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[Congressional Record Volume 141, Number 68 (Wednesday, April 26, 1995)]
[Senate]
[Pages S5686-S5687]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

                    MEDICARE: THE TICKING TIME BOMB

  Mr. FRIST. Mr. President, I rise to discuss the approaching 
insolvency of our Medicare Program.
  The Clinton administration has confirmed that Medicare is going 
bankrupt. We must act now to save it. We must reform Medicare to 
protect it, to preserve it, and to improve it.
  Next year, for the first time in its 30-year history, the program 
will begin deficit spending. And on April 3, the Medicare Board of 
Trustees announced that Medicare will go bankrupt by the year 2002. In 
7 years--well before I will be eligible for benefits--the program will 
have exhausted all of its resources and will cease to exist in its 
current form. We must act now.
  This is not new information--Congress has been warned repeatedly of 
the Medicare time bomb. Mr. President, the clock is ticking--we must 
take action this Congress to save this vital program. I come before you 
today to discuss the successes and failures of this program, and to 
begin to look for ways to protect and preserve its long-term health.
  What is Medicare? It is a Government program which gives 32 million 
older Americans and 4 million individuals with disabilities access to 
the private health care system. Medicare is actually made up to two 
entirely different programs: A hospital insurance program, which is 
compulsory for seniors, and a physician insurance program, which is 
voluntary, with 96 percent of all seniors participating in this 
voluntary insurance program.
  Medicare's hospital insurance program--part A--is funded by a payroll 
tax on working citizens, a tax which entitles them to future benefits.
  The physician insurance program, part B, in contrast, is funded by a 
combination of general tax revenues and premiums paid by the 
beneficiary.
  Medicare has been very successful, successful in providing access to 
quality care. More than 37 million Americans today are covered by the 
program. Today's elderly live longer, live healthier lives, and enjoy a 
better quality of life than ever before. Medicare participants are 
extremely satisfied with the overall care they receive. Yet, Medicare 
has become a victim of its own success. All will be lost if we do not 
act to save Medicare.
  Over the years, many have found fault with the program: it does not 
cover comprehensive benefits; it does not protect out-of-pocket costs; 
it does not really provide incentives for consumers to maintain cost-
conscious behavior; it does not reward providers with keeping people 
healthy; and its costs clearly are growing out of control faster than 
the Nation's economy, faster than the budget as a whole, and faster 
than twice the rate of inflation. Medicare spending rose by 11 percent 
last year, while private sector health care spending rose by only 4 
percent.
  Thus, each of us comes to the Medicare Program with the hope of 
addressing one or more of these problems. As a citizen legislator, one 
who comes to the Senate directly from the private sector, I approach 
this challenge wearing many hats. I come to the table as a health care 
provider, a physician who on a daily basis has served the personal 
health care needs of thousands of Medicare patients. I come to the 
table as the son of two active parents, both of whom are 84 years of 
age. They have been beneficiaries of Medicare as they were treated for 
heart attacks, colon cancer, pulmonary edema, a fractured neck, 
bleeding ulcers, kidney failure, a broken arm, phlebitis, and a stroke. 
I come to the table as a father of three boys whose generation will be 
working to the pay the bills for my generation. And I come to the table 
as a legislator who sees the looming crisis of Medicare staring us 
straight in the face.
  When Medicare was designed in 1965, the goal very clearly was to 
provide senior citizens with greater access to our country's health 
care system. Medicare at that time was structured to mirror the private 
system of the time which in 1965 was primarily Blue Cross and Blue 
Shield fee for service. That means Congress paid providers based solely 
on the cost of the care delivered. There was no fee schedule of 
negotiated rates with providers. There was no real justification of 
costs. Furthermore, at that time Medicare insulated providers from the 
Government by allowing them to work through fiscal intermediaries and 
carriers, similar to private insurance.
  Now, Medicare is an insurance program that pays for private services. 
Great Britain took quite a different approach. I spent almost a year as 
a physician in England, and I as a physician worked directly for the 
English Government receiving a salary from the English Government as an 
employee of the National Health Service. The English have replaced 
their national insurance program and moved directly into Government 
provision of services. Whereas our country relies on the private sector 
for control and direction, England relies on direct Government 
intervention. This underlying philosophy is fundamental to our 
understanding of Medicare. Medicare was established to give seniors 
access to the very same health care system available to all other 
Americans.
  But as the American medicine delivery systems have changed over the 
last 30 years, and matured and diversified, Medicare has remained 
stagnant. Medicare fails to give seniors access to the full range of 
plans currently available to all other Americans. The private system 
has evolved and Medicare has failed to keep up. Changes and 
improvements are required today before seniors and the disabled fall 
even further behind.
  Managed care illustrates that point. Today, 63 percent of working 
Americans obtain their care through some type of managed care program. 
In contrast, only 9 percent of seniors are enrolled in some type of 
managed care. Yet, it is important for people to understand managed 
care is only one of the options in the private system today. There are 
many others. And reasoned Medicare reform would open the Medicare 
Program broadly to the many options that are available to all other 
Americans in our private system today. It would allow seniors the 
freedom to direct their Medicare money to the plan of their choice. For 
some, that would mean an employer-sponsored plan. For others, it would 
mean an indemnity-type plan, and for still others a looser form of 
managed care. But the bottom line is that the Government should no 
longer restrict a senior's choice of health plans.
  New to this body, I find it hard to understand why Congress has 
failed to pay attention to the ticking time bomb--Medicare. By failing 
to address the issue head on, we only delay the inevitable and make it 
more difficult for our successors. If we choose not to preserve 
Medicare's integrity, we resign ourselves to either substantial benefit 
reductions for seniors or repetitive tax 
[[Page S5687]] increases. We must act now. Either my generation, the 
children of today's Medicare beneficiaries, will have greatly reduced 
opinions in the future, or our children will incur unprecedented tax 
increases.
  Now, the President of the United States has failed to address this 
imminent financial crisis. In fact, the Clinton administration predicts 
Medicare expenditures will grow by a staggering 66 percent over the 
next 5 years. Yet, despite this forecast and despite the findings of 
the Medicare trustees and the entitlement commission, the President 
failed in his fiscal year 1996 budget to recommend even one measure to 
save Medicare.
  We must act now. I expect that the President will rely simply on tax 
increases to maintain the program in the future, and that will work 
only for a short time, because it fails to address the underlying cause 
of the crisis. If nothing is done, the Medicare portion of FICA taxes 
would have to be raised by 125 percent. That is more than $700 taken 
out of a $40,000 salary. That is intolerable. Structural improvement is 
necessary if we are to protect and preserve Medicare in the long run. 
We can and will protect and save Medicare if we act now.
  I will be taking time over the next several days to come back to the 
floor to continue this discussion of how best this Congress is to save 
Medicare.
  I yield the floor.
  Mr. BRYAN addressed the Chair.
  The PRESIDING OFFICER. The Senator from Nevada.
  Mr. BRYAN. I thank the Chair.
  Mr. President, I ask unanimous consent I be allowed to speak for a 
period of time not to exceed 15 minutes as if in morning business.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. BRYAN. I thank the Chair.
  

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