Mr. KERRY. Madam President, I might pick up, if I may, on this issue of premiums. First, let me say it is astonishing to me how we are continuing here to have a debate about mythology and not reality. We keep trying to bring it back to reality. Our friends on the other side of the aisle, for better or worse, seem to be content to continue to try to scare America's seniors and to try to frighten people about this legislation overall.
I was listening to the debate about premiums, whether premiums are going to go up or premiums are going to go down. Let me share with people who are listening, particularly seniors, who I hope will not be scared by the false assertions that have been made; let me tell you about the experience in the Commonwealth of Massachusetts where we passed landmark health care reform 3 years ago.
Since implementing this plan in which we require--we require--every single citizen in the State to buy insurance, and employers are penalized if they do not provide insurance, the fact is that today in Massachusetts, the plan is working.
The companies like it and the citizens like it because they have the coverage. In fact, coverage by companies, corporations, has gone up since we put it in place. There are more companies that now participate and find that it works for them than before. But most important, 432,000 people now have gained quality, affordable health care coverage where they didn't have it before.
We have the lowest uninsured numbers in the United States of America and we are proud of that. In Massachusetts, 97.3 percent of our citizens--more than we are attempting to cover under the legislation we want to pass here--97.3 percent of our citizens are covered and have health insurance. Equally important, the newly insured have enrolled in all types of private and public coverage. There are 18 percent who are in the State's Medicaid; 40 percent are in something called Commonwealth Care, which is administered by the Commonwealth, the new subsidized plan; 33 percent are in employer-based coverage; and 9 percent are in a nongroup purchase plan.
Let me say to the Senate, health reform has improved access in the Commonwealth of Massachusetts. There are fewer insured individuals who report cost as a barrier to being able to get care. In the last year, most Massachusetts residents--88 percent--had at least one visit to a doctor and 78 percent had a preventive care visit. A recent State survey found that 92 percent of individuals reported having a primary care provider in our State. As coverage has increased, the number of uninsured individuals going to hospitals for free care has declined. So we have reduced the number of people who sort of unfairly require everybody else to pay for their coverage when they go to a hospital and the hospital covers them, and it is paid for unevenly by the people who have coverage and by the corporations that have to make up the difference. That has gone down now. Now the free care has gone down because the people have a program, they have a plan, and they can go in and get the care that is afforded to them.
Here is what is important--and I say this to my friend who is managing for the Republicans right now--the average premiums in the individual market fell dramatically in Massachusetts--falling from $8,537 at the end of 2006 to $5,143 in mid-2009. In other words, premiums, which we have been arguing about, in the individual market, fell by 40 percent, while the rest of the Nation saw a 14-percent increase. Which would you rather have, a program where you spread the risk more fairly, where you lower the premiums and you provide quality care for people who don't have coverage today or continue the status quo, where you get thrown off your insurance by a company that just wants to take the profit and doesn't care about the fact that you got sick; that cuts you off after you have paid your premiums because they find a little catchphrase in the clauses of the contract and they tell you: Sorry, you are not covered when you are sick, or you can't even get covered because you have a preexisting condition when you walk in and you try to get the coverage.
I think the case is so clear it is almost unbelievable to me that we are here arguing about this at this point. But even more ridiculous is the following: The very same people who are coming to the floor right now and telling us not to slow the growth of Medicare, which is all that we are doing. We are not cutting any benefits. I hope every senior in America hears this. It is time to end these scare tactics. There is no cut in benefits. Every benefit currently under the law will continue to be given to the seniors of this country, and that is an obligation we have. But listen to what the people who are coming to tell you that there are cuts in your benefits used to say. I say used to say because it was when they had a Republican President and they were running the Senate.
The fact is, back in June 2009, because of a report on the long-term budget outlook, we know, point-blank, that if we don't cut, if we don't do something to reduce the rate of growth in Medicare, by 2080, the Federal Government is going to spend almost as much a share of the economy on just its two major health programs as it spent on all its programs in every branch of government in recent years. The Medicare provisions in this bill take the necessary steps to try to reform the delivery system through value-based purchasing initiatives, through bundled payments. A bundled payment is when you give a hospital or a delivery provider a sort of global budget, if you will. You give them a big amount of money and you say: This is what we are giving you, and you have to manage with that amount of money, instead of paying them for every single time somebody comes in to do something. When you give them that global budget, that so-called bundled budget, it encourages the executives to do what they haven't done today, which is find the ways to deliver the same quality of care but to deliver it more effectively and more efficiently.
