Service Members Home Ownership Tax Act Of 2009

Floor Speech

Service Members Home Ownership Tax Act Of 2009

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Mr. GRASSLEY. Mr. President, I yield myself such time as I might take. I don't think I am going to speak more than 6 or 7 minutes, for the benefit of my colleagues who may want some of this time.

I want to tell my colleagues why I am supporting the Hatch amendment. In my home State of Iowa there are 64,000 seniors enrolled in Medicare Advantage. These are seniors who have come to rely on lower cost and particularly additional benefits that Medicare Advantage provides, as opposed to traditional Medicare. Yesterday I came to the floor to point out that my colleagues on the other side of the aisle are playing word games to cover up the fact that they are raiding Medicare, cutting benefits by 64 percent for these 11 million seniors who have chosen voluntarily to go on Medicare Advantage as opposed to traditional Medicare. Let me repeat: This bill cuts Medicare benefits, or let's say raids Medicare, by 64 percent for 11 million Medicare beneficiaries.

My friends on the other side of the aisle keep saying they are not cutting and they use these words, ``they are not cutting guaranteed benefits.'' But this is not even the case. Because we have this new independent Medicare advisory board that is set up in this legislation, it is given very specific authority to cut payments to Medicare Part D. This will result in higher costs and less guaranteed benefits for Medicare beneficiaries enrolled in Medicare Part D.

But I want to leave that debate for later. I want to visit with my colleagues now about Medicare Advantage. Mr. President, 64,000 seniors in Iowa and 11 million seniors nationwide do not care about the gobbledy-gook type words we use here in town, as legal as they are--``guaranteed benefits'' on the one hand and the words ``additional benefit'' on the other hand. In other words, guaranteed benefits or, as the other side wants us to believe, somehow additional benefits provided under Medicare.

I say that is Washington nonsense. I want to bring a little bit of Midwestern common sense to this debate. Our constituents want to know that Congress is not cutting Medicare benefits they have come to rely upon and that would include, under Medicare Advantage, dental care, eyeglasses, hearing aids, and other additional benefits provided by this program that they voluntarily chose, Medicare Advantage.

I know that to be the case. I have at least 1,000 letters I have received since last summer on this point. But I want to read one from Miss Purificacion S. Gallardo of Iowa City, IA.

I am writing to urge you to oppose cuts to Medicare Advantage. ..... This plan was a great help to me when my late husband, who passed away in May, was hospitalized. ..... I was able to afford to pay the hospital without going bankrupt. We seniors who live on a fixed income depend on our benefits from Medicare Advantage. I am retired and don't know how I would have managed without [Medicare Advantage].

Some of my colleagues on the other side of the aisle don't want seniors, even people such as my constituent from Iowa City, Ms. Gallardo, to know that this 2,074-page bill is cutting their benefits. Because the other side will say they are simply cutting so-called overpayments to Medicare Advantage plans. That doesn't make any difference to Ms. Gallardo. They fail to mention, 75 percent of these so-called overpayments must be spent for additional benefits--not only free money for a company to use or free money that benefits a Medicare Advantage recipient without any concern about what it costs--75 percent of these payments must be spent for additional benefits. Then where does the rest of it go? The rest of it comes back to the Federal Treasury. Cuts to these Medicare Advantage payments are, in fact, cuts in Medicare benefits.

I am more than happy to have a debate on how to reform Medicare Advantage payments. We should always be looking for ways to make payments more efficient. But the solution is not to cut benefits by 64 percent, on which seniors have come to rely, to fund an entirely new entitlement program this country can't afford. At a time when seniors are in the midst of the biggest economic crisis since the Great Depression, we should not be debating a bill that forces them to spend more money on health care, and that is exactly what this 2,074-page bill will do. Seniors who lose their Medicare Advantage as a result of this bill may be forced to buy a Medigap plan to fill in all the holes in traditional Medicare. That is why more low-income seniors enroll in Medicare Advantage. The so-called overpayments my colleagues on the other side of the aisle keep decrying help fill in the significant cost sharing and premiums that exist in traditional Medicare.

This bill will force low-income seniors, who pay little to nothing under Medicare Advantage, to come up with $175 per month to buy a Medigap plan. That doesn't sound like that is a very good way to help seniors. That sounds like this bill is paying for an entirely new entitlement program and paying for it, quite frankly, on the backs of 11 million Medicare beneficiaries.

I support the Hatch amendment. Let's take the $120 billion in Medicare Advantage cuts back to the Finance Committee and find a way to improve the program without hurting 11 million seniors.

