[Congressional Record Volume 157, Number 86 (Wednesday, June 15, 2011)]
[Senate]
[Pages S3791-S3793]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                            MEDICARE REFORM

  Mr. LIEBERMAN. Mr. President, I rise to speak about the fiscal crisis 
facing our country and specifically the dire financial situation of 
Medicare, which is a program that matters so much to tens of millions 
of senior Americans but also adds so much to our national debt. I wish 
to talk about some ideas I have about how we might effectively deal 
with this problem in Medicare, particularly, without doing away with 
the Medicare Program because I believe in it.
  If I can start on a broader level, briefly. It is hard to find 
anybody in Congress in any party who does not acknowledge that our 
Federal Government is hurtling toward the edge of a financial cliff. We 
are now running deficits in this year of over $1 trillion. That means 
we are spending $1 trillion more than we are taking in so we have to 
borrow that money, and at some point we are going to reach a level of 
borrowing that is unsustainable. It will send our economy hurtling 
down, will bring us into another great recession, will compromise our 
ability to provide the security and services to the people of our 
country that it is our responsibility to provide. To avoid that 
horrific result, we have to show some responsibility and work across 
party lines to get some things done. None of this is easy.
  Almost everybody will say we have a terrible financial problem in the 
Government, debt, deficit, but when you get to the solutions, there has 
been an outbreak of what I call Federal Government NIMBYism. Everybody 
talks about NIMBY at the State and local level--Not In My Back Yard; 
this is a great program, but I do not want it in my neighborhood. The 
Federal Government budget crisis we are in, NIMBYism seems to be not my 
program or not my favorite tax credit. You can cut other stuff but not 
what I am in favor of.
  We have one group saying no tax increases whatsoever, even indirect 
through the elimination of tax credits, which is spending money, and 
tax credits can be as wasteful an expenditure of the taxpayers' money 
as a wasteful spending program can be. On the other side, we have 
people saying: Not my program. You cannot touch it. You cannot even try 
to make it more efficient. It is just too good or it is too politically 
popular or whatever. If we keep going down that road, we are not going 
to get anything done.
  The main hope of our result in the next couple months is the small 
bipartisan, bicameral leadership group that is being presided over by 
Vice President Biden. I think anytime any of us comes out and says: No, 
we cannot do this, we cannot have a tax increase of any kind, we cannot 
even eliminate wasteful tax credits, and on the other side people say, 
we cannot touch Medicare, for instance, it, one, shackles the hands of 
Vice President Biden as he tries to solve this problem, and it also 
means, more generally, that we are not fulfilling our responsibility. 
That is the case with Medicare. The fact is, those who say you cannot 
do anything with Medicare, just will not support it, are not doing a 
favor to the Medicare Program.
  Congressman Paul Ryan, in the House, put forth his own budget, 
including a Medicare reform program. I said when he did it, I want to 
look at it in more detail, but I gave him credit to put something so 
comprehensive out because it is going to take that kind of guts by all 
of us to save our great country from going over the edge of the cliff, 
from going into permanent decline, from making it impossible for our 
children and grandchildren and beyond to have the opportunities we have 
had.
  When I looked at the Ryan plan, particularly on Medicare, I decided I 
was not for it. When it came to the Senate, I voted against it. That 
was the case, generally, when it came up in the Senate and the vote on 
the Ryan budget. But one cannot just stop there and say no, which is a 
popular vote on a Medicare reform proposal. I think any of us 
responsibly have to then come forward with our own ideas. That is why, 
last week, I indicated in a newspaper op-ed column that I would be 
putting some proposals forward that will save Medicare, that will 
protect Medicare as a Government program of health insurance for senior 
Americans but will change the program. Anybody who

[[Page S3792]]

tells you Paul Ryan is going to kill Medicare as we know it, there is 
another way to kill Medicare as we know it, which is to do nothing to 
try to save it.
  We cannot save Medicare as it exists today. There are a couple of 
statistics. In 2010, the Medicare Program cost $523 billion. The 
estimates I have seen are consensus, not extreme estimates, that within 
the next 10 years that number will double to over $1 trillion for 
Medicare. Where are we going to get the money to pay for that? That is 
going to add to the national deficit and the national debt. Part of 
what is happening is the baby boomers are coming of age and Medicare 
eligibility--15 million in the coming years coming into this program.
  I will give you another general statistic. All the studies I have 
seen show--most people do not appreciate this, if I can say, the 
average Medicare participant over their lifetime will actually cost the 
system in benefits three times what we put in through premiums, 
withdrawals, et cetera. So this program is on an unsustainable course. 
I think if you want to save Medicare, you have to be willing to change 
it. You cannot say do not touch Medicare. I must say I am disappointed 
when I hear people say that.

