[Congressional Record (Bound Edition), Volume 150 (2004), Part 14]
[Senate]
[Pages 18716-18717]
[From the U.S. Government Publishing Office, www.gpo.gov]




                       MEDICARE PREMIUM INCREASE

  Ms. STABENOW. Mr. President, I rise to speak on the announcement of a 
dramatic increase in the Medicare Part B premium for seniors and the 
concern the people of Michigan have about trying to pay a 17.5-percent 
premium increase for next year. Just a day after President Bush touted 
his efforts to help our seniors and the disabled cope with increased 
medical expenses, his administration announced the largest premium 
increase in Medicare's history, dating back to 1965.
  Unfortunately, nothing has been done about record increases in the 
cost of health care over the last 4 years. Now we see the largest 
premium increase, a 17.5-percent increase. We have seen it consistently 
going up since 2001. It is time to say enough is enough.
  Seniors are only going to see about a 3-percent increase in their 
Social Security cost of living. Yet the Part B premium comes directly 
out of that track. So instead of getting at least a 3-percent increase 
to help pay for food and the mortgage and utility bills, prescription 
drugs and so on, they will actually see a reduction of 14.5 percent in 
what they receive through Social Security.
  This is absolutely unacceptable. Unfortunately, instead of helping, 
Congress and this administration have pushed through a Medicare plan 
about which CMS Administrator McClellan has acknowledged that about a 
sixth of this year's premium increase results from the billions that 
Medicare is paying private health plans to encourage them to offer 
private health insurance. So what we see are conscious decisions that 
we made that have caused this increase to be as high as it is. I 
believe they were the wrong decisions, the wrong choices.
  It doesn't make sense and it is not fair that the millions of seniors 
who enjoy and want to stay in traditional Medicare--about 89 percent of 
seniors right now have chosen traditional Medicare over Medicare+Choice 
or being in an HMO--have to subsidize the big private health insurance 
companies and HMOs and the 11 percent of the seniors and disabled who 
have the ability or have the choice, even, to be in an HMO.
  Moreover, we have heard time and time again that the private plans 
are less efficient than traditional Medicare. I have shown charts on 
the floor as we have debated the Medicare prescription drug bill. We 
have seen the Congressional Budget Office analysis. In fact, we heard 
it again last week when the Medicare Payment Advisory Commission 
reported that CMS pays Medicare private health plans an average of 107 
percent of what it costs to care for the same beneficiaries under 
traditional fee-for-service programs.
  At a time when we are looking at great concerns about the long-term 
solvency of Medicare, looking at these huge increases that have 
occurred for seniors related to the premiums for Medicare, we are 
hearing from the Medicare Payment Advisory Commission that CMS is 
paying private plans an average of 107 percent of what it costs to care 
for beneficiaries under traditional Medicare.
  This makes absolutely no sense, no matter how you look at it. 
According to the report, Medicare payments to private plans cost 16 
percent to 23 percent more than traditional plans. So, basically, we 
can be spending up to 23 percent more on the approach of privatizing 
Medicare. That is what it is; this is a strategy to privatize Medicare, 
which the majority of seniors have not asked for, they have not chosen, 
and they don't want; and the icing on the cake is it costs up to 23 
percent more.
  I ask, if HMOs are so much better and more efficient, why do they 
need the extra dollars? I am certainly not opposed to HMOs. I have 
participated in the past, as my mother has, when she was on Medicare 
and when Medicare HMO was available in our community. She got dropped, 
unfortunately, when they chose to leave. Certainly, this is not a 
discussion about whether HMOs provide an important service or quality 
service.
  My concern is, within the context of Medicare, why, if they are so 
much better and more efficient, are we providing them more money? The 
debate on privatization was that somehow Medicare is going broke, the 
trust fund is going to run out of money; therefore, we have to 
privatize Medicare. And exactly the opposite result has occurred as we 
have begun to privatize Medicare. Premiums for seniors are going up 
faster than at any other time in our history. We hear from independent 
reports that it costs anywhere from 16 percent to 23 percent more to 
privatize Medicare than to keep it the way it is. With higher 
administrative costs, in fact, private plans are more costly than 
regular Medicare. So we are told they need subsidies because it costs 
more to administer them.
  Again, the whole point is to be more efficient, stretch the dollars 
farther, lower costs, so we can provide better prescription drug 
coverage for seniors and other kinds of preventive care they need, and 
that Medicare remains solvent and healthy for the future. Older 
Americans are staggering under the relentless increases in the cost of 
their health care and prescription drugs. We have all heard the 
stories. More older Americans will face harsh choices in meeting basic 
needs of health, food, housing, and paying utility bills. Meeting those 
challenges will be even more difficult as percentage increases in 
Medicare premiums greatly outpace the increases for Social Security. 
The increase will be especially painful because Social Security 
payments again are expected to rise less than 3 percent. I say 
``expected'' because we don't know how much or how little Social 
Security payments will be yet.
  Yet, this year, this administration decided to release the Medicare 
numbers the Friday right before Labor Day, right before the weekend 
when the news was focused on a hurricane. That is some holiday for 
millions of seniors who have labored their whole lives. We learned the 
OMB moved up the release of this huge increase by 6 weeks. In fact, we 
hear today in an article that the internal administration memo reveals 
that the unprecedented 17-percent increase in Medicare premiums

