[Congressional Record Volume 149, Number 140 (Tuesday, October 7, 2003)]
[House]
[Pages H9219-H9220]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




             THE HARM OF MEANS TESTING THE MEDICARE PROGRAM

  Mr. PALLONE. Mr. Speaker, I rise on the House floor to express my 
concern regarding an agreement that is being sought by the Medicare 
conference committee on means testing the Medicare program. Accepting a 
provision that will allow means testing of Medicare beneficiaries will 
in time only lead to the destruction of the Medicare program that 
seniors rely on and that we as Democrats have worked on preserving 
since its days of inception nearly 40 years ago.
  The House Republican bill means tests the protection against high 
drug costs. Seniors who earn more than $60,000, or $120,000 for 
couples, will not have the $4,900 catastrophic protection, and instead 
they will have to pay more out of pocket before they get catastrophic 
protection because of their income. Means testing the catastrophic 
protection will force many seniors to pay more for their drug coverage.
  This provision in the House Republican Medicare legislation for the 
first time in the history of Medicare taxes middle class, or I should 
say the middle class seniors, twice for their benefits. Today Medicare 
is available to all who are eligible. Everyone pays the same percentage 
in payroll taxes and gets the same benefits out. Universality is the 
central theme of the Medicare program, and all Americans who contribute 
taxes during their working years are eligible for the full package of 
Medicare benefits when they retire.
  The House Republicans, however, are taking the first steps to turning 
Medicare into what is essentially or what could become a welfare 
program, making higher-income seniors pay more for their Medicare 
benefits. What this amounts to is an additional Medicare tax on higher-
income seniors who have already paid more money in Medicare taxes 
because of their higher earnings. Now they are getting hit again 
through this drug benefit and are being asked to pay another tax to pay 
more money for their drugs than other seniors. They basically are 
paying twice for their benefits. Keep in mind that in many localities a 
$60,000 income does not make you wealthy, and that once the precedent 
is set, there will likely be a domino effect with the cutoff reaching 
lower and lower, affecting more and more middle class seniors. Right 
now the Republicans are talking $60,000, but that could change to 
$50,000 or $40,000; and as it goes down, more middle income seniors 
will be impacted.
  It is unclear how the provision in the House Republican bill is going 
to work, or whether it will even work. The Medicare administrator will 
send the names of seniors to the IRS, and the IRS will send back the 
senior's income for the previous year. Medicare will

[[Page H9220]]

then send this very private information to private health insurance 
companies, and seniors' confidential information will be sent all 
across the country, a situation ripe for abuse.
  Medicare currently does not means test benefits, and it does not have 
staff to deal with this complicated matter. The Republican bill will 
increase government bureaucracy in both Medicare and the IRS to 
administer the provision. And under the Republican bill, Medicare is 
supposed to have a process for seniors who have seen their incomes 
decline to come in and get an adjustment; and because we know seniors' 
income declines as they age, Medicare would need to be able to deal 
with millions of people coming in every year to have their income 
information reevaluated.
  Mr. Speaker, private plans will have a hard time administering this 
means test provision as well. They will have different catastrophic 
levels for every senior making above $60,000 in income. More 
importantly, with this income information, the provision to allow means 
testing of catastrophic levels will also enable plans to risk-select 
and pick out other seniors to be in their plans. Private insurance 
companies will have incentives to seek out only higher-income seniors 
to make their premiums lower. Because higher-income seniors will have a 
higher catastrophic level, plan premiums will be lower because the plan 
will be paying less of beneficiaries' drug costs. And seniors living in 
low-income areas may find that plans do not want to come there because 
these seniors will make the plan premiums more expensive.
  Mr. Speaker, all in all the provision in the House Republican bill is 
a bad idea for Medicare. It increases government bureaucracy, injects 
the IRS into Medicare, and it will be unworkable for plans and seniors. 
The approach taken in the Republican bill is wrong. We should not be 
taxing middle class seniors twice for Medicare benefits or because they 
have retiree coverage. This threatens the program's broad support and 
popularity, fragmenting public support and confidence in the Medicare 
program and making it easier to end the program once and for all.
  I urge my colleagues on the conference committee to eliminate the 
means testing of catastrophic drug coverage and all Medicare benefits. 
Means testing will destroy the universality of Medicare and will 
destroy the Medicare program altogether.

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