[Congressional Record (Bound Edition), Volume 154 (2008), Part 3]
[House]
[Pages 3105-3107]
[From the U.S. Government Publishing Office, www.gpo.gov]




                            MEDICARE CRISIS

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 18, 2007, the gentleman from Texas (Mr. Barton) is recognized 
for 60 minutes as the designee of the minority leader.
  Mr. BARTON of Texas. Mr. Speaker, in 1965 the hot car on the American 
market was a Ford Mustang, which cost less than $2,000. The President 
of the United States was Lyndon Johnson. The entire Federal budget was 
less than $100 billion. The war that was on the front pages was the war 
in south Vietnam. The Super Bowl didn't exist. Cell phones didn't 
exist. If you wanted to use a computer, you typed out your program on 
data index cards and submitted them in a batch to a mainframe computer. 
I believe the dominant mainframe was an IBM 360. Gasoline cost 
approximately 25 cents a gallon, and a little-noticed program was put 
into effect to help our senior citizens with their health care costs 
called Medicare.
  Forty-three years later, that Medicare program is going to expend 
over $400 billion to provide health care for over 45 million senior 
citizens in every State and territory of the United States. If 
something is not changed between now and the year 2018, in the year 
2018, or 2019, the Medicare Trust Fund is going to be bankrupt.
  If we look back in 1965 at how health care was provided and look at 
how it's provided in 2008, you would see numerous differences. We now 
focus, in Medicare, through the Medicare Advantage programs, which 20 
percent of our seniors have chosen, on preventive care. A lot of 
Medicare spending today is through drug therapy, as opposed to surgery, 
things of this sort.
  But the one thing that's constant has been the continuing escalation 
in cost. Medicare has averaged double digit increases in cost the last 
10 years, and it's expected, by the year 2018, to be over $800 billion.
  Medicare spending this year of over $400 billion is going to exceed 
by a factor of 4 the entire Federal budget back in 1965, the year that 
was created.
  So because of the increase in the population, the increase in the 
complexity, the diversity of health care therapies, several years ago 
the Congress put into place what's called the Medicare trigger. The 
Medicare trigger says that in any year that Medicare spending or 
Medicare revenues come from 45 percent or more of the general revenue, 
i.e., the premiums that Medicare beneficiaries and the cost share that 
companies and Medicare payors pay into the system, when more than 45 
percent of the funds going into Medicare come from the general U.S. 
Treasury, the Medicare trustees have to issue to the Congress a report. 
And if this happens 2 years in a row, the President of the United 
States has to submit a proposal to the Congress on how to bring 
spending back below the 45 percent trigger. That happened for the first 
time last year, in fiscal year 2006, and it's happened again this year, 
in the fiscal year that just ended, fiscal year 2007.
  So several weeks ago the President and the Secretary of Health and 
Human Services presented to this Congress a report that did two things: 
Number 1, it did announce that the spending had exceeded 45 percent of 
the revenues of the general treasury, and Number 2, it put forward an 
outline of the proposal on how to bring that spending back below the 45 
percent trigger.

                              {time}  1945

  The Congress does not have to act on the President's proposal. The 
Congress can initiate one of its own. In fact, if 70 Members of this 
House decide that they want a different proposal than the President of 
the United States, if 70 Members will sign a letter, I believe, to the 
Speaker of the House and also to the chairman of the Budget Committee, 
those 70 Members will present their proposal to the Budget Committee. 
If the Budget Committee holds hearings and certifies that the proposal 
that's been submitted by the 70 Members does, in fact, meet the 
requirements of the law, that proposal then is ordered reported to the 
House of Representatives for an up-or-down vote.
  So sometime in the next several months, you are going to hopefully 
see a number of proposals submitted to the Budget Committee on how to 
deal with the pending crisis in Medicare. And I would encourage all 
Members of this body, since we all have Medicare recipients in our 
congressional districts, to be a part of some group that tries to 
address this problem.
  Now, the President's proposal, again, it is not a definitive 
legislative language developed proposal. It's more of an outline of 
policy objectives, but the policy objectives are pretty straight 
forward: number one, Medicare beneficiaries that have higher incomes 
would pay slightly more in their premiums so you would begin to have a 
graduated means-tested premium increase based on your ability to pay 
the Medicare premium; number two would be a Medicare liability reform 
proposal that has been talked about for years. That, by itself, would 
probably save $180 billion over 5 years or so. There would be a 
requirement for more pricing transparency and more openness, so that 
Medicare beneficiaries could see what prices they're paying or are 
being paid on their behalf. And also there are some proposals, I 
believe, on quality indexing, quality of reporting so that, again, 
before the beneficiary decides where to have a particular procedure 
done or which doctor to use, he or she might have some data on the 
quality of the health care that's provided by various Medicare 
providers.
  All in all, the President's proposal is very modest, but it's 
certainly one that needs to be seriously considered; and, again, the 
need for doing something on Medicare is something that we need to begin 
to address as a Congress. The Medicare trustees have reported that if 
current policies are not changed within the next 11 years, the Medicare 
trust fund will go bankrupt. What that means is if you are 54 years old 
or younger, when you retire there will be no money in the Medicare 
trust fund to pay your Medicare benefits which you are, by law, 
entitled to at age 65.
  So this is a problem that we can't put off for 20 years or 50 years. 
In my opinion, we can't put it off for any years. Again, we need to 
begin to address it immediately, we need to address it in this 
Congress, and we need to hopefully address it in a bipartisan fashion.
  I now yield to the distinguished member of the Energy and Commerce 
Committee, the ranking member of the Veterans' Affairs Committee, the 
gentleman from Indiana (Mr. Buyer).
  Mr. BUYER. Mr. Speaker, I want to thank some of my colleagues for 
their vision back in 2003. They recognized that Congress does a good 
job talking about Medicare and the concerns about the future, but they 
realize that very few are very committed to addressing Medicare's 
challenges.
  We, as a Congress, came together and worked with President Clinton in 
the 1990s when we did the Balanced Budget Act; and at that time, we 
even realized that Medicare was growing, the growing senior population 
was going to be a tremendous challenge to us; and in 2003 a small group 
of Members of Congress, they put in trigger legislation, and now this 
trigger, as the chairman said, goes into effect if the Medicare board 
of

