[Congressional Record Volume 145, Number 64 (Wednesday, May 5, 1999)]
[House]
[Pages H2788-H2795]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
MEDICARE MUST NOT BE PRIVATIZED
The SPEAKER pro tempore (Mr. Isakson). Under the Speaker's announced
policy of January 6, 1999, the gentleman from Ohio (Mr. Brown) is
recognized for 60 minutes as the designee of the minority leader.
Mr. BROWN of Ohio. Mr. Speaker, I am joined tonight by my friends,
the gentleman from Florida (Mr. Deutsch), the gentleman from Texas (Mr.
Green), the gentleman from New Jersey (Mr. Pallone).
For the next hour we are going to talk about efforts that the
majority party has tried to improve Medicare in this system, perhaps
the single best government program of our lifetime, that has brought
half the population in this country, really has provided health care
for half the senior population.
In 1965 when Medicare was created, only about half of America's
elderly had health insurance. Today 99-plus percent of America's
elderly do.
Mr. Speaker, many in Congress have been on a campaign to scare
America's seniors into believing that Medicare is going bankrupt. They
say that Medicare must be improved in order to save it. Once again,
Medicare privatizers are wrong. The Trustees of the Medicare Trust Fund
have just reported that Medicare will remain solvent through the year
2015, up from its earlier projection just a year ago of 2008.
Republicans in Congress, the Washington, D.C. think tanks, and their
media supporters who want to privatize Medicare are wringing their
hands over the Trustees' latest report. They believe these new
projections will lead Congress to do nothing toward reforming social
security and Medicare. With the programs projected to last longer, they
tell us we cannot rest on our laurels.
The real threat to Medicare, however, is not its alleged pending
bankruptcy. The real threat is a proposal just rejected by the National
Medicare Commission to privatize Medicare and to deliver it to the
private insurance market.
Under a proposal soon to be introduced called premium support,
Medicare would no longer pay directly for health care services.
Instead, it would provide each senior with a voucher good for part of
the premium for health care, for private health care coverage. Medicare
beneficiaries could use this voucher to buy into the fee-for-service
plan sponsored by the Federal Government, or could join a private plan.
To encourage consumer price sensitivity, the voucher would track to
the lowest cost private plan. Ostensibly, seniors would shop for the
plan that best suits their needs, paying the balance of the premium or
paying extra if they want higher quality. The proposal would create a
system of health coverage, but it would abandon Medicare's fundamental
principle, its fundamental principle of egalitarianism.
Today the Medicare program is income-blind. All seniors have access
to the same level of care. The idea that vouchers would empower seniors
to choose a health plan that best suits their needs is simply a myth.
The reality is that seniors will be forced to accept whatever plan they
can afford.
The goal of the Medicare Commission was to ensure the program's long-
term solvency. The premium support proposal will not do that.
Supporters of the voucher plan say it could shave 1 percent per year
from the Medicare budget over the next few decades. That is still not
enough to prevent insolvency, and it is surely based on much too
optimistic projections of private sector performance.
Bruce Vladeck, a former administrator of the Medicare program and the
Medicare Commission, a bipartisan Commission Member, doubted the
Commission plan would save the Federal Government $1. That same
proposal under a legislative plan, under a legislative title, will not
succeed, either.
Efforts to privatize Medicare are, of course, nothing new. Medicare
beneficiaries have long been able to enroll in private managed care
plans. Their experience, however, does not bode well for a full-fledged
privatization effort. These managed care plans are already calling for
higher government payments. They are dropping out of unprofitable
markets, and they are cutting back on benefits to senior citizens.
Managed care plans obviously are profit-driven, and they simply do
not tough it out when those profits are not realized. We learned this
the hard way last year when 96 Medicare HMOs unceremoniously dropped
400,000 Medicare beneficiaries because the HMOs did not meet their
profit objectives.
Before the Medicare program was launched in 1965, more than one-half
of the Nation's seniors were uninsured. Private insurance was the only
option for the elderly. But these insurers did not want senior citizens
to join their plans because they knew that seniors use their coverage.
The private insurance market surely has changed considerably since
then, but it still avoids high-risk enrollees and, whenever possible,
dodges the bill for high-cost medical services.
The problem is not necessarily malice or greed, it is the expectation
that
[[Page H2789]]
private insurers can serve two masters, the bottom line and the common
good. Logically, looking at the bottom line, our system leaves 43
million people without health insurance, 11 million of whom are
children. Only Medicare can insure the elderly and disabled population
because the private market had failed to do so.
If we privatize Medicare, we are telling America that not all seniors
deserve the same level of health care. We are betting on a private
insurance system that puts its own interests ahead of health care
quality and a balanced Federal budget.
Look at efforts to privatize in other parts of government, efforts to
privatize our public pension system. The mission of a private pension
system is to make a profit. The mission of a public pension system,
like social security, is to provide a decent amount of money, a decent
standard of living, for people as they are older.
The mission of a private prison is the bottom line, to make a profit.
The mission of a public prison is public safety, punishment, and
rehabilitation.
The mission of a privatized national park system, as many Republicans
in this body have proposed, is to make a profit in commercialization.
The purpose of a public national park system is to provide green space,
to provide entertainment, to provide places for Americans to go and
enjoy life with their families in secluded areas in national parks.
The point is, privatization of the greatest part of our health care
system, Medicare, the mission of privatization for insurance companies
is the bottom line, is to make a profit. But the purpose of our public
health care system, our Medicare system, is to provide a decent amount
of health care so that older people can live their lives more
productively, can live their lives longer, can live their lives in a
more healthy sort of way.
