[Congressional Record Volume 145, Number 65 (Thursday, May 6, 1999)]
[Extensions of Remarks]
[Pages E901-E902]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




           PRIVATIZATION: THE WRONG PRESCRIPTION FOR MEDICARE

                                 ______
                                 

                        HON. FORTNEY PETE STARK

                             of california

                    in the house of representatives

                         Thursday, May 6, 1999

  Mr. STARK. Mr. Speaker, several Members have touted the idea that 
Medicare should be turned over to the private sector. Although they say 
that privatization will save the program, their true motivation is to 
irreparably damage Medicare to the point that there is nothing left to 
salvage. In the words of former speaker Newt Gingrich, they want 
Medicare to ``wither on the vine.''
  Republicans have always intended to destroy Medicare. While they have 
found new ways to disguise their message over the years, their 
intention remains the same: get government out of health care no matter 
what the cost. ``Privatization'' is just another one of their ploys.
  The truth is that the private sector cannot provide high quality 
health services to disabled and elderly Americans. Especially not at a 
lower cost.
  Medicare was originally created to fill in the gap of health 
insurance coverage for older Americans, and later the disabled. Before 
Medicare, the private sector either refused to provide insurance 
coverage to the elderly, or made the coverage so expensive that seniors 
could not afford to pay the premiums. Lack of health coverage meant 
having to pay for health care out of their limited retirement incomes. 
This left many elderly poverty stricken.
  Today the health coverage problem for older Americans is getting 
worse, not better. The fastest growing number of uninsured are people 
age 55-62, an even younger group than when Medicare was first 
established. Rather than extending coverage to this uninsurable group, 
Republicans insist on doing nothing, even though the President's 
Medicare early-buy proposal would have cost nothing.
  Why should we believe that private sector insurers will put their 
financial interests aside and compete to provide coverage for an older, 
sicker population when evidence suggests that they will not? Especially 
as costs for the chronically ill continue to rise.
  Republicans have also claimed that the private sector will save money 
for Medicare. This is simply not true. Over the past thirty years, 
Medicare's costs have mirrored those of FEHBP and the private sector, 
even though Medicare covers an older, sicker population. Recent 
evidence shows that private sector costs are now rising faster than 
Medicare's.
  Last fall Medicare+Choice plans abandoned 400,000 Medicare 
beneficiaries claiming that the Medicare rates were too low to cover 
this population. This suggest that health plans will charge ever more 
than we currently pay them, not less.
  Privatizing Medicare will not improve quality, either. Paul Ellwood, 
the ``father of managed care,'' recently stated that the private sector 
is incapable of improving quality or correcting for the extreme 
variation in health services across the country and that government 
intervention is necessary and inevitable. In his words, ``Market forces 
will never work to improve quality, nor will voluntary efforts by 
doctors and health plans. . . . Ultimately this thing is going to 
require government intervention.'' Why would we want to encourage more 
people to enroll in private health plans given the managed care abuses 
igniting the Patient's Bill of Rights debate?
  Medicare is the primary payer for the oldest elderly, chronically 
ill, disabled, and ESRD patients--all very complex and expensive groups 
to care for. Private managed care plans, which primarily control costs 
by restricting access to providers and services, simply do not meet the 
health care needs of everyone in this population. For the most part, 
Medicare+Choice plans have enrolled only the healthiest beneficiaries, 
while avoiding those most in need of care. There is no way of knowing 
whether or not private health plans are able to provide quality care to 
the sickest population.
  Medicare beneficiaries will have significant difficulties making 
decisions in a market-based system. This is potentially the most 
disastrous consequence of moving to a fully privatized Medicare 
program. Many Medicare beneficiaries are cognitively impaired. Thirty 
percent of Medicare beneficiaries currently enrolled in managed care 
plans have low health literacy. That is they have difficulty 
understanding simple health information such as appointment slips and 
prescription labels. Now we're discovered that health plans often fail 
to provide critical information to potential enrollees. How can we 
expect senior citizens and the disabled to participate as empowered 
consumers in a free-market health care system, especially without 
essential information?
  Medicare reform cannot be based solely on private sector involvement. 
More than 11 million Medicare beneficiaries--30% of the population--
live in areas where private health plans are not available, and because 
of the limited number of providers probably never will be available. A 
comprehensive, viable, nationally-based fee-for-service program must be 
maintained for people who either cannot afford to limit their access to 
services in private managed care plans, or who are incapable of 
participating in a free market environment.
  Unfortunately the debate surrounding privatizing Medicare is grounded 
in ideology, not fact. While I understand the need to improve and 
expand the choices available to Medicare beneficiaries--the 
Medicare+Choice program was created in recognition of this--we also 
have an obligation to preserve the promise of guaranteed, affordable 
health insurance for the people who need it most. The private sector is 
not a panacea for our problems. Historical experience proves that 
alternative solutions are necessary for our elderly and disabled 
citizens. Before we move to an entirely new system, we should attempt 
to improve the existing infrastructure, one that has served elderly and 
disabled citizens effectively for over thirty years.

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