Health Care Reform

Floor Speech

BREAK IN TRANSCRIPT

Mr. CRAPO. Mr. President, I rise today to discuss Medicare also in the context of the proposed health care reform we are dealing with in the Senate.

This is one of the most troubling aspects of the health care reform proposals that are being considered in the Congress: the massive cuts to Medicare that will total, under the legislation that came out of the Finance Committee at least, about $500 billion in cuts and similar levels of cuts are included in all major legislation being moved at this point.

In this time of economic downturn, all Americans must look to their budgets and to their own spending very carefully. The same is true for the Federal Government.

Some will argue these Medicare cuts are necessary for fiscal responsibility and that everybody must play a part. Others are going to argue that Medicare is facing insolvency in 2017 and that these cuts are necessary to slow the growth of Medicare spending. In fact, the 2009 trustees report shows that Medicare's annual costs were 3.2 percent of the gross domestic product of the United States in 2008. To give a little bit of context, that is about three-quarters of Social Security's costs. These costs are projected to surpass Social Security expenditures in 2028 and reach 11.4 percent of GDP by 2083.

The unfunded obligation of the Medicare hospital trust fund is $13.4 trillion, which is $1 trillion higher than even last year's estimate. And Medicare's total unfunded obligations, which include Part B and Part D programs, have reached $37.8 trillion.

Yes, we do need to address the solvency issues related to Medicare. We must deal with it. But let's be clear about one thing: These proposals in these health care bills do not strengthen the solvency of the Medicare Program.

These cuts accomplish one simple goal; that is, they take money from the Medicare Program in order to create a new entitlement program. The program is created at the expense of America's seniors. We are not shoring up Medicare for America's seniors with these bills; we are transferring $500 billion out of the Medicare programs into a new government entitlement program.

A recent article described it like this: Let's imagine that Medicare is your family's overall budget. You have lived beyond your means and you have run up a huge debt. In order to deal with this new debt, your family thinks of creative ways to cut spending and reduce expenses and put some of your savings aside to catch up. Then, though, you see all this cash that you saved up and you would like to go out and buy a brandnew car. So instead of using the cash to help pay off your debts and your obligations and shore up your financial circumstances, you take this cash and go out and spend it on a brandnew car, in this case a government-run car.

This is what is happening with the Medicare system in the bills before us. These cuts damage the existing program in order to create a new one, harming America's seniors along the way. They are negatively going to impact choice, access, benefits, and quality of care. When Americans said they wanted change, I don't think this is what they were talking about.

Let's talk about a few specifics.

Among the largest cuts to the Medicare Program are the

$117 billion in cuts to the Medicare Advantage Program. Currently, there are nearly 11 million seniors enrolled in Medicare Advantage, which represents about one out of every four Medicare beneficiaries. In my home State of Idaho, there are more than 60,000 Medicare Advantage beneficiaries or 27 percent of Medicare beneficiaries in the State.

Since the creation of the Medicare Advantage Program in 2003, overall enrollment in private plans has been steadily increasing and beneficiaries across the country have had more private plans to choose from than they did 10 years ago.

A 2007 study reported ``high overall satisfaction'' with the Medicare Advantage Program. Mr. President, 84 percent of respondents said they were happy with their coverage, and 74 percent would recommend Medicare Advantage to their friends or family members.

According to Congressional Research Service, as of January 2009, all Medicare beneficiaries across the country had access to Medicare Advantage plans along with traditional Medicare plans. The choice is particularly crucial in rural areas. Between 2003 and 2007, more than 600,000 beneficiaries in rural areas joined the Medicare Advantage Program, which is a 426-percent increase.

The Medicare Advantage cuts proposed in the Finance bill will force plans to cut benefits, increase premiums, or drop coverage altogether. In fact, CBO estimates that enrollment in Medicare Advantage will decrease by 2.7 million people by 2019, resulting from the changes in this proposed legislation.

This number represents not only people who would lose their plan but also those who would no longer be able to choose Medicare Advantage because of the decrease in benefits.

