[Congressional Record Volume 143, Number 89 (Monday, June 23, 1997)]
[Senate]
[Pages S6084-S6093]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
BALANCED BUDGET ACT OF 1997
The Senate continued with the consideration of the bill.
Mr. LAUTENBERG. Mr. President, I yield to my colleague from New
Mexico so much time as he needs to make his remarks.
The PRESIDING OFFICER. The Senator from New Mexico.
Mr. BINGAMAN. Mr. President, I thank the Senator from New Jersey for
his courtesy, as always.
Let me speak for a few moments on a motion, or amendment, that is
going to be offered by the Senator from Illinois, Senator Durbin, the
Senator from Rhode Island, Senator Reed, and myself. This is a motion
to strike one provision that is in this reconciliation bill which would
change the age at which senior citizens become eligible for Medicare.
It raises that age from 65 to 67. Our amendment would propose to strike
that provision from the reconciliation bill. In my view this is an
unacceptable provision, it is very misguided, and one that we should
not continue to keep in this legislation if we send this legislation on
through the legislative process.
[[Page S6085]]
Mr. President, there are no budgetary savings that would accrue as a
result of this provision until the year 2003, after the target date for
reaching the balanced budget. I am informed that this section would
fall under the Byrd rule, and for that reason a vote of 60 Senators or
more will be required to keep this provision in the bill, so I hope
that a substantial majority of the Senate will agree with us that this
provision should be stricken from the legislation.
Raising the eligibility age for Medicare, first of all, is not
necessary in order to balance the budget. The extra budget savings that
this provision might generate are not necessary to meet any of the
targets set by the budget negotiators in the earlier negotiation. While
this change is described as being something that was done in order to
bring Medicare into line with Social Security changes that were earlier
made, there are obviously very real differences between Medicare and
Social Security. Social Security allows an individual to receive early
retirement benefits at age 62. Unlike Social Security, Medicare does
not provide any other option for the retiree who wants to retire at age
65. Either the person has insurance or they do not. To make this change
in Medicare, I believe, would visit a real hardship on many seniors who
have planned for their entire careers to be able to retire at age 65
and to have Medicare available to them at that time. For us to make
this kind of change, even though there is a long period for the phase-
in of the change, I think will be breaking faith with many of those
Americans and many of the people in my State.
Raising the eligibility age creates, also, the specter of a new group
of uninsured Americans. We have spent much time in the previous
Congress and in this Congress debating how we can cover more Americans
with health care insurance. We have too many Americans today--in my
State we have way too many Americans--who do not have health care
coverage. We have talked about how to cover more children, how to cover
more working families, how to cover more seniors before they are
eligible for Medicare. This provision that we are going to propose to
strike from the reconciliation bill adds to that pool of uninsured
Americans who would be without health insurance at a very critical time
in their careers. Essentially, it says to them that between the age of
65, when they would normally expect to retire, and the age of 67, the
responsibility for health care will be theirs.
There are different groups of Americans and people have different
circumstances. There is a large group that has no health care coverage
in their employment. This would provide that there is an additional 2-
year period in which they continue to have no health care coverage as
they approach their senior years. There is another group that has
health care coverage but that health care coverage terminates at the
time they quit their jobs. That group, of course, would have the
financial responsibility. They would have the choice to either go out
and buy private health care coverage, which would be very expensive, to
cover that interim period of 2 years, or they would have the choice, of
course, of trying to get through that period without health care
coverage, either depending upon Medicaid or hoping against hope that
they do not get sick and do not need medical attention.
Of course there are others, I should point out, who have health care
coverage and whose employers have agreed to maintain that health care
coverage until they reach the eligible age for Medicare. Those
individuals, of course, would continue to have health care coverage
under their employer but the provision we are trying to strike here
would visit a hardship on the employers in that case. The provision
would have an immediate impact on employers right now, who provide
health benefits to individuals until they reach the age for Medicare.
Companies are required today, under Financial Accounting Standard 106,
to estimate their liabilities for all future retiree health benefits.
Companies determine the present value of their future liabilities for
those health benefits and have to report that. These figures are
reported as part of the financial statements the companies make. All of
those liabilities would have to be rolled into those financial
statements immediately upon the adoption of this provision, if this
provision were to remain part of the reconciliation bill.
So the change that we are proposing here not only would visit a
hardship on the employees, the senior citizens who are ready to retire
or who have retired, it also visits a financial hardship on employers
and constitutes, in many ways, an unfunded mandate on the private
sector. I am sure that issue will be discussed to a great extent by the
other sponsors of this legislation. A higher Medicare eligibility age
would actually create a disincentive for employers to hire or retain
older workers, and it would also create an additional incentive,
perhaps, for them to cut back on health care benefits at an earlier
time.
Mr. President, we are in the period where employers are cutting back
on additional benefits that go with employment. That trend has
continued, now, for some time. I do not think there is any doubt that
it is a lower percentage. I have one figure here that the American
Association for Retired Persons put out that in 1973, 71 percent of
large employers covered early retirees with health care coverage. By
last year, that proportion was no longer 71 percent, it was down to 63
percent. Of course, that only applies to large employers. Most of the
small employers in my State do not provide that coverage and most of
the employees in my State, accordingly, do not have that benefit.
Mr. President, I believe very strongly that we need to make necessary
changes in the structure of Medicare in order to keep it solvent as we
go forward. I support efforts to do that. I do not, though, believe it
would be appropriate for us to try to improve the solvency of Medicare
by reducing the number of individuals who are eligible to receive
Medicare, reducing the pool of individuals who are eligible to receive
those health benefits. This provision which we are trying to strike
from the reconciliation bill has that exact effect. I hope very much
the Senate will agree with us on this proposed amendment to strike this
provision. I think this would substantially improve the legislation if
we did strike this provision.
I urge my colleagues to support the amendment when the vote is taken
on the amendment. As I understand that will be tomorrow morning.
Mr. President, I ask unanimous consent that five letters and a report
on this subject be printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
National Association
of Manufacturers,
Washington, DC, June 16, 1997.
Hon. William V. Roth, Jr.,
U.S. Senate, Senate Hart Office Building, Washington, DC.
Dear Senator Roth: The National Association of
Manufacturers has been a strong supporter of the May
bipartisan balanced budget agreement and the subsequent House
Ways and Means Committee markup of proposals to preserve
Medicare's solvency to 2007. The proposal being considered by
the Senate Finance Committee is nearly identical with at
least one major exception: conforming the eligibility age for
Medicare with that for Social Security, which is scheduled to
rise from 65 to 67 beginning in 2003. No budgetary savings
would accrue until that time, well after the target date for
achieving a balanced budget.
Beyond the pending short-term fixes, Medicare's survival
depends on making long-term structural changes. Increasing
the eligibility age could well fall into that category and
should be studied along with other proposals by the Baby Boom
Generation Medicare Commission. Increasing the eligibility
age now would not contribute to a balanced budget, while it
would do harm to early retirees and employers who provide
retiree health coverage.
Medicare currently has no option for early access to a
reduced benefit and, thus, a shift in the eligibility age
would create a major shifting of medical costs from Medicare
to retirees. Only about one-third of Medicare enrollees have
employer-sponsored retiree medical coverage, largely through
jobs in manufacturing, which typically pay higher wages.
Persons without such coverage, typically in lower-wage
industries, would be particularly affected and least able to
cope with this delay in Medicare coverage.
On the employer side, companies now paying full medical
benefits prior to Medicare eligibility would have to continue
paying unreduced benefits for the duration of the age
increase. These companies would see an immediate increase in
their Financial Accounting Standards (FAS) 106 liability.
Thus, while any increase in the Medicare-eligibility age may
not begin to take effect for several years, the impact on
companies' book value would be immediate.