I yield 5 minutes, as the manager on this side, to Senator Hutchison.

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Mr. GRASSLEY. Mr. President, before the Senator from Arizona leaves, on the point he made and the efforts by the members of the other party to strike Medicare Advantage, I have a letter that was sent to members of the Medicare conference on September 30, 2003, with more Democratic signers who are still in the Senate than Republican signers who were in the Senate, which set out all of the reasons Medicare Advantage was so very important and why it needed to have more money put into the year 2003.

For instance, I will read from the letter:

For nearly 5 million Medicare beneficiaries across America, Medicare Plus Choice--

That is what it was called before Medicare Advantage--

is an essential program that provides high quality, comprehensive, affordable health coverage. These seniors and disabled Americans have voluntarily chosen to receive their health coverage through Medicare HMOs and other private sector plans because they have excellent value. To preserve this important option for seniors across the country, bipartisan legislation was introduced in the Senate as S. 590, the ``Medicare Plus Choice Equity and Access Act.''

Cosponsored by Senators Schumer and Santorum, S. 590 sought to increase reimbursement rates and add new reimbursement options. .....

Et cetera, et cetera. We have plenty of history in the Senate that is bipartisan that we ought to maintain--Medicare Advantage--rather than do an injustice to it, as this legislation before the Senate is trying to do.

I ask unanimous consent to have this letter printed in the Record.

There being no objection, the material was ordered to be printed in the RECORD

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Mr. GRASSLEY. Mr. President, I take a back seat to no one on issues associated with improving the lives of seniors and the disabled.

As ranking member on the Aging Committee, I oversaw critical hearings into deep and persistent problems in our Nation's nursing homes. I was the principal author of the Medicare Part D prescription drug bill which is currently providing our seniors and people with disabilities with affordable prescription medications.

On the disability front, one of my proudest achievements is the enactment of legislation I sponsored along with the late Senator Ted Kennedy, the Family Opportunity Act, which extends Medicaid coverage to disabled children.

In large part, through my efforts, the Money Follows the Person Rebalancing Act, and the option for States to implement a home- and community-based services program were included in the Deficit Reduction Act of 2005.

Along with Senator KERRY, I have introduced the Empowered At Home Act which, among other things, revises the income eligibility level for home- and community-based services for elderly and disabled individuals.

If I thought that the CLASS Act would add to this list of improvements to the lives of seniors or the disabled, I would be first in line as a proud cosponsor of the CLASS Act.

But the CLASS Act does not strengthen the safety net for seniors and the disabled.

The CLASS Act compounds the long-term entitlement spending problems we already have by creating yet another new, unsustainable entitlement program.

The CLASS Act is just simply not viable in its current form.

It is almost certain to attract the people who are most likely to need it--this is known as adverse selection.

That will cause premiums to increase and healthier people to drop out of the program.

It is the classic ``insurance death spiral.''

On November 13, the administration's own Chief Actuary confirmed this. The Chief Actuary issued a dire warning in a report on the CLASS Act in the House bill which is virtually identical to the Senate version.

The Chief Actuary said:

There is a significant risk the problem of adverse selection would make the CLASS program unsustainable.

The CLASS Act has been characterized by the Washington Post editorial page as a ``gimmick.''

For the first 10 years, the CLASS Act saves money at the beginning because it collects premiums before benefits start getting paid out.

But sometime afterwards, it starts to lose money.

We all know what happens from there. It will become the taxpayers' responsibility to rescue the program as it fails.

Look at the financial struggles of Social Security. Look at Medicare. Look at Medicaid.

Now go home and look at your children and grandchildren.

Voting to protect the premiums of a program that you know will fail is irresponsible.

Creating the unsustainable CLASS Act is irresponsible.

Adding the ticking timebomb of yet another unfunded liability to our children and grandchildren through the CLASS Act is irresponsible.

The responsible vote is to strike the CLASS Act from the bill; I urge my colleagues to support this amendment.

Mr. President, I ask unanimous consent to have printed in the RECORD two items. First is an article from Fortune magazine on the CLASS Act. Second is a letter signed by seven of my Democratic colleagues objecting to the CLASS Act.

There being no objection, the material was ordered to be printed in the Record

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Mr. GRASSLEY. Mr. President, it is late in the evening. I was going to address three different issues tonight, but out of respect for Senator Baucus, the chairman of my committee, I am going to address just one of these issues and I will come back tomorrow morning, on Saturday, and speak on the rest of the issues.

