[Congressional Record (Bound Edition), Volume 158 (2012), Part 12]
[Senate]
[Pages 16727-16728]
[From the U.S. Government Publishing Office, www.gpo.gov]




                            THE FISCAL CLIFF

  Mr. GRASSLEY. Mr. President, a week ago I visited with my colleagues 
about the necessity of taking a closer look at the problems of Medicare 
and taking advantage of the opportunity we have now with the fiscal 
cliff debate, to bring attention to it because I do not think it was 
getting enough attention.
  There is no greater threat to America's growth and prosperity than 
our uncontrolled national debt. Currently, the country's debt exceeds 
$16 trillion. We face the so-called fiscal cliff that could send our 
economy into another recession. In these difficult times, we are 
challenged by the people we represent to find real solutions, not 
short-term bandaids.
  As we move forward, it is clear that we must discuss spending. I 
emphasize that word, ``spending.'' I know President Obama is 
hyperfocused on increasing taxes as part of his deficit reduction 
proposal. I think the election shows he is legitimate in doing that, 
but he could have declared victory about 3 weeks ago. And in the 3 
weeks since then he could have spent time talking about the expenditure 
side of the ledger because if we are going to be serious about reducing 
our debt, we must talk about spending--not sometime next year, not only 
after we talk about taxes, we must talk about spending and talk about 
it now.
  We need to have a thoughtful conversation that focuses on where 
Federal spending most calls for control and containment. That is the 
purpose of my charts today. That is the purpose of my remarks. We must 
have a thoughtful conversation about where our Federal spending is 
taking us. It is past time for the President to engage on health care 
entitlements with proposals that affect the long-term growth of health 
care costs. I am going to try to dissect this issue into 3 divisions 
and point out where the problems are.
  The first division I will do, as shown in this chart, is the total 
government spending with everything except the interest on the national 
debt. By the way, this chart is from the Congressional Budget Office. 
It is not something I put together. It details, as I said, noninterest 
spending as a percentage of the gross domestic product.
  We can see the percentages of GDP of health care, Social Security, 
and other noninterest spending. So we can see over the period of the 
next 25 years fairly level noninterest spending. We can see that Social 
Security, even though it has funding problems over the next 25 years, 
is going to be fairly constant as well. But when we get to health care 
costs, we can see a very dramatic rise. I suppose I should have had 
this on bigger charts so it would be more dramatic than it shows.
  So this is the problem I want to address today. The driver of the 
cost is health care. And even though this chart only goes out 25 years, 
the board of trustees focuses 75 years ahead on Social Security and 
Medicare. So if this chart went out 75 years on Medicare, it would show 
about a $40 trillion deficit.
  So it is a very dramatic increase compared to other parts of Federal 
Government spending. I want you to look closely at these longer term 
projections as I proceed with some other divisions of this problem and 
segmenting the issue of health care, Medicare and Medicaid.
  It is pretty clear that we must address the growth of health care as 
well as entitlements. I do not think my colleagues on the other side of 
the aisle can walk away from the issue. We should start by looking at 
where we are spending the most money in our health care entitlements.
  This next chart that we will put up divides this into three 
categories: Medicare-only health care costs, Medicaid-only health care 
costs, and then what we call the duals. The duals are people who 
qualify for both Medicaid and Medicare.
  The middle group, as I said dual eligible, account for just over 10 
percent of the entire Medicare-Medicaid population. But we can see by 
the chart that the amount of money that is spent on that 10 percent is 
much greater than either Medicare only or Medicaid only. When we talk 
about the need to find ways to control spending for these dual 
eligibles, it is for a good reason. They are poorer, they are sicker, 
and more often they are in need of more extensive, as well as 
expensive, coordinated care.
  The inefficiency created in the misaligned incentives of Medicare and 
Medicaid is frequently cited as one of the areas in health care in the 
greatest need of improvement, not only for the quality of health care 
but also maybe a better caretaker of the taxpayers' money.
  ObamaCare created an office in CMS charged with creating 
demonstration projects to allow for greater coordination of dual 
eligibles. Those demonstration projects have been moving forward at 
breakneck pace, with nearly half of the States looking to participate. 
Essentially, all demonstrations under ObamaCare seek to give States 
greater control of the acute care of the dual eligibles--in other 
words, of this group here. CMS has the incredibly broad legal authority 
under ObamaCare to take these demonstrations nationally if they are 
successful.
  No one argues that the way Medicare and Medicaid coordinate the dual 
eligibles works very well. The coordination today is akin to asking me 
and somebody else to compose a letter with the other person writing the 
consonants and my writing the vowels. Giving the States greater control 
over duals may be a good answer. Some States might do a good job.
  But when we consider the fiscal challenges faced by the States, this 
should be a decision considered by Congress examining all possible 
alternatives and in consultation with States rather than something 
occurring through this regulatory action that we are seeing under 
ObamaCare and what CMS is doing with those demonstration projects.