[[Page S6086]]
Current proposals to increase the Medicare-eligibility age
contribute nothing to budget savings until 2003. Therefore,
we urge that this proposal be studied by the Baby Boom
Generation Medicare Commission with a focus on its effect on
early retirees, employers and the Medicare program. Should
such a change be recommended, the implementation date should
allow companies and individuals sufficient time to plan
accordingly for this program change.
Sincerely,
Jerry J. Jasinowski,
President.
____
Increase in Medicare Eligibility Age Should Be Deleted From the Budget
Reconciliation Bill
Issue: A provision to increase the Medicare eligibility age
from 65 to 67 was included in the budget reconciliation bill
approved by the Senate Finance Committee. The provision is
identical to one which the Senate rejected during its
consideration of the 1995 balanced budget act. Removing the
provision from the current budget bill would have no scoring
consequences because the phase-in to the increased
eligibility age would not begin until 2003. However, there
would be an immediate adverse impact for employers which
provide health benefits until an individual becomes eligible
for Medicare. Shifting these costs from Medicare to private
coverage is likely to result in a reduction in health
benefits for active workers, retirees or both.
Discussion: The Senate bill provision would increase the
Medicare eligibility age over a 24 year period to conform it
to the revised Social Security age. The consequences of such
a long term change appropriately belong on the agenda of the
Bipartisan Commission on the Future of Medicare, a panel
which would be established by both the House and Senate
budget reconciliation bills to make recommendations to
Congress on the changes that need to be made to prepare
Medicare for the demographic impact of the Baby Boom
generation.
The provision has no scoring consequences for the current
budget bill because the phase-in to the new eligibility age
would not begin until 2003, the year after the five-year
period of budget reconciliation bill. However, its effects on
private health coverage would be immediate. Employers must
comply with financial accounting standard (FAS) 106 which
requires companies to determine the present value of their
future liabilities for the health benefits provided to their
active workers and retirees. Increases in the Medicare
eligibility age would result in increased liabilities for
employer-sponsored coverage, including those firms which
agree to continue coverage for early retirees until they
become eligible for Medicare benefits. Because FAS 106
standards require that companies must account for their
increased financial exposure immediately--even though the
increase in the eligibility age would take place over many
years--the impact to employers' bottom line would occur long
before the full phase-in period.
Shifts in health care costs from the federal government to
the private sector can have profound and unanticipated effect
and are very likely to result in lower coverage for active
workers, retirees or both. That is why any change in the
Medicare eligibility age must be carefully considered and
compared with other long term financial and structural
changes needed in Medicare to prepare the program for its
future beneficiaries.
Congress and the President reached an historic bipartisan
agreement to balance the budget by 2002 and expressly decided
that long term Medicare changes would be addressed only after
an expert panel provides much needed guidance on the best set
of choices to secure Medicare's future. Clearly, increasing
Medicare's eligibility age should be given the further
consideration that such a fundamental change deserves.
____
NYNEX,
New York, NY, June 18, 1997.
Hon. Daniel Patrick Moynihan,
U.S. Senate, Russell Senate Office Building, Washington, DC.
Dear Senator Moynihan: NYNEX urges you to delete the
Medicare eligibility retirement age increase from the Senate
Finance Committee's bill. As you know, a provision in the
Chairman's mark would increase the Medicare eligibility age
from 65 to 67. Besides public policy concerns about insurance
coverage for senior citizens, this provision would also have
a significant and immediate adverse financial impact on
NYNEX.
NYNEX provides health care coverage to its employees,
retirees and their dependents. Our retirees receive full
health care benefits at retirement and supplemental benefits
that are integrated with Medicare once they become eligible
for Medicare. Under the Finance Committee proposal, NYNEX
would ultimately be responsible for paying for the additional
two years of full benefits for its retirees.
There is also a more immediate concern. Companies are
required under Financial Accounting Standard (FAS) 106 to
estimate their liabilities for all future retiree health
benefits and ``book'' (recognize on their financial
statements) the present value of these liabilities, net of
any assets dedicated to retiree health. This figure is
deducted from earnings. As a result, responsible companies
providing generous retiree health benefits will be penalized
and viewed as less profitable compared to their competitors
who do not provide retiree health benefits.
The impact of this legislation will be to discourage
companies like NYNEX from offering comprehensive retiree
health benefits to their employees.
Changes to the Medicare eligibility age should be
considered in the context of overall Medicare reform. It is
not necessary for the Finance Committee to adopt this
proposal to meet its budget reconciliation commitments, since
the proposal does not raise any revenue over the short-term.
Again, NYNEX urges you to delete the Medicare eligibility
age provision from the Finance Committee bill. This issue
should be considered in the context of comprehensive reform
to ensure all aspects of the issue, including the concerns of
employers providing retiree health benefits, are addressed.
Sincerely,
Morgan Kennedy,
Vice President,
Government Relations.
____
Bell Atlantic,
Charleston, WV, June 18, 1997.
Hon. John D. Rockefeller IV,
Hart Senate Office Building,
Washington, DC.
Senator Jay Rockefeller: Bell Atlantic urges you to delete
the Medicare eligibility retirement age increase from the
Senate Finance Committee's bill. As you know, a provision in
the Chairman's ``mark'' would increase the Medicare
eligibility age from 65 to 67. Besides public policy concerns
about insurance coverage for senior citizens, this provision
would also have a significant and immediate adverse financial
impact on Bell Atlantic.
Bell Atlantic provides health care coverage to its
employees, retirees and their dependents. Our retirees
receive full health care benefits at retirement and
supplemental benefits that are integrated with Medicare once
they become eligible for Medicare. Under the Finance
Committee proposal, Bell Atlantic would ultimately be
responsible for paying for the additional two years of full
benefits for its retirees.
There is also a more immediate concern. Companies are
required under Financial Accounting Standard (FAS) 106 to
estimate their liabilities for all future retiree health
benefits and ``book'' (recognize on their financial
statements) the present value of these liabilities, net of
any assets dedicated to retiree health. This figure is
deducted from earnings. As a result, responsible companies
providing generous retiree health benefits will be penalized
and viewed as less profitable compared in their competitors
who do not provide retiree health benefits.
The impact of this legislation will be to discourage
companies like Bell Atlantic from offering comprehensive
retiree health benefits to their employees.
Changes to Medicare eligibility age should be considered in
the context of overall Medicare reform. It is not necessary
for the Finance Committee to adopt this proposal to meet its
budget reconciliation commitments, since the proposal does
not raise any revenue over the short-term.
Again, Bell Atlantic urges you to delete the Medicare
eligibility age provision from the Finance Committee bill.
This issue should be considered in the context of
comprehensive reform to ensure all aspects of the issue,
including the concerns of employers providing retiree health
benefits, are addressed.
Sincerely,
Dennis Bone,
President and CEO.
____
Corporate Health
Care Coalition,
Washington, DC, June 16, 1997.
Hon. William V. Roth, Jr.,
Chairman, Committee on Finance, U.S. Senate, Washington, DC.
Dear Senator Roth: We would like to bring to your attention
the concerns of our companies about a provision we believe is
included in the Senate Finance Committee Proposal for Budget
Reconciliation. This provision--to raise the Medicare
Eligibility Age--could have a serious effect on our corporate
liabilities and book value.
As you know, many companies today provide their retirees
with health benefits. In most plans, retirees receive full
benefits at any early retirement age and supplemental
benefits that are integrated with Medicare beginning at the
Medicare eligibility age. Under the Senate provision,
companies now paying full benefits prior to Medicare
eligibility would eventually have to continue paying the
unreduced benefits for two more years.
Companies are currently obligated under Financial
Accounting Standard (FAS)106 to estimate their liabilities
for all future retiree health benefits that may be paid to
active and retired workers, and ``book'' the present value of
these liabilities, net of any assets dedicated to retiree
health. These net liabilities, which are estimated today to
exceed $300 billion, must reflect all current law
requirements and existing plan provisions, even though
companies may be planning to make changes in their plan.