Mr. Speaker, Republicans earlier this evening, two of my friends from
Arizona, talked about choice and how the great thing about
privatization of Medicare is choice. The fact is, under Medicare fee-
for-service, people have choice in this system. They can choose their
doctor, they can choose their hospital. Managed care privatization of
Medicare is taking away that choice, and ultimately it will reduce
quality.
The goal is simple: Let us keep Medicare the successful public
program that it always has been.
Mr. Speaker, I yield to my friend, the gentleman from New Jersey (Mr.
Pallone).
Mr. PALLONE. First of all, Mr. Speaker, I want to thank my colleague,
the gentleman from Ohio (Mr. Brown) for organizing this special order.
It goes without saying that along with social security, the Medicare
program is the cornerstone of the Federal government's commitment to
America's seniors, and the importance of the program to the millions
who are covered by it cannot be overstated. I do not think there is any
question that we in Congress have to continue to search for ways to
strengthen Medicare.
I just wanted to say a few words today to agree with my colleague,
the gentleman from Ohio (Mr. Brown) about the proposal put forward by
the cochairs of the recently disbanded Bipartisan Commission on
Medicare. The cochairs' proposal fortunately did not pass the
Commission because it did not achieve the required majority in the
voting process, and I am glad that it did not, because I think that the
cochairs' proposal of this Commission would drastically change Medicare
as we know it.
The problem is that there is really nothing we can do to stop the
proponents of this proposal from introducing the bill in Congress. Here
on the House side, the gentleman from California (Mr. Bill Thomas), who
was one of the principal authors of that proposal that failed in the
Medicare Commission, has vowed to move forward and pass this ill-
conceived scheme.
The centerpiece of this scheme is changing Medicare from a program
with a guaranteed benefits package to a program without a guaranteed
benefits package.
Proponents of this plan would do this by converting Medicare into
what they call a premium support program. I would caution, and I know
my colleague from Ohio said, that seniors should beware of this
proposal. Premium support is just a fancy phrase that the plan's
supporters like to use to hide the fact that they want to turn Medicare
into a voucher program. It is nothing more than a voucher program.
Under this proposal, the Federal Government would pay a set amount
towards the cost of a beneficiary's health care. Any expense that
exceeded what the Federal Government contributes would have to be paid
by the beneficiary. Seniors may still choose fee-for-service under this
scheme, but their premiums will be more expensive.
I think this was designed deliberately. The goal of the proponents of
this proposal is to eliminate fee-for-service as we know it and
basically replace it with a managed care-dominated system.
Ironically, the voucher plan's proponents want to put seniors out of
fee-for-service into managed care because they think the competition
between managed care plans will drive health care costs down. But the
information we have on the cost of health care in recent years
indicates that the Federal Government is doing a better job of
controlling health care costs than the private sector.
The figures we have, for example, for the first 6 months of fiscal
year 1999 indicate that this trend is continuing. Medicare funding has
actually declined by $2.6 billion, compared to the first 6 months of
last year.
What I am basically putting forward is that under this voucher plan,
the costs of fee-for-service would see a sharp increase. According to
an independent Medicare actuary, the voucher proposal would be an 18 to
30 percent increase in the cost of the traditional fee-for-service
program.
So there should not be any doubt here, the price increase would bully
seniors into managed care programs, and then we have a track,
essentially, for our seniors. Once seniors make the switch to managed
care, they will not only lose their freedom to choose their doctor,
they will also lose the guaranteed benefits package today's Medicare
beneficiaries enjoy. A voucher system is simply not going to provide
the guarantee.
What we are seeing essentially with this proposal that has been put
forward by the Medicare Commission, and I stress again, it failed the
Medicare Commission, is that we are going to see increasing costs, out-
of-pocket expenses for seniors. We are going to see them pushed out of
fee-for-service and into a managed care plan.
The problem is that if we look at what has been happening across the
country in terms of managed care plans, we know that many people are
not satisfied with their managed care plans, even when they are
available, and that many seniors, after a few months or a few years in
the managed care plan, find that the HMOs drop them because they claim
that they cannot afford to continue with the seniors in the managed
care plan. So we have seen cases and cases across the country,
particularly in my home State of New Jersey, where seniors have simply
been dropped from HMOs or managed care plans.
Why in the world do we want to push more and more American seniors
into the managed care plans when people have not been happy with many
of them, they have not had adequate protections, and, in many cases,
they have simply been dropped?
I am very concerned that what we are doing with this voucher plan
that is being proposed is simply changing Medicare to the point where
it will not be the type of quality program that we have had in the
past.
The other thing I wanted to mention, and then I would yield back to
my colleague, is that the other aspect of this voucher plan that
disturbs me a great deal is this idea of increasing the age of
eligibility for Medicare from 65 to 67.
We know there has been a steady increase in the number of uninsured
Americans. That is probably the greatest threat we see today is the
number of people who are uninsured. The most rapidly growing group of
the uninsured are people between the ages of 55 to 65. If we raise the
eligibility, we are only exacerbating this problem and denying even
more people coverage at a time when they most need it.
If I could just say, in conclusion, the fact of the matter is that
the Medicare program has been enormously successful and does not need
to be changed in
[[Page H2790]]
the manner suggested by this voucher proposal. The voucher proposal is
a solution in search of a problem, and it ignores six key principles
that most Democrats on the Medicare Commission supported, that I
support, and I think must be protected as Congress and the President
consider ways to improve and strengthen the current Medicare program. I
just want to list them briefly, if I could.
First, any revision of Medicare must protect the right of individuals
to choose their doctor by continuing the traditional fee-for-service
program.
Second, any revision of Medicare should not increase the number of
uninsured or reduce access to health insurance.
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Third, any revision of Medicare must not increase burdens on
beneficiaries and should do more to help low-income beneficiaries.