We provide the creation of an innovation center to test new payments, to have comparative effectiveness research. Doesn't that make sense? We want to know if what they are doing in Wyoming or what they are doing in Colorado or some other part of the country makes as much sense as what they are doing in Kentucky or Massachusetts or West Virginia somewhere. By looking at the comparative effectiveness, we will all learn and become more effective and more efficient at delivering services. Thanks to the distinguished Senator from West Virginia, we create an independent Medicare advisory board, which will have a profound impact on forcing the Congress to make decisions we have avoided for far too long.
Our colleagues who are here today saying: Don't do this. Don't be smart about Medicare. That is effectively what they are saying because that is what we are doing. We are trying to be smart about Medicare. We are not cutting any benefits. But they are coming here and telling you we are cutting benefits, even though in June of 1995, June 28, Senator Grassley from Iowa came to the floor and said:
We propose slower growth of Medicare. Medicare would otherwise be bankrupt.
On June 29, 1995 Senator John Kyl said:
We do heed the warning of the Medicare board of trustees and limit growth to more sustainable levels to prevent Medicare from going bankrupt in 2002.
Medicare, we think, is not going to go bankrupt until 2017. Thanks to what is in this bill, we actually extend the life of Medicare another 4, definitely, and hopefully 5 years. But here is what Senator Kyl said:
Preventing Medicare from going bankrupt is what is necessary to make sure seniors do not lose their benefits altogether as a result of bankruptcy in 7 years.
On June 29, 1995, Senator Hatch said:
It is important to start the structural reforms which are necessary to make Medicare solvent in the long term.
That is exactly what we are doing. That is precisely what we are doing, and we should have the support of Senator Kyl and Senator Grassley and Senator Hatch.
On October 17, 1995, Senator Kyl said:
We also know that it is necessary to prevent the Medicare program from going broke. The Republican budget will slow the growth in Medicare because the Medicare trustees have warned us that without doing so the system will go broke. I think that it is totally irresponsible for any organization in America to be scaring America's senior citizens.
I am quoting Senator John Kyl: ``..... irresponsible for any organization ..... to be scaring America's seniors.'' Yet here is the Republican Party scaring America's seniors.
I wish to talk about what this legislation does and doesn't do because every claim that is being made is simply without foundation. This amendment is basically an amendment designed to try to gut this bill and what it does is condition any spending increases or tax reductions in the bill on certification that all costs in the bill are offset, without counting changes in Medicare or Social Security. That is a gimmick. It is a game. It is calculated to prevent us from taking the positive changes we make and using those positive changes in an effective way to do even more that is positive.
I wish to be very specific about more that is positive, but I want to, first, go through each of the claims made by the other side. First of all, they claim the Medicare payroll taxes are used in this bill to pay for non-Medicare benefits. They say this bill raises the Medicare payroll tax so we pay for non-Medicare benefits. Well, it is not true. It is true the payroll tax goes up for an individual with an income over $200,000 and for a married couple with an income over $250,000. But let's set the record straight. By law--and nothing in this bill changes that law--all Medicare payroll taxes are used to improve the solvency of the Medicare Program. This bill does not change that practice, notwithstanding anything they try to say, and it certainly doesn't divert Medicare payroll taxes to another program.
Even the CMS actuary has certified that because of the Medicare provisions contained in this bill, the solvency of the Medicare Part A hospital insurance trust fund will be improved by 5 years. So what they are saying with respect to that is simply not true.
They also claim Medicare cuts are used to pay for coverage expansion. This statement actually ignores the benefits seniors receive from this bill.
I think it also is important to remind people how the Medicare financing system works. I just talked about the Medicare solvency in the Part A Program. The Part A Program is paid through payroll tax. The Part B Program and the prescription drug program is paid through a combination of general revenue contributions and enrollee premiums. About 25 percent of the total program cost is paid through the premium, and 75 percent is paid by the general revenues. Part D financing works exactly the same way.