Even though the Senate's increase in the Medicare
Eligibility would not begin until 2003, and then would
proceed gradually over the next 24 years, the impact on
corporate book liabilities would be immediate. Under FAS106,
companies would have to re-estimate their future liabilities
and account for any addition to their liabilities as a result
of this change. The impact on FAS106 liabilities would vary
greatly depending on the type of plan and age of work force,
but would
[[Page S6087]]
range from a 5 to a 25 percent increase in FAS106
liabilities.
This would create a serious financial and accounting
problem for companies currently operating retiree health
plans, and could cause many to move to limit or eliminate
their commitment to retirees. While there is some logic to
coordinating Medicare and Social Security retiree ages, we
ask that we take up this task after Budget Reconciliation is
completed and we have time to consider provisions to avoid
the FAS106 liability effects.
Since we do not believe this provision contributes to
meeting the Budget Reconciliation instructions to the
Committee, we urge you to drop this provision altogether.
Sincerely,
Ellen Goldstein,
Chairman.
____
International Union, United Automobile, Aerospace &
Agricultural Implement Workers of America--UAW,
Washington, DC, June 23, 1997.
Dear Senator: Today the Senate is scheduled to take up the
budget reconciliation legislation dealing with spending
reductions. The UAW strongly opposes this bill because it
incorporates a number of anti-worker, anti-senior provisions.
We urge you to support amendments to delete the objectionable
provisions; If they are not eliminated, we urge you to vote
against the bill on final passage.
This budget reconciliation legislation contains a massive
attack on the Medicare program that would be extremely
harmful for the elderly and for working men and women. In
particular, the UAW strongly opposes the provisions that
would; Increase the Medicare eligibility age to 67; this
provision would greatly increase the number of Americans
without health insurance coverage; it would also impose huge
new costs on those employers who currently provide pre-
Medicare retirees with health insurance coverage, and impose
additional pressure on these employers to drop this coverage;
means test the Medicare program by imposing drastic increases
in the Part B deductible for beneficiaries with higher
incomes; this provision would be extremely difficult to
administer, while raising relatively little revenue; in
addition, it unfairly penalizes seniors who are ill, and
would generate increased pressure to totally abandon the
social insurance nature of the Medicare program; impose a $5
per visit copay for home health care visits; this provision
would impose enormous costs on seniors who depend on home
health care; and establish a dangerous pilot program for
100,000 Medical Savings Accounts, which would allow insurance
companies to engage in skimming practices that would threaten
to fragment the Medicare program.
Taken together, these provisions would undermine the social
insurance nature of the Medicare program, and would represent
the first step towards converting it into a welfare program
that would lack broad based political support. In addition,
these provisions would impose significant and unacceptable
new costs on many senior citizens. At the same time, the
budget legislation fails to provide adequate assistance to
low income seniors in paying their Part B premiums. It is
also important to note that the provisions increasing the
Medicare eligibility age and means testing the Part B premium
were approved without adequate public hearings and debate,
and are outside the scope of the budget agreement. For all of
these reasons, the UAW urges you to support amendments to
strike all of these objectionable Medicare provisions from
this reconciliation legislation.
The UAW also opposes the provision in this reconciliation
legislation that would overturn the federal court decision in
the Pennington case. This decision prohibited the states from
using accounting devices to make certain groups of workers,
especially part time employees, ineligible for unemployment
benefits. By overturning this decision, the reconciliation
legislation would reduce coverage under state unemployment
compensation programs by about six percent. We urge you to
support efforts to strike this provision from the budget
legislation so that laid off workers are not denied this
essential assistance.
The UAW also opposes the provisions in the reconciliation
legislation that would: allow Texas to privatize the
administration of its Medicaid and food stamp programs; this
represents a dangerous precedent that would allow private
companies to make decisions regarding the eligibility of
individuals for government benefits; establish an open-ended
block grant program to encourage the states to provide
expanded health insurance coverage to children; the funds
provided for this effort are inadequate; in addition, we
believe that the most cost effective way to provide health
insurance coverage to uninsured children would be by
expanding the Medicaid program; deny SSI coverage in the
future to elderly and disabled legal immigrants; this would
unfairly penalize extremely vulnerable populations who
genuinely need public assistance; and allow HHS to administer
the Welfare to Work program, while failing to emphasize the
importance of job training; we believe that this program can
be better administered by the Department of Labor; in
addition, the funds available under this program should be
made available for job training, which is critically
important to moving individuals off to welfare and into the
work force.
Lastly, the UAW strongly urges you to oppose any amendment
that would exempt individuals in workfare programs from
coverage under the minimum wage and other provisions of the
Fair Labor Standards Act. As a matter of basic social
justice, we believe that all workers should be entitled to
these fundamental protections. We are also concerned that
this type of exception would undermine these protections for
other workers.
Accordingly, the UAW urges you to support amendments that
would eliminate the objectionable provisions discussed above,
and to oppose any amendments that would further undermine
protections for seniors and working men and women. Unless the
objectionable provisions are stricken from the legislation,
the UAW urges you to vote against this budget reconciliation
legislation on final passage.
Thank you for considering our views on this vital
legislation.
Sincerely,
Alan Reuther,
Legislative Director.
____
[From the Association of Private Pension and Welfare Plans, June 20,
1997]
Increase in Medicare Eligibility Age Should Be Deleted From the Budget
Reconciliation Bill
A provision to increase the Medicare eligibility age from
65 to 67 has been included in the budget reconciliation bill
approved by the Senate Finance Committee. The provision is
identical to one which the Senate rejected during its
consideration of the 1995 Balanced Budget Act. While removing
the provision from the current budget bill would have no
scoring consequences because the phase-in to the increased
eligibility age would not begin until 2003, if the provision
remains, there would be an immediate adverse impact on
employers who provide health benefits until an individual is
eligible for coverage under Medicare. Shifting these costs
from Medicare to private coverage is likely to result in a
reduction in health benefits for active workers, retirees or
both.
Any changes in the Medicare eligibility age must be
carefully considered and compared with other long term
financial and structural changes needed in Medicare to
prepare the program for its future beneficiaries and we
oppose including an eligibility age increase in the budget
package for the following reasons:
A Long-Term Agenda Issue. The Senate bill provision would
increase the Medicare eligibility age over a 24 year period.
The consequences of such a long term change more
appropriately belong on the agenda of the Bipartisan
Commission on the Future of Medicare, a panel which would be
established by both the House and Senate budget
reconciliation bills to make recommendations to Congress on
the changes that need to be made to prepare Medicare for the
demographic impact of the Baby Boom generation.
Immediate, Negative Effects on Employees. Because the
phase-in to the new eligibility age would not begin until
2003, the provision has no scoring consequences for the
current five-year budget reconciliation bill. However,
private health coverage would be affected immediately.
Employers must comply with financial accounting standards
(FAS) 106 which requires companies to determine the present
value of their future liabilities for the health benefits
provided to their active workers and retirees. Increases in
the Medicare eligibility age would result in increased
liabilities for employer-sponsored coverage, including those
firms which agree to continue coverage for early retirees
until they become eligible for Medicare benefits. Because FAS
106 standards require that companies must account for their
increased financial exposure immediately--even though the
increase in the eligibility age would take place over many
years--the impact to employers' bottom line would occur long
before the full phase-in period.
The Costly Effects of Cost Shifting. Shifts in health care
costs from the federal government to the private sector can
have profound and unanticipated effects and are very likely
to result in lower coverage for active workers, retirees or
both. In addition, the provision would leave many individuals
with a costly gap in health coverage until they turn 67 which
would further discourage companies from providing health
benefits to retirees.
Congress and the President reached an historic bipartisan
agreement to balance the budget by 2002 and expressly decided
that long term Medicare changes would be addressed only after
an expert panel provides much needed guidance on the best set
of choices to secure Medicare's future. Clearly, increasing
Medicare's eligibility age should be given the further
consideration that such a fundamental change deserves.
