Service Members Home Ownership Tax Act Of 2009--Resumed

Floor Speech

SERVICE MEMBERS HOME OWNERSHIP TAX ACT OF 2009--Resumed -- (Senate - December 01, 2009)

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Mr. CORNYN. Mr. President, I want to talk principally about the Medicare cuts in this bill and make sure that people understand the context in which this takes place and what it means in terms of benefits for seniors.

There has been a lot of parsing of language here in a way that I think can perhaps obscure the real impact of these proposals.

First, let me say there is broad agreement that our health care system needs reform. But I thought the purpose of that reform was to lower costs and make it more affordable--not raise premiums, raise taxes, and cut Medicare benefits.

Again, I say to our friends across the aisle, no one wants the status quo. But it is clear that our friends across the aisle are not interested in any proposals from this side of the aisle, as demonstrated by the party-line votes in the HELP Committee and the Finance Committee, and the product coming from the House of Representatives.

This is simply too important to do on a purely partisan basis. Yet that seems to be the intention of the majority. The American people want us to get this right because they understand this impacts 17 percent of our economy, and it affects all 300 million of us. This is important to them. As they have watched these debates and proposals, as they have learned more about them, it is no mystery why public opinion for these proposals has dropped like a rock. Again, it has dropped like a rock.

First of all, on cost, they realize that the proposals as made have masked the true cost of this bill, and there was celebration when the bill came in under $900 billion. Forget the fact it doesn't actually go into effect until 4 years into the 10-year budget window, so it was only 6 years of implementation; and never mind that it didn't include reversing the 23-percent cut in physician payments that go into effect at the first part of next year, unless Congress acts. That was left out intentionally to make this look cheaper than it is.

The Senate Budget Committee has pointed out that this bill, when fully implemented, would cost the American people $2.5 trillion. I have constituents who asked me: Do you know what a trillion dollars is? They say: I don't know. We used to talk about a million dollars being a lot of money, and then a billion dollars. Now we are into the trillions--hence, the bumper sticker ``don't tell Congress what comes after a trillion,'' for fear we will spend it.

This bill, written by the majority leader behind closed doors, increases taxes by nearly $ 1/2 trillion on American families and small businesses during the worst recession we have had since the Great Depression. Unemployment is 10.2 percent, and it is perhaps headed higher. This bill proposes to make it harder on businesses to retain employees, or perhaps maybe someday hire employees and bring down that unemployment rate.

This is a job-killing bill. That is why the American people, the more they learn about it, like it less and less. I predict that the longer this debate goes on, the more they learn about it, the less they will find to like about the bill for that and many other reasons.

This bill also, according to the CBO, increases health insurance premiums by $2,100 for American families purchasing insurance on their own. If you are fortunate and you have large group coverage, it is a little better. But for the millions who are not, it increases the cost of their insurance by $2,100 a year.

I want to focus primarily on the cuts in Medicare. When our colleagues celebrate the fact that this comes back budget neutral, let me explain that mystery. That means you have raised taxes so much and cut Medicare benefits so much, you can claim it is budget neutral. I daresay that is not cause for celebration. In order to create a $2.5 trillion new entitlement program--and that is what this is, at a time when the unfunded liabilities of our current entitlement programs go somewhere into the $40 trillion to $60 trillion range--this bill actually cuts $465 billion in payments from Medicare. These cuts include $135 billion to hospitals; $120 billion from 11 million seniors on Medicare Advantage, including a half million--or to be more precise, 523,000 Texans who depend on Medicare Advantage will see a cut in benefits because of this proposal if it passes.

Mr. President, $15 billion will be cut from nursing homes, $40 billion will be
cut from home health agencies and $8 billion from hospice care.

You can try to parse those words and say we really are not cutting Medicare, but we are cutting Medicare Advantage. Indeed, the Obama administration's own Actuary at the Center for Medicare and Medicaid Services said Medicare cuts of this size would hurt seniors' access to care for several reasons.

First, let me start with Medicare Advantage. Medicare Advantage provides benefits over and above Medicare fee for service. But I think we need to understand that with regard to Medicare fee for service in my State, the last time I checked, 42 percent of physicians will not see a new Medicare patient because the payment rate is too low for the doctors to be able to break even or maybe perhaps earn a small profit. Again, 42 percent of Medicare patients are denied access to a doctor in my State because Medicare payments are so low.

What we did a few years ago was pass the Medicare Advantage Program, which was created to give seniors choice. In other words, there has been so much celebration of the public option or the government-run plan. We have a government-run plan now--Medicare fee for service, which has, depending on where you read, somewhere between an 8- to 12-percent faulty payment rate. In other words, it pays somewhere around 7.8 to 12.4 percent of bills it does not owe to people who do not deserve it, diverting that money away from payment for beneficiaries.