[[Page 3106]]

trustees certifies in two consecutive years that 45 percent of Medicare 
spending will come from general revenues in any of the upcoming 6 
years.
  Last year, the trustees certified this Medicare spending level; and 
again this year, they have certified that the spending is exorbitant 
and that the trigger has now been hit.
  As directed by law, the President had no choice. He sent legislation 
to Congress to address this spending. We in Congress have a 
responsibility to the American people to act on the President's 
proposal. Unfortunately, last year my Democrat colleagues tried to 
remove this trigger so that they can continue to put off addressing the 
unsustainable cost of our Medicare program. Under their CHAMP 
legislation, they slipped in a provision that would have removed this 
trigger. In effect, it would have allowed Congress to continue to 
ignore Medicare's growing cost.
  Even worse, the Democrats decided to ignore Medicare's growing costs; 
and when they do that, frankly it just shoves these challenges off into 
the future and onto the backs of our children, and that is something we 
should not be doing.
  Last week, the majority leader and the minority leader introduced a 
bill to move forward with the President's proposal to bring Medicare 
costs back under the trigger level. That is the responsible thing to 
do.
  This Congress now should act on this legislation. According to the 
Centers for Medicare and Medicaid Service Health Care Spending, the 
United States will hit $4.3 trillion by year 2017, nearly double that 
of 2007, equating to nearly 20 percent of our gross domestic product. 
In 2007, health care spending accounted for 16.3 percent of our gross 
domestic product. But more of that cost is expected to shift to 
government agencies even as the Federal Government struggles to shrink 
our own deficits.
  Medicare spending alone is expected to grow to $844 billion in year 
2017. That's up from the $427 billion we spent just last year in 2007. 
So Congress must stop talking about Medicare and its potential 
insolvency, and we must take action.
  Medicare is the single largest purchaser of health care in the United 
States; and within the next 11 years, the Medicare trust fund could 
potentially go bankrupt. Our Nation is at risk to lose this important 
health care program for seniors if we do not reform this program. 
Future generations will not have access, and that would be unfortunate.
  This trigger has forced Congress to be honest with the American 
people about Medicare's dim future. The future of our Medicare program, 
as I said, is at risk. I ask my colleagues to join with me to change 
this trend and protect Medicare for future generations, and we can only 
do that by working together.
  Mr. BARTON of Texas. Mr. Speaker, I want to recapitulate why we are 
here this evening taking this Special Order. As I pointed out earlier, 
Medicare is a mandatory program for senior citizens over age 65. It was 
established in 1965, which is 43 years ago. I don't exactly remember in 
the first year how many citizens were covered and how much money was 
expended, but my recollection is that several million senior citizens 
were covered and expenses were in the order of a magnitude of 6 or $700 
million. In the last year that we have numbers for, 45 million 
Americans were covered and the costs were over 400 billion.
  Now, it is a good thing that we have 45 million senior citizens in 
this country. Those are our grandparents and great grandparents and 
great aunts and uncles. They are certainly the generation that has been 
pointed out that fought the great wars of World War II and Korea and 
Vietnam. They have ushered in an amazing American economy unsurpassed 
in the history of the world in terms of its ability to generate wealth 
and economic prosperity. And they are well deserving of the benefits 
that we are paying out for Medicare.
  So the problem is not that our senior citizens don't deserve the best 
health care in the world, and it is not that we are living healthier 
and longer. The problem is, quite simply, how do we pay for it. Average 
expenditures for Medicare are on the order of magnitude of about $7,000 
per person per year. And to put that in perspective, that is more than 
most families pay per person for their food or for their housing.
  If nothing is done on the current Medicare program in terms of its 
policies and the way it's structured in 11 years, in 2019, the Medicare 
trust fund is going to be bankrupt. As I pointed out earlier, if you 
are 54 years young or younger, when you retire, there will be no 
Medicare. Now I'm 58. So if I were to retire at age 65, in 7 years I 
would have 3 years of Medicare benefits before the program went 
bankrupt. My wife, Terry, who's younger than me, when she retires, she 
would have no benefits. None of my children would have benefits. None 
of my grandchildren would have benefits.
  So this is not a program that we can just let go on automatic pilot. 
We need to begin to fundamentally and in a focused way look at the 
Medicare program as it exists today, not cut people off the program, 
not change it so that there are fewer benefits. We need to look at 
Medicare and try to bring our technology to bear, bring our management 
processes to bear, all of the innovations that have happened in the 
last 40 years.
  As I pointed out earlier, if we were still making the 1964 Mustang, 
that was a great car in 1964, 1965. But it's hardly the car that people 
want to buy today. We didn't have cell phones in 1965. Today, everybody 
in America has a cell phone. In fact, there are more cell phones than 
there are hard line phones. If you look at computers, the computer in 
1965 was a mainframe computer that you had to go to a central location 
to use. I would guess that almost every American citizen has some 
access to a personal computer today.
  So a lot has changed in many fields since 1965. But in Medicare, we 
have the same basic program funded the same basic way.