Mr. BINGAMAN. I yield the floor and I suggest the absence of a
quorum. I request the time be charged equally to both sides.
The PRESIDING OFFICER. Without objection, it is so ordered. The clerk
will call the roll.
The legislative clerk proceeded to call the roll.
Mr. KERREY. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
[[Page S6088]]
The PRESIDING OFFICER. Who yields time?
Mr. LAUTENBERG. I yield the Senator from Nebraska as much time as he
needs.
Mr. KERREY. I thank the Senator from New Jersey.
The PRESIDING OFFICER. The Senator from Nebraska.
Mr. KERREY. Mr. President, first, I would like to praise the chairman
of the Finance Committee, Senator Roth, and the ranking Democrat on the
Finance Committee, Senator Moynihan, as well as the chairman and
ranking member on the Budget Committee, Senator Domenici and Senator
Lautenberg.
The bill we are debating right now makes a substantial contribution
to deficit reduction. The goal of all this deliberation is to balance
the budget by the year 2002, the purpose of which is to enable us to
continue with an economy that is growing and continue creating jobs and
continue the prosperity that we are currently enjoying in the United
States.
I am saying all this because we will be debating all kinds of reasons
why this bill is bad, and I think it is very important for us to begin
by saying there is a purpose here.
We know Medicare is a very substantial program in terms of cost, and
any attempt to balance the budget has to look at this program. Chairman
Roth has done, I think, an exceptional job of producing a proposal that
not only contributes to deficit reduction, but does a number of other
things which I believe are very important.
First of all, one of the things this bill does, in addition to
contributing to deficit reduction, is there are a number of provisions
that Chairman Roth and Senator Moynihan put in this bill that directly
affect our capacity in rural America to get good health care. That has
been a bit of a problem. There are a number of issues we have
identified over the years, and Chairman Roth has made some changes in
law in this bill that will benefit those of us who represent rural
States. I would like to list some of those provisions.
First, rural hospitals and physicians will be able to form their own
networks, independent of larger managed care companies, and contract
directly with Medicare on a capitated basis. These provider-responsive
organizations would not only provide competition, but they will enable
us to increase coverage and increase health care delivery in the rural
areas.
Second, the proposal is one that will increase managed care payments
in rural areas. The increase in payments will be detailed during the
course of this debate, but it is critical, if we are going to get
managed care in rural areas, that the payments be increased, and
Chairman Roth has made certain in this bill that happens.
Third, it creates a single designation for small rural limited
service hospitals that would be paid on a reasonable-cost basis. This
new authority will include the current--called EACH/RPCH--demonstration
hospitals. Once again, we have been asked by rural hospitals and rural
providers for this provision. Chairman Roth and Senator Moynihan have
included it in their bill, and for those of us who represent rural
States, we are going to be able to say, correctly so, that this law is
going to make it more likely that we are going to get good care in the
rural community.
Next, it allows sole community hospitals to opt for a fourth payment
option based upon the costs from fiscal year 1994 or fiscal year 1995.
It is a detail that I will not go into at length here today, but again
on the ground at the community level this will make a tremendous
difference in most States where rural health care shortages are a
problem.
Next, it reinstates the Medicare dependent hospital program through
2002. This means that hospitals with less than 100 beds and where 60
percent or more of the discharge is paid for by Medicare will be paid
on the same basis as sole community hospitals. It is a very important
provision. There are lots of hospitals in Nebraska sort of hanging on
the edge with fewer than 100 beds. This will give them a fighting
chance to survive.
Last, it allows rural referral centers greater flexibility to receive
payments based on rates for the nearest germane area.
Mr. President, I just say again that this provision is one last thing
in the bill that will enable us to say that in addition to eliminating
this deficit that has plagued us for so many years, this proposal will
increase the likelihood that managed care and good health care will
reach the rural area. I thank Chairman Roth and I thank Senator
Moynihan and Senator Domenici and Senator Lautenberg. It is a terribly
important provision for those of us who represent rural States.
Second, and I will not go at length in describing this, this bill
grants authority to the Secretary of Health and Human Services to bring
more competition into this system. Competition in my judgment will not
solve all of the problems, but it is a tremendously useful tool to
bring costs out of the system. It is more likely to get it done in an
efficacious fashion. Again, Senator Roth and Senator Moynihan have
included this in the mark. And I believe it represents substantial
reform and important reform in the Medicare system.
Third, this committee, the Finance Committee, again under Senator
Roths's and Senator Moynihan's leadership, has paid attention to the
unique problems that low-income Medicare beneficiaries face. And it can
be a tremendously difficult problem.
It is relatively easy for us to get caught up in all the numbers and
presume that all we are doing is trying to find numbers savings. But
for an individual out there at the community level, Medicare really can
be a lifesaver.
I have a woman in Omaha, NE, that I pulled from our file, we are
working with at the moment, that faces some problems, a very common
situation. A widow on Medicare, she has $610 a month in Social
Security. She has $182 in rent subsidized through section 8. Her
utilities and phone are $55 a month. Her Medicare part B is $43 a
month. She has a Medigap cost on top of that. By the time she is done,
she has $4,000 left over for everything, for food, clothing, and other
expenses. It does not take much in the way of prescription drugs and
additional costs for health care for her to find herself with almost no
money left over.
So this mark, for those of us concerned about low-income people,
continues the dual eligibility system for Medicare and Medicaid. It
continues both the SLMB and the QMB Programs that enables lower-income
people to get payment. And I believe the managers' amendment will make
it more likely that the SLMB Program will enable low-income people to
find themselves able to accommodate the increases in premiums that will
occur as a consequence of the shift of some home-based coverage from
part A to part B.
Though I would argue there is still some room for improvement, this
bill represents a good-faith effort to acknowledge that there are low-
income beneficiaries out there who are faced with different problems
than higher-income beneficiaries.
There is still one out of seven Americans over the age of 65 who live
in poverty. Medicare and Social Security reduces the rate of poverty
from 50 percent to about 12 percent in the country. But still, for
those 12 percent, life can be quite difficult. And I assure you,
Chairman Roth and Senator Moynihan have paid attention to that problem
and, I think, have enabled us to say that we have at least tried to
make certain that low-income beneficiaries are given full
consideration.
The next thing that I would like to spend most of my time talking
about is, this mark, this piece of legislation does acknowledge, as
well, that we have long-term problems, that we cannot stick our heads
in the sand and ignore that the Medicare Program not only promises to
make payments for the next 5 and for the next 10 years but it promises
to make payments for the long-term as well, promises to make payments
especially for that baby-boom generation that will begin to retire in
2010, 2011, depending upon when you mark the generation. It is either
1945 to 1965 or 1946 to 1965. In that 20-year period, about 2010 to
2030, under current forecasts, even as we have adjusted the program--I
note there will be some that try to knock out the increase in the
eligibility age. There will be some that try to knock out the income-
related test on part B, the copayment on home health, the $5 fee on
[[Page S6089]]
home health, and make compelling arguments. But you can only make those
arguments persuasive if you ignore where this program is going.
Mr. President, the current cost of Medicare represents about 10
percent of this budget. And from 2010 to 2030, Medicare costs will go
from about 10 percent to 35 percent of the budget. That is the kind of
growth that we see out in the future. It is a demographic problem. And
when you move the eligibility age from 65 to 67, in order to bring it
into line with where Social Security is going, we are making and
recommending an adjustment that takes into account where this program
is going, what the future looks like out there.
I acknowledge that there are problems when you move the eligibility
age for people who are between the ages of 60 and 66 or 67. There is a
problem. This legislation has in it not only a commission, but in law
we recommend that the commission consider doing what Kerrey-Danforth
recommended, which is to allow seniors between the ages of 62 and
eligibility age to be able to buy into the Medicare Program. I think it
is the sort of thing that we are going to have to consider whether we
adjust the eligibility age or not.
