,500 and $11,800. Yet--
despite this clear commitment--this needed assistance is not included 
in the Senate bill, and the House bill provides only one-third of the 
money under a proposal that is likely to be ineffective. More than 3 
million beneficiaries fall into this category, most of whom are older 
women who live alone.
  Where did this money go? At least a portion went to pay for an 
unnecessary test of medical savings accounts. Proponents claim that 
these high-deductible private plans will help Medicare by encouraging 
seniors to take responsibility for their own health care. But we know 
that MSA's are just another gift for the wealthy and the healthy. They 
will encourage the wealthiest beneficiaries to opt-out of Medicare and 
take their premiums with them, leaving the Government with the sickest 
patients and fewer dollars to pay for their care. Again, the real 
reason for this change is MSA's cost the taxpayers money while 
benefiting private insurers. The private insurance industry has been 
itching for 30 years to get its hands on Medicare, but that is no 
reason for this Congress to scratch that itch.
  We are already spending approximately $1.5 billion between 1997-2002 
to review the effect of MSA's in the private insurance market under 
last year's Kassebaum-Kennedy health insurance reform law. There is no 
need to gamble with scarce Medicare funds before an adequate evaluation 
of the current test is obtained. This additional demonstration program 
serves only to put another foot in the door in the misguided effort to 
turn Medicare into a private insurance plan.
  Unfortunately, it is the low and moderate-income elderly who will 
suffer most from these proposals. Senior citizens already spend, on 
average, more than 20 percent of their income on health expenses. 
Ignoring this fact, the committee proposal also includes a new $5 per 
visit copayment for home health services under Medicare. This copayment 
alone will raise nearly $5 billion. It is a tax on the very senior 
citizens who are sick, and can least afford to pay it. It will fall 
disproportionately on the very old, the very ill and those with modest 
income.
  Another extremely serious change for beneficiaries is the proposal to 
means-test the Medicare deductible. Unlike proposals to means-test the 
premium, which would apply to all beneficiaries, means-testing the 
deductible affects only those who actually use health services. It 
therefore imposes a sickness tax that undermines Medicare's fundamental 
policy of spreading risks and costs across all beneficiaries.
  Supporters justify this step by claiming that most beneficiaries have 
supplemental insurance policies--called Medigap--which will cover the 
increase. But insurance companies do not set their rates based on 
income. So the additional costs will be reflected in higher Medigap 
premiums paid by all--unconscionably forcing lower income beneficiaries 
to subsidize the higher deductibles of the wealthier beneficiaries.
  No one should be under any illusions about the impact of these 
provisions on Medicare. The issue is clear. On the question of whether 
senior citizens deserve decent health care in their retirement years, 
the answer of this bill is a resounding ``no.''
  Taken together, the proposals in this plan give upper income 
beneficiaries no need to stay in Medicare--and every incentive to 
leave. This plan will destroy the successful social compact that if 
rich and poor alike contribute to the program, rich and poor alike will 
receive the same benefits.
  Our priority should be to keep the promise of medical and financial 
security for senior citizens that Medicare provides. We are the 
guardians of that promise and we should oppose any schemes that violate 
it.
  There is no question that Medicare will face serious challenges in 
the next century as a result of the retirement of the baby-boom 
generation. Today, there are nearly four adults of working age for 
every senior citizen. By the year 2030, that ratio will be only two 
workers for every senior citizen. But there is a right way and a wrong 
way to respond to that challenge. The wrong way is to destroy the 
program under the guise of saving it.
  One right way that Congress should carefully explore has been 
suggested by a recent study at Duke University. It shows that the most 
important factor driving Medicare costs is not how many seniors are in 
the program, but how sick they are. The chronically ill, those who are 
disabled, account for the overwhelming majority of Medicare costs. In 
1995, the average disabled senior citizen cost the program seven times 
as much as a nondisabled beneficiary. Saving just one senior citizen 
from disability saves Medicare an incredible $18,000 a year in costs on 
the average.
  Over the last 12 years, the rate of disability dropped by an average 
of 1.3 percent per year. Maintaining and slightly raising that rate of 
decline to 1.5 percent a year could make the Medicare Program solvent 
far into the 21st century--without destructive benefit cuts or major 
tax increases. This is a far better way to save Medicare for the long 
haul. It will put Medicare's fiscal house in order, and enable all 
Americans to live longer and healthier lives. It is unacceptable for 
Congress to make deep and excessive cuts in Medicare without exploring 
this alternative.
  In fact, we need to do more, not less, to provide good health care to 
senior citizens. We need to double our investment in biomedical 
research over the next 5 years.
  It has been a bipartisan effort. Senator Mack has been a leader. 
Senator Specter, Senator Harkin, and many others on both sides of the 
aisle have provided leadership in this area. We need to make sure that 
every senior citizen receives the best and most up to date medical 
care. We need to encourage every American--and especially senior 
citizens--to follow healthier lifestyles and receive good preventive 
medicine. I am pleased that one of the positive parts of this 
reconciliation bill is its expansion of preventive benefits for 
Medicare beneficiaries, including annual mammograms, colorectal cancer 
screening, and diabetes self-management. But this is one of the few 
bright spots in an otherwise destructive approach to the long-term 
health of Medicare and its beneficiaries.
  Today the Finance Committee will also mark-up its tax proposal. There 
is little reason to expect that the result will be any fairer than the 
assault on Medicare. Our goal next week is clear.
  Next week also as an amendment to the reconciliation bill Senator 
Hatch and I intend to offer our proposal for children's health 
insurance, paid for by an increase in the tobacco tax. Clearly the 
provisions in the Finance Committee plan, which will cover fewer than

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one out of three of America's uninsured children, fall far short of any 
responsible initiative to deal with the urgent health needs of our 
children. We were encouraged that a strong bipartisan majority of the 
Finance Committee voted to include our legislation in their bill. Now 
we have a realistic opportunity on the floor to guarantee every 
American child a healthy start in life. I urge the Senate to support 
it.
  Congress can balance the budget with fairer Medicare changes to 
protect senior citizens, expanded health care for children fully paid 
for by an increased tobacco tax, and we can still balance the budget 
with fairer tax cuts to help working families. As those major battles 
reach the Senate floor, we will have a chance to correct the many 
serious injustices in the current proposals, and I look forward to 
working with my colleagues to do so.
  Mr. President, I have a chart about the average Medicare outlays per 
beneficiary. If you take the healthiest 90 percent of Medicare 
beneficiaries, we only spend $1,444; the sickest, 10 percent; on which 
we spend $36,960 a year. If we are able to reduce the sickest and those 
that have chronic disabilities, we can have a dramatic impact on the 
financial stability of our Medicare system. And we certainly ought to 
take a hard look at that before we start cutting the benefits, and 
raising copays and deductibles for those on Medicare in the way that 
the Finance Committee has done so in the last few days.
  Mr. President, I yield the floor.
  Mr. DORGAN addressed the Chair.
  The PRESIDING OFFICER (Mr. Enzi). The Senator from North Dakota.

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