Defense Communities Assistance Act of 2009

Mr. President, let me, first of all, commend our colleague from Michigan, who is a member of the Finance Committee and has been a stalwart defender of the traditional Medicare Program and of our elderly not only in her State but around the country. She has offered, I think, some very cogent and worthwhile information this morning once again on this subject matter.

We keep going around and around in this debate. It is a little frustrating because we are talking about basically whether we are going to limit to some degree the profits of some private insurance companies that are under the rubric of something called Medicare Advantage. Again, these are private companies that are receiving subsidies, supported by Medicare beneficiaries and the taxpayers of this country. We are not talking about eliminating Medicare Advantage but rather--we had a big chart a few minutes ago. We will get it in a few minutes. It shows we are not eliminating the program, we are restraining profit growth in the program.

We are rewarding Medicare Advantage in the bill, as the chairman pointed out. Based on performance and quality, we actually give bonuses in Medicare Advantage--contrary to the arguments you have heard by those who are heralding Medicare Advantage, despite the fact that the very companies who argued for it to begin with, promised they were going to prove how they could reduce costs and be more efficient. In fact, today, it is quite the opposite. Right now the government pays these Medicare Advantage insurance companies $1.14 to do the same thing for seniors that Medicare does for $1. That is basically, on average, what it amounts to.

The question is, can we reduce the cost of the overpayments, which are basically ending up in the pockets of insurance companies? There is nothing wrong with profits in private companies, but let's declare them what they

are. This is not traditional Medicare. They are private companies that are anxious not only, I presume, to provide benefits to their beneficiaries, but they are also looking to make a profit. There is nothing wrong with that, but since the premiums were set by statute, and we have an obligation to try to keep our costs down, we are trying to do so because the promises that were made have not been kept. The costs are vastly exceeding the promises made.

The amendment we are going to hear about from our friends on the other side is nothing more than a recycled compilation of some of the ``greatest hits'' we have heard: stalling with arcane obstruction tactics, while standing up for some of the private companies--and I have no objection to standing up for private companies that do a good job, but when you do so at the expense of scaring seniors with baseless claims, then I do object. That is what is going on here because, quite frankly, today almost 80 percent of our elderly are paying $90 a year in additional premium costs, without getting any benefit from it whatsoever, to provide benefits under the Medicare Advantage Program. That is not equitable. The 80 percent of our elderly need to know that they are being disadvantaged by this.

What the Finance Committee, under the leadership of Max Baucus, is trying to do is bring some equity back into this. He pointed out--and it deserves being repeated--that nothing in the bill does away with Medicare Advantage. We are trying to get it back to a sense of reality and not, again, disadvantage 80 percent of our seniors.

Right now, there is Medicare ``disadvantage''--that is what it ought to be called, because that is what it does--disadvantages. Why should 80 percent of the elderly in this country pay higher premiums, with no benefits, at the expense of the 20 percent who are going to get some small advantage under this--but very little, because most of it ends up in profits. I will tell you why that happens in a minute.

To make my point, according to the Oppenheimer Capital analyst Carl McDonald, in a report issued a month ago:

Between 2006 and 2009, we estimate that Medicare Advantage

accounted for nearly 75 percent of the increase in gross

profits among the larger plans in the industry, highlighted

by an estimated gross profit increase of $1.9 billion in

2009, relative to commercial risk earnings gains of nearly

$600 million.

I know the chairman of the Finance Committee made that point. Seventy-five percent of the increase in gross profits came from the Medicare Advantage plans. These profits come out of the pockets of the American taxpayer because of the subsidies and, of course, the Medicare beneficiaries who are paying those extra dollars every year, without receiving any of the benefits at all. Our bill will protect and strengthen Medicare and extend the life of the trust fund, as you have heard over and over again. That is not a fact to dispute. That is a fact. We extend the life of the Medicare Program. Part of the way our bill adds to the use of Medicare is to eliminate wasteful overpayments. These are overpayments far beyond what was anticipated when the program was written.

As I mentioned a moment ago, the government pays insurance companies in the Medicare Advantage Program $1.14 to do the very same things for seniors that traditional Medicare does for $1. So those are the overpayments we are trying to rein in. There is no evidence these wasteful overpayments do anything to improve the care of our seniors. At the same time, they speed Medicare's descent into bankruptcy and raise premiums for all Medicare beneficiaries.

Our bill would end that waste and use the money we save to help seniors pay for prescription drugs by closing the doughnut hole. For the second time in less than a week, our friends on the other side are using these tactics to halt progress completely, fighting for these profits and overpayments that, again, come out of the hide of taxpayers and our elderly.