But I will give this evening--I suspect I am going to have plenty of
opportunity to argue this when the amendment is offered to strike it on
the eligibility age--I give this evening one set of facts. Between the
years 2010 and 2030, the number of people in the work force will grow
by 5 million, a 5-million-person increase between 2010 and 2030. But
the number of people who are retiring who will be eligible for payments
will increase by 22 million. That is a problem, Mr. President, that we
face with our program. And we can either ignore it and say we do not
want to make change or we can acknowledge, in order to preserve and
protect Medicare for the long term, these kinds of changes will be
necessary.
The change does not impact anyone over the age of 58 today and does
not fully impact anyone over the age of 36. I say that because I have
already seen interviews given to current Medicare beneficiaries, people
who are 65, people who are 70, receiving Medicare that are
beneficiaries today, and the question is put to them, ``What do you
think about moving the eligibility age?'' as if it is going to affect
them. And very often again they will find themselves concerned about
losing their Medicare, about whether or not they are going to be paying
more for their Medicare. And there is a presumption made that this
change is going to have an impact on them.
Mr. President, this movement of the eligibility age is one of the
easiest. Right along with that, a change that I believe should be made
is to bring a new accounting to the cost of living index. We debated it
earlier on in the year. We were not able to get it. Some objected to
the so-called ``politicization'' of the CPI. The CPI was imposed in
1973 for political reasons.
I want a good formula, a good calculation. Unfortunately, we were not
able to get that because we ended up being opposed both on the left and
on the right. But these are the kinds of changes that are necessary to
accommodate demographics.
There was a piece in the New York Times Sunday magazine yesterday. I
think it was Ben Wattenberg that made a couple of suggestions. And if
Members want to bring that kind of suggestion to the floor, why it will
be an interesting debate. He suggested that we change our tax and our
spending laws to encourage Americans to have more babies or we open our
borders and accept more people in the United States as immigrants,
trying to increase the number of workers per retiree.
Or one can walk to the floor if they choose to and propose a tax
increase. Many people who have honestly evaluated this program have
suggested that all we need to do is increase the payroll tax just a
little bit and that will solve the problem.
Mr. President, I intend in this debate to repeatedly point out to
colleagues that the tax-cut provisions in this bill addresses the
income tax. It does not address what is for many Americans the largest
tax of all, and that is the payroll tax.
And I have been in Nebraska many times in townhall meetings and
talked about this movement of the eligibility age and the income-
related test on part B, which is also in the chairman's mark. And very
often it provokes a big debate. And some do not like it.
I say, let me just ask the audience, How many of you would support
increasing the payroll tax? And it is rare where you will find more
than one or two people holding up their hand, Mr. President. And the
reason is, that for a family of four in Nebraska, earning $34,000 a
year, husband, wife, two children, they will pay $2,719 in Federal
income tax; they will pay $5,358 in payroll taxes, $4,300 of which is
FICA and $1,000 of which is the Medicare tax. Mr. President, that is
almost twice as much in payroll taxes.
One of the reasons that we find people say to us that this system has
to be fixed with these kinds of changes is that they acknowledge that
this payroll tax is taking a substantial bite out of the income of the
working families of America.
So the bill has a change in the eligibility age. I defend it
strongly. I intend to come down when the amendment is offered to strike
and explain at greater length why those who are arguing to strike it
will not help strengthen this program. I intend to argue as well, by
the way, that I, having studied this a long time, believe long term it
is going to be difficult for us to maintain Medicare and Medicaid, the
VA, and the income-tax deductions as intact programs.
I think it is going to be difficult for us to not, at some time,
relatively soon, begin to examine once more whether or not we should
change the law and change the way people become eligible.
It is very revealing when you talk about moving the eligibility age,
Mr. President. The law says if you have reached the age of 65 in
America you are eligible for Medicare. If you can prove you are poor,
under the law, the law says you are eligible for Medicaid. If you get
blown up in a war, as I did, the law says you are entitled to the VA
system. If you work for the right employer, the law says you can get a
subsidy through the income tax system. If you work for the Government
very often, the law says you also have a right to health care.
Mr. President, I believe, though it may seem counterintuitive for
those of us who have been worried about the growing cost of the
mandatory programs and entitlements and that interest, that we need to
consider rewriting the social contract for Federal health care and
establishing a simplified eligibility. If you are an American or legal
resident, you pay according to your capacity to pay. Everybody has to
pay the true cost of health care.
We ought to allow competition to control the cost. And we ought to
allow consumers to get far more information about what the health care
system is both doing for them and sometimes doing to them.
I think it is very difficult for me to stand here and say that we can
preserve Medicare as an intact program unless some demographic change
occurs between now and 2010.
I believe it is inescapable you look at these kinds of choices,
otherwise you are basically going to prolong the due date and at some
point we are going to be facing choices that are far more difficult
than the choices that are being presented by the committee in this
budget.
Mr. President, another change that we have in this proposal is a
change that says that we are going to make the Medicare part B more
progressive than it currently is by asking Americans who have higher
incomes to pay more, to be subsidized less, in short, by Americans with
lower income for that part B premium.
Initially, Senator Gramm of Texas and I, who worked on this proposal,
had an offering that we would use the deductible as a basis for change,
in short, that we were going to try to affect utilization. It got a bit
confusing. And as a result of that confusion, both he and I have agreed
to change it so that it will be an adjustment in the part B premium for
Americans under $50,000 a year. They will not be affected at all.
Roughly 94 percent of beneficiaries are somewhere in that range. It
does not fully affect any individual under $100,000. We phase the
subsidy out over $100,000 for an individual and $125,000 for a couple.
[[Page S6090]]
I appreciate the sacred nature of Medicare, but nowhere do I find it
persuasive that we ought to ask people with lower incomes to subsidize
people of higher incomes. Very often the people of lower incomes do not
even have health insurance. They are struggling to pay the cost of
health care themselves out of pocket, and part of their taxes--again,
the larger share of their taxes coming from payroll taxes being
delivered to pay the health care of individuals with a capacity to be
able to take care of themselves.
I do not believe this challenges the Medicare system. I do not
believe it is a slippery slope to destroying Medicare. I believe it is
consistent with what Medicare attempts to do, which is to say that the
market will not provide insurance for all of our citizens, that we have
to, on a progressive basis, write a law that enables us to do that.
This change will make the system more progressive, not less. I
emphasize that.
For all those who will come to the floor and argue that this package
is not sufficiently progressive, they will find themselves, in my
judgment, turning their arguments inside out in proposing this test of
income on part B. How can you defend a change, a simple change at a
relatively high income, Mr. President, $100,000 for an individual and
$125,000 for a couple? Mr. President, this is a substantial first-step
change, once again, to acknowledge that we have a long-term problem
with Medicare, and we are going to have to begin to make more difficult
choices if we want to arrive out there in the future and say we have
solved future problems as well.
Very importantly, under this change, we did not do it for budgetary
reasons. Neither the move of the eligibility age nor the change in part
B premiums has been done in order to generate budget savings. Indeed,
the revenue that we get from the part B premium will go into the health
insurance trust fund, strengthening the health insurance trust fund. We
have not had it scored. We are not using it to pay for other things. We
are using it to strengthen the Medicare Program and, as I say, to make
the program more progressive.
Mr. President, finally, as we go through this debate, I intend to
repeatedly come to the floor and call to my colleagues' attention
another terrifying fact. People come and they will argue, well, in 1965
when we passed Medicare, we intended the following--and whatever it is
that the colleague wants to offer in opposition to either moving the
eligible age or in opposition to putting an income test on part B, will
suggest there was something in 1965 that caused us to say we would do
something and never come back and change it. There have been lots of
changes that have occurred since 1965.
