Service Members Home Ownership Tax Act Of 2009

Floor Speech

SERVICE MEMBERS HOME OWNERSHIP TAX ACT OF 2009 -- (Senate - December 04, 2009)

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We have Senator Cornyn sitting right behind me here. Senator Cornyn, you are in the $6.8 billion category for Texas. I might ask the Senator, What is going to happen if you get cut $6.8 billion in regard to home health care service?

Mr. CORNYN. If the Senator will yield for a response, $6.8 billion would cut not just into the muscle but into the bone and deny a lot of elderly people, particularly in rural areas, access to care entirely.

Mr. ROBERTS. I thank the Senator. The Senator from Nebraska has already pointed out what happens in Nebraska, and I know what will happen in Kansas. Nearly two-thirds of Kansas home health care agencies will have negative margins within only 5 years, probably 2 or 3, if these cuts are allowed to occur.

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Mr. CORNYN. Mr. President, I think as the American people are listening to the debate we are having on health care reform, they are being asked to accept some pretty implausible claims. One claim is that we can take $ 1/2 trillion out of Medicare and it would not have any impact on the delivery of services to Medicare beneficiaries--$ 1/2 trillion.

I think the biggest mistake about the way this bill is paid for, with the huge tax increases and huge cuts in Medicare, is the proposal to take $ 1/2 trillion out of Medicare, including $40 billion out of home health care, in order to pay for a brandnew entitlement program, when we already know Medicare itself is on a fiscally unsustainable path.

I want to talk primarily about another aspect of these cuts, and that is the 11 million seniors, including 532,000 Texans, who will lose benefits under their Medicare Advantage Program because these are not inconsequential cuts in their benefits. They are serious. I want to talk about some real human beings, some real Texans, who are going to be affected in a negative way by these cuts.

First of all, I think it is absolutely critical for the American people to understand that Medicare itself does not provide complete coverage to seniors. That is why so many seniors end up buying supplemental insurance coverage--Medigap coverage, as it is sometimes called--in order to get their bills paid for. Medicare only pays, on average, about 80 percent to providers of what private health insurance does. That is the reason, without additional compensation, many doctors will not see a new Medicare patient. They simply cannot do it and keep their doors open to their other patients.

The truth is, Medicare Advantage was created to fix some of the flaws with Medicare fee for service to give seniors more affordable and better coordinated health care. None of us are standing up saying the proposed bill is all bad because some of the positive developments in the bill call for greater coordination of health care.

On balance, it makes things worse than it does better because of these cuts in things such as Medicare Advantage.

The President of the United States has said providing Americans with a choice of quality, affordable health care was a guiding principle for him. I agree with that statement of principle. Medicare Advantage was created for that very purpose because, as I said, Medicare itself does not always work well for patients.

Where I live in Austin, TX, which is Travis County, the last time I saw a report, only 17 percent of physicians will see a new Medicare patient because Medicare reimbursement rates are so low. Those problems are avoided in large part by Medicare Advantage because it pays physicians and providers better than Medicare fee for service.

According to the American Medical Association's 2008 national health insurance report card, Medicare--not private health insurance--but Medicare had the highest percentage and the largest number of denied medical claims. In fact, Medicare denied 10 times more medical claims than private health insurers. That is another reason why seniors deserve a choice between Medicare and private plans that will offer them better benefits.

As I mentioned, today, 11 million Americans made that choice of better benefits and better care coordination through the Medicare Advantage Program. The proposed bill, the Reid bill, will take away those choices and the benefits of those 11 million seniors by cutting about $120 billion from the program.

Many of our friends across the aisle will say we can cut $120 billion out of Medicare Advantage, and it will have no impact on delivery of services. But the Director of the Congressional Budget Office disagrees with them, who says their additional benefits will be cut roughly in half.

We need to set the record straight on these so-called overpayments allegedly going to insurance company profits. It is simply a false statement. It is not true. Our colleagues know the so-called overpayments to Medicare Advantage plans do not go into those plans. They go to seniors in the form of additional benefits. That is because, under Federal law, 75 percent of additional payments to Medicare Advantage plans are used to provide seniors with additional benefits--benefits which they would not get under Medicare fee for service, benefits such as chronic care management, hearing aids, eyeglasses, and the like. The other 25 percent of any extra payments is returned to the Federal Government.