[[Page 16728]]

  Furthermore, moving more responsibility to the States may miss a real 
opportunity to address an even larger cost problem. While some dual 
eligibles are expensive and need extensive long-term support and 
services, there are dual eligibles who, in fact, are relatively low 
cost. More importantly, though, is that not all the expensive Medicare 
beneficiaries are dually eligible.
  Take a look at this chart. In this chart we see the most expensive 
individuals in the Medicare Program.
  These are beneficiaries who have multiple, chronic conditions and 
functional impairments. Fifty-seven percent of them are eligible for 
Medicare only, and 43 percent of them are dually eligible for Medicare 
and Medicaid.
  We have numerous studies showing that the care for high-cost, 
Medicare-only beneficiaries is just as complex, and the quality of care 
calls for as much attention as that of the dual-eligibles.
  So, then, legitimately ask the question of, Why are we splitting 
these two groups? These are two groups of similarly situated 
individuals. They all have need for improved care. They all have 
multiple conditions that are very expensive. Why do we tell some 
people: You get Medicare solely because you have income--income that 
doesn't qualify for Medicaid--and then we tell some people: You should 
get Medicaid solely because you don't have enough income. Why is it a 
good idea to give States control of poor beneficiaries? Why should low-
income beneficiaries get one of 50 different models to coordinate their 
care and people with higher incomes get Medicare only? Why is CMS 
pushing States to take a greater role with a complex, expensive 
population when they are also being asked to find the resources to 
cover poor individuals in Medicaid and develop exchanges to cover 
people in the private market?
  Congress should consider what States should do in health care and 
what are reasonable expectations in those States. Congress should 
involve States in this conversation. If Congress wants States to 
administer benefits for the aged, the blind, the disabled, and low-
income individuals, along with managing the exchanges for individuals 
with incomes over or up to 400 percent of poverty, Congress can do so.
  If health care is the primary responsibility of States, it is because 
of decisions made by this Congress. States are being asked to do so 
much in health care while also overseeing education, public safety, 
roads, bridges, and meet, in most cases, a balanced budget requirement.
  So I think Congress needs to step back and ask where the States are 
best able to focus on health care. We should ask States.
  When we look at the long-term spending growth of our health care 
entitlement, we should use this as an opportunity to reconsider the 
role of the States in providing health care coverage. What we ask of 
the States should be thoughtfully considered in any discussion.
  I know there are people telling us we shouldn't talk about health 
care entitlements now. President Obama hasn't come to the table yet on 
this issue. We don't have a choice. All you have to do is look at the 
numbers I have given you. Look at the spending. We only make the 
problem worse by putting it off.
  We can save Federal dollars by extracting more from beneficiaries, 
providers, and States, but that is not going to do the same thing we 
need to do when we talk about health care changes. It is the very same 
thing we went through when Obamacare was being considered by a 
bipartisan group.
  We need to do things to change the long-term growth curve of Medicare 
and Medicaid costs generally. That needs to be done right now. We need 
to talk about solutions to actually lower the growth curve and do it 
sooner than later.
  We are $16 trillion in debt. One of every $4 we will spend in this 
next decade will be on Medicare and Medicaid. When you get further down 
the road than 10 years, it is going to grow even more dramatically. We 
will see health care entitlements double as a percentage of GDP in the 
next 25 years. I said the trustees look ahead 75 years, and it is even 
a bigger problem 75 years out.
  If we want Medicare and Medicaid to not only survive--and I do--but 
also to thrive for the next generation, we need to be willing to ask 
fundamental questions and seek solutions that can affect the growth 
curve. I sincerely hope we are able to look for solutions that can make 
a real difference.
  I yield the floor, and I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. CARDIN. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER (Mr. Merkley). Without objection, it is so 
ordered.

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