I will in the midst of the debate have plenty of opportunity to go
through many of those changes that I think dictate that we change the
program again. The one that is the most impressive of all is that in
1965, 30 percent of the Federal budget went to mandatory programs. That
is entitlement programs plus net interest, and 70 percent of our budget
went to discretionary spending. Mr. President, in the year 2002, when
this budget agreement ends, we will have exactly the opposite--70
percent will be mandatory spending and 30 percent will go to
discretionary. It does not stop there. It will continue to grow until
100 percent of the budget is mandatory, until we have converted the
Federal Government into an ATM machine, collecting taxes and merely
transferring back out.
Mr. President, for all those who care about investing in our future,
who want to invest more in education, who are concerned about
productivity, we have all kinds of other things we believe this Nation
needs to be addressing, unless we come to grips with the growing cost
of mandatory programs, it will be impossible for us to do all the
things that most of us would like to do in order not only to make our
country fair but also to make our country more prosperous and
productive.
I believe the legislation that Chairman Roth and Senator Moynihan
have presented to the chairman of the Budget Committee, Senator
Domenici, and Senator Lautenberg, the ranking member, is a fair
proposal. It will enable us to say we will balance the budget by the
year 2002. It is more progressive than the current law, taking greater
account both of low-income Americans as well as upper-income Americans'
capacity to pay. It is a terrific package that will enable us in rural
America to increase the quality of care that we see our citizens
getting. It moves more toward a competitive model, not only giving
Health and Human Services more power, but giving consumers more power
by giving them the data and the information that they need to make
choices. There is substantial reform not just for budgetary reasons but
for the purpose of improving the quality of this program that has been
so enormously beneficial for our country.
I appreciate the opportunity to work with the chairman and the
ranking member, Senator Moynihan, and I look forward to the opportunity
of returning to the floor to debate some of the specific amendments
that are offered.
I yield the floor.
Mr. LAUTENBERG. Mr. President, I yield 20 minutes to the Senator from
Illinois.
Mr. DURBIN. I thank my colleague from New Jersey for yielding.
Privilege of the Floor
Mr. DURBIN. Mr. President, I ask unanimous consent that Ann Marie
Murphy of my staff be accorded privileges of the floor during debate on
S. 947.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. DURBIN. Mr. President, let me say at the outset I want to
acknowledge the leadership role that has been played by my colleague,
the Senator from Nebraska, who preceded me on the floor. He is calling
on us as Members of the Senate and the House to face the reality that
entitlement programs need reform. Senator Kerrey has oftentimes been a
lonely voice in that effort. It is not altogether a popular position to
take and yet it is necessary. I admire him for his leadership and his
candor, and I think that we in the Senate should heed his advice that
we must resolve ourselves into the business of addressing the needs of
these entitlement programs--Social Security and Medicare in
particular--on a long-term basis.
What I am about to speak to today in no way should reflect on Senator
Kerrey's effort or the effort of others for meaningful reform with
Medicare. But the issue which I address is one included in this
reconciliation bill which I feel is fundamentally wrong and
fundamentally unfair. It is a provision which is included in this bill
which would over a period of time raise the eligible age for Medicare.
By way of background, many years ago we raised the eligibility age
for Social Security. The reason the people still think in terms of
Social Security eligibility at age 65 is that this change to age 67
will be implemented during a transition period from the years 2003 to
2027. It is a gradual change adding, over 24 years, 24 months before a
person can be eligible for Social Security. During the course of its
deliberations, the Senate Finance Committee entertained a motion by my
colleague from Texas, Senator Gramm, to add an amendment which would
increase the eligible age for Medicare from 65 to 67. It is said in the
report of the Finance Committee--and I am sure this reflects the nature
of the debate--that an attempt was being made to find some symmetry
between the increase in eligibility age for Social Security and the
increase in eligible for Medicare. If there is any parallel or any
symmetry between these two programs it is only that they both serve
elderly Americans, and there it ends. I think we should view this
suggestion of raising the eligible age for Medicare from 65 to 67 in
the context of the people who are affected.
This package that raises that age to 67 for Medicare literally
reneges on our promise to provide Medicare to seniors at the age of 65.
There is no budgetary impact in this provision. There is no money to be
saved, because whatever is going to be saved, if it is ever
implemented, will not occur until the next century, far beyond the 5
years when we measure the impact of this bill.
This change does not parallel the Social Security change which I
described. Individuals have the ability now to begin their Social
Security benefits at age 62. Of course, those benefits are diminished,
but should a person reach that point in life and say, ``I'm ready to
retire. I do not want to wait until 65. I have talked it over with my
spouse.
[[Page S6091]]
I'm going to retire at age 62.'' It is perfectly legal. They can do
it. The Social Security benefits start flowing to their family based on
what they have paid in.
There is no corresponding option for Medicare. Medicare begins at 65.
Unless you are disabled and thereby qualify for Medicare, you cannot
touch this program until you are age 65.
Currently, 1.6 trillion individuals in America between the ages of 55
and 65 are uninsured. How do people find themselves in this
predicament? Well, I bet you everyone listening, those viewing, can
probably think of someone in their family or a friend who reached that
situation. I have a situation in my own family, a person who had worked
for years and years for a major company and decided he would retire at
age 60 and the company said, ``Well, here is your watch. Here is your
package of benefits. Good luck in your retirement.'' Within 12 months
they notified him there had been a change in the program, and no longer
would they offer health insurance to him as a retiree. His recourse?
None, zero, no place to turn. Age 60, retired, out of work, no health
insurance. Then the trouble began for him personally, heart problems,
leading to serious heart surgery. He literally put his life savings
into his medical care and counted the days until he reached the age of
65. He had been critical of a lot of ``big government'' and big
government programs, but now a big government program was coming to his
rescue and his family's rescue. He finally made it and reached age 65
and reached eligibility.
Is this an isolated case of one person who did not have good luck
when he retired? I am afraid not. A 1997 Commonwealth Fund study
indicates in 1994 only 30 percent of retirees had health insurance from
a previous employer, compared with 44 percent in 1988. The trend,
unfortunately, is in the direction of uninsured people at the age of 60
and beyond. Even coverage by larger employers has declined. In 1993, 71
percent of large employers provided coverage. But then again by 1996,
this figure had dropped to 63 percent. Many retirees, incidentally, do
not retire voluntarily and may not have much chance of future
employment. Private insurance for this group of seniors is very
expensive.
In my home State of Illinois, I checked in the city of Chicago, and
the average cost of health insurance for a healthy male age 60 to 64 is
$6,520--healthy male. What if they had a preexisting condition, a
serious medical condition? The cost goes up over $10,000 a year. You
are retired, you are going fishing, you are taking it easy, all of a
sudden, no health insurance. Where do you turn? You just had a
diagnosis that says you have a medical problem--$10,000 a year and you
wait, counting the days until you are eligible for Medicare.
This bill does not help seniors. This bill does not help retirees.
This bill does not help working families, and this provision is totally
unfair. If we lived in a country where everyone had health insurance,
universal health coverage and you did not have to worry about whether
you lost it through changing a job or retirement, that is one thing,
but we do not live in that nation. We live in a country where any one
of us with the loss of a job could be vulnerable to no health insurance
coverage, and the suggestion of the majority that we raise the
eligibility age for Medicare leaves more people vulnerable--vulnerable,
of course, to the cost of health insurance if they can buy it.
That is why I oppose this provision and why I will make a point of
order when I have concluded these remarks. I yield for debate only to
my colleague, Senator Reed.
Mr. REED. I thank the Senator from Illinois for yielding. I join him
in my opposition to this provision in the bill. I also have great
respect and regard for Senator Kerrey, the primary sponsor of this
provision. He has courageously identified many issues with respect to
Medicare and has provided great insight, but in this particular
situation I believe that to raise the eligible age for Medicare is
going in exactly the wrong direction. It forgets why we created
Medicare in the first place in the mid-1960s.