Let's be clear. Cuts to Medicare Advantage would be taking away seniors' health care benefits for those 11 million seniors. As I mentioned, 1/2 million Texans are on Medicare Advantage, and the Reid bill would cut their benefits by well over half. You do not have to take my word for it. Listen to what the CBO Director, Dr. Elmendorf, said when Senator Crapo asked him during a Finance Committee hearing. He said:

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

Director Elmendorf:

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

Nearly one out of every four seniors in Texas would lose about $122 a month in health care benefits to create a new $2.5 trillion entitlement that their grandchildren will ultimately have to end up paying for. And $122 a month may not sound like a lot for people inside the beltway, but a couple from my hometown of San Antonio recently wrote to me:

Please vote to leave our Medicare Advantage plans alone. We can't afford anything else as our portfolio was wiped out in the stock market collapse last year. My wife and I have had to go back to work, and we are in our seventies.

Yet this bill would impose another $122-per-month cut in their benefits.

Another constituent of mine from Conroe, TX, wrote:

Please do what you can to protect the Medicare Advantage plans. I'm on one and it has been beneficial to me. It has saved me an enormous amount of money and given me the benefits I've needed.

Some groups that support these cuts to Medicare Advantage have a conflict of interest, to say the least, because the benefits under traditional fee for service, as I mentioned, for Medicare is about 80 percent of what private insurance will pay. In order to get coverage, in order to pay the bills, many seniors have had to buy additional insurance coverage. For 11 million seniors, Medicare Advantage provides those benefits.

For many seniors, former employers sometimes provide wraparound plans. For retired military, TRICARE provides a wraparound plan. For many low-income seniors, Medicaid helps with cost sharing and premiums. For many other seniors, they purchase a standalone Medigap policy.

We heard from our friends across the aisle about AARP's endorsement of the Medicare cuts in the Reid bill. If it sounds odd that a seniors' advocacy group would support taking nearly $ 1/2 trillion from an already near bankrupt program, it should.

The fact is, as the Washington Post noted on October 27:

..... But not advertised in this lobbying campaign have been [AARP's] substantial earnings from insurance royalty and the potential benefits that could come its way from many of the reform proposals ..... Democratic proposals to slash reimbursements for another program, called Medicare Advantage, are widely expected to drive up demand for private Medigap policies, like the ones offered by AARP, according to health care experts, legislative aides, and documents.

So AARP, the so-called seniors' advocacy group, is advocating for a cut in benefits to 11 million beneficiaries of Medicare Advantage. The suggestion is one reason they would do so is because they will profit from this bill because these seniors will, if they can afford it, have to go out and buy Medigap coverage from, lo and behold, entities such as AARP.

The fact is, Medicare Advantage allows private plans to innovate better and provides better coordinated care for seniors. Groups such as the Kelsey-Seybold Clinic in Houston, TX, which is basically not seeing Medicare fee-for-service patients but is seeing Medicare Advantage patients because they can afford to coordinate care, the kinds of things we know they ought to be doing to provide better care, but they cannot afford to do it on the fee-for-service Medicare.

We have had the Medicare Program around for more than 40 years. The fact is, government bureaucrats are still trying to get the complex reimbursement formulas right. We know, as the distinguished chairman of the Finance Committee has said, that under the fee-for-service program, which is part of what needs to be reformed in this health care bill, Medicare pays for volume and not value.

Some of the positive things which I have complimented the bill on is, it includes some small steps to change our current pay-for-volume program to a pay-for-value approach through various delivery system reform demonstration programs.

The irony is, Medicare did not think of these delivery system reforms; rather, Washington is finally catching up on what private sector innovators have been doing for years. We heard the distinguished Senator from Minnesota talk about the Mayo Clinic. The Mayo Clinic has been doing that. I mentioned Kelsey-Seybold in Texas. But private sector innovators have been doing this through the Medicare Advantage Program already.

The delivery system reforms in the Reid bill would allow Medicare to experiment with different approaches to changing physician incentives, such as accountable care organizations or physician quality reporting initiatives.

Will they work? I happen to think they will. We do know private sector innovators have already figured out how to change physician incentives in the sorts of ways we ought to be doing more of and not punishing by cutting Medicare Advantage.

One Medicare Advantage plan, HealthSpring, serves 20,000 seniors in my State. They have been a leader for changing incentives for physicians to focus on quality rather than quantity. I met with their leadership and heard how they have done it. What they told me is they have a collaborative partnership with their physicians. They call it Partnership for Quality. Physicians are accountable for both cost and quality based on an evidence-based set of quality measures.

The results are a win-win: better quality care leading to healthier seniors and physicians who succeed in meeting evidence-based quality standards and ultimately lower health care costs, which I thought was supposed to be one of the goals of health care reform.

Participating physicians were paid financial incentives for meeting their goal, but as a result of coordination of care and evidence-based quality standards, they actually ended up charging less and patients experienced better results too. Members needed fewer hospitalizations and emergency room visits. Preventive measures increased mammograms by 80 percent, diabetic foot exams by 360 percent, and flu vaccinations by 246 percent.