The one issue I am going to address this evening is my support of the Senator from Nebraska and his motion to commit with instructions on the home health care aspect of this 2,074-page bill. That is Senator Johanns' motion. We are now considering a bill that cuts $ 1/2 trillion from a Medicare Program to fund yet another unsustainable health care entitlement program. Around $42 billion comes from cuts to home health care providers--hence the purpose of Senator Johanns' amendment that that not happen.

You have heard from Members on this side of the grave consequences of these cuts. Several Senators have already addressed these. These severe cuts pose a legitimate threat to beneficiaries' access to home health services. In my State of Iowa alone, there are around 160 home health agencies that provide valuable services to Medicare beneficiaries across the State. Thanks to these home health care providers, seniors in Iowa are able to live at home instead of institutional settings, such as nursing homes. These seniors place great value on being able to stay in their homes. I would have to say that in all the years I have been involved in senior issues, whether it has been chairman of the Aging Committee, or chairman and now ranking member of the Finance Committee, I haven't run into one single senior citizen in my State who said to me: I am just dying to get into a nursing home. They do not want to go there.

So that is the purpose of home health agencies, to save money, but it is to retain the quality of life, and maintain the quality of life for these citizens. I rarely hear Iowans say anything about living in a nursing home, except not to go there.

Since living at home has been found to be a more cost-effective alternative than institutional care, this results in Medicare spending less. These cuts that are in this 2,074-page Reid bill will make it even harder for Iowa home health care providers to care for Medicare beneficiaries. A good part of the Medicare home health cuts come from permanent productivity adjustments.

Let's look at the possibility--or I would say I have concluded the impossibility--of bringing greater productivity to nursing home care. You have heard this week about how Medicare's chief actuary found savings from these productivity adjustments to be very unrealistic. And just so you know that the letter I refer to from the chief actuary is real, observe this chart. You also heard this week how these permanent cuts would make it harder for providers to remain in the black. You also heard these providers might end their participation in Medicare and possibly then jeopardize access to care for beneficiaries, and probably then more people ending up in the more expensive environment of a nursing home.

The threat to access to home health care from these permanent productivity cuts isn't theoretical. It is real. Like many other Medicare providers, home health agencies provide labor-intensive services. It is because of these labor-intensive services that I raise the question and the possibility--and I say it ends up being an impossibility--for them to be more productive. There are few gadgets in home health that will increase productivity. And whatever available gadgets there are, they are unaffordable for many Iowa home health agencies because they are small operations with limited financial resources.

Home health care is about doctors, it is about nurses, and home health aides, and it is about all of these providing care to the most needy. So it is incorrect, in my judgment, to assume these providers will achieve the levels of productivity like the rest of the economy.

The HHS chief actuary's findings clearly apply to home health in my State of Iowa, as they do nationally. Just to remind you: ``The estimated savings may be unrealistic;'' and ``possibly jeopardizing access to care for beneficiaries for our seniors.'' More people in nursing homes.

Because of these cuts, the percent of Iowa home health agencies that have negative Medicare margins will increase to 75 percent. So over 120 of the 160 home health providers will have negative Medicare margins because of this 2,074-page Reid bill. Iowa providers are not alone. From 1/2 to 90 percent of home health agencies in States across the country would have negative Medicare margins.

I ask a unanimous consent to have printed in the Record three letters, which I wish to put in at various places in my remarks.

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

(See exhibits 1, 2, and 3.)

Mr. GRASSLEY. Mr. President, I have here a letter dated September 23 of this year from Val Halamadaris, the president of the National Association for Home Health and Hospice. This organization represents home health agencies across the country.

Mr. President, Mr. Halamadaris wrote this letter in response to the $43 billion in home health cuts in the Finance Committee package, which presumes to be the same number that is used in the Reid bill. In this letter, he stated:

It is crucial to the survival of the home health services delivery system that you work to reduce the $43 billion in cuts currently contained in the Senate Finance Committee's health reform package. Our analysis indicates that by 2016, the proposed cuts in home health care services payment rates will lead to nearly 70 percent of providers nationwide at risk of closing because their costs will exceed Medicare payments. If that occurs, President Obama's promise that Medicare beneficiaries will not be adversely affected by health care reform will be broken.

I have yet to hear from a home health care provider in Iowa that these permanent cuts will make it easier for them to care for their Medicare beneficiaries. Instead, I hear these cuts would reduce access to home health services.

The second letter I asked to have inserted in the Record is from the Iowa Alliance in Home Care, and they wrote:

Ensuring that Medicare home health payments are not reduced further is essential to avoid the resulting limited or no access to home health services for many Iowans who prefer to receive services in their home.