The overwhelming reality was that seniors at that age could not get
health care. That is why the Government stepped in. Private insurance
companies were unwilling to sell insurance to those people at any
reasonable price. Many things have changed since the mid-1960s--the
demographics of our population, the efficacy of a health care program,
the longevity of our citizens--but one thing has not changed, and that
is the unwillingness of private insurance to step in and provide
affordable and accessible health insurance to seniors.
Today, 13 percent of the 21 million people aged 55 to 64 lack health
insurance, and by adopting this provision we will simply add to that
number because, now, from age 65 to 66, they will not have access to
the Medicare system. Therefore, we have to, I think, maintain a
situation where the Medicare system begins at age 65.
Indeed, I hope that we will endeavor to try to develop programs that
would broaden the base of health care insurance for all Americans. It
is quite disturbing to listen to the statistics cited by my colleague
from Illinois, and to point out that many, many companies are now no
longer insuring, as a matter of routine, their employees and,
consequently, the percentage of insured Americans, particularly in the
later years of their work life, is declining. We would add to that
precipitous decline by adopting this particular amendment.
Indeed, also, we have to understand that the majority of Medicare
beneficiaries between the ages of 65 and 67, who would be affected by
this amendment, have incomes below $30,000. They certainly would not be
in a position to pay a $10,000 a year private insurance premium, as is
evident in some States, like Illinois. Often they are single, poor,
unemployed. They would have no recourse. And this is not the way to fix
the Medicare system--by denying health care insurance to people, by
essentially pushing them out of the system of health care with the idea
that we will somehow stabilize and increase the longevity of our health
care system.
There is another aspect of this that should be studied much more
deeply before we embark on such a change; that is, many employers have
provided health care benefits to their employees until they reach the
Medicare age of eligibility. As a result, if we were to push back the
eligibility table, we would require corporations throughout this
country to immediately recognize, because of accounting rules, an
increase in their liability, a significant increase in their liability.
This could force them to rethink their overall health care strategy to
accelerate the decline of health care not only for seniors but for
working Americans, as companies simply say, ``we can't afford to
shoulder this burden any longer.'' As a result, we also, I think, have
to recognize the significant impact this would have on the application
of health care insurance throughout our society. As one employer wrote
to me, ``The impact of this legislation will be to discourage companies
from offering comprehensive retiree health benefits to their
employees.''
I think we have to be very careful and thoughtful about how we reform
Medicare. We all want to stabilize the system, to ensure solvency. We
can do that without adopting this amendment. To move away from a
guarantee of health care for seniors, beginning at 65, is a retreat
that I don't think we should make and I don't think we have to make.
Therefore, I join my colleague from Illinois in objecting to this
provision of the bill before us today. I thank the Senator and yield
back my time.
Mr. DURBIN. I thank my colleague, the Senator from Rhode Island, for
his remarks. I want to really follow up on one of his last points. I
say to Senator Reed, I have in my hand a letter signed by some 80
businesses and business organizations objecting to the increase in the
Medicare eligibility age from 65 to 67. These are not just a few odds
and ends when it comes to the business profile of America. We not only
have a letter signed by the U.S. Chamber of Commerce, but also the
National Association of Manufacturers, companies like ARCO and Bell
Atlantic, Chrysler Corp., Ford, General Motors, and the list goes on
and on. Making the point my colleague from Rhode Island made, they have
already made a commitment to their employees and it is this: We will
protect you with health insurance as a member of our family, our
corporate family, after retirement until
[[Page S6092]]
you are eligible for Medicare. Now, if we raise the Medicare
eligibility 2 years, these companies having made that commitment have a
new liability that they had not anticipated. It is not only a cost but
a disincentive to these and other companies to make that kind of
promise. That is the real world. For people to see the simple symmetry
between Social Security and Medicare--oh, it is going to 67 by the year
2027 on Social Security, and let's go to 67 for eligibility on
Medicare--is to overlook the real world that people live in. The
employees who are faced with troubling medical conditions late in their
lives who may not have health insurance coverage, who cannot afford to
buy it at that point in their lives, where are they? Who speaks for
them in this Chamber? Who will stand up and say that these people
deserve protection and coverage? Well, we have it today--at least
beginning at age 65.
I hope that, in the name of balancing the budget and having some
budget impact in the next century, we will not throw away a basic
commitment to those in our country who have worked so long and so hard.
I will be making a point of order at this point in the debate, unless
others would like to speak.
Mr. REED. If the Senator will yield one more time. The fact is that
this will create a significant system impact. For example, private
companies may change their insurance packages, et cetera. There is
another impact, also. In this country, sick people--and I hope in this
country they will still get care someplace. As a result, without the
Medicare Program, they will be thrust upon the hospitals for
uncompensated care and thrust upon--if they are low-income citizens--
Medicaid programs or special programs at the State level. So as we hope
to save at the Federal level, we very well may generate other costs,
and perhaps larger costs, at local-State levels and in other insurance
programs. So, essentially, our commitment to Medicare, I feel, should
be maintained. I, again, concur with the Senator and thank him for
yielding me this time to further comment.
Mr. DURBIN. I thank my colleague. Senator Barbara Boxer of California
and Senator Tom Harkin of Iowa could not be here for this debate, but
they wanted to have their names joined in support of our effort.
In conclusion, I will say that my colleague from Rhode Island brings
home the conclusion to this debate; that is, if we shirk our
responsibilities to these working families, if we walk away from a
Medicare promise of over three decades, we will end up with people in
unfortunate circumstances, many of them sick, presenting themselves for
care without any health insurance, without Medicare. Of course, most
hospitals and most health care providers in this country will do their
best to treat them anyway. Then the cost of that care will be borne by
everyone, borne by those who pay into insurance and those Government
programs that insure, as well. Unfortunately, people wait until they
are in acute and critical conditions before they come to a hospital
under those circumstances. Then the care is more costly, and many times
they sacrifice their health and their lives. In the name of balancing
the budget, let us not include a provision raising the eligibility for
Medicare that creates such a disadvantage and such pain and suffering
for so many working families across America. This is not an idea whose
time has come. This is an idea that should be shelved until our
commission working on the future of Medicare can come up with sensible
suggestions that really reflect the reality of the world that many
seniors face today.
Mr. President, at this point, I understand that before I make my
point of order I must ask that all pending amendments be laid aside. I
make that request.
The PRESIDING OFFICER. Without objection, it is so ordered.
Point of Order
Mr. DURBIN. Mr. President, I raise a point of order that section 5611
of the bill, S. 947, contains provision that produces no change in
outlays or revenues during the required period of time and therefore
violates section 313 (b)(1)(A) of the Congressional Budget Act of 1974.
Mr. ROTH. Mr. President, pursuant to section 904 (c) of the
Congressional Budget Act of 1974, I move to waive the point of order,
and ask that debate on the waiver be postponed until tomorrow following
any votes ordered for tomorrow morning.
The PRESIDING OFFICER. Is there objection?
Without objection, it is so ordered.
Mr. DURBIN. Mr. President, I ask for the yeas and nays on the
Senator's motion to waive.
The PRESIDING OFFICER. Is there a sufficient second?
There is a sufficient second.
The yeas and nays were ordered.
Mr. ROTH. Mr. President, I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The bill clerk proceeded to call the roll.
Mr. LAUTENBERG. 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. KENNEDY. Mr. President, the reconciliation bill before us today
seeks to raise the age of eligibility for Medicare from 65 to 67. If we
allow this increase to remain in the bill, we will be breaking a
compact made with millions of future beneficiaries. For 32 years, we
have said to working Americans ``pay into this program and we will
provide you with health security at age 65.'' During the drafting of
this bill, however, this promise was callously and capriciously cast
aside.
Proponents will claim that they are merely conforming the eligibility
age for Medicare to that of its sister program, Social Security. Yet,
the manner in which we are approaching this change and the final
outcome differ dramatically and dangerously.
