[Congressional Record Volume 153, Number 126 (Thursday, August 2, 2007)]
[Senate]
[Pages S10762-S10764]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                                 SCHIP

  Mr. GRASSLEY. Mr. President, before I go to further remarks, I want 
to give some credit on the passage of H.R. 976 the bill we just had and 
the cooperation.
  The Grassley-Baucus cooperation has been mentioned here. I really 
compliment Senator Baucus for his leadership in working with us. But, 
also, it took us 3 or 4 months to put together a bill, and Senator 
Hatch and Senator Rockefeller were very much involved in that effort 
with many long hours. So I thank them.
  I do wish to make the point that what the Senate has done over the 
past few days has genuinely served the interests of the American 
people. The Senate passed this bipartisan legislation which will cover 
an additional 3.2 million children.
  The Senate has proceeded in regular order to process amendments. 
Every amendment that was offered was defeated--I mean every one on 
which we had a rollcall vote was defeated. So this bill basically has 
come out of the Senate the same way it came out of the Senate Finance 
Committee.
  This is how we should do business in the Senate. Amendments were 
debated and voted upon. Members had the opportunity to consider a 
variety of changes to the Senate Finance Committee bill. Some were 
adopted by voice vote. Those that took a rollcall, none of those were 
adopted. But regular order was followed, and the Senate worked its 
will.
  I am pleased with the Senate Committee product, which is a bipartisan 
product.
  I am also pleased with how the majority and minority leaders have 
handled the process. This has been a tough, complicated piece of 
legislation. A lot of Members and staff have worked very hard to get us 
to this point.
  I thank the chairman for his tireless efforts and how he worked in a 
bipartisan manner. I wish to thank his staff: Alice Weiss, Michelle 
Easton, Bill Dauster, Russ Sullivan, David Swartz, and Rebecca Baxter. 
I also thank Senator Rockefeller and his staff: Jocelyn Moore and Ellen 
Doneski. Much is also owed to the Senator from Utah, Mr. Hatch, and his 
staff. Finally, I wish to thank the staff of the minority--I should say 
the Republicans on the Finance Committee: Chris Condeluci, Mark Prater, 
Becky Shipp, Rodney Whitlock, Mark Hayes, and Kolan Davis.
  Now, I would like to address the Senate since we passed our bill, 
since the House last night passed their bill, and soon there will be a 
conference between the House and Senate. I wish to speak about some 
things I think the House of Representatives has done that are damaging 
to Medicare Advantage.
  People are saying that Medicare Advantage plans are overpaid. They 
talk about cutting payments, and that is what the House of 
Representatives has done in their SCHIP bill. But they do not talk 
about why Congress set up the payment structure, which was to create 
choices of plans in Medicare and to expand private plan choices in 
rural America. They do not talk about why Congress set up that choice. 
It worries me that those arguing about the plan payments are losing 
sight of the Medicare beneficiaries.
  These beneficiaries, the seniors and disabled of America, are the 
ones who benefit from having Medicare Advantage plans available to 
choose from. Congress, in 2003, enacted the Medicare Modernization Act. 
That is the act that included the prescription drug program as an 
improvement in Medicare. A major goal of the MMA, the Medicare 
Modernization Act, was to expand beneficiaries' choice of Medicare 
plans. Before MMA, rural beneficiaries, such as my people in Iowa and a 
lot of States that are more sparsely populated than Iowa, rarely had a 
private Medicare plan to choose from. Now rural and urban Medicare 
beneficiaries can decide whether a private plan option or traditional 
Medicare works best for them.
  I want to tell you why Medicare Advantage can be a good option for 
beneficiaries and why the program should not be touched, as it was 
recently by the House of Representatives in their SCHIP bill. I want to 
explain at the same time why Congress thought all beneficiaries, 
whether you were in rural America or urban America, should have a 
choice of plans.
  The original Medicare benefit is set up based on how medicine was 
practiced in 1964, meaning in 1964 the fee for service that is the 
traditional Medicare was set up at a time when you went to the doctor. 
If you were very sick, then you went to the hospital. Medicine was much 
less specialized.

[[Page S10763]]

