[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
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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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