  Here are some of the ideas I am working on legislation to propose. 
The plan I outlined last week, and I am putting into legislation, I 
think will extend the solvency of the Medicare Part A, a big program 
for hospital care. It will lower the Federal Government's financial 
commitments to the Part B Program for doctor services and, most 
importantly, it will keep the Medicare Program alive and serving 
America's senior citizens for at least 20 years and when we get it 
estimated, probably by a lot more.
  A lot of the proposals I made--and I have five key parts of it--are 
similar to ones that have been made earlier and the Congressional 
Budget Office has made estimates on. My guess, applying existing CBO 
estimates to the ideas I put forward, is they will save $250 billion in 
the first 10 years and extend the life of the program by at least 20 
years, which is 20 more years in which American seniors can depend on 
Medicare to help them pay their health care bills in their senior 
years.
  Here is some of what I am proposing. It is controversial. They are 
all controversial. We cannot save Medicare without doing some things 
that make people unhappy. I am proposing to raise the eligibility age 
of Medicare from 65 to 67, beginning in 2014, by 2 months every year 
until it reaches 67 years in 2025. That would put it on the same course 
Social Security is on now, to go up to 67, which means if you turn 65 
in 2014, you are going to have to wait an additional 60 days before you 
become eligible for Medicare. In my opinion, that is a small price to 
pay for the guarantee that you are going to have Medicare to take care 
of your health costs for the rest of your senior years.
  The reason for this change being necessary is factual. When the 
Medicare Program began in the mid-1960s, the average lifespan of an 
American was a little less than 70 years. Today, the average lifespan 
is 78. Thank God. That means people are obviously living longer. Part 
of why they are living longer is they are getting better health care, 
but that wonderful fact explains why the average recipient takes three 
times as much out of the Medicare system as they put in.
  I will give you another number that says this in a different way. In 
1965, there were about 4.6 active workers for every Medicare enrollee 
in the program as a senior. In 2005, that went down to 3.8 active 
workers. The Medicare actuaries tell us, by 2050, that will drop to 2.2 
workers for everybody on Medicare at that time, and that means the 
burden on those 2.2 workers is going to be too high. The current math, 
therefore, is unsustainable, and it is why we have to change the 
eligibility age.
  According to the Congressional Budget Office, doing so, 65 to 67, 
will save $125 billion over 10 years. That is a substantial savings, 
which will contribute to keeping the program viable and paying bills 
for seniors.
  The other thing to say is that for those who fear what will happen to 
those seniors between 65 and 67 as they wait--some will have their own 
health insurance--but we did pass health care reform, and that is going 
to be there to cover those people through the health care exchanges.
  Second, I am proposing that we reform the complex Medicare benefit 
structure, which is wasteful, misunderstood, particularly by the 
beneficiaries and a lot of the providers, and prone to overutilization 
and fraud. That is, prescribing more health services because someone 
doesn't pay for it, Medicare does--but we all pay for it. The Medicare 
benefit structure is so confusing and so maligned with various 
deductibles, copays, cost sharing, caps, fees, forms, and limits that 
one would be hard-pressed to find a Medicare enrollee who really 
understands how their insurance coverage works. As a result, there is 
enormous waste and excess utilization, with services being paid for by 
the Medicare Program that are really not needed for the health of the 
individual. That, again, means more costs for the taxpayers.

  I think we can fix these problems by implementing a single, combined 
Part A and B deductible requiring a copay on all Medicare services and, 
if we choose, we can also do something new, which is create a maximum, 
out-of-pocket benefit that will give seniors peace of mind. In other 
words, they would only be required to pay up to a certain amount out of 
their pockets every year. So it guarantees them that if they have a 
serious illness requiring long-term hospitalization, they are not going 
to be forced into poverty or bankruptcy. This proposal was part of the 
Bowles-Simpson report, and it is a good one.
  Third, I think it is time to reform the premium structure. When 
Medicare was implemented, the premiums paid by the beneficiaries 
supported 50 percent of the cost of the program. In fact, when 
President Johnson signed Medicare into law, he noted that this equal 
contribution--50 percent from government, 50 percent from the insured--
was a critical part of the program. He said:

       And under a separate plan, when you are 65 you may be 
     covered for medical and surgical fees whether you are in or 
     out of the hospital. You will pay $3 per month after you are 
     65 and your government will contribute an equal amount.