Fourth, Medicare must always cover a well-defined set of benefits
that cannot be reduced or eliminated.
Fifth, Medicare must provide comprehensive prescription drug coverage
for all its enrollees; and
Sixth, 15 percent of the budget surplus should be set aside to extend
the life of the Part A Hospital Trust Fund to 2020 and to combine the
Part A and Part B Trust Funds to eliminate solvency as an issue in
Medicare.
I am afraid, I say to my colleague from Ohio and my other colleagues
here on the Committee on Commerce, that if we look at this voucher
proposal that is being put forth by the cochairs of this Medicare
Commission, it does not satisfy these different enumerated guarantees
or principles that we should be aspiring to. These principles will
ensure Medicare is preserved and protected for the current and future
generations.
I know my fellow Democrats want to accomplish that goal, and
hopefully we will be able to withstand some of the efforts that are
being put forward, primarily by the other side of the aisle, to change
Medicare--from to what it has traditionally been: a good program, a
quality program that covers all seniors.
Mr. BROWN of Ohio. I thank the gentleman from New Jersey. I want to
add that the leadership of the gentleman from New Jersey (Mr. Pallone),
especially in his efforts to fight Republican efforts to privatize
Medicare, have been very, very important in our so far successful
efforts to do that.
One point, before calling on the gentleman from Florida (Mr.
Deutsch), and that is that the gentleman from New Jersey (Mr. Pallone)
repeatedly has talked about the success of Medicare; that it is a
program that almost no one in this country, except for some insurance
company executives, some Wall Street analysts, and some Washington
political pundits and their representatives in the Republican Party say
that that Medicare is that broke. There are not huge demands from
across the country in any of our districts clamoring for Medicare to be
so radically changed.
Sure, it needs some changes; sure, it needs some fixes; but it is not
a broken program. It is serving people in this country very well. And
this kind of radical surgery proposed by Republicans is dead wrong.
Mr. PALLONE. If the gentleman will yield, I would like to say one
more thing before he yields to another colleague.
This Sunday coming up is Mother's Day. A few years ago I was on the
floor talking about Medicare at the time when there was an effort by
the Republicans on the other side to try to cut back significantly on
the funding. And one of my colleagues on the Republican side was
talking about how his mother was frustrated and did not need Medicare
because it was not a good program.
And I was shocked because, as the gentleman said, everyone that I
talk to, including my own mother who is on Medicare, tells me just the
opposite. They think Medicare is very valuable. What they would like to
see is maybe expanded coverage.
I sort of thought it was ironic that it was close to Mother's Day, as
it is again today, and we had these opposite points of view about the
Medicare program. But, frankly, I get no one who suggests to me that
they want to see a radical overhaul of Medicare.
One of the things I want to talk about later, after my other
colleagues have spoken, is a report that just came out by OWL, I guess
the Older Women's League, that talks about Medicare and women, and this
was in preparation for Mother's Day. It has some significant insights
into the problems that elderly women face.
Mr. BROWN of Ohio. I thank the gentleman from New Jersey, and now I
want to yield to my friend, the gentleman from Florida (Mr. Deutsch), a
prominent member of the Subcommittee on Health and Environment of the
Committee on Commerce, and thank him for his help.
Mr. DEUTSCH. Mr. Speaker, I appreciate the opportunity to be here
this evening and really focus in on Medicare and what it faces in the
future and, in a sense, what it has done in its past.
Medicare's creation is not ancient history. We are talking about a
program in effect for less than 30 years at this point in time. And the
bad old days, which many people still remember, not in terms of reading
about but hearing about, it almost seems like ancient history to us, of
America prior to Medicare; of seniors literally across the country not
having health care coverage, period. In a sense, effectively dying by
not having health care coverage. That does not happen today.
In fact, Medicare, as a government program, is really government at
its best; government coming in and dealing with incredibly serious
problems on a societal level, on a community level in the United States
of America and changing the world. That in fact is what Medicare as a
program has done. Over 30 million people are presently on Medicare. It
is the largest health care system in the world, and it has changed the
world.
One of the things I think is interesting to reflect on, just as we
are talking about this issue, is does anyone seriously believe that
Medicare would have been created if my Republican colleagues were in
the majority of the United States Congress? I do not think that is a
serious question because I think we know the answer to it.
And, in fact, the reality of what is occurring, and we have talked
about some of the battles that we have shared in fighting to save
Medicare over the last several years, is that Medicare really has been
and continues to be attacked. In fact, literally there is an attempt to
destroy it on a continual basis.
That is what this whole voucher concept is about. And hopefully we
will have a chance to really discuss it at some length this evening,
but the voucher concept is an attempt to destroy Medicare. It would
destroy the Medicare system because it would fundamentally alter the
Medicare system.
That is the intention of the proponents of the voucher system. They
are not going to come flat out and say we are proposing vouchers to
destroy Medicare, but the reality of what their proposal will do is, in
fact, destroy the Medicare system.
Again, I think we really need to talk about it in a detailed way so
people understand what really the Republicans, in general, are talking
about as their solution to destroying Medicare.
Medicare is presently a defined benefit plan. The statute
specifically delineates what benefits a beneficiary, those 30 million
people, get under Medicare. They get 80 percent of reasonable cost.
Under Part B they get hospitalization coverage with a deductible; under
Part A they get certain home health care benefits, nursing home
benefits, specific benefits that are delineated under the Medicare
statute.
And, in fact, we have added, occasionally. Just in the last Congress
we have added some preventive coverage, and we have pushed and we have
pushed. And, in fact, if anything, what we ought to be talking about is
adding additional benefits. One of the issues that this Congress should
address is the issue of prescription drug medication being covered
under Medicare. That is a critical issue for us to pass in this
Congress. It is a gap in the Medicare system that we do not provide
coverage. In fact, I think we can make a very strong case that
providing coverage will have a positive cost effect in terms of the
Medicare Trust Fund.