                              {time}  2000

  So we need to look at ways to change that program and to bring it 
into the 21st century. I think some of those ideas are going to be in 
the form of preventive medicine, like we have in those seniors, about 
20 percent of those 9 million that have chosen a Medicare Advantage 
plan. There may be some ways in terms of sharing costs; as the 
President has suggested, Medicare beneficiaries that are more well-to-
do could pay a higher share of their premium.
  We have the whole issue of health information technology, or health 
IT. It's suspected and predicted that if we would bring health 
information technology to bear on Medicare, you could save tens of 
billions, perhaps more, each year just by using that technology that's 
currently in the private sector.
  So, there are a number of great ideas, but because of this Medicare 
trigger, this year, a certain percent of Members, I believe it is 70 
Members, but a number on that order of magnitude, if they have a plan 
to restructure Medicare, to reform it, to bring the spending in total 
below 45 percent of general revenue, they can submit their plan to the 
chairman of the Budget Committee. The chairman of the Budget Committee 
will hold hearings to certify that the plan does, in fact, meet the 
Medicare trigger recommendations. And if it does, my understanding of 
the law is that those plans have to be brought to the floor; they have 
to be voted on by the House of Representatives. Now, I'm not clear 
exactly the procedure for the rules for bringing these proposals to the 
floor, whether every proposal is given a vote on the floor or whether 
there are only certain proposals that are certified by the Rules 
Committee, but my understanding is that all proposals that meet the 
budgetary cutoff do get an up or down vote on the House floor.
  So, if you're a member of the majority, of the Democrat Party, and 
you've got an idea and you can get 70 Members to support it, your plan 
can be voted on. If a bipartisan group of Members bring a proposal, 
that plan can be voted on. If the Republican leadership, whom I'm doing 
this Special Order for,

[[Page 3107]]

has a plan, it can be voted on. If the President can get 70 Members to 
sign under his plan, it can be voted on. I personally don't see any 
problem with having different plans on the floor. The bottom line is to 
vote on some plan that begins to restructure and reform Medicare. 
Again, not trying to cut people off the program, not trying to tell our 
senior citizens we're going to do away with Medicare; what we should be 
telling our senior citizens is that we want Medicare to be there not 
just for another 11 years, but we want it to be there for another 50 
years, another 60 years, not for people that are just now over 60 and 
over 70, but for our children and our grandchildren.
  This is a program that, again, in 1965, my recollection is it cost 
less than $1 billion a year. This past year it cost over $400 billion. 
And by 2018, it's going to cost over $800 billion. And by 2036, it's 
going to cost more than the entire Federal budget today, which is over 
$2 trillion.
  So this is not something that we can just put on the back shelf and 
not do anything about. It is something that we need to take action on. 
And again, because of the Medicare trigger, we have the ability, under 
expedited rules, to put these proposals to the Budget Committee, the 
Budget Committee certifies its proposal will meet the cost savings 
requirement, those plans will come to the floor and be voted on 
sometime this year before we go home in October for the elections in 
November.
  So, Mr. Speaker, I want to bring to the attention of the House the 
Medicare trigger language and that it does require the President to 
submit a proposal. He has done so. It does require the Budget Committee 
to meet on that proposal and any other proposals that 70 Members of the 
body can put before the Budget Committee. And it does require that the 
House vote on the bill, or the bills, later this year.
  We need to address it. The Medicare trustees have pointed out that 
for 2 years in a row the spending has exceeded 45 percent of the 
general revenues going into the program, and so it is time for us to 
begin to address it.
  Mr. Speaker, I see no other Members present. So with that, I would 
humbly suggest that everybody begin to think about what to do to 
protect and reform Medicare.

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