We decided a few years ago to give Medicare beneficiaries a choice--something I thought we all were for--a choice that provided better care coordination and better benefits. Today, 11 million seniors, including the 532,000 I mentioned in Texas, have chosen Medicare Advantage. But this bill, if passed in its current form, will take away health care benefits from those 11 million seniors on Medicare Advantage by cutting $118 billion from the program.

During the Finance Committee markup, the Congressional Budget Office acknowledged that Medicare Advantage cuts would mean fewer services, such as dental or vision.

Senator MIKE CRAPO asked this question:

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

Congressional Budget Office Director Doug Elmendorf said:

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

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

What happened to the President's promise that if you like what you have now, you can keep it? This is another example of a promise that breaks under this bill, in addition to the $2,100-per-family premium increase for those who buy their insurance on the individual market.

Despite the fact that this bill cuts $465 billion from the Medicare Program, it also fails to deal with draconian cuts that will go into effect in January, unless Congress acts, which will further ensure that seniors will be less likely to see a doctor in 2012. We all know this is sometimes called the doc fix, but this is basically a misguided decision Congress made back in the late nineties to cut provider benefits, thinking that they could do so and it would not have any impact on access to care. But what it has done is while on one hand Congress can stand here and say: Yes, we kept our promise to seniors by providing Medicare coverage, seniors are finding it harder and harder to find a physician who will actually see them because of those low reimbursement rates. This bill does nothing to cut the 23-percent cut in those benefits in 2012 which will have an extremely negative impact on seniors' ability to see a doctor.

We know the majority leader tried, on a standalone bill, to address this issue earlier. But it was not paid for. On a bipartisan basis, Senators in this body rejected sending a bill for $200 billion more to our children. We said we need to be responsible and pay for the bill.

Then the President said health care reform would be paid for by dealing with waste, fraud, and abuse in Medicare. But that is not what this bill does. The Congressional Budget Office said the Reid bill only saves $5.9 billion from reducing waste, fraud, and abuse--$5.9 billion in a bill which over a full 10 years of implementation will cost the American taxpayers $2.5 trillion.

Instead of cutting Medicare, we should be addressing this problem. We know it is a serious problem. The Obama administration found that there was at least $47 billion in Medicare fraud, and that is a conservative estimate. According to Harvard professor Malcolm Sparrow, Medicare fraud may consume as much as 15 to 20 percent of the $454 billion Medicare budget. That means the amount lost to fraud each year in Medicare alone is $70 billion to $90 billion. As I mentioned, improper payment rates, depending on where you look, range anywhere from 7.8 percent of all Medicare payments paid improperly to as much as 12.4 percent, depending on where you look.

Defrauding Medicare has become so lucrative that even the Mafia and other organized criminals are getting into the act. According to the Associated Press last month, members of a Russian-Armenian crime ring in Los Angeles were indicted for bilking Medicare of more than $20 million, and a week after the FBI issued search warrants for a Medicare fraud investigation in Miami, the body of a potential witness was found in the backseat of a car, riddled with bullets.

Earlier this year, I introduced a bill which I hope our colleagues on the other side of the aisle will look at as a way to change the paradigm in terms of the way we address this problem of Medicare fraud. Rather than the pay-and-pursue model, we would have a model which would actually detect potential fraud on the front end by certifying payees and otherwise making sure that money is spent properly. We need to implement commonsense solutions such as this to fix fraud in Medicare before we simply cut in half or cut $ 1/2 trillion out of benefits in provider benefits to create a new entitlement.

We all understand Medicare is in miserable shape financially--miserable shape. If nothing is done, Medicare will go broke in 2017, according to the Medicare trustees. The Medicare part of entitlement problems has unfunded liabilities--promises Washington made but cannot keep and does not know how to pay for, nearly $38 trillion. Mr. President, $38 trillion is more than three times the current national debt of $12 trillion, and $38 trillion translated into the burden on every American family means that each American family owes $322,000--more than most American families' homes are worth.

The bottom line is, it is simply irresponsible, without fixing Medicare, without fixing the fraud and the waste--which I know the Presiding Officer is as concerned about as I am--and without dealing with the fact that Medicare promises coverage but denies access because of low payments, to pillage nearly $ 1/2 trillion from the bankrupt Medicare program to create a new budget-busting entitlement program.

There had been some talk on the floor about earlier attempts to reduce the rate of growth of Medicare. Interestingly, back in 2005, when there were some proposals to do just that--but, frankly, the numbers paled in comparison: about $10 billion in cuts compared to $500 billion in cuts--the majority leader called those cuts immoral. I have a long list of comments made by our friends across the aisle which stand in stark contrast to the comments they are making today.