Not only is the chief actuary saying it, as the chart reflects, but people who are connected with the business of home health care are saying it: These permanent cuts will in fact jeopardize access to home health services in Iowa. So if the home health cuts in the Reid bill are allowed to go into effect, then Iowa's seniors, who prefer to live full lives from their homes, will be forced to live in the more expensive settings of facilities such as nursing homes.

I believe many Members on both sides of the aisle share my concern about home health care cuts.

I have here a third letter, this one dated from July 27, 2007, and it is written to Senator Baucus and me.

Mr. President, I use this letter, even though it is 2 years old, because we were getting entreaties from 61 of our colleagues--of which 52 now still serve in the Senate--about a legislative proposal to cut Medicare home health payments in that year--2007--by $9.7 billion and hospice payments by more than $1.1 billion.

They urged me and Senator Baucus, at that time, to ensure that home health and hospice providers receive full market basket inflation adjustments. They also urged us to oppose any cuts in payment rates through administrative actions.

In the letter, these Members stated that home health and hospice care ``have been demonstrated to be cost-effective alternatives to institutional care in both Medicare and Medicaid programs.'' They stated that ``reducing Medicare home health and hospice payments would place the quality of home health care and hospice and the home care delivery system at significant risk.''

Of these 61 Senators who signed this letter 2 years ago, 52 are currently here debating this bill in the Senate. Of those 52 Senators, 37 are from his side of the aisle who are now proposing $43 billion in cuts instead of $9.7 billion in home payment cuts and $1.1 billion in hospice payments cuts. I would think they would find these kinds of cuts three or four times--four times what we were talking about 2 years ago to be very unrealistic, and to keep home health as a viable organization going.

We also must look beyond health care when we look at the impact of these permanent cuts. I have also heard from providers in Iowa that permanent cuts such as these will make it even harder for them to keep their doors open. So around 3,500 Iowans who work at home health agencies are at risk of losing their jobs at a time when we have 10 percent unemployment, at a time when more of this country is concerned that Congress ought to be working on creating jobs, jobs, jobs as opposed to the health care issue and in some cases cutting jobs out. The Labor Department reported today that unemployment is 10 percent. Now is not the time to consider bills that increase unemployment rates.

About an hour ago, the Senator from Nebraska offered this motion I am speaking in favor of now, to send this bill to the Finance Committee with instructions to report a bill without these very enormous home health cuts that are in it. We should take this opportunity to fix the bill and then come back to the full Senate with a better bill. That is why I support the motion of the Senator from Nebraska to commit, and I urge my colleagues to do the same.

I yield the floor.

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Mr. GRASSLEY. When they reach age 65, they will have that benefit.

Mr. SESSIONS. Yes, 65. Yes.

Mr. GRASSLEY. To the tune of 2.9 percent of payroll. That is how much a self-employed person would pay. And an employee would pay 1.45 percent and the employer would pay 1.45 percent. Then, you know this 2074-page bill adds half a percentage point to those, so you are going to get it to a point where it is almost 2 percent for the employer, 2 percent for the employee, and it would be almost 4 percent for a self-employed person paying into this that is now going to be raided to finance a brandnew entitlement program.

Mr. SESSIONS. My constituent, then, is fundamentally correct in his concern?

Mr. GRASSLEY. I sense a great deal of resentment coming through in that letter, from the words of that letter from that person, that what he has paid into, for the probably 45 years of working before he retired--that now, with Medicare already being in jeopardy, based on the trustees' report which says that by 2017 there is not going to be any money in the trust fund, and then having $464 billion taken out of that trust fund to help finance a new entitlement program at a time when the present entitlement programs are in a great deal of financial jeopardy.

Mr. SESSIONS. I think you stated that so well. Just to reemphasize, this gentleman, Mr. Eberle, who paid into Medicare for 40 years, until he got to be 65, he got not a dime of Medicare benefit, did he?

Mr. GRASSLEY. No. The only way he would have gotten benefits is if he had become disabled before age 65.

Mr. SESSIONS. He pays into it all these years and just now gets to draw it, and people start taking it out.

I thank Senator Grassley for his leadership on this issue. I think he and I come out of the soil of our States, out of the real world. My impression is that nothing comes from nothing. Would you agree? Somebody has to pay?

Mr. GRASSLEY. I say it this way. We are in a town where we are dealing with a lot of Washington nonsense, and I hope, from the rural areas of Alabama, like the State of Iowa, you bring a lot of common sense to this town where there is not a lot of it.

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