[Congressional Record Volume 145, Number 37 (Tuesday, March 9, 1999)]
[House]
[Pages H1021-H1022]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                     WE MUST NOT PRIVATIZE MEDICARE

  Mr. BROWN of Ohio. Mr. Speaker, the National Commission on the Future 
of Medicare is poised to recommend to the President and to Congress 
that Medicare be privatized. They are soon likely to propose that 
Medicare, perhaps the Nation's best government program, be delivered to 
the private insurance market.
  There is nothing new here. Conservative newspapers, like the Wall 
Street Journal and the Washington Times, for years have been attempting 
to privatize Medicare. Privatize it, they say, in order to save it.
  This is a critical time for Medicare. The program faces significant 
financial difficulty in part because of the impending retirement of the 
baby boomers and the fact that people are living longer. The Republican 
answer has been to privatize Medicare by moving Medicare beneficiaries 
into managed care and creating Medicare medical savings accounts.
  These efforts to undermine the universal risk pool that has long 
supported Medicare will lead to one private system for the healthy and 
wealthy and a government-run welfare program for the sick and the less 
well off.

[[Page H1022]]

  The managed care industry illustrates this point. HMOs understand 
that providing health insurance to Medicare beneficiaries who need 
little health care is far more profitable than providing it to those 
who need expensive care.
  This is not a theoretical example. HMOs act according to the rules. 
Their primary purpose is the pursuit of profit, as it should be. Anyone 
who thinks we can ask the private sector to put qualitative values 
ahead of their shareholders' expectations of profitability did not take 
the same economics classes that I did.
  Medicare is a fundamental part of the fabric of our society. Thirty-
three years ago, before Medicare, fewer than 50 percent of America's 
elderly even had health insurance. Today, almost everyone over 65 is 
part of Medicare. It has helped people live better, it has helped 
people live longer. Medicare is such an important part of our lives and 
our society that it is almost taken for granted.
  Two things about HMOs: They like profitable enrollees, and they do 
not stick around when things do not go their way. Last year, Medicare 
HMOs took it upon themselves to dispel the myth that privatization 
works. After enduring 1 whole year of reduced profits, more than one-
fourth of the HMOs participating in Medicare, 96 plans total, quit. 
They left behind some 450,000 Medicare beneficiaries.
  In my home city of Lorain, Ohio, United Health Care of Ohio dropped 
2,000 Medicare patients from its plan because Lorain County seniors 
simply were not profitable enough for them. Yet United Health Care's 
CEO was paid a 1997 compensation of $8 million and $61 million in stock 
options.
  Insurance that may not be there when we need it is not insurance. 
HMOs that bail out after 1 year are not serving anyone but their 
shareholders.
  Clearly, the market deserves its very important place in our society. 
It is a dynamic engine of job growth in our State and across the 
country. The market creates wealth and raises our standard of living. 
There are many things the market does very well. But the purpose of 
publicly-owned national parks is to protect open space and preserve our 
Nation's heritage; the purpose of privatized national parks is to 
maximize profit through development and commercialization; the purpose 
of public prisons is to protect the public, to punish and to 
rehabilitate; the purpose of privatized prisons is to maximize profit 
by reducing staff and possibly cutting back on security; and the 
purpose of public medical systems is to provide the best health care 
possible to help people, especially children and the elderly, live 
healthier and longer lives; and the purpose of privatized medical 
systems is to maximize profit through private insurance companies 
denying benefits and introducing incentives to withhold care.
  Our Nation has a compelling interest to maintain a steady, mutually 
beneficial balance between the public and private sectors. Private 
companies are important. Public programs are important. Government 
regulation is important.
  We are in danger of becoming a land of two societies: One society for 
the more affluent and another for the less well off. The problem is 
that a Nation that produces the wealth that ours does should not leave 
43 million of its citizens without health insurance. The private 
insurance market simply cannot provide for the common good by itself.
  Let us remember how our country achieved its greatness. We are a 
Nation that taps the best effort and commitment from its citizens to 
build the world's strongest economy and the strongest Nation. We are a 
Nation that marshaled its military might to stop Hitler and protect 
freedom. We are a Nation that launched the GI bill, Social Security, 
Medicare, public education and the interstate highway system. We are a 
Nation that joins the resources of the private and public sectors to 
help people pursue a decent quality of life. It is a balance that 
works.
  Let us keep Medicare the successful public program that it is.

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