But that is the present Medicare system. In fact, the way it is set
up, regardless of how much hospitalization
[[Page H2791]]
costs, that is the coverage that a Medicare beneficiary gets.
Obviously, people also have the option, in most communities in the
country, most urban centers in the country, of choosing Medicare HMOs,
if those are available to them.
But what is the voucher system? The voucher system is a totally
different concept. It says we believe that each person should get X
dollars, whatever that X dollars is, for their health care coverage
under Medicare. Theoretically, someone can then take that voucher and
go shopping in the private sector for health care coverage. The theory
of our colleagues is that the private sector is going to do better than
this present system and they are going to provide individuals with more
coverage.
Do not be fooled. Because the whole concept of the voucher system,
the way it has been proposed continuously, is a set amount of dollars.
Now, from a strict budgeting point of view, if our only concern was
outlays of dollars, then we could see supporting the voucher system.
But if our concern is really impact on people's lives, we just cannot
be.
But once that voucher system is set up and we pick that dollar
amount, and today it might be a good dollar amount, and we can really
debate that dollar amount, but what about tomorrow, and what about the
next day, and what about the day after that? And the reality is that no
matter what the dollar amount in the voucher is, there will be a health
care provider who will bid for that service.
So the voucher today is $4,000. Next year it might be $3,500, or even
next year it might be $4,000. It will be below the average cost of
Medicare beneficiaries today. And there will always be a private-for-
profit provider of care who will bid for that. But what we are saying,
effectively, is that we are creating a two-tier health care system,
because the wealthiest of the wealthy in America will not have to opt
into that type of process.
What will happen is the voucher system, inevitably, from a policy
perspective, will force the vast majority of Medicare beneficiaries
into substandard HMOs. That is the result of the voucher system that is
proposed. And that is not Medicare. That is minimalist health care.
That is a tragedy of monumental proportions for this country.
I know the four of my colleagues here, and really almost everyone on
our side of the aisle, will fight with our last ounce of strength, and
I know the President is committed, to prevent that from happening. And
I look forward to really entering into a dialogue with those of us who
are here this evening and really defining this a little bit more.
I yield back to my colleague from Ohio.
Mr. BROWN of Ohio. Mr. Speaker, I want to thank my colleague from
Florida, and I want to now introduce another good friend, the gentleman
from Texas (Mr. Gene Green), who has been a member of the Subcommittee
on Health and Environment for 3 years now and has done a good job.
Mr. GREEN of Texas. Mr. Speaker, I want to thank my colleague for
requesting this special order. I think it is so important that we
recognize the Medicare issue.
Here we have a Member from Ohio, our ranking member on our
Subcommittee on Health and Environment who requested this hour, a
Member from Florida, a Member from New Jersey, and myself, I am from
Texas, and it shows how it is not just a regional problem.
The Medicare program has been so important since 1965, and I am glad
we are taking time out at the end of the day to talk about it and to
hopefully raise the level of intensity for not only senior citizens who
are now Medicare beneficiaries but those of us who will grow into being
Medicare beneficiaries over the next few years and realize the benefits
of the current program.
My colleague, the gentleman from Florida (Mr. Peter Deutsch),
mentioned that Medicare does not pay for everything. In fact, it does
pay for 80 percent. There are a lot of things Medicare should not pay
for, but it does not pay for all the things that maybe health care
should. One in particular, prescription medication, has risen now to a
new level of importance, because prescriptions in 1999 are such that we
do provide delivery. It saves ultimately on going to the doctor or the
hospital, whereas in 1965 or 1975, some of the advances in medications
were not there.
So perhaps we should reflect and say, okay, let us do what we can do
on prescription medications and provide some type of copay for Medicare
beneficiaries and not necessarily force seniors into managed care, an
HMO, simply because they are paying $300 or $400 a month for
prescriptions.
In some cases in my own district I have seniors who are paying that
much, and their minimum benefits on Social Security are just a little
bit less than that. So thank goodness the family is still together, the
husband and the wife, and maybe the wife is the minimum beneficiary and
they are paying her whole Social Security check just for their
prescription medication.
Medicare is such an important program. Again, it started in 1965, and
I was proud that in 1965 it was Lyndon Johnson from Texas who
originally proposed it, although it was not a new program. It had
frankly been around since the depression, but it was enacted in 1965 as
a national health care insurance program for people over 65. It was
expanded in 1972 under a Republican administration to cover the
disabled and the need for continuing dialysis, for permanent kidney
failure, or a received kidney transplant. So over the years Medicare
has been expanded to include disabilities.
The United States public and private spending on health care far
exceeds that of other industrialized nations by roughly a trillion
dollars. Medicare comprised 11 percent, more than $200 billion of our
Federal spending, and is funded by a combination of both general funds
and payroll taxes. Current workers are taxed 1.45 percent of their
earnings and our employers are taxed 1.45, where the self-employed are
at 2.9 percent. This tax makes up 89 percent of the income for the
Medicare Trust Fund Part A. And I would challenge any other Federal
program to have that kind of taxpayer supported program.
We will talk tomorrow about the supplemental defense spending, what
is going on in Kosovo. I always like to give the example that if we did
not appropriate $1 for the Pentagon tomorrow, we would not be able to
handle our commitments to NATO or buy another missile or another tank
or pay another service personnel, but the hospital portion of Medicare
Part A, 89 percent is funded by the taxpayers directly.
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It does not come out of necessarily general revenue. It is for the
trust fund. Medicare Part B is a split between 75 percent and 25
percent, general fund 75 percent and 25 percent from the beneficiaries.