Patients were treated by one doctor at a time, not the teams of people 
who treat patients now. Under traditional Medicare, dating from 1964, 
hospital benefits are in Part A of Medicare; physician benefits are 
financed and delivered separately in Part B of Medicare. Each set of 
benefits has its own deductible. A hospital deductible alone is a lot 
higher than most working people have in their health insurance. It is 
$992, and it goes up a little bit every year. That is a pretty 
significant amount. That deductible alone can impose a big hardship on 
a family, if they are relying solely on Medicare for their health 
coverage. Medicare also only covers a limited number of hospital days 
each year. It is not great protection if you are severely injured or if 
you have an illness that has a long hospital stay. Say you happen to 
end up in the hospital for months at a stretch, you might end up 
exhausting your Medicare coverage. A lot of people don't realize how 
limited Medicare benefits can be.
  Medicare also does not actually have catastrophic coverage. 
Traditional fee-for-service Medicare, the Medicare since 1964, by 
itself does not provide protection against the cost of catastrophic 
illness. Some beneficiaries then buy Medigap insurance for this 
catastrophic insurance. Medigap insurance can be expensive for those on 
fixed incomes. In contrast, and hence why the House of Representatives 
should not change Medicare Advantage, Medicare Advantage plans have 
catastrophic coverage for those seniors who want to choose it, and they 
do it for a much lower premium than the Medigap add-on to traditional 
fee-for-service Medicare. That is one of the many reasons Medicare 
Advantage should be an option, not just in metropolitan areas, as it 
was before we passed the prescription drug bill in 2003. We need rural 
equity. And through the MMA, we brought rural equity so that people in 
my State and more sparsely populated States can have a choice between 
fee-for-service Medicare and Medicare Advantage, which can be a 
preferred provider organization, HMOs, or fee-for-service Medicare 
Advantage. Prior to 2003, in my State of Iowa, only 1 of 99 counties 
had the Medicare Advantage option. That was Pottawatomie County right 
across the river from Omaha, because they could work in with Omaha, but 
the other 98 counties did not have choice as they have in Los Angeles 
and Texas and Arizona, New York and New Jersey, Philadelphia, and 
Florida. There may be some others but not really rural States. You are 
stuck with fee-for-service traditional Medicare written in 1964, not 
much for the practice of medicine in the year 2007.
  So I am very concerned that what the House of Representatives did in 
their SCHIP bill is such that it is going to put in danger the choices 
we now have in rural America between fee-for-service traditional 
Medicare and Medicare Advantage such as some of the more metropolitan 
States have had for a couple decades.
  If you are in Medicare Advantage, you don't have to have the Medigap 
add-on to your traditional Medicare. Another plus is that most Medicare 
Advantage plans also have a limit on out-of-pocket costs. In Iowa the 
plans often have a limit of $1,000 or less. In other States, Montana, 
much of New York and California, that is true as well. In some States 
and counties, out-of-pocket limits are higher. Traditional Medicare has 
no out-of-pocket limits. In original Medicare, to keep costs down, 
Congress imposed caps on types of care. For example, there is a $1,780 
annual cap on physical therapy. Once a patient hits that cap on 
physical therapy, he must pay out of pocket if he needs more therapy, 
unless he gets approved for an exception. Many patients hit the cap 
early in the year. These are patients who have had a stroke or a 
serious accident. After that they have to pay themselves for the 
service unless they succeed in appealing for more therapy services. 
Then by contrast, Medicare Advantage plans can base coverage for 
physical therapy on what the patient needs, not what some bureaucrat in 
Washington says there is a limit on. They can avoid these arbitrary 
caps.
  In original Medicare, patients may see a doctor whenever they like. 
That may seem like a good idea. Many patients see a lot of doctors and 
are prescribed many different drugs. In original Medicare, physician 
care can be disjointed. No one oversees all the care a patient 
receives. Some patients prefer it that way. Others welcome having help 
navigating the health care system. They would like to choose a plan 
that would help them coordinate their care, and most Medicare Advantage 
plans do just that. So that is why we don't want the House of 
Representatives to cripple Medicare Advantage.
  Let's say a patient has diabetes. In Medicare fee for service, there 
is no one to help monitor that she is testing her blood sugar. No one 
checks to see if she is getting her eyes and feet checked, which are 
the result of diabetes. And in most Medicare Advantage plans, somebody 
does that oversight. Somebody does that checking. Plans use teams of 
people, ranging from doctors to pharmacists to nurses to dieticians to 
case managers, all to make sure enrollees are getting the care they 
need. Four out of five Medicare beneficiaries have a chronic illness. 
In many Medicare Advantage plans, one doctor oversees their care. The 
plan assigns a case manager. Patients don't have to navigate the system 
alone. For many patients, this can be preferable, and it is because of 
Medicare Advantage. We don't want that plan crippled, as the House of 
Representatives bill does.

