[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.

                              {time}  2115

  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.

                              {time}  2130

  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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