So we see that Medicare is not just general funds, it is a tax support.
And that was created in the late 1980s and 1990s.
The deductible for Medicare Part A is $768 per patient for Medicare
Part A. That is a deductible. So it does not pay for everything.
Medicare Part B, the premium that seniors pay is $45 a month, with a
$100 a year deductible. Actually, beneficiaries pay a co-pay of 20
percent of the approved amount because Medicare pays for 80 percent and
that 20 percent is the responsibility of the senior citizen. They can
buy them a Medigap coverage that is regulated by State insurance
commissions or they can pay that 20 percent themselves.
The reason I think we are here tonight, and I do look forward to the
dialogue that we have, and I could talk all evening about the benefits
of the current program in the fee-for-service program, but the Medicare
Commission I think had a great many shortcomings.
I do not want to take anything away from Senator Breaux and his
efforts to try and come up with a compromise. But the concern I had was
the premium support proposal that they did come up with. That is not
something I could vote for on the floor of this House. And I was glad
that the Medicare Commission failed to get the number of votes that
they needed to. It would increase premiums for millions of
beneficiaries. It would cause the traditional program to rise, the
premium, from 18 percent to 30 percent.
In rural districts, of course my district is very urban, but in rural
areas
[[Page H2792]]
Medicare beneficiaries would pay differential premiums for the same
traditional Medicare for the first time. And also, the premium support
system, with what has happened with the managed care proposal issue
now, we have managed care companies withdrawing from rural areas
predominantly, so we could even see that as not as an option for rural
areas in our country.
It was a lose-lose situation for urban beneficiaries because urban
beneficiaries who generally have access to managed care would not be
protected against the higher traditional program premiums. They would
also likely pay more for private plans, such as plans that would raise
premiums for beneficiaries to compensate for Government payments that
do not cover the local cost.
And an unclear commitment on defined benefits. Again, we have a
defined benefit program instead of a defined premium program. And
again, the concern that we also hear is unfunded mandates for the
States. Traditional Medicare premiums would rise under this proposal,
and Medicaid cost for some States would actually go up for the low-
income beneficiaries.
So that is the concern. And again, I know the Commission worked long
and hard. Both Members of the House and Senate were on it, along with
private citizens. But I was glad they were not able to come up with a
plan because the plan they ultimately came close to was one that we
would be fighting here every day to try to keep from happening.
Again, I thank the gentleman for asking for this time. Medicare is so
important to not only my district and our Nation but to all our
districts that we need to again continue this dialogue and raise the
intensity so people know Medicare is challenged. It is in good shape
until 2015 now. But it is still something we have to guard against
every day to see that the reforms do not literally do what we in Texas
call throw the baby out with the bath water.
Sure, we can have some reforms. But let us not lose the traditional
support that Medicare has for senior citizens.
Mr. BROWN of Ohio. Mr. Speaker, I think that both the gentleman from
Texas (Mr. Green) and the gentleman from Florida (Mr. Deutsch) both
touched on the history of Medicare and who really was responsible for
this program, and I think it begs the question of whom do we trust to
make changes in Medicare?
In 1965, Medicare, with an overwhelming Democratic majority in
Congress, the Congress passed the program setting up Medicare. Many
Republicans opposed it. In fact, Bob Dole, who was then the leader of
the other body and later was the Republican nominee for President in
1996, was in 1995 bragging to a conservative group on whom he counted
for the Republican nomination for President, bragging about who he was
one fighting against Medicare against its creation in 1965 as a Member
of the House of Representatives at that point because he knew it would
not work and he wanted to defeat it.
Literally the same day, then Speaker Gingrich said he wanted to see
Medicare wither on the vine. It is the same group of people that
opposed Medicare in 1965. The conservative wing of the Republican party
which now dominates the Republican party are the people that really do
not like Medicare.
In 1993, when Medicare was in some trouble, this Congress and I know
the four of us all supported the efforts of this Congress to make some
relatively minor changes in Medicare, some cuts to some providers that
were probably making too much money at the time and some minor changes
in the program of some significance but, by and large, did not affect
Medicare beneficiaries particularly but made the program a good deal
fiscally stronger in 1993. Again, every Republican in this institution
voted against it then.
Then, 2 years later, Republicans tried to cut Medicare $270 billion.
At the same time, they were giving a tax break mostly to wealthy
taxpayers of roughly the same number of dollars and it was another
assault on Medicare. And every time we turn our backs or we forget to
watch or we are not vigilant, we see the conservative wing, not all
Republicans, but the conservative wing of the Republican party which
dominates that party in the 1990's go after Medicare.
And before we think about radical surgery on this program, the
program of Medicare, we need to think whom do we trust? Do we trust the
people that never liked Medicare to begin with, the far right of the
Republican party? Do we trust them to make changes, the voucher program
that the gentleman from Florida (Mr. Deutsch) talked about? Or do we
trust people who supported this program, people like us that have
supported it all along, mainstream Democrats, the President who
supports it? Do we trust this group of people to make some minor
changes to continue to keep Medicare strong?
Mr. DEUTSCH. Mr. Speaker, if the gentleman would yield, it really is
a philosophical chasm between us and them in a sense, or at least part
of them and most of us, that we really believe that Government can be a
useful vehicle to help solve problems, to change the world; and I
think, philosophically, probably maybe a majority of my colleagues on
the other side of the aisle believe that Government would mess up a
two-car funeral and Government should not be involved.
We can create a voucher system where effectively Government is not
involved in this process even though Government is paying the money.
But it is a totally different concept of the role of Government. I
think none of us believe that Government can solve every problem. But I
think what we do believe is that Government can be a force to literally
make people's lives better.
