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[Congressional Record Volume 141, Number 73 (Thursday, May 4, 1995)]
[Senate]
[Pages S6136-S6138]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

                                MEDICARE

  Mr. WELLSTONE. I thank the Chair.
  Mr. President, we are, in a very short period of time, going to have 
a historic debate about the budget and about priorities in our Nation, 
the United States of America. Part of that debate--and I know my 
colleague from California will be speaking to this as well--will focus 
on Medicare.
  As I have followed over the last couple of days some of the press 
conferences and some of the discussions taking place about Medicare, I 
think it is really important to come to the floor and speak about 
Medicare, not so much in political terms but in substantive terms.
  We are faced with a real irony. It may very well be that a good many 
of my colleagues will now discover that health care reform--not just a 
focus on Medicare or Medicaid but real health care reform--is a 
pressing, compelling issue in this country.
  First of all, Medicare is a benefit program. It is not just an 
actuarial program. It is important for me to make this point, Mr. 
President. My mother and father are no longer alive. Both actually had 
Parkinson's disease, but I can tell you, for my parents in their older 
age, Medicare, imperfections and all, was extremely important and it 
continues to be extremely important to senior citizens in this country.
  It is not by any means perfect. It does not cover catastrophic 
expenses, it does not cover prescription drug costs, and elderly people 
over 65 years of age pay four times as much out of pocket as citizens 
under 65 years of age. But I think this focus on the budget is going to 
get us to the point where all of us understand some realities about 
health care and health care policy in the United States.
  Eighty-five percent of Medicare expenditures pay for care for seniors 
with household incomes of less than $25,000 a year. So let us also 
understand that these benefits help hard-pressed people, not people who 
have plenty of income on their own.
  Second point, Mr. President. I was on the floor the other day in a 
debate with one of my colleagues--I think it was the Senator from 
Texas, Senator Gramm--and he was talking about his efforts to block 
health care reform in the last Congress and he was proud of that. In 
another point in time, we will have a debate, and I do not have a 
practice of debating colleagues when they are not on the floor, but I 
will say, as a matter of fact, one of the reasons that we are now 
dealing with the whole question of Medicare and how to finance Medicare 
is because we did not pass any comprehensive health care reform last 
Congress.
  Mr. President, 89 percent of the growth in Medicare spending since 
1980 has been due to medical inflation, general inflation, and changes 
in enrollment. Let me go over those.
  Medicare is a benefit program that, of course, we have to finance. It 
is part of what we are about as a country. It is, indeed, a contract 
with senior citizens, and as we move into the next century, a larger 
percentage of our population are older Americans, and a larger 
percentage of those older Americans are older. That means that the cost 
of the program goes up.
  Then there is the issue of general inflation. There is not much we 
can do about the first issue that I mentioned. And there is not that 
much we can do about general inflation, but we can look at medical 
inflation.
  The interesting thing is that the Congressional Budget Office made it 
clear last Congress--I did not say Democrat, Republican, but CBO--that 
there are two ways you can contain medical costs. One is through global 
spending caps, as in the single payer proposal, or, if you do not 
prefer that, by placing some limits on insurance premiums. Some limit 
on insurance premiums is a very effective way of containing costs.
  But, Mr. President, if you just focus on one segment of the 
population and you cut $250 to $350 billion
 between now and the year 2002, you will have a severe impact on that 
population. Let me say to my colleagues, when you were talking about 
rationing last Congress when we were talking about comprehensive health 
care reform, when you were yelling and screaming about rationing last 
Congress, I did not think that you had a case to make. But if you are 
just going to target Medicare, if you are going to cut expenditures for 
just one segment of the population, then you will ration by age, you 
will ration by disability, and if you throw Medicaid into the equation, 
you will ration by income. But now I do not hear my colleagues talking 
about rationing at all.