Frankly, we need to do something about the insolvency of Medicare. Even if we did not do anything else, that would be a great benefit to the seniors to whom we promised health coverage but who are currently denied coverage because of the problems I talked about.

I know the distinguished chairman of the Finance Committee talked about the sterling endorsements that come from a variety of Washington-based advocacy groups. One of them is the AARP, the American Association of Retired Persons.

Mr. President, I ask unanimous consent to have printed

in the Record an article about AARP dated October 27 at the conclusion of my comments.

The PRESIDING OFFICER. Without objection, it is so ordered.

(See exhibit 1.)

Mr. CORNYN. Mr. President, what this article demonstrates is that one reason AARP might be opposed to maintaining Medicare Advantage and
be for the cuts in benefits to current Medicare Advantage beneficiaries is because that group and its subsidiaries collected more than $650 million in royalties and other fees last year from the sale of insurance policies, some of which are designed to fill that gap between Medicare fee for service and what it actually costs to get to see a doctor. It is a conflict of interest for this association. Frankly, I don't think its endorsement is worth the paper it is written on, just like other associations that, contrary to the best interests of their members, have made a deal that is bad for the American consumer. The American consumers know it. They know a bad deal when they see it--a deal that includes increased premiums, higher taxes, and cuts in Medicare. Frankly, I think those people with such glaring conflicts of interest should not be in the position of trying to endorse something that is basically going to enrich them to the detriment of the American people.

I plan to offer amendments about this bill's provisions as currently proposed to cut $ 1/2 trillion from the Medicare Program. My first amendment would make Medicare play by the same financial solvency rules as private insurers.

We hear our friends on the other side of the aisle talk about insurance companies. I have no doubt that their desire is, frankly, to do away with private sector involvement in the health coverage field, which leaves, of course, only the Federal Government--ultimately a single-payer system making decisions out of Washington, DC, that affect the health care delivery of 300 million people--a bad idea.

My first amendment would make Medicare play by the same financial solvency rules as private insurers. Because private insurers are owned by their shareholders and have fiduciary responsibilities, they could not do business the way Medicare does. They could not tolerate high fraud, waste, and abuse rates. They could not function based on the same risk-based capitalization that private insurance companies do. My amendment would ensure that before we pillage $ 1/2 trillion from the Medicare Program to pay for yet another unsustainable entitlement program, the Medicare Program should be able to meet the same solvency and risk-based capitalization requirements private insurance plans meet.

My second amendment will be to strike the unelected, unaccountable board of bureaucrats known as the Medicare advisory board.

We have heard this Medicare advisory board extolled, but this is the same kind of unelected, unaccountable board that we saw just a couple of weeks ago issued a new order or recommendation on mammograms based on cost-benefit, which would have condemned some women between the age of 40 and 49, denied them access to a mammogram and, frankly, condemned them to an early, premature death because of breast cancer. When you put all the power to determine the coverage and also payment in an unelected, unaccountable board, such as the Medicare advisory board, then, frankly, you are going to get more of that rationing and that same sort of cost-benefit analysis which is going to consign too many Americans to a premature death because, frankly, the Federal Government doesn't care and is not going to see them get access to care.

After the Reid bill pillages $465 billion from the Medicare Program to create a new entitlement, it sets up this new Medicare advisory board, an unaccountable board of bureaucrats, to find more ways to cut billions of dollars from Medicare. Unsurprisingly, patients, providers, and even Congress don't always agree with experts, including the ones we have in place today. According to the Wall Street Journal, the Medicare Payment Advisory Commission, created by Congress in 1997, has recommended more than $200 billion in cuts in the last year alone, which lawmakers--that means Congress--has ignored.

Artificial and arbitrary budget targets leave little room for innovation as well. What if we were to find a cure for Alzheimer's in 2020 but because it would be too expensive, the Medicare advisory board would say the Federal Government is not going to pay for it?

Some have said this independent board would be a way to insulate Medicare payment decisions from politics. But the very creation of the Board was the result of a political deal with the White House that insulated hospitals from future cuts.

I wish to close by saying I hope my colleagues will reconsider and vote for the McCain amendment, which will reverse the pillaging of $ 1/2 trillion from the Medicare Program to create a new entitlement program. We should fix Medicare's unfunded liabilities of nearly $38 trillion and not steal from Medicare to create another unsustainable entitlement program that will, of course, have to be paid for by our children and grandchildren on top of all the other debt we are piling on them. At a time of insolvent entitlement programs, record budget deficits, and unsustainable national debt, this country simply cannot afford to spend $2.5 trillion on an ill-conceived Washington health care takeover.

I yield the floor.

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