I think part of this history discussion, for people who are watching
us this evening, and if they do not know it themselves, talk to their
parents or their grandparents and ask them about the time, it is only
30 years ago or a little bit over 30 years ago when Medicare did not
exist in America.
I tell my colleagues, there is an analogy of it as well if we go back
of when Social Security did not exist in America. I mean, it is not an
accident that Social Security was created under a Democratic
administration of Franklin Roosevelt.
I mean, do any of my colleagues really believe that, philosophically,
that would have occurred in a Republican administration? And there is a
real parallel I think in terms of that. And it is not ancient history
before Social Security existed in America.
Mr. PALLONE. Mr. Speaker, will the gentleman yield?
Mr. BROWN of Ohio. I yield to the gentleman from New Jersey.
Mr. PALLONE. Mr. Speaker, I just wanted to say, I mean, I totally
agree with what the gentleman from Florida (Mr. Deutsch) said and my
colleague from Ohio (Mr. Brown).
I think that the problem that we face with this Breaux-Thomas voucher
proposal is the following: Right now, because Medicare applies to
everyone over 65 and is a program that most people can rely on and is a
quality program, there is substantial support for it, I think, all over
the country. But, as my colleague from Ohio points out, the Republicans
traditionally were not very supportive of Medicare from the beginning.
And that statement about Medicare withering on the vine that Speaker
Gingrich made I think is exactly what would happen with this Breaux-
Thomas voucher plan, it would wither on the vine. Because once this
voucher plan went into effect, people would be paying more and getting
less.
So they are going to be paying more out of pocket because they are
just going to get a set amount of money which is not going to cover a
lot of expenses. And as they pay more out of pocket and find that the
benefits of the program, which are very vague under Breaux-Thomas so it
is not clear what kind of benefits they are going to get, as they find
that they are going to pay more and get less in terms of benefits or
alternatively and at the same time be pushed into managed care, which
they do not like or where they cannot choose their doctor or they end
up getting dropped, because, as my colleagues know, in many States
managed care has dropped seniors after a bit of time, they are going to
become very dissatisfied with the Medicare program.
And the kind of consensus that we have now that says that this is a
good quality program will disappear. And then we are going to have a
race, if you will, to see what is going to replace it. And I think it,
essentially, destroys the program so that people will not
[[Page H2793]]
have faith in it anymore. They will be looking for an alternative.
I do not want to be so cynical, because maybe I am being a little too
cynical. But if we look at that whole philosophy of withering on the
vine, that is essentially what would happen to this program.
The irony of it is that Breaux-Thomas does nothing to solve the long-
term solvency of Medicare. I think the information we have is that it
extends Medicare for 1 or 2 years, at the most.
President Clinton and the Democrats have said, we want at least 15
percent of the budget surplus to go towards extending the life of the
Medicare program. The Republican leadership has refused to do that.
They are not really interested in extending the life of the program.
They just want to change it radically with this voucher system. And I
think ultimately it would wither on the vine.
Mr. BROWN of Ohio. Mr. Speaker, I yield to my colleague from Texas
(Mr. Green).
Mr. GREEN of Texas. Mr. Speaker, I want to agree with my colleagues
from New Jersey and from Florida.
Medicare was originally created because of the failure of the free
enterprize system for insurance. If I owned an insurance company, I
would not want to sell insurance to someone over 65, although we do
have some who only want to take the healthiest, as we know, because we
cannot afford the premiums.
Any actuary will tell us what is the quote of a premium for someone
over 65, $1,500 a month, $2,000 a month, because they are ill. That is
why Government had to step in, free enterprise could not take up the
need for some type of health care for senior citizens.
In fact, under the current system, almost half of all seniors have an
income of below $15,000 a year. Approximately 10 million widows have an
income of less than $8,000 a year. So this is not a program for the
rich, as we sometimes hear we have all these rich seniors.
Despite all the out-of-pocket costs that seniors already have to pay,
52 percent of Medicare's costs now go to 5 percent of the most sickest
senior citizens. So we are not talking about a program for the wealthy.
We are talking about a program for seniors who make less than or earn
$15,000 a year under their pension plans or Social Security.
Let me talk a little bit about raising the age to 67. That may be
something that the actuaries can say, well, we are living longer. I do
not know if we are living that necessarily healthier longer. Because I
can tell my colleagues, in my own district, again, maybe it is the
difference between someone who is predominantly a white-collar worker
and somebody who is a blue-collar worker, I have a very industrialized
district. They load the airplanes at Intercontinental Airport. They
load the ships at the Port of Houston. They work in the petrochemical
facilities. Those folks cannot wait, they are just barely waiting now
until they are 65 so they can get Medicare.
And also private business. If they have an early retirement and they
have some type of retiree health plan, let us see what some of our
large employers are going to do in the country by saying, by the way,
their collective bargaining agreement is going to have to last 2 more
years because once they become 65 their retiree health plan goes into
Medicare.
So raising it to 67 may be great for some folks. But if my colleagues
have a district where people literally work with their hands, they are
not necessarily getting healthier.
Again, following my colleague from New Jersey when he said the
proposed Commission plan only extended the life, at the maximum, of 2
years.
Mr. DEUTSCH. Mr. Speaker, if the gentleman would continue to yield,
it is really interesting also just talking about the present situation
of Medicare. I think we would agree that this is another area where
benefits really should be expanded, not cut back.
I think what we really should be doing, and we have been involved in
supporting legislation to this effect, although it has not passed, is
giving options to buy into Medicare for that age group that my
colleague from New Jersey talked about as people who retire early.