  Second of all, if you make these cuts in Medicare, you are going to 
throw this whole health care system into--and I do not want to 
exaggerate--I would say a fair amount of chaos, if not utter chaos.
  I ask unanimous consent to have printed in the Record a statement 
from the National Leadership Coalition for Health Care Reform, which 
includes many businesses in this case.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                           The National Leadership

                             Coalition for Health Care Reform,

                                    Washington, DC, April 3, 1995.
     Senator Paul David Wellstone,
     Hart Senate Office Building, Washington, DC.
       Dear Senator Wellstone: We are writing to express our 
     serious concerns about the proposed cuts in the Medicare and 
     Medicaid programs. Our Coalition is the nation's largest 
     nonpartisan alliance of business, labor, consumers, and 
     providers dedicated to improving the health care system--in 
     order to enhance the availability, affordability, and quality 
     of care. (Our membership list is attached.)
       We have long been on record as strong supporters of cost 
     containment for both public and private payers. Until we 
     contain costs, our citizens cannot be secure in coverage for 
     themselves and their families. However, we believe that 
     further drastic cuts in Medicare and Medicaid, coming on top 
     of deep cuts legislated in 1993, would pose program 
     difficulties and force the provider community to increase the 
     shifting of costs to the private sector. Such cost-shifting 
     would result in even more limited access, especially for low 
     and middle-income Americans, and an increase in the number of 
     uninsured.
       We are troubled by approaches that focus primarily on 
     cutting the price of services. One of our central concerns--
     as patients, payers, and providers--is that the quality of 
     care be enhanced by changes in the health care system. If 
     draconian cuts are made in prices, quality could further 
     suffer. We urge a balanced approach, one that would control 
     total system cost while improving quality, stopping cost-
     shifting, and expanding universal coverage.
       We believe that if our nation were to concentrate on better 
     outcomes and quality initiatives in addition to measures 
     targeted on costs, there would be significant gains both in 
     the appropriateness and efficiency of services, and in the 
     reduction of costs. Strong quality assurance mechanisms are 
     also essential as we shift more to better systems of managed 
     care.
       [[Page S6137]] We urge Congress to take an integrated 
     approach to addressing our three serious and interrelated 
     problems of cost, quality and access. We fear a one-
     dimensional approach, or one dealing only with federal 
     programs, will only make matters worse. We stand ready to 
     work with you on a balanced solution that will create a 
     better system for all our citizens.
           Sincerely,
                                                   Paul G. Rogers,
                                                         Co-Chair.
                                                    Robert D. Ray,
     Co-Chair.
                                                                    ____

  Members of the National Leadership Coalition for Health Care Reform

       Acme Steel Company.
       Almalgamated Clothing & Textile Workers Union, AFL-CIO.
       American Academy of Family Physicians.
       American Academy of Pediatrics.
       American Association of Retired Persons.
       American Automobile Manufacturers' Association.
       American College of Physicians.
       American Federation of Teachers, AFL-CIO.
       American Iron & Steel Institute.
       American Nurses Association, Inc.
       American Physical Therapy Association.
       American Psychological Association.
       American Subacute Care Association.
       Association of Academic Health Centers.
       Association of Minority Health Professional Schools.
       B. C. Enterprises.
       Bannon Research.
       Bethlehem Steel Corporation.
       Blue Cross Blue Shield of Iowa.
       Blue Diamond Growers.
       Brown & Cole Stores.
       Burlington Coat Factory.
       Ceridian Corporation.
       Christian Children's Fund.
       Chrysler Corporation.
       Cold Finished Steel Bar Institute.
       Communications Workers of America.
       CoreStates Financial Corp.
       Del Monte Foods.
       Designworks Inc.
       Drummond Company Inc.
       Families USA Foundation.
       Filter Materials.
       Ford Motor Company.
       GEC-Marconi Electronic Systems Corporation.
       General Motors Corporation.
       Giant Food Inc.
       The Great Atlantic & Pacific Tea Company, Inc.
       Gross Electric Inc.
       The Heights Group.
       H. J. Heinz Co.
       Inland Steel Company.
       INSIGHT Treatment Services.
       International Brotherhood of Electrical Workers.
       International Multifoods.
       Internatinal Union of Bricklayers and Allied Craftsmen.
       Johnstown Corporation.
       Keller Glass Company.
       Lincoln Telephone & Telegraph Co.
       LTV Steel Company.
       Lukens Inc.
       Mankoff, Inc.
       Maternity Center Association.
       Maytag Corporation.
       MEDNET.
       National Association of Childbearing Centers.
       National Association of State Boards of Education.
       National Council of Churches of Christ in the U.S.A.
       National Education Association.
       Natinal Steel Corporation.
       Navistar International Transportation Corporation, Inc.
       Norwest Corporation.
       Olympia West Plaza, Inc.
       PAR Associates.
       Pella Corporation.
       Preferred Benefits.
       R. R. Donnelley & Sons Co.
       Ralphs Grocery Company.
       Regis Corporation.
       Rohm & Haas Company.
       Safeway Inc.
       Sara Lee Corporation.
       Scott Paper Co.
       Service Employees International Union, AFL-CIO.
       Sokolov Strategic Alliance.
       Southern California Edison Company.
       Strategic Marketing Information, Inc.
       Texas Heart Institute.
       Time Warner Inc.
       United Air Lines,Inc.
       United Food and Commercial Workers International Union, 
     AFL-CIO.
       United Paperworkers International Union, AFL-CIO.
       United States Catholic Conference.
       United Steelworkers of America, AFL-CIO.
       U.S. Bancorp.
       The Vons Companies, Inc.
       Westinghouse Electric Corporation.
       Wheat, First Securities, Inc.
       Wheeling-Pittsburgh Steel Corp.
       The Whitman Group.
       Wisconsin Public Service Corporation.
       Xerox Corporation.