This bill reduces Medicare spending by a total of $463 billion. It doesn't reduce the benefits, but it reduces the spending over the next 10 years. Do you know what that does? That lowers the out-of-pocket premiums beneficiaries pay for Medicare physician services and prescription drug coverages. In effect--and this has already been certified by CBO--we lower the premiums for seniors. That is the benefit.
The opponents claim the Medicare cuts to providers are going to result in decreased access. Well, it is interesting that the very same people who brought us the so-called death panels, which never existed, are at it again with respect to access. They want to scare you. They want to say you are not going to get access to a doctor or access to your medical care, and they claim Medicare benefits could be harmed by the bill. Yet, even as they say that, AARP, the people who represent 40 million retired Americans, says: No, no, no, that is not true. Our people are protected. The American Medical Association says: No, no, no, that is not true. The folks we care about are protected.
This bill fully protects guaranteed Medicare benefits for seniors.
It will keep Medicare from going broke in 7 years, it extends the life of the Medicare trust fund, it reduces prescription drug costs for seniors, it ensures seniors can keep their own doctors next year by blocking a 21-percent pay cut for physicians, it creates new prevention and wellness benefits in Medicare, and it keeps seniors in their own homes and not in nursing homes.
So the opponents of health care reform are simply not telling you that the program is about to be insolvent because private insurance companies and some of the providers are, in fact, using the money basically to get rich off the Medicare dollar.
We ought to be clear about the impact of these policies. Even with the Medicare changes we have made--I hope Medicare beneficiaries hear this--even with the Medicare changes in the bill, overall provider payments are still going to go up. They are not cut. They are going up. We are simply slowing the rate of growth, and that is something everybody on the other side has said they want to do.
Wall Street analysts also have suggested that many providers, including hospitals, are going to be ``net winners.'' That is a quote, ``net winners.'' Under our bill, they estimate hospital profitability will increase with reform because more and more hospital patients will have private insurance that they do not have today and the hospitals today are out of pocket because they take care of these people but they do not have the insurance. Just as in Massachusetts, where the premiums went down and where the expenses for free care went down, that is precisely what the impact will be here.
We have a choice. We can do nothing, which is basically what our colleagues have proposed. The status quo means Medicare is going to be broke in approximately 7 years. It means seniors are going to pay higher and higher premiums and cost sharing due to wasteful overpayments to providers. It means that each year billions of Medicare dollars are going to continue to be wasted, lining the pockets of the private insurance companies that kick people off indiscriminately or tell them they don't have the coverage when they finally get sick and need the coverage. The status quo means seniors are going to continue to pay for their prescription drugs.
The fact is, this is the time for responsible action. This bill strengthens the Medicare Program, it reduces premium costs for seniors, it restores Medicare's financial integrity, and it fortifies Medicare and protects Medicare benefits for America's seniors.
Let me point to another thing they keep saying. They keep saying this bill cuts billions of dollars from the Medicare Advantage Program, hurting the 11 million seniors who are enrolled in those programs today. I know that is exactly what they have said--this bill cuts Medicare Advantage and hurts those millions of seniors. Wrong, not true, scare tactic, same old procedure, trying to distort and provide fear. Nothing could be further from the truth. This bill cuts down on overpayments, not benefits. What taxpayer in America should knowingly be paying an additional amount for a service, more than the service is worth and more than we pay in the regular program?
Mr. KERRY. I want to finish the thought. If we can yield on your time at the end, I will be happy to do that, but I want to make the points.
It is the overpayments to insurers that actually threaten Medicare's future. That is what increases the costs for seniors.
In 2009, MedPAC, the independent commission that advises us on issues affecting Medicare, estimates that Medicare is going to pay approximately $12 billion more for beneficiaries enrolled in private Medicare Advantage plans than if they were in the traditional Medicare. These are overpayments, according to MedPAC and according to folks in the medical profession. They exist because private insurers, under Medicare Advantage, are overpaid by about 14 percent, on average.
