April 9, 2003

Thank you, Chairman Bilirakis, for scheduling this hearing on Medicare. The topic of the hearing is "strengthening and improving Medicare," and today we will hear about Medicare reform. There are many different ideas about what kind of "reform" Medicare needs, and it is important that we understand exactly what the President and other advocates of his type of reform are talking about.

We will hear witnesses make two points today. One, that Medicare is going broke, and we can no longer afford to maintain the current program. Two, the only way to "save" Medicare is to move seniors and people with disabilities into private insurance plans. I do not agree.

Today, Medicare is in far better financial shape than it was when Congress created the program. The Medicare Trust Fund is expected to remain solvent for 23 more years. This is a far cry from what we faced in 1997, when Medicare was expected to go bankrupt as soon as we reached the 21st century.

Arguments will be made that because Medicare will consume a larger share of the Nation’s gross domestic product, and a larger share of the Federal budget, it is unsustainable. Whether our society can afford Medicare is a question of values. Do we want to invest in strengthening Social Security and Medicare, or do we want to fatten the wallets of the rich with more huge tax cuts? I draw your attention to an analysis prepared by the Center on Budget and Policy Priorities, which concludes that the 75-year cost of the President’s tax cuts is larger than the long-term deficits in Social Security and Medicare combined.

The argument that the only way to save Medicare is to turn it into a system run by private insurance plans is equally unpersuasive. Dr. Marilyn Moon will testify today that over the long run Medicare has surpassed the private sector in its ability to hold down costs. Dr. Robert Berenson will testify that, contrary to popular belief, private plans do not always provide better quality care than Medicare. Other tools used in private health plans, such as disease management for seniors with chronic illnesses, could certainly be incorporated into Medicare. Yesterday, Dr. Bruce Vladeck, the former Administrator of the agency that runs Medicare, stated that the best disease management tool is prescription drugs – beyond that, private plans do not do much else. All of the much-touted advantages of private health plans could be applied to Medicare if Congress had the will to do so.

The critical point here is "if Congress had the will to do so." It is becoming more and more clear that the President and this Administration have no desire to improve Medicare as we know it. Rather than add a meaningful drug benefit and other improvements to Medicare, the President’s reform plan would force seniors to join private health plans in order to get the benefits they need and deserve. The President’s reform plan would also shift more costs onto the backs of beneficiaries. The reason? The Administration doesn’t believe that the government should be in the business of Medicare and wants to cap its financial responsibility for seniors and people with disabilities.

When you hear testimony from various witnesses today, remember that Congress has a choice. We can choose to turn the health care security of seniors over to private insurance plans and wash our hands of the whole business. Or we can choose to reform Medicare, as Ms. Barbara Kennelly and the seniors of her organization point out, by adding a meaningful drug benefit and more preventive services for all seniors.