We have a phenomenon in America now that, yes, people are living
longer and some working longer. But some are not working longer. And
really the worst situation to be in is either by choice or by forced
circumstances, maybe by health, of retiring early and not having
retirement benefit of health care coverage and trying to buy private
coverage in that 60-to-65 age group, where private coverage could
literally be potentially 50 percent of someone's income.
{time} 2145
It is an incredible box that we are in. Previously we have tried to
expand that coverage, because that is another area where appropriately
from what Medicare should be doing, we should be expanding the coverage
to people who retire before 65, and not talking about raising the
eligibility to 67.
Mr. BROWN of Ohio. If I could reclaim my time for a moment, following
up on what you are saying and what the gentleman from Texas (Mr. Green)
said about people that work with their hands, that start working, a
neighbor of mine is a carpenter. He started working when he was about
18, he is about my age, in his mid 40's. He cannot quite lift as much
as he used to be able to.
If we let Republicans raise the Medicare age to 67, then they will
look at the actuarial tables and they will say the average person is
living another year longer and raise it to 68. It is simply not fair to
the large number of people in this country who do not dress like this
when they come to work, whose bodies really do not allow them to work
until they are 67 or 68. It really shows how out of touch people are in
this institution and in this city, and especially on that side of the
aisle that really do think, well, because people are living longer, we
will raise the Social Security age, the Medicare age, because people
are living to be 80 and they can take care of themselves.
The fact is, as the gentleman from Florida (Mr. Deutsch) is implying,
people between the ages of 55 and 64, the age that we want to move
Medicare coverage and include them, those in that age group, there are
so many people in that age group that are losing their health care
coverage because they are getting laid off, their company is
downsizing, their company is moving to Mexico or somewhere else.
There are people that have many more health demands, many more health
needs as they are 60 years old compared to when they are 50 years old.
They are getting their health care cut off from their employer when
they lose their job or when their employer cuts benefits when they are
59 years old, right at the time they most begin to need their health
care.
For this body to endorse moving the age up to 67 is absolutely
absurd. We should be thinking of moving the opposite direction,
especially since the President's plan and the plan that all of us have
worked on actually pays for itself in the cost of the premium between
the ages of 55 and 64. It is no giveaway program, as Medicare is not,
anyway. But particularly this part of it, expanding it to 55 to 64,
voluntarily pays for itself and will make a difference in the lives of
literally hundreds of thousands if not millions of Americans in that
age group who no longer have the health insurance coverage they figured
that they would have from their employer until their 65th birthday,
until they could move into Medicare.
Mr. PALLONE. I totally agree with the gentleman. I think you were
hinting earlier about the fact that really what this is is like a
social contract. In other words, people were told when they started out
working at 18 that when they got to be the age of 65, that Medicare
would be there. I think it is grossly unfair after they have depended
upon that to say all of a sudden now the age is going to be higher.
Because we know that in fact what is happening is that many people in
that near elderly group, as you mentioned, are the very ones that do
not have any health care coverage.
In the beginning I talked about women, because this Older Women's
League put out this report in conjunction with Mother's Day coming up
this Sunday. A lot of the people that are in that near-elderly category
that do not have health care coverage or insurance are women, because
what happens a lot of times is that the spouse who is not
[[Page H2794]]
working, for example, is not covered when there is a buyout or somebody
gets laid off at that age, and there is a tremendous amount of people
that are in that category that are women.
The other thing I just wanted to say very briefly is that instead of
worrying about the aspect of this that how we are going to make
benefits less for people, as the gentleman from Florida (Mr. Deutsch)
said, we do not want to do that. What we want to do is look at the gaps
that exist in Medicare and try to fill them.
We know that when Medicare started in the 1960s, at least this is
what I have been told historically, that prescription drug coverage was
not that important because people did not rely on prescription drugs
that much. The preventive care that comes with prescription drugs
really was not available all that much. Also the long-term care, adult
day care, which is another gap that Medicare does not pay for, that did
not exist then because people did not live as long or they had a
situation where they maybe were at home and the family would take care
of them.
The reality is that the gaps in Medicare have resulted because of the
changes in life-style, of people living longer. It is absurd to suggest
that in order to accomplish and deal with that, you should simply raise
the age. You should try to cover those gaps by providing prescription
drugs, providing for long-term care, providing for adult day care.
It is particularly important for women. I do not mean to keep
stressing that, but I keep thinking about the fact that Mother's Day is
coming up. I think about my own mother, and the fact that there are so
many women that particularly benefit from Medicare and that these gaps
are particularly important to them, and raising the age even makes it
worse for them.
Mr. DEUTSCH. I could not agree with the gentleman more, literally
listing some of the areas where we ought to legislatively increase
benefits. That is really what the debate should be about. I think this
year our focus, and I think really the President's focus is really
trying to get that prescription drug coverage which is a necessary
component of Medicare. That is our number one priority.
I could add and agree with the gentleman on five other things that
are probably just as high but I think the focus this year is trying to
get that additional coverage. I think some of the things that the
gentleman also mentioned, this is sort of a high class problem we have.
First of all, we have dealt with the actuarial issues and it is a
good thing people are living longer. That is a high class problem that
we have in America. We can deal with it, we have dealt with it, in some
of the changes that we talked about in 1994. I keep thinking as we are
talking, particularly in that pre-65 age group, where if we went from
65 to 67.
One of the things about health insurance is statistically people who
do not have health insurance actually get sick at a higher rate than
people who do have health insurance. In effect, whether you have health
insurance or not, statistically you have got a chance of getting sick.
What is going to happen when you do not have health insurance? What
happens in America today? What happens to real people in that category,
65, younger than 65, retired, for whatever reason, as you said, without
health insurance in America? What is happening to those people? The
reality is not a lot of good things, things that we know for a fact we
can do better as a country.
