Mr. President, tomorrow marks the 40th Anniversary of the Medicare and Medicaid programs. On July 30, 1965, President Lyndon Baines Johnson traveled to Independence, MO to sign the Medicare and…
Mr. President, tomorrow marks the 40th Anniversary of the Medicare and Medicaid programs. On July 30, 1965, President Lyndon Baines Johnson traveled to Independence, MO to sign the Medicare and Medicaid programs into law. That day, President Johnson signed a contract with the citizens of this country. The contract states that our Nation recognizes that health care is a fundamental human right and that a just society will marshal resources to provide basic medical care for those most in need. Forty years later, the Medicare and Medicaid programs continue to abide by that contract, providing government safety nets that keep the elderly, disabled, and economically disadvantaged from falling into the ranks of the uninsured.
In passing legislation to establish the Medicare program, Members of this
body took a courageous step by guaranteeing health insurance coverage to seniors and people with disabilities--regardless of a person's income and regardless of a person's illness. Medicare is a commitment to America's seniors that if you are over 65 or disabled, no matter what your income, we will stand by you and you will get the health care you need.
Before the Medicare program was established, nearly 50 percent of seniors lived their golden years without health coverage. Seniors were forced to choose between a trip to the grocery store and a visit to the doctor's office. Today, because of Medicare, 98 percent of older Americans have access to and can afford to get the medical care they need. Of the forty-two million Americans currently covered by Medicare, including 35 million seniors and 6 million people with disabilities or end-stage renal disease, 1.3 million live in my home State of New Jersey. I've spoken with many of those beneficiaries from throughout my State and it's clear there is great uncertainty about what the future of Medicare holds for beneficiaries.
On the 40th Anniversary of the Medicare program, we should be cheering the dramatic impact Medicare has had on the health and wellbeing of this country. Yet, I would be remiss if I failed to mention the real fear I have that Medicare beneficiaries will be in for a rude awakening early next year. This coming January, a prescription drug benefit will be added to the Medicare program. Since the day I joined the Senate, I consistently supported ensuring seniors access to affordable prescription drugs by adding prescription drug coverage to Medicare. In June, 2003, I was one of 76 Senators to vote to pass legislation to establish a comprehensive, affordable prescription drug benefit under Medicare. While bill was not perfect, on the whole the legislation would have been good for Medicare beneficiaries in New Jersey and those across the Nation. Yet, Mr. President, the bill that came back from House-Senate conference and was ultimately signed by the President does more harm than good.
For most New Jersey beneficiaries, the prescription drug plan set to take effect January 1, 2006 is neither affordable, nor comprehensive. It will cost seniors $3600 for $5,000 in drug benefits, will result in over 90,000 New Jersey retirees losing their drug coverage from their former employers, and could force nearly 200,000 New Jersey seniors out of Medicare as they know it into private HMOs.
Most troubling is the impact that the prescription drug plan will have on low and middle income beneficiaries in my state. My colleague Senator Lautenberg and I worked hard to save New Jersey's PAAD and Senior Gold programs--which the original Republican plan would have scrapped. But unlike New Jersey's PAAD and Senior Gold programs, the Medicare plan will have drug formularies that will restrict seniors' access to certain drugs. This means that a senior in PAAD or Senior Gold who now has complete prescription drug access may face limited drug access or substantially higher costs for their drugs.
One of the few bright spots that came of the Medicare prescription drug bill is the establishment of a ``Welcome to Medicare'' physical exam for new beneficiaries. For the majority of Medicare beneficiaries, this program has been a treatment program, not a preventive health program. Instead of covering preventive services like colonoscopy, cardiovascular screenings, and wellness programs that keep beneficiaries healthy, Medicare has traditionally focused more on treating the patient once he or she gets sick. We need to continue to promote prevention, instead of just reacting to illness, under the program. Not only will a focus on prevention keep our beneficiaries healthier and more independent, but the imminent retirement of the baby boom generation will continue to drive the costs of the program higher. The simplest way to constrain Medicare spending while also keeping Americans in their home and out of the hospital is to advance the program's focus on providing coverage of preventive health services.
I have no doubt that expanding Medicare coverage to include preventive measures will continue to improve the health and wellbeing beneficiaries. On the whole, however, I have grave reservations about the impact that the new prescription drug plan will have on what has, for 40 years, been a reliable and affordable health coverage program for this country's elderly and disabled citizens. One of the guiding principles of health care is, ``do no harm.'' My real fear is that the prescription drug plan will seriously undermine the Medicare program by shifting costs and limiting access to lifesaving services. These terms were not part of the contract President Johnson signed to establish Medicare.