  Fifty-fifty.
  Unfortunately, today, as a result of acts of Congress of various 
kinds--well-intentioned--Medicare enrollee premiums support only 25 
percent of the cost of the program--half of what they were intended to 
when President Johnson signed this extraordinarily progressive and 
beneficial law into effect. We make up the difference from funds taken 
out of our Federal budget--general revenues. That is part of why 
Medicare contributes to the exploding national deficits and long-term 
debt.
  So I am going to propose that we raise premiums for all new enrollees 
in Part B, which is the part that covers doctor expenses, starting in 
2014, so they pay for 35 percent of the program costs instead of 25 
percent. That will result in around a $40 increase in premiums. The 
fact is there is some indexing based on income in the Part B and Part D 
Programs, and, therefore, under the current law, the increase from 25 
percent to 35 percent will be paid by more people of higher income. I 
know asking anybody to pay more money for anything is not popular, but 
it is needed if we are to address the stranglehold Medicare puts on our 
annual budget and if we are to avoid something even more unpopular, 
which is the demise of the Medicare Program as we know it.
  Fourth, I think we need to reform the way Medigap policies work. 
Medigap policies are insurance policies that cover the gaps in a 
senior's Medicare coverage. They are designed to pay an enrollee's 
copays and deductibles so he or she would not be liable for a big 
hospital bill if they ever get sick. But study after study has found 
that the Medicare enrollees who have a comprehensive Medigap plan that 
pays all of the deductible and all of the copays, so the individual 
doesn't pay anything, use as much as 25 percent more services than 
those with the traditional Medicare Program, and that is because they 
don't have any impact on themselves for the utilization of services. 
Again, who pays for that extra utilization of services? Not the 
individual Medicare enrollee, the taxpayer, and it is not fair.
  Fifth, I think we have to increase revenues into the Medicare 
Program. We just can't save it by adjusting benefits and making changes 
in the premium structure. So I am going to propose that higher income 
Americans--in

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this case defining it as people making over $250,000 a year--contribute 
an additional 1 percent of every dollar of income over $250,000 to save 
Medicare as we know it.
  That is the outline of my plan. I wanted to come and describe it to 
my colleagues: We raise the eligibility age; charge a more financially 
sound premium; address overutilization and waste and fraud; and develop 
a more reliable funding stream so we can save Medicare, which is a 
great program, and which we would not save unless we make some tough 
decisions.
  I said earlier I think this proposal will save at least $250 billion 
in the first decade and keep the program alive for 20 years. I was 
encouraged that the very respected Committee for a Responsible Federal 
Budget said, after I disclosed this plan last week, that they believed 
it would save as much as $325 billion over the next decade and reduce 
spending even more in the following decades.
  I offer these ideas as a starting point in a discussion we have to 
have about how we can both extend the solvency and life of Medicare for 
the seniors who depend on it and reduce our national deficit and debt, 
which we will not do unless we reduce the drain on our National 
Treasury that the Medicare Program now represents. I am going to be 
drafting this as legislation, and I will circulate it to my colleagues. 
I hope it is of some assistance to Vice President Biden and the 
leadership group that is working with him as they prepare proposals to 
get America's ship of state back into fiscal balance.
  I know all of these are full of political risk, but the refusal of 
different parties of Congress to either cut spending on the one hand or 
raise taxes on the other is exactly why we are in the fiscal mess we 
are in now, and the more we wait to deal with it the harder it is going 
to be. At some point, there is going to be such a disaster that we are 
going to have to both impose Draconian cuts in spending and tax 
increases, and none of us want to do that. The way to avoid that moment 
is to do it now in a methodical and sequenced, longer term way.
  The fact is, unless we take risks together, the great losers--and 
those risks have to be across party lines. This has to be a moment when 
we say to each other across party lines: These are tough votes. I can 
demagogue this vote, I can go after you in the next election based on 
this vote, but I am pleading with you to cast this vote, and I will 
cast one that is risky, too, politically, so we can do something good 
for the country because, if we don't turn away from partisanship and 
turn toward shared responsibility, the big losers are going to be our 
great country and the wonderful people who elected us and sent us here 
to lead. I thank the Chair.
  Mr. President, I yield the floor, and I suggest the absence of a 
quorum.
  The ACTING PRESIDENT pro tempore. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. SANDERS. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The ACTING PRESIDENT pro tempore. Without objection, it is so 
ordered.
  (The remarks of Mr. Sanders pertaining to the introduction of S. 1200 
are printed in today's Record under ``Statements on Introduced Bills 
and Joint Resolutions.'')
  Mr. SANDERS. I yield the floor and I suggest the absence of a quorum.
  The PRESIDING OFFICER (Mr. Franken). The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. HARKIN. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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