CBO estimates that the value of extra benefits offered by Medicare Advantage plans will drop from $135 a month to $42 a month. When we were in the Finance Committee markup, I asked CBO Director Elmendorf to confirm this point. I asked him:

So approximately half of the additional benefit would be lost to those current Medicare Advantage policyholders?

His response was:

For those who would be enrolled otherwise under current law, yes.

The point is, the Medicare Advantage cuts in the Finance Committee bill will clearly break the President's pledge that if you like the insurance you have, if you like the protection you have, you can keep it.

Even if some seniors on Medicare Advantage are able to keep their plans, they are not going to be able to enjoy the same level of benefits they enjoy today. During the Finance Committee markup, I offered an amendment that would have prohibited the implementation of the bill's Medicare Advantage provisions if their implementation would decrease choice and competition for seniors in Medicare--very simple and straightforward. The amendment was defeated on a straight party-line vote.

Many congressional Democrats argue that by defending Medicare Advantage you are actually defending overpayments to insurance companies. That is not true either. Medicare Advantage plans are paid 14 percent more, on average, than traditional Medicare fee-for-service. However, these overpayments--or alleged overpayments--don't go into the plans. They go to the seniors enrolled in the plans in the form of extra benefits. That is why Medicare Advantage is so popular among seniors. Seventy-five percent of the additional payments to Medicare Advantage are used to provide seniors with additional benefits--benefits such as dental coverage or vision coverage or preventive medicine or flu shots or hearing aids. The remaining 25 percent is returned to the Federal Government. So the cuts to Medicare Advantage will reduce benefits and will deprive seniors of choice.

But that is not the only kind of cuts we have coming to Medicare. In addition to the cuts to the Medicare Advantage Program, the Finance Committee bill also contains massive cuts to other Medicare providers. It contains $40 billion of cuts to home health agencies, there are nearly $8 billion of cuts to hospice, and more than $16 billion of cuts to skilled nursing facilities. These levels of cuts would be devastating for providers and will threaten access as well. As more and more providers will not take Medicare patients, it will be harder and harder for beneficiaries to find care.

I spoke to Gary Thietten, the president and owner of Idaho Home Health & Hospice, just last week about the impact of the Medicare cuts to home health and hospice. He described to me how bad the fiscal situation has become for home health, hospice, and other Medicare providers in Idaho. Idaho lost nearly 30 percent of its home care providers in 1998 and 1999, including the State's largest provider. The providers that are still in business in my home State are working under the same Medicare reimbursement levels they received in 2001--8 years ago. If the cuts from the Finance Committee bill go into effect, on top of the current reimbursement issues, the situation will get significantly worse for many providers, and the net result, again, would be a loss of providers, a loss of options, and a loss of services to our seniors.

Costs have gone up considerably due to the economic downturn, and rural Idaho is being hit the hardest. Gary compared the situation for home health and hospice providers to the farmers in Idaho. Most farmers don't grow just one crop. Similarly, home health agencies don't provide just one service. They provide hospice and private-duty care, along with medical supplies and equipment. All of these services are going to suffer because of the home health and hospice cuts.

These proposed cuts will not just affect providers in my home State, they will affect Medicare providers in every State around the country, particularly rural States, which already face significant provider access problems. At some point, providers will no longer be able to give the best care or any care, for that matter, to Medicare beneficiaries. As I indicated earlier, we have already seen the trend start with those medical service providers that simply can't afford to take Medicare patients.

I have long supported policies that increase access to high-quality affordable health care for all Americans and provide for fair reimbursements to providers of the medical services rendered. However, the types of blunt, across-the-board cuts we see in these proposed bills will result only in increased harm to providers and to Medicare beneficiaries around the country.

It is my hope that as we face these difficult times, and dealing with needed health care reform, we will not take the cuts out of the Medicare Program that are proposed in this legislation. Specifically, and importantly, it is critical that we not cut our Medicare beneficiary services in order to simply fund a new, massive government entitlement program.

With that, I yield the floor.

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