I might add, coincidentally, in 2008, when the Senator from Arizona was the nominee for President, one of his top aides, Mr. Douglas Holtz-Eakin, said--I think it was in an article in USA TODAY--that Medicare Advantage plans should ``compete on a level playing field'' with traditional Medicare. The changes in this bill will help to reduce these overpayments, and they bring us closer to that level playing field that was suggested last year.
My friends on the other side of the aisle also say that reducing the government subsidies to private medical plans is going to increase the costs for seniors. Again, this statement is fiction. The overpayments private insurance companies receive under the current law to deliver Medicare benefits have increased the costs for seniors today. They, in fact, result in a $90 increase in premiums to every married couple enrolled in Medicare.
As we go forward, I hope it is the truth and facts that will prevail here, not the fiction we keep hearing to scare seniors.
Americans ought to take note that the Minority do not come to the floor of the Senate and show us how we could fix Medicare's problems more effectively. The minority does not support changes that serve seniors better. Instead, they just embrace the status quo. Everyone in America knows the status quo is unacceptable. We cannot afford it. Medicare will go bankrupt within the next 10 years. I ask my colleagues, then where are we going to be?
This is the time for responsible action, and every step we have offered offers that kind of responsible action without reducing care. Opponents of health reform won't rest. They are using myths and misinformation to distort the truth and wrongly suggest that Medicare will be harmed. After a lifetime of hard work, don't seniors deserve better?
The Patient Protection and Affordable Care Act clearly strengthens the Medicare program. The bill reduces premium costs for seniors, improves Medicare's financial integrity and delivers immediate benefits for seniors like lower prescription drug costs and free preventive services. In short, health care reform will fortify Medicare and protect Medicare benefits for America's seniors.I would like to take the next few minutes to separate the facts from the fiction.
My friends on the other side of the aisle say that health reform will cut Medicare benefits for seniors. And once again, this statement is false. Health reform will increase the number of Medicare benefits that seniors are entitled to under law. Nothing in this bill will take away or reduce guaranteed Medicare benefits. In fact, the legislation increases coverage of preventive services at no additional costs to seniors. That means, when seniors visit a doctor for a colonoscopy, mammography, or other preventive screen, they won't pay the co-pay required under current law. Encouraging more preventive care is one of the best ways we can save lives and lower health care costs. That's why, under this bill, seniors will receive even better preventive benefits than they receive today.
My friends on the other side of the aisle say that under health reform, government bureaucrats will dictate personal health care decisions. This statement is completely false. Health care decisions about providers and treatments are some of the most personal decisions many people make. Under current law, doctors and patients decide which treatments Medicare patients need. The same is true under this bill. Health reform will keep these decisions between health care providers and patients. And with improved payment policies, this bill also ensures Medicare providers get the resources they need to continue providing quality care to their patients.
My colleagues on the other side of the aisle say that reducing fraud, waste and abuse in Medicare will not save a significant amount of money. To the contrary, waste, fraud and abuse cost the health care system billions of dollars every year. Improving Medicare's financial integrity is one of the first steps we can take to save the program. According to independent analysis from the Congressional Budget Office, under this bill, enhanced oversight, like requiring background checks and screening for providers, will save Medicare dollars. Targeting waste, fraud and abuse in Medicare will protect American taxpayers and help extend the life of the program.
My friends on the other side of the aisle claim that health care reform will not lower costs for seniors but drive costs higher. The truth is that seniors will see immediate savings in prescription drug costs under health care reform. This legislation will save seniors money in the Medicare prescription drug coverage program by providing more coverage and lowering the costs of brand-name prescription drugs. In 2010, seniors will receive an additional $500 of coverage before they have to begin paying out of their own pocket in the coverage gap or ``doughnut hole'' in the Medicare Prescription Drug Benefit. Also beginning in 2010, the price of brand-name drugs and biologics will be cut in half for the seniors who have to pay for prescriptions out of their own pocket when they hit the ``doughnut hole'' between initial and catastrophic coverage.