We have made changes where we can do things. It is going to be an
approach of saying, hey, here is a problem, how are we dealing with it?
As my colleague from Ohio mentioned, there is a plan out there, there
is legislation out there to do that without costing the system any
money. That is an actuarially based system, which I think is something
that people again need to hear and really need to understand.
Medicare is not welfare for health. Medicare is not a giveaway
program. Medicare is a forced retirement system. It is Social Security
for health. Every working American is paying into the Medicare Trust
Fund today, this week, in their paycheck, a certain amount of money
that is going into a trust fund that is Social Security for health.
That is what we are getting back. It is not an entitlement, it is an
insurance plan. That is a big difference. It is a forced insurance
plan, yes. You do not have a choice in our salaries, or working people
in America in their salaries, whether to choose to pay the Medicare
payroll tax or not. You have got to pay that payroll tax. But that is
going into a plan that we as Americans control, this body, this Chamber
and our colleagues on the other side of this building control.
I think also, just as we are coming to the close of this hour, to
reiterate, is people out there in the real world, in America, who live
with Medicare understand the system. With all of its faults and
foibles, it is a darn good system. It is not Cadillac coverage but it
is a darn good Chevy. It has worked really well for over 30 million
people in this country.
It is an incredibly successful system. It has done innovative things
over the last 10 years to make itself even more successful. We could
talk about some of the specific changes, probably not this evening but
another night, that we have done in terms of whether it is DRGs or
whether it is issues regarding that which have really saved the system
incredibly, tens of billions of dollars to make it even better, to
provide more benefits for people.
Mr. BROWN of Ohio. The comments of the gentleman from Florida about
people without insurance actually are sicker, get sicker is
particularly applicable to prescription drugs. We all have heard
stories in our district similar to the one in the city of Elyria in my
district, a woman who is paying $400 for her prescription drugs, her
Social Security is about $800 a month, she has no prescription drug
coverage. What she does with her prescriptions is she typically takes
half the dosage that she needs. If she is supposed to take four pills a
day, she will take two or take four half pills a day so her
prescription will last twice as long. She is more likely to get sick
and end up back in the hospital, more likely to suffer and more likely
to cost the Medicare system more money because the system is not paying
for prescription drugs and not dealing with some of the preventive care
and wellness care and less expensive care, like prescription drugs,
than emergency room or hospital stays. That is one reason, putting even
the humanitarian element aside, looking at the importance of taking
care of this woman and hundreds of thousands like her around the
country. The health of the Medicare system long-term will be in better
fiscal shape if we can do some of these things like prescription drugs,
put a better system out there for America's elderly and make it more
fiscally sound at the same time.
Mr. GREEN of Texas. I know we are getting close to the end of the
hour, and there are things that can be done with modernizing and making
Medicare more efficient. Of course we talk about prescription
medication. It can save ultimately people from going to the hospital if
they can take the full dosage instead of trying to self-diagnose and
lower their amount. The President's plan of dedicating 15 percent of
the surplus to Medicare. Let me say, and I know the dollars and the
numbers are on our side, but let us realize the humanity of it. I use
this example at my town hall meetings in Houston. My dad will be 84
years old this year. I did not know his father. His father died before
I was born. He is part of the success of Medicare. If we can talk about
our constituents, talk about our family, and instead of looking at what
we can do to say, well, how do we need to save money in Medicare, let
us also look at what impact that will have on our own constituents, on
our own family. By living to 84 years, that is successful. He is a
product of the benefits of our system, Medicare. His father did not
have Medicare when he passed away in the late 1940s. We need to
remember that. The better quality of life for our senior citizens, they
have paid their dues, the World War II generation that my dad is part
of. Let us remember those folks, that they are the ones that this was
created for. It was created for that. Let us not forget those folks
that are still providing for our country, that we want to make sure
that they will have Medicare and a good Medicare program when they
retire.
Mr. PALLONE. I just wanted to follow up on what my colleague from
[[Page H2795]]
Florida said also about low-income people, low-income seniors not being
aware and therefore not applying for some of the low-income protection
programs like the QMB or the SLMB programs that we have. Under Medicare
and Medicaid, if you are below a certain income, you can apply through
Medicaid so that you actually get certain prescription drugs covered
and certain other benefits covered. But one of the things that is in
this Older Women's League report that I mentioned for Mother's Day is
that half the elderly women who are eligible for those low-income
protection programs never apply for them because they are not aware of
them. And also because they do not want to go to the welfare offices
where they have to go from what I understand in order to get them
because they do not want to be part of a welfare program. One of the
reforms that was suggested by OWL is that individuals be able to apply
directly through Medicare or Social Security for those low-income
protection benefits. Again that is a kind of reform that we should be
looking at, something that is going to help people with prescription
drugs and some of these other protections rather than worrying about
how we are going to save money by raising the age of eligibility.
Mr. DEUTSCH. I just want to quickly mention, because I think what the
gentleman said is really important, sort of almost as a public service
announcement for whoever is watching us this evening, that there are
benefits in Medicare that unfortunately not enough people take
advantage of. We have put into Medicare some preventive coverage.
Mammogram screening. Right now less than 50 percent of Medicare
beneficiaries who are eligible for it take advantage of it. It is free,
with no copayment, no deductible. We really need to push that, because
that also has its positive humanitarian, human side, preventing one but
also the monetary side as well.
Mr. BROWN of Ohio. Preventive care for prostate cancer, for breast
cancer, for osteoporosis, for diabetes, a whole host of new preventive
care programs paid for by Medicare all in the last 2 or 3 years. That
is something people should certainly take advantage of.
Mr. PALLONE. Those were put in as a result or with the balanced
budget process.
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