If you look at this chart, if you extend to 2019, almost 10 years from now, what is the difference between what our bill does and what those who want no change do? The difference is $20 billion. In the post-reform period, in 2019, it is $183 billion going to Medicare Advantage. What the opposition wants is to hold it at $204 billion in 2019. That is $20 billion. That is the savings we are looking for in order to reduce overpayments and provide those resources to the elderly so they can afford prescription drugs.

If you want to side with these companies--they are still going to make a profit. This will not deprive them of that. The profit margins will be far more realistic and it will reduce subsidies, as well as overpayments being made by the elderly who receive nothing from this program at all.

Let me make my case on this point. Senator Stabenow listed the guaranteed benefits under Medicare. The chairman did it as well. Also, we add benefits as a result of our bill. In addition to the inpatient hospital care, doctor office visits, lab tests, kidney dialysis, emergency care, occupational therapy, organ transplants--all of these issues--we also do things in our bill that are not available presently. We reduce the size of the Medicare doughnut hole. That is an added benefit that does not exist today. We reduce premiums to pay for drugs and medical care. We eliminate the copays. What an advantage that is here. Ask yourself whether you would like to eliminate copays or watch private companies make an additional $20 billion in 10 years. Which is the better choice? Ask the overwhelming majority of seniors which they would rather have--an elimination of the copays they are paying today, or continue to provide excess profits for the companies here that have made so much under the Medicare Advantage Program.

Lastly, of course, and most important, we help keep Medicare solvent. People say: Give me some examples on why the differences exist between Medicare and Medicare Advantage. I have a couple of examples from my home State that I think highlight the point. These come from the Center for Medicare Advocacy, or CMA, which is a nonprofit organization, as my colleagues know, that does casework on behalf of individuals who need assistance dealing with Medicare Advantage plans. They provided two cases from my State. I presume most of my colleagues could find cases in their own States.

A woman living in Madison, CT, a shoreline community in Connecticut, had Lou Gehrig's disease, ALS. We are all familiar with ALS. We know the stories people go through with that disease. She was in a Medicare Advantage plan. She was denied coverage for home health care because she was said to be ``stable.'' That was the quote, ``she was stable.'' That is not a valid reason for denial, and she was hardly stable with ALS. CMA, the Center for Medicare Advocacy, had to go to Federal court to get her care covered despite firm written support regarding her medical condition from her doctors.

Here is a woman under Medicare Advantage with ALS being declared by Medicare Advantage ``she was stable.'' Her doctors said anything but the case.

When my friends talk about rationing of care under the present system, here is Medicare Advantage, a private firm, making a medical decision that should have been made between her and her doctor. They eventually got it overturned, but they had to go to Federal court to get it overturned. That would not have happened under Medicare. If she had been under Medicare, she would have gotten that help, no questions asked.

When people say there is no distinction, this is a live case.

Let me give the second one. A woman from Vernon, CT, and her husband traveled to Florida to visit their daughter living there. When she got to Florida, she fell down and sustained some physical injuries. While being treated at a Florida hospital for her injuries, it was discovered that she had a brain tumor, the reason she had the fall. She had no idea of this beforehand.

The Medicare Advantage plan covered treatment for the fall as an emergency--which Medicare Advantage plans must cover, even out of network, by the way--but not any diagnosis or treatment for the brain tumor.

The woman had another daughter who was a nurse who lived in Utah. So they traveled from Florida to Utah where she went for the cancer treatment for the brain tumor. While undergoing chemotherapy, this woman had a

life-threatening reaction to one of the medications from which she almost died. The Medicare Advantage plan denied coverage for all of this care because it was out of network. She was in Utah. They said no, leaving the client and her husband with $100,000 in bills.

Again, the Center for Medicare Advocacy went to court and battled against this decision. They were successful in recovering $90,000 out of the $100,000. This woman is now deceased, but she and her family were left with over $10,000 in bills, all of which would have been covered under traditional Medicare, but she had gone into a Medicare Advantage plan. In both instances, they would have avoided having to go to Federal court, having to fight as hard as they did, going through the trauma and turmoil. It is bad enough you have to wrestle with cancer or wrestle with a brain tumor, but then you get saddled with $100,000 in bills and Medicare would have taken care of them. This Medicare Advantage Program disadvantaged her in the process.

These are examples of how private Medicare Advantage does not always operate in good faith. They are not always there when you need them.

There are significant differences between Medicare Advantage and Medicare. With traditional Medicare, you know what services you get.

I ask unanimous consent to have printed in the Record a list of services so people can read about it, if people have not already done that.

Mr. President, all medically necessary hospital care and doctor office visits are covered under Medicare. You know you can get these services from any Medicare provider anywhere in the country. Out of network you get this kind of help, whether you are in Utah, Florida, or Vernon, CT, where one woman was from. Medicare would have provided that care. Here she was bouncing around the country and denied one place after another under Medicare Advantage. With traditional Medicare, she would not have had to worry about a private insurance plan playing games with her coverage.