Those on the other side of the aisle say that we are not doing enough to protect home health care. The fact is that this bill includes provisions I introduced to make home and community-based services more widely available in Medicaid. Despite advancements in home and community-based services, seniors have few affordable and accessible options in choosing a health care setting today. Seniors deserve more options, rather than just nursing homes. For seniors eligible for both Medicare and Medicaid and who prefer home or community-based services, this bill provides valuable support.
We have heard repeatedly from my friends on the other side of the aisle that leading advocacy groups do not support the Senate health care bill. Nothing could be further from the truth. The country's leading advocacy groups for seniors rights are helping stop the scare tactics and clear up the facts. Voices like AARP and the American Medical Association support the responsible Medicare reform in this bill.
On November 18th, AARP said:
The new Senate bill makes improvements to the Medicare program by creating a new annual wellness benefit, providing free preventive benefits, and--most notably for AARP--members reducing drug costs for seniors who fall into the dreaded Medicare doughnut hole, a costly gap in prescription drug coverage.
On November 20th, the American Medical Association said:
(We are) working to put the scare tactics to bed once and for all and inform patients about the benefits of health reform.
On November 16th, the Federation of American Hospitals said
Hospitals always will stand by senior citizens.
And on November 16th, the Catholic Health Association of the United States said:
The possibility that hospitals might pull out of Medicare (is) very, very unfounded. Catholic hospitals would never give up on Medicare patients.
The minority today is arguing the exact opposite of what they have said previously. In the late 1990s, Republicans and Democrats joined together to fight for America's seniors, advocating Congress take the advice of experts who said the solvency of Medicare was in trouble. Today, some are using scare tactics, falsely claiming that the Patient Protection and Affordable Care Act will impose ``cuts to Medicare'' that hurt seniors. In truth, this bill protects the guaranteed Medicare benefits our seniors deserve. I urge my colleagues to stop spreading the misinformation and false claims about this bill that are intended only to scare seniors. Instead, I urge you to work with us on this legislation which delivers health care to an additional 31 million Americans and strengthens and preserves Medicare for the 45 million beneficiaries who rely on the program.
Mr. KERRY. Mr. President, thank you very much, and I thank Senator Baucus for the time.
My friend from Oklahoma asked how many patients I take care of in terms of Medicare. I must say that is not the essential ingredient of being able to exercise common sense
and to make some judgments about this issue. I could turn to him and ask, how many buses has he driven, but he votes on transportation policy; how many wars has he fought in, but he sends people to Afghanistan; how many courtrooms has he practiced in and tried a case in, but he is willing to limit attorney's fees. That is not the measure here. The measure is, what does the policy do?
Let me be very clear. The Medicare Advantage Program was put in place. It is a private plan that is run by the insurance companies. We put them in place, and they grew, in 2003, and gained the name ``Medicare Advantage'' because they were going to be run more efficiently and at lower cost. Originally, we were paying about 95 percent to the repayment, but that has angled up now to the point where MedPAC itself--not AARP. This is not AARP. This is MedPAC. Here is the MedPAC report. MedPAC says:
Currently, Medicare pays Medicare Advantage plans 14 percent more than it would spend for similar beneficiaries in (the Medicare program), pays a subsidy of $3.26 for each dollar of enhanced benefits. .....
So the Medicare folks are subsidizing additional payments to a program that is paying more than is regularly paid, and it goes straight to the insurance company. It does not make sense for tax dollars to be spent that way.
Finally, let me just say, the Senator referenced Massachusetts. Let me read a quote from the Massachusetts Taxpayers Foundation. It is the most conservative--it is constantly protecting the expenditure of tax dollars. Everyone in the State looks to it on issues of tax policy, expenditures. Here is what it says about our plan in Massachusetts:
(T)he cost to taxpayers of achieving near universal coverage has been relatively modest and well within initial projections of how much the state would have to spend to implement reform, in part because many of the newly insured have enrolled in employer-sponsored plans at no public expense.
That is what happens.
The final comment I make to him: We are blessed to have five physicians in my immediate family--my daughter, my son-in-law, her father-in-law, and two nieces--and every single one of them would overwhelmingly disagree with the comments made by the Senator from Oklahoma. They hope we will pass this legislation, as do millions of other doctors.
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