  Medicare Advantage is a great program for poor and low-income people. 
Critics of the program argue that poor people qualify for Medicaid. 
They say Medicare Advantage doesn't help them. I want to make it clear 
that this is not true. I am going to get to that point later. But even 
the critics cannot argue with the statistics about lower income or near 
poor beneficiaries. These beneficiaries can't afford a Medigap policy. 
For them, Medicare Advantage is a godsend. According to the Centers for 
Medicare and Medicaid Services, the average Medicare Advantage 
beneficiary gets $86 a month in extra benefits. Most of those extra 
benefits are in reduced cost sharing. Medicare Advantage plans often 
reduce copays and deductibles that beneficiaries otherwise would have 
to pay.
  As I noted, Medicare Advantage plans offer catastrophic coverage. If 
an enrollee ends up in the hospital for weeks or even a year, the plan 
covers it. That is not true of traditional Medicare fee-for-service, 
started in 1964. It doesn't fit the practice of medicine today. But 
Medicare Advantage offers medicine delivered on the practice of 
medicine in 2007. The benefits may include an annual physical. They may 
include lower copays for enrollees needing kidney dialysis. They 
include unlimited physical therapy based upon patient need.
  Ninety-nine percent of the beneficiaries have access to a Medicare 
Advantage plan that plugs the gap in the Part D drug coverage; 98 
percent have access to a plan that offers preventive dental benefits. 
Beneficiaries in Medicare Advantage plans are more likely to get 
preventive services. Almost all Medicare beneficiaries have access to a 
plan with no-cost cancer screening. And for this, many beneficiaries 
pay no extra premium. They pay only the regular Part B premium, as 
everybody else does. Eighty-four percent of beneficiaries had access to 
a zero premium Medicare Advantage plan last year.
  Many seniors live on fixed incomes. Medicare Advantage may be the 
only way they can afford these benefits. It is also easy to use. Many 
Medicare Advantage plans let seniors use one health care card, their 
Medicare Advantage plan card, for all of their health care needs. 
Instead of three cards, they have one card. They pull the same card out 
when they go to the doctor, same card they use for the hospital, the 
same card they use for the pharmacist. They don't have to worry about 
dealing with claim forms from two or three different insurance plans. 
But that is not the case for beneficiaries in the original 1964 type 
Medicare. If they have Medigap and Part D prescription drug coverage, 
they have to deal with multiple plans that don't coordinate their 
coverage or coordinate their benefits.
  I said I would get back to why Medicare Advantage is good for lower 
income seniors. It is true that many lower income beneficiaries are 
also covered by Medicaid. These individuals are referred to as dual 
eligibles, because they are under both Medicare and Medicaid. But we 
have a program

[[Page S10764]]

in Medicare Advantage for people who are eligible for both. This 
program is called a special needs plan. It coordinates the care and the 
benefits between the Medicaid Program which is run by the States and 
the Federal Government. It should be seamless to the beneficiaries. 
Have these special needs plans worked perfectly? Not always. The 
program is a work in progress. Surely it is a lot better than what 
happens without it. Without it, health care for poor beneficiaries is 
siloed. The parts covered by Medicare are never coordinated with the 
parts Medicaid is responsible for.
  Let's say a frail senior is in a nursing home. She has exhausted her 
savings so Medicaid is paying. She has Medicare for her health 
coverage. She enrolls in one of these special needs plans. When she 
gets a fever or an infection, the Medicare Advantage special needs plan 
can treat her at the nursing home. In the original Medicare, the 
nursing home would send her to the more expensive hospital environment. 
The hospital, after 3 days, would discharge her to a skilled nursing 
home facility. For her, the Medicare Advantage plan reduces disruptions 
and keeps her from being exposed to additional infections in the 
hospital. At the same time, you save a lot of money in Medicare. Both 
she and Medicare are spared the cost of hospitalization--the most 
expensive health delivery.

  So the critics who say that Medicare Advantage is not helping poor 
people are mistaken. While the program is small, that is because the 
program is new. It can be a model for all of us. This is how we want 
our care to be delivered to us when we are very old and when we are 
very frail.
  So Medicare Advantage can be a good choice for very sick people. It 
can be a good choice for people with chronic illness. It can be a good 
choice for lower income people. It can be a good choice for people who 
want some extra benefits. It can be a good choice for people on fixed 
incomes. It can be a good choice for rural beneficiaries as well as 
urban ones.
  When the House of Representatives gets done with it all, we will not 
have it in rural America. But they will still have it in urban America, 
and that is very unfair. That inequity was meant to be taken care of 
when we passed the prescription drug bill in 2003, and I am not anxious 
to let that sort of equity between rural and urban America go away. But 
it can also be a good choice for seniors.
  All Medicare beneficiaries, whether they live in a city, a small 
town, or on a farm, ought to be able to choose their own plan. They 
know best what suits their needs--the original 1964 Medicare or the 
2003 Medicare Advantage plan. The House bill would gut the Medicare 
Advantage program. It would take these choices away from our 
beneficiaries. The Senate SCHIP bill avoids this.
  I urge my colleagues to remember why we decided to give Medicare 
beneficiaries a choice of health plans. I urge my colleagues to reject 
efforts to cut Medicare Advantage.
  I yield the floor.
  The PRESIDING OFFICER (Mr. Menendez). The Senator from Tennessee.
  Mr. ALEXANDER. Mr. President, let me ask, through the Chair, the 
manager of the previous bill, is he finished with what he would like to 
do this evening? If I could ask the Senator from Iowa, does he need any 
more time on the subject he has been talking about? I will be glad to 
wait.
  Mr. GRASSLEY. No. I am going home.
  Mr. ALEXANDER. Congratulations.
  Mr. GRASSLEY. I thank the Senator for listening to me.
  Mr. ALEXANDER. Mr. President, I thank the Senator from Iowa.

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