Forty years ago, along with the Medicare program, President Johnson signed legislation establishing Medicaid. This health insurance program was designed to keep the Nation's most vulnerable populations--the poorest and sickest, from falling onto the rolls of the uninsured. Medicaid is based on the proposition that the health of a nation should be judged by the health of its people. For the last 40 years, Medicaid has provided health care for 105 million Americans with disabilities, working families, the elderly, children, and pregnant women. The success of this federal-state partnership is a tribute to President Johnson and the members of Congress who were brave enough to recognize that, in the world's richest country, basic medical care should be a right, not a privilege.
The Medicaid program has grown and evolved from a safety net program to the primary source of care for millions of Americans. Today, Medicaid provides vital health care services more than 53 million Americans. For millions of low-income children and families, including 500,000 children in New Jersey, Medicaid covers primary and preventive health care services that they otherwise could not afford. Medicaid provides crucial primary care health services for children with disabilities. And as my colleagues know, Medicaid is the Nation's largest payer of nursing home and other long-term care services. The amazing thing about Medicaid is the fact that the program covers people who can't get health coverage anywhere else, and it does so at a fraction of the cost of other programs. A recent study found that the cost of serving an adult in Medicaid in 2001 was about 30 percent lower than if that same person were instead covered by private health insurance. And Medicaid spends about half as much on administrative costs as private insurance. In 2003, only 6.9 percent of Medicaid costs were administrative expenses compared to 13.6 percent for private insurance. It is truly remarkable that Medicaid is able to do so much for so many Americans.
As we take time to celebrate the dramatic success Medicaid has had in covering our most vulnerable populations, we must be cognizant that there is much more to do and that the program itself is vulnerable. Clearly, Medicaid does a remarkable job covering Americans who would otherwise be uninsured, but the reach of the program is becoming more and more limited. Forty-five million Americans were uninsured at some point during the past year. For many of these Americans, their primary source of care is hospital emergency rooms. Many could have been kept out of the hospital emergency room if they had access to basic health services under Medicaid, and this could have been achieved at a fraction of the cost. Yet, arguing that the program is rife with waste, fraud, and abuse, Republicans passed a budget earlier this year that cuts $10 billion out of the Medicaid program. Clearly, there's always room for improvement, and I don't think there is a member of this body who believes we shouldn't rid the program of any waste, fraud, and abuse that exists. However, I have seen no credible evidence to convince me that there is $10 billion in savings to be had from such efforts. Instead the evidence suggests that $240 million of the $10 billion in cuts will come directly from the New Jersey Medicaid program. For $240 million, New Jersey could cover 100,000 more children, 17,000 more seniors, or 12,000 more residents with disabilities. Instead of expanding the Medicaid program to these populations, the $10 billion in cuts will likely come at the expense of beneficiaries--pregnant women, children, and people with disabilities-- people who rely on the program for their basic medical needs.
Dramatic changes to Medicaid based not on sound public policy but on
achieving $10 billion in savings would be a grave mistake. It would be a huge step backward for Medicaid beneficiaries in New Jersey or across the country. It simply is not possible to cut $10 billion from the Medicaid program without chipping away at the foundation on which the program is based. Make no mistake about it, in a federal-state partnership such as this, cutting $10 billion from Medicaid means taking $10 billion away from the States ability to cover their uninsured. It means that States will be left with the tough choices of decreasing reimbursements to providers, eliminating services like prescription drugs and specialized services for the mentally ill, or raising taxes to preserve these services.
The most egregious aspect of the proposed Medicaid cuts is that these cuts come in a budget that includes the $204 billion cost of making permanent the President's tax cuts for millionaires. How do we, as legislators, look hard-working Americans in the eye and tell them honestly that we can't afford $10 billion for health coverage for low- income Americans, but we can afford $204 billion in tax breaks for the most well-off? Is this the same legislative body that recognized the social value of offering a helping hand to those who could otherwise not help themselves? Instead of tax cuts for those Americans least in need of tax cuts, we should be preserving and expanding access to health care for our Nation's most vulnerable by maintaining our Federal obligation to the States to pay our fair share for these services.
As we celebrate the 40th anniversary of Medicare and Medicaid, we must recognize that some of those who have urged the dismantling of these programs are the same people who argue that these programs are the epitome of big government run amuck. On the contrary, Medicare and Medicaid are government at its finest. For 40 years, these programs have been examples of government up to the plate to provide a lifeline for citizens who would otherwise fall through the cracks of society. On July 30, 1965, Medicare and Medicaid were the vision of a stronger, healthier, more prosperous America. We must continue to share this vision today, as we have for the past 40 years.