[[Page 18717]]

seniors will pay in 2005 was scheduled for release October 22. It was 
scheduled for release on October 22, along with Social Security COLA 
payments.
  Obviously, somebody looked at this and said: This is the largest 
increase in the history of the program. We want to make sure it is done 
as quietly as possible. So they chose the Friday before the Labor Day 
weekend, late in the afternoon, in the middle of a hurricane, to 
release the numbers.
  OMB received the premium notice from HHS on September 1 and cleared 
it for release only 2 days later. As I said, for the last at least 10 
years, they have done it in October along with Social Security.
  We are not going to only talk about premium increases here today. We 
have the ability to do something about it. I am proud to be doing 
something about this, saying enough is enough; the portion of this that 
comes from privatizing Medicare needs to be removed and we need to put 
these premiums back in line with Social Security.
  We know health care costs are going up for everyone--every family and 
every business. In a larger sense, we need to be addressing that as 
well, which we can do with the cost of prescription drugs. We can bring 
it to the floor and pass an effort to open the border and lower the 
costs in half by allowing pharmacists to do business safely with 
pharmacists in Canada and other places. There are other strategies. 
There are things we can do to address the broader issue of health care 
and we need to be doing them.
  But while this is happening, we should not be saying to our seniors, 
saying to someone on Medicare, that instead of addressing these issues, 
we are going to require you to pay an extra-large increase because of a 
policy made here to privatize Medicare that, in the face of all 
evidence, shows the administrative costs are higher and the costs of 
providing the kinds of care are higher. We now have one more report 
saying that. In the face of all objective evidence, the Congress and 
the President have moved forward to want to privatize Medicare, anyway, 
saying it will lower prices, when in fact it has resulted in the 
largest premium increase for seniors and the disabled in the history of 
the Medicare Program.
  I believe this is wrong. So I have introduced S. 2780, Keeping the 
Promise of Medicare Act, with 11 of my colleagues. My bill would cap 
the Part B premium at the same level as the cost-of-living adjustment 
so that seniors do not see real cuts in their Social Security benefits. 
In other words, we would at least keep seniors whole, moving in the 
right direction while we deal with these other issues, in terms of 
rising health care costs that need to be and must be addressed.
  We need a sense of urgency about this issue. Health care is not 
optional. This is one of the most urgent issues a family addresses. It 
is the most urgent cost right now that businesses across the country 
are facing. Yet we do not see that sense of urgency, even though I know 
colleagues on both sides of the aisle have concerns, have knowledge 
about this, and want to see something happen. We can do better than 
that. We can do better for our seniors through Medicare. We can do 
better for businesses that are desperately asking us for help. We can 
do better for our families, for every worker being asked to pay more 
for health care, or losing their job because the company cannot keep 
their health care plan and their jobs. There is more we can do, much 
more. I urge my colleagues to join with me in one step, S. 2780, 
Keeping the Promise of Medicare Act. We can, at minimum, start by 
saying to our seniors we are going to make sure you are not burdened 
with the costs of paying for these policies to privatize. We will keep 
you whole by capping this increase at the same level as the cost of 
living for Social Security. I hope we will vote on this bill before we 
leave and have the same sense of urgency about it that those paying 
their bills have every day.
  I yield the floor.
  Mr. DAYTON. Mr. President, I commend my colleague from Michigan. I am 
a proud cosponsor of her legislation. She has been a true champion for 
seniors and affordable prescription drugs, and she continues that 
leadership today.

                          ____________________