I have heard about HealthSpring's success from a couple in Farmers Branch, TX, who recently wrote to me. They said:

We had a Medicare supplemental policy for several years until they priced themselves out of the market. We are now with a Medicare Advantage plan called HealthSpring. We have been very happy with this plan and the way they are saving us money. Please do not change or eliminate this program.

Let me tell you about one other Texas company called WellMed. While the Reid bill would finally give Medicare the ability to experiment with medical homes and care coordination, a San Antonio-based company, a Medicare Advantage company called WellMed, has been using a medical home model to coordinate patient care and emphasize prevention for nearly 20 years.

To quote from an article last month in ``Inside San Antonio:''

The health care delivery model at WellMed puts the patient at the center of a team directed by a primary care physician. The team may include a nurse, health coach, hospitalist, social service worker and physician assistant.

According to WellMed CEO Dr. George Rapier, ``We really do have to bring back the old-time primary care doctor who cared for you, who was concerned about you, who was part of your family, and you were part of their family. It's a primary care physician who knows all about you. So if you need a specialist, they know the best specialist to send you to. If you need to go in the hospital, they make sure you get the appropriate care in the hospital. They are your coordinator of care. And that's really the concept of a medical home.''

There is no question in my mind that the model has been saving lives in my State. Here is a story about one Texan whose life was saved by physicians caring for him at WellMed:

For years, Crohn's disease weakened--we will call him Ed--Ed's immune system and left him susceptible to infections. One morning in 2001, he lacked energy to even get out of bed. His breathing became labored. He developed a cough that sounded ``wet.''

His worried wife called his primary care physician at WellMed, Dr. Marlene Sanchez, who wanted Ed hospitalized immediately so she could order a nuclear scan of his lungs. He protested.

``She told me that if he refused to go, I should call 911 and have the paramedics come get him,'' [his wife] Annette recalled. ``He heard Dr. Sanchez talking to me, the urgency in her voice, and that convinced him to go.''

The scan confirmed Dr. Sanchez's suspicions: A potentially fatal blood clot had traveled from Ed's leg to his lungs. He was successfully treated and recovered. [Ed and his wife] recently celebrated Ed's 74th birthday.

Annette credits Dr. Sanchez for saving Ed's life and for acting as a catalyst that keeps him thriving in their golden years.

``We have seen an abundance of doctors, from the cancer doctors to the dermatologist, gastroenterologist, the blood doctor, the heart specialist--Ed has gone through it all ..... and they've all been coordinated by his primary care doctor. I've been to other doctors outside WellMed and you don't get the feeling that they are communicating like this.''

Well, many Texas seniors currently enjoy these extra benefits under Medicare Advantage, such as--another benefit--the Silver Sneakers program, the Nation's leading exercise program for older Americans. This past year, one of the Silver Sneakers members personally visited my office to deliver testimonials from other Silver Sneakers members. One Texan said:

At my age I need a program to strengthen me all over but primarily to help me with my balance and coordination. I need these skills to keep me from falling and breaking my bones.

Another participant in the Silver Sneakers program said:

I am 66, have been in the Silver Sneakers program a year. Prior to that I led a sedentary life, which included many health problems. I had hypertension, high cholesterol, chronic bladder condition, and mild depression. Since coming to classes and utilizing the weights and cardio machines, my life has improved immensely. My blood pressure has dropped, my cholesterol has been lowered, my chronic bladder condition has improved and I just feel better all around. I am no longer depressed because I look better and look forward to going to class and visiting with my friends.

These cuts in Medicare Advantage are going to have a direct impact on the benefits my constituents in Texas are benefiting from--the 532,000 Texans who are currently on Medicare Advantage--and what they are asking me--which I can't answer--is why in the world would we want to cut Medicare Advantage, which actually works, as opposed to Medicare fee for service, which does not work well? Why would we take a fiscally unsustainable program, such as Medicare, which is going insolvent in 2017, and use that to create a $2.5 trillion new entitlement program?

My constituents, the seniors who have paid into Medicare all these years, are saying: It is not fair to take the money we have paid into Medicare and use it to create yet another entitlement program and not to fix Medicare itself. So I believe we need to fix Medicare's nearly $38 trillion in unfunded liabilities. We need to fix the improper payment rate of roughly 1 out of every 10 Medicare dollars which results in somewhere on the order of a minimum of $60 billion of fraudulent payments each year. We need to put it on a fiscally sustainable path, rather than taking $ 1/2 trillion from Medicare for another ill-conceived Washington health care takeover.

I don't believe my constituents believe you can take $ 1/2 trillion out of these programs, just as they do not believe you can take more than $100 billion out of Medicare Advantage, and it will have no impact on their benefits. They don't buy it. They don't believe it, and I don't either.

Mr. President, I yield the floor.

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