[Congressional Record Volume 150, Number 116 (Thursday, September 23, 2004)]
[House]
[Pages H7547-H7548]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




     MEDICARE PREMIUMS INCREASE FINANCES TO HMOS AND DRUG COMPANIES

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentleman from Ohio (Mr. Brown) is recognized for 5 minutes.
  Mr. BROWN of Ohio. Mr. Speaker, the Bush administration recently 
announced that America's seniors will pay 17.4 percent more for 
Medicare coverage next year. It is no accident that they announced this 
piece of information late in the afternoon on Friday of Labor Day 
weekend. They simply hoped nobody would notice. But the largest premium 
hike in Medicare's history, the largest premium hike in the 38 years of 
Medicare is the sort of news you just cannot suppress. One senior 
advocate called it a hidden tax on seniors.
  That hidden tax on seniors is a multi-billion dollar tax at that. 
That is big news and it is bad news for President Bush. But when faced 
with bad news, the Republican spin machine does what it always does. It 
tries to shift the blame. It is the Democrats, they said, President 
Bush rolled out his ad plan knowing this would happen, it is the 
Democrats that are responsible for the premium hike, even though the 
Republicans control the House, the Senate and the White House. But 
because that did not jibe with the facts, no one bought it then and no 
one buys it now.
  Before the Bush Medicare bill became law, the nonpartisan Medicare 
trustees estimated that Medicare monthly premium would increase $2 in 
2005. After the Bush Medicare bill became law, the premium jumped to 
$11.60.

                              {time}  2030

  Hence, the 17.4 percent increase. Those are the facts. No amount of 
sweet talk, misdirection, or spin from the Bush team can change those 
facts; but rather than take responsibility, the Bush team just changed 
its spin again. This time they said the premium, the record-setting 
17.4 percent increase, the Bush administration says was a good deal for 
America's seniors because it financed new preventive benefits. Again, 
there are a few things the Bush administration did not tell us.
  They forgot to say that the preventive benefits account for less than 
one-fourth of 1 percent of the premium increase. In other words, 
virtually nothing in the premium increase really

[[Page H7548]]

went into prevention benefits. Here is where the money went.
  They neglected to mention that the Bush Medicare law creates a $23 
billion slush fund for the HMOs. These are bonus payments for an 
industry, the HMO industry, which already saw their profits go up 50 
percent last year. They can use these bonuses to lure seniors out of 
Medicare's reliable, equitable, traditional program.
  Interestingly, the benefits do not take effect until 2006. Seniors 
actually cannot get the Medicare benefit until 2006, but the payout to 
the insurance industry to pay back for the contributions the insurance 
industry frankly made to my colleagues on this side of the aisle and to 
the White House began in March of 2004. In other words, the insurance 
industry as a whole got checks from the Federal Government totaling 
$290 million in March, $290 million in April, $290 million in May, $290 
million in June, all the way through this year, all the way through 
next year, $290 million a month. The benefit is not available to 
seniors until the following year.
  They also forgot to tell us, in addition to this slush fund the 
insurance industry paid for out of seniors' premium increases, they 
forgot to tell us that the Bush Medicare law actually goes out of its 
way to prohibit the Federal Government from negotiating with the drug 
industry for fair prices to bring the cost of prescription drugs down, 
which go up at double-digit increases every year.
  They did not tell us that the Bush Medicare law will increase drug 
industry profits, already the highest industry profits of any industry 
in America, they will increase industry profits, not gross income but 
industry profits, by $180 billion, that is with a B, $180 billion over 
the next 10 years.
  So that insurance industry got huge subsidies, the drug industry got 
record profits, the Bush administration got huge campaign 
contributions, tens of millions of dollars from the drug and insurance 
industries, and seniors were stuck with a 17.4 percent premium 
increase. It is wrong. The increase was five times larger than it 
should have been. That is an outrage.

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