The Medicare Advantage plans run the show. They change the benefits. Cost sharing goes on. This is why Medicare Advantage is not like traditional Medicare. So when people say it is just like Medicare, no, it is not just like Medicare. If you doubt me, then call that family in Madison, CT, or call that woman's family from Vernon, CT. Ask them whether Medicare Advantage is just like Medicare. You will get an earful from them on what they went through.

We should be clear that we are not eliminating Medicare Advantage. Again, I appreciate Senator Baucus making this point. It needs to be made over and over again. We are not eliminating it at all. We are reducing payments to private plans and making the system work more uniformly. We actually give bonus payments for care coordination and quality improvements. These plans can use those payments to improve benefits for beneficiaries. So we are hardly eliminating it. We are making it work better.

I have serious reservations about how this plan operates, I will say that, but I would not advocate on the floor of the Senate the elimination of Medicare Advantage. I do want to make it work better, and I do want to cut back when we have overpayments occurring. I don't think it is fair that 80 percent of the seniors in my State or elsewhere are paying $90 a year extra to cover this program and get none of the help from it and people under Medicare Advantage, who could have been protected, are not because they opted to be in that plan and then found out it is anything but what they thought it was.

We are going to hear these arguments over and over about Medicare Advantage. A little truth in advertising is necessary here. So people understand, it is not Medicare and it is not an advantage, not under the present system, not at all. That is what we have been trying to say over and over again here so people understand.

This is a good bill. This is a solid bill. This took a tremendous amount of work in the Finance Committee, which had the responsibility of crafting these provisions which are highly complicated and very delicate in what they do. What we have done is preserve and strengthen our Medicare system, expanding benefits for people, eliminating copays, allowing those preventive and screening services to be available to our elderly, seeing to it they will have prescription drugs at lower costs. That is all in this bill. That is a great advantage.

What a tragedy it would be if in these next few days, after all the debate, that we lose all the work that has been done to make these improvements in our health care system.

I commend my colleague from Montana and my colleagues on the committee who worked so hard to put this bill together, this balance together that can make a great difference in people's lives.

I also thank our colleague from Rhode Island for offering his amendment, which we are going to be considering at some point when we get to vote occasionally on some matters here. I hope at some point we get to do that. We have done it a couple of times. There has been over a year of debate and discussion. I think the American people want to see some action.

We think we have a good bill. It is going to take on important market insurance reforms that ensure Americans can get access to health care promised by their insurance plans. It is going to make sure if someone loses his or her job, they can get insurance. It is going to improve the quality of health care and focus our system more on prevention and wellness.

On top of all these things, it is going to reduce the deficit. As we have heard over and over again, CBO is talking about saving $130 billion in the first 10 years and $650 billion in the second.

I have to say something. The other day we got the news that CBO said the premiums on the individual plans, the small business plans and the large business plans, are actually going to reduce premiums costs by as much as 20 percent in one area, and 3 percent in another. I would have thought there would be wild applause. Even those who oppose the bill would have said: Isn't this great news? What we got was almost a deep disappointment that CBO gave us a report that people are actually going to save money under this bill. All of a sudden they attack CBO because they did not like the results coming out of CBO. I guarantee had they come back and said they are going to increase premiums, we all would be talking about that. Here we get a report that actually we are going to save premium costs, reduce the costs to the Federal budget as has been pointed out.

Senator Whitehouse is going to offer an amendment that makes clear these savings we are talking about are used to strengthen Social Security, reduce the deficit, and contribute to the long-term solvency of the CLASS Act, that it will be for that purpose and that purpose alone.

The third part of his amendment is particularly important. Many of our colleagues have come to the floor in the last few days to claim the CLASS Act will be a long-term drain on the budget. It is not true. Thanks to our colleague from New Hampshire, Senator Gregg, the CLASS Act will be required by law to be solvent for 75 years. This was not in our original proposal. It was added in the HELP Committee markup by Senator Gregg, and I thank him for it.

The Gregg amendment was unanimously adopted in our markup. CBO says it produces $72 billion in savings for the Federal Government over the first 10 years of its existence and it will save nearly $2 billion for Medicaid.

We further added language to the bill to require the Secretary to maintain enough reserves after the first 10 years to pay off any claims that may emerge. We have included language to prevent

Federal appropriations from being used to pay benefits to ensure the program is self-funded.

Finally, at the request of several Senators, the distinguished majority leader made sure we did not use any of the savings in the CLASS Act for any other purpose than to pay for the CLASS Act itself. This amendment offered by Senator Whitehouse will give Senators a chance to commit themselves to that purpose. Senators who claim the CLASS Act will hurt the Federal budget, of course, should vote for this amendment because statutorily it will prohibit any of those funds from being used for any other purpose other than for the CLASS Act and the recipients who want to use them. I commend him for that move and thank him. When that vote occurs, I urge colleagues to vote for the Whitehouse amendment.