  Mr. WELLSTONE. That is why the business community is opposed to these 
cuts in Medicare, because they know it will be a shell game. Mr. 
President, this will result in utterly irrational charge shifting. What 
will happen is that the providers already not receiving reimbursement 
they need will just shift the cost to the private sector, to those of 
us who have private health insurance plans. The business community 
knows that.
  Some of my friends who were talking about Medicare just as a way of 
reducing the deficit, or even when they talk about reforming health 
care but just focusing on Medicare, I think really overlooked problems.
  Third of all, Mr. President, I could tell you right now, I would 
fight this tooth and nail if for no other reason than in rural 
Minnesota, greater Minnesota, many hospitals and clinics will go under. 
In some cases, 75 percent of their revenues comes from Medicare. If you 
are going to take a meat-ax approach, a slash-and-burn approach, if you 
are not going to contain costs in the health care field but you are 
going to have these cuts in Medicare alone, then I could just tell you 
right now, many of our hospitals will go under and clinics will go 
under in our rural communities.
  Fourth of all, Mr. President, this idea of vouchers--this is 
unbelievable. People are going to have to get real with the people that 
we represent. To say we will just give you a voucher, that we will set 
some kind of limited per capita payment, and then you go out, senior 
citizens, and sort of negotiate whatever plan works well for you. Mr. 
President, with preexisting condition exclusions, with no risk 
adjustment between plans, with no community rating, how do you think 
that is going to work? How do you think that is going to work? If you 
have a preexisting condition, you may be flat out of luck. If there is 
no risk adjustment, under a capitated system there will be a tremendous 
incentive for health plans not to accept people who are older and 
sicker. You have to make an allowance for that and that involves 
serious insurance market reforms.
  Mr. President, my colleagues and I were able, a couple weeks ago, to 
restore the funding for an insurance counseling and assistance 
program--unwanted by Republicans, unfortunately. They wanted to even 
eliminate a small program providing counselors for elderly people to 
make sure people do not get ripped off by some of these private 
Medicare supplementary plans. It is as if they are just going to give 
people a voucher and say, good-bye, you are on your own.
  Finally, Mr. President, let me make a point that the Medicare payment 
system is the way in which we finance some of the most important things 
we do in medical education. If we take away that funding, we are going 
to lose one of the most important things we do in this country. 
Training residents is a public good--the competitive private insurance 
market will not pay for it. You would have to ask everyone to pay into 
a fund in order to eliminate Medicare funding. But I have not heard 
such a proposal this year.
  Mr. President, in Minnesota we have efficient markets. We have done 
an excellent job of holding down the costs. But there has been very 
little equity in terms of the kind of per capita payment. Parts of New 
York get $646 per month per enrollee, and Hennepin County in Minnesota, 
urban Minneapolis, gets $363 per month per enrollee. This is in terms 
of our reimbursement now for Medicare managed care plans. My State does 
not have any fat. If you are going to talk about across-the-board cuts, 
I will just tell you right now the impact on a State like Minnesota 
will be severe. We are in a very precarious position.
  So, Mr. President, let me conclude this way. No. 1, the idea of 
cutting $300, $350, $250 or $400 billion in Medicare, so that we can 
have across-the-board tax cuts flowing to the wealthiest segment of the 
population, is simply outrageous. It is simply outrageous.
  A family making under $30,000 would be getting, roughly speaking, 
$100; and families with incomes of over $200,000 would be getting, 
roughly speaking, $11,000. And for that, we are going to have these 
kinds of draconian cuts in Medicare? It is outrageous.
  No. 2, if we do not have that tradeoff--and I think some of our more 
responsible colleagues understand we cannot do that--I say to my 
colleagues that you cannot move forward with cuts in Medicare unless 
you do overall health care reform, and you cannot do it unless you 
contain overall costs.
  [[Page S6138]] I say to the Senators on both sides of the aisle, 
welcome to health care reform. Welcome to the health care issue. It is 
back. How ironic it is that when historians write about the 104th 
Congress, they are going to say that the 104th Congress had to address 
health care reform, how to finance it, how to deliver health care to 
people out in the communities in an affordable, dignified way. The 
reason the 104th Congress finally moved on this question is that some 
Senators realized, finally, that the only way we are really going to 
have deficit reduction based on a standard of fairness and the only way 
we are going to make sure we are able to provide decent health care 
coverage for all of our citizens, regardless of age or where they live 
or income, is with significant, meaningful health care reform.
  I am ready to work with colleagues on both sides of the aisle, 
because I think that will now have to be one of our major priorities.
  I yield the floor.
  Mrs. BOXER addressed the Chair.
  The PRESIDING OFFICER. The Senator from California is recognized.
  Mrs. BOXER. Mr. President, I want to thank my colleague for really 
putting out in very clear and simple terms the kind of crisis that we 
knew about. Indeed, President Clinton was so clear in his very first 
and second State of the Union Address when he said, ``If we want to 
have meaningful deficit reduction, we better address the issue of 
health care reform.''
  Here we have a situation--and I serve on the Budget Committee. I am 
waiting for the Republican budget, by the way. It is way late. Since I 
came here, I have been on the Budget Committee, and the Budget 
Committee has been on time. Not this year. Do you know why? Because the 
Republicans have promised certain things they just cannot keep: huge 
deficit reduction, increases in the military, big tax breaks for some 
of the wealthiest again. Guess what? They said they would not touch 
Social Security. Thank goodness. Frankly, I think a lot of my 
colleagues made that point clear in the balanced budget debate. So the 
only cash cow they can look at is Medicare. And at this point, they 
want to cut hundreds of billions of dollars out of Medicare, and they 
realize, how can we sell that to the seniors? So they are creating this 
big crisis.
  We talked about the need for health care reform. My friend, Senator 
Wellstone, was one of the leaders in this fight. So I say to my friend, 
thank you for your remarks this morning. It is almost poignant that we 
are at this point. Does he not agree?
  Mr. WELLSTONE. Mr. President, I thank my colleague from California 
for her gracious remarks. It is ironic that indeed we have now come 
full circle back to the last Congress.
  The very people who were so proud of having blocked health care 
reform are now talking about a crisis in Medicare, talking about how we 
will finance it, and are now making a proposal, I say to my colleague, 
for rather draconian cuts in Medicare. But they do not want to talk 
about rationing. Now they really are making proposals that will ration.
  I think there are certain realities now that we all hope we will face 
up to and move forward on health care reform. It is the only way to do 
it. Otherwise, it will be disastrous.
  The kind of proposals I hear people making now to cut Medicare will 
not only hurt senior citizens, but as I said, will create absolute 
utter chaos in this health care system. They do not deal with 
preexisting conditions, they do not deal with any of the bias of not 
having community rating, they do not deal with how to make it 
affordable. If anything, it will just have a severe impact.
  Mrs. BOXER. I just want to thank my friend again. He is, of course, 
correct. The kinds of cuts that my colleagues on the Republican side 
are talking about out of Medicare simply will ruin Medicare. We cannot 
possibly, in the name of deficit reduction, destroy the Medicare system 
or the Medicaid system, for that matter.

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