[Congressional Record Volume 150, Number 21 (Wednesday, February 25, 2004)]
[Senate]
[Pages S1591-S1592]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. CORZINE (for himself and Mr. Lautenberg):
  S. 2117. A bill to amend part C of title XVII of the Social Security 
Act to prohibit the comparative cost adjustment (CCA) program from 
operating in the State of New Jersey; to the Committee on Finance.
  Mr. CORZINE. Mr. President, I rise today with my colleagues from New 
Jersey, Senator Frank Lautenberg, and Congressmen Frank Pallone and Rob 
Andrews, who are introducing comparable legislation in the House of 
Representatives today, to introduce a bill to protect from 
privatization the Medicare program that more than 1 million New Jersey 
seniors rely on.
  As a result of a provision in the new Medicare law, more than 1 
million Medicare beneficiaries nationwide, including 186,000 New Jersey 
Medicare beneficiaries who live in Camden, Salem, Burlington and 
Gloucester counties, will be subject to a risky Medicare privatization 
scheme beginning in 2010. This scheme, which is called premium support, 
will give seniors a set Medicare premium payment--similar to a 
voucher--that would be based on a combination of the prices that 
private plans in their area charge and the cost of Medicare fee-for-
service in their area. Seniors choosing to enroll in a plan that costs 
more than the amount of that voucher would have to pay the difference.
  While it may seem like an easy and straightforward choice to seniors 
who currently enjoy and thrive on traditional Medicare to choose to 
remain in the fee-for-service program, under this privatization scheme, 
those seniors who make that choice will end up paying significantly 
higher premiums than their counterparts in private plans. Because the 
private plans will be able to cherry pick the healthiest seniors to 
enroll in their plans and will receive huge subsidies from the federal 
government, they will be able to provide lower cost health care than 
the traditional Medicare program. That means that sicker, older 
beneficiaries will remain in the traditional Medicare, thereby 
increasing costs in that program, while younger, healthier 
beneficiaries will choose to enroll in private plans where they will 
pay lower premiums.
  That's right, Under this privatization scheme, seniors who choose to 
remain in the Medicare program they know and trust will pay more--
significantly more than they pay now--for their coverage.
  Not only will these seniors pay significantly higher premiums than 
they do now for fee-for-service Medicare, and much more than they would 
if they enrolled in a private plan, but also depending on where a 
senior lives they will pay a different price for the same Medicare 
coverage that a senior in a neighboring community might pay. So, for 
the first time in history, seniors in some areas will pay higher 
premiums for their Medicare coverage than seniors in other areas.
  How much more will seniors who want to stay in the traditional 
Medicare program pay? According to documents released by the Centers 
for Medicare and Medicaid Office of the Actuary on August 9, 2003, 
seniors living in Gloucester and Hudson counties in New Jersey could 
pay as much as $1,700 more than they pay now for traditional Medicare. 
Yet, seniors in these counties could, depending on the plan they 
select, join an HMO for a premium that is $2,000 less. Why is that? 
This is because private plans will select healthier seniors will offer 
fewer choices than traditional Medicare and, at the same time will 
receive grossly inflated payments from the government.

[[Page S1592]]

  In fact, the new Medicare law overpays private plans by $1,920 per 
beneficiary--at a total cost of $14 billion to taxpayers--so that these 
plans may compete with Medicare. This sounds like socialized 
privatization to me. Indeed, in the last 6 months I have struggled to 
understand the logic behind paying private plans more than we pay 
Medicare. The only logical reason I've come up with is that this is the 
perfect plan to make the Medicare program fail--to give my Republican 
colleagues the read meat they need to raid and privatize Medicare.
  This is not competition. It is a plan to force seniors into private 
plans and out of the Medicare program they trust. There is no real 
choice here. Very few seniors will have the luxury of choosing to pay 
$2,000 more a year for traditional Medicare. Most seniors will be 
forced into managed care plans.
  Seniors in my State want no part of this privatization scheme. Baby 
boomers in my State want no part of this. New Jerseyans want to know 
that the Medicare program, as we know it, will be there for them when 
they need it. My legislation provides that assurance. Under my bill, no 
New Jersey county and no New Jersey senior will be subject to this 
disastrous privatization scheme.
  In closing, I urge my colleagues to pass this bill and the many other 
bills that Democratic members are introducing today to exempt their 
States from this program and to protect and preserve the Medicare 
program for our seniors today and our seniors tomorrow.
                                 ______