First, it is important to note that the change in the age of
eligibility for Social Security, which begins to rise in 2003, was
enacted in 1983. Therefore, individuals affected by the Social Security
change will have had a minimum of 20 years to adjust their retirement
planning. By changing Medicare at this late date, we are giving future
beneficiaries only 6 years notice to absorb in their retirement
planning a change that could eat up a significant portion of their
retirement income, should they actually be able to purchase insurance.
It could also bankrupt them, if they are forced to go without insurance
and suffer a devastating illness.
Second, under Social Security, individuals will still be able to
receive reduced benefits at age 62, the age of early retirement, if
they choose to retire before they are eligible for full benefits. Under
this proposal, however, senior citizens will be unable to receive any
Medicare benefits until they reach the new age of eligibility.
A delay in eligibility for Medicare could throw millions of senior
citizens into the ranks of the uninsured. Unless we are willing to
enact simultaneous insurance reforms to guarantee access to affordable
and comprehensive coverage for this group, these senior citizens will
be forced to forgo health security in their retirement.
In 1992, employer-related retiree health plans paid for only 6
percent of health expenditures for persons over age 65. There is no
reason to expect this number to increase. In fact, many employers are
now reducing or canceling retiree health coverage for both early
retirees and Medicare-eligible retirees. According to one study, in
1988, 62 percent of firms offered retiree coverage to those under age
65, and 55 percent offered benefits to those eligible for Medicare. In
just 4 years, by 1992, the numbers of firms offering retiree health
coverage had dropped nearly 10 percent in both categories--to 52 and 46
percent, respectively.
Members of the Corporate Health Care Coalition have ominously issued
a warning that this provision could hasten the loss of employer-
sponsored coverage. In a letter of June 16, 1997, they state that
raising the eligibility age ``. . . could cause many [companies] to
move to limit or eliminate their commitment to retirees.''
It is difficult to know why the Finance Committee proposed this step,
since it does not contribute a single penny toward their reconciliation
instructions. A change of this magnitude deserves careful study and
planning. 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, which this bill will create. To change the age of
eligibility suddenly, on the
[[Page S6093]]
spur of the moment, on this reconciliation bill, is an unwise,
unfortunate, and unnecessary attack on all senior citizens.
The provision also violates the Byrd rule because it does not affect
spending within the budget window. We eliminated this proposal 2 years
ago, and Senator Durbin's point of order should strike it from the bill
again.
Mr. LAUTENBERG. Mr. President, I rise to support removing the
provision on the increase in Medicare eligibility. I would like to see
that removed. This provision, as we all know, calls for increasing the
eligibility age for Medicare from 65 to 67.
Throughout our negotiations on the bipartisan budget agreement, there
was no serious discussion--none--of increasing the eligibility age for
Medicare. And, if there was, even the most casual discussion didn't
wind up in the bill. So it wasn't believed in the contentious review
that it would be appropriate. Nor has this issue been the subject of
hearings or serious debate in the 105th Congress. There is nothing in
the budget resolution that calls for dealing with the issue, as I said.
Nevertheless, the bill before us would increase the eligibility age
for Medicare and would do so without protecting the seniors aged 65 and
66 to make sure that they will have access to affordable health
insurance as they age. Typically corporations now have men aged 65 to
offer retirement in many cases, and that is the vulnerable age. If
there is an illness that befalls someone or they run into economic
differences during that period of time, that is a very harmful
experience. I think it would be a serious mistake to do that without
making certain that the those aged 65 and 66 are protected.
Before going further, I want to acknowledge that the Senators who are
responsible for this proposal are trying in good faith to confront the
long-term problems facing the Medicare Program. They deserve real
credit for that. I, too, would like to have a comprehensive review on
Medicare.
I think we have made a good first step back when we finally had the
policy behind the development. That was to add years of solvency to the
Medicare Program while we engaged in a comprehensive review. So this is
not the time, frankly, nor the place on our agenda to do that. So I
disagree with their approach.
My concern is that if we simply exclude 65- and 66-year-olds from
Medicare, what do these folks do? At that age private health insurance
can be prohibitively expensive, if it is available at all. Without
Medicare, these people may have nowhere else to turn.
Mr. President, I point out that more and more businesses are dropping
health insurance coverage for their retirees. The trend has been
accelerating in recent years, and it may well continue into the future.
I know lots of people who face retirement who want to engage in a
business or continue to work productively. But in almost no case can
they be assured that they are going to get private health insurance to
take them over if they wanted to go beyond Medicare protection. So
private insurance doesn't look like it is a real course for those in
that 65-66 category.
It is a frightening prospect. I have never heard so many
conversations from people about their concerns about health insurance.
It is a continuing subject. Notice that in job opportunities very often
the health insurance discussion is no longer one that is available.
Lots of small companies can't afford to provide it, and they don't.
So people are worried about the prospect of bankruptcies as a result
of a catastrophic illness, about being put out on a limb and not
getting the coverage that they need. We know that hospital services in
this area are expensive. We also know that there has been a major
change in the psychology of our society; that is, people in their
sixties no longer expect to be put out to pasture. They can do lots of
good things. Take it from an expert here, they can do lots of good
things. And they want to know that their health is protected.
So it is a scenario that could face millions of Americans if we are
not careful.
If the Congress decides, Mr. President, that the Medicare eligibility
age should be changed, there are ways to protect senior citizens in the
process. Some have suggested allowing uncovered seniors to pay a
reasonable premium in return for Medicare coverage. Others have
suggested subsidizing private insurance or other options.
I am not advocating any single program at this point. My focus is
that we should not pull the rug out from millions of Americans without
ensuring that they have at least a basic safety net.
I also believe that a fast-track reconciliation bill is the wrong
vehicle to be considering a fundamental change like this. For those who
are not familiar with our terminology, ``fast track'' means get it
done, try to zip it through the place--not undercover but to try to get
it done. The reconciliation bill is one that kind of commands an
enforcement mechanism for achieving the objectives that we set out for
ourselves--in this case the balanced budget by the year 2002, to try to
extend the solvency of Medicare, take care of legal immigrants who
are here, to provide insurance coverage for children that are not
ensured.
Those are the missions that we encompass in this bill. They were
negotiated over a long period of time--several months. They were very
difficult negotiations--difficult not because we were at each other's
throat but because we tried to deal with reason and thought and arrived
at a consensus that would take care of most of the needs that we
provide for our citizens, including a massive infusion into our
education programs to provide young people with opportunities for the
future, and again to protect senior citizens who are perhaps
impoverished and can't afford increased premiums. Suddenly this is a
new factor introduced from the Finance Committee which is an amendment
to the basic bill.
In addition to the limit on amendments to the reconciliation, it
would be very difficult even for Senators to consider fully various
options.
The proponents of rating the eligibility age in this bill argue that
we must act now to give Americans adequate notice about a change that
is coming in the future. However, I would note that this bill includes
a commission to look at the long-term issues involving the Medicare
Program. The commission is required to report within 1 year of this
bill's enactment. If the commission determines that a delay in the
eligibility age is required, Americans will have plenty of notice about
that possibility to be able to respond with their community and with
their organizations. They will be able to send in considered opinions.
I think we must do that.
So I hope that my colleagues will support the effort to remove this
provision from the reconciliation bill. It would be wrong to leave
older Americans without health care coverage. We certainly shouldn't do
so on something that is going to move as rapidly as this is without an
opportunity for having adequate public input and a full debate.
So, Mr. President, again I salute the effort of those who are
offering the change because they think that it is essential for the
solvency and for the long-term survival of Medicare. But, on the other
hand, if it is that important and that crucial, then we ought to make
sure that we allow enough time and allow enough review to make certain
that the step we are going to choose is the correct one.
Mr. President, I see nothing is going on at this moment. I therefore,
note the absence of a quorum, and I ask that it be charged to both
sides.
The PRESIDING OFFICER. Without objection, it is so ordered.
The clerk will call the roll.
The bill clerk proceeded to call the roll.
Mr. ROTH. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
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