Lastly, I ask unanimous consent to be included as a cosponsor, along with my colleague from Maryland, Senator Mikulski, of Senator Coburn's amendment No. 2789 which adds Members of Congress to the public option.

Mr. President, we added that provision to the HELP Committee bill. Senator Coburn offered that amendment. Senator Kennedy, myself, and others voted for that Coburn amendment. I think it may have shocked the Senator from Oklahoma at the time that we actually voted for his amendment. I know Senator Brown has been added as a cosponsor. I have no objection to that amendment. That is how much I think the public option would be worth. If we have a public option in this plan-- and my hope is we will--there is nothing wrong with insisting Members of Congress be included in that public option proposal. His amendment suggests that. We supported it in committee, and I am prepared to support it again on the floor of the Senate.

I point out, I wish we could get Members as well who are reluctant to support this bill to recognize that as Members of Congress today, we all have pretty good health care plans under the Federal employees benefits package, some 23 options every year that are available to us, along with the 8 million Federal employees in this country under those plans. I wish we could get others to recognize how valuable that is to all of us and our fellow Federal employees. Unfortunately, that does not seem to be the case.

I hope before this is concluded we will have far more support for this effort we have crafted and provided to our colleagues for their consideration.

Again I compliment the Finance Committee and my friend from Montana for the work he has done on this issue. It is very well thought out, very balanced and fair.

I said this over and over: I challenge any Member to come to the floor and identify a single guaranteed benefit under Medicare that is cut out under this bill. There is not one. Three days have gone by since I made the charge that not a single guaranteed benefit under Medicare is cut. You will not find one; not one.

I see my friend from Wyoming has come to the floor. I know I have probably gone over my time.

I yield the floor.

Mr. President, a few moment ago I started to describe an amendment that will be offered by our colleague from Rhode Island, Senator Whitehouse, regarding the CLASS Act.

As a bit of background, the CLASS Act is a proposal that was originally conceived by a former colleague and dear friend, Ted Kennedy of Massachusetts, years ago, the idea behind it being that we ought to try to figure out a way to support people in this country who end up with disabilities. Their disabilities are not so dramatic that they would deprive them of the opportunity to continue with work but serious enough that they would require some additional help in order to provide a basic standard-of-living, either a driver, some help on food assistance, whatever it may be.

Under present disability formulas, which are basically income- replacement bills, in order to get some help if you are disabled, you almost have to impoverish yourself to qualify and then be restrained about how much you can actually earn, if you want to continue to work. So while it has been a good program and certainly has helped a lot of people, in a sense there are catch-22s in it, that to qualify for it, you have to divest whatever you have acquired or earned and impoverish yourself. Then, even though you may be capable of continuing to work, you are limited on how much you can actually earn under those programs.

It was the vision of Senator Kennedy years ago to try to come up with a different idea, not to replace that but an idea that might allow for people who are disabled to get some help during that period of disability, however long it might last, without necessarily having to then impoverish themselves or to limit their outside earnings, given the fact that they may be able to continue to perform and, in fact, would like to continue to work.

The question was, how could we do this, particularly in light of the fact that we don't want to necessarily be adding a cost to taxpayers. It was his idea to come up with a totally voluntary program that individuals would have to contribute to out of their own pocketbooks, not out of taxpayers pocketbooks, by putting aside resources on a monthly basis over a period of years--5 in the case of this bill--where the plan would become vested and then to contribute that amount thereafter. Then, in such case if you found yourself disabled--and there are criteria that would determine whether you met those thresholds--you would then qualify, based on the fact that you have paid your own money into this program continuously, without exception, to receive at least about $75 a day, providing assistance to you so that you might get along and be able to continue to operate without having to impoverish yourself and put limitations on your work. At $75 a day, that would provide over $27,000 a year for those individuals who meet it. Again, entirely voluntary, your money, not public money--no taxpayer money goes into the plan.

Five million people under the age of 65 living in the community have long-term care needs, and there are over 70,000 workers with severe disabilities in the Nation today who need daily assistance to maintain their jobs and their independence. Long-term care supports and services are an area that is not currently affordable or accessible for millions of our fellow citizens. It is estimated that 65 percent of all those who are 65 or over today will spend some time at home in need of long- term care services, for which average costs run at least $18,000 a year.

Mr. President, 1\1/2\ million people today are in nursing homes, and roughly 9 million of our fellow elderly Americans will need help with activities of daily living during the current year. By the year 2030, that number will increase to 14 million, as we watch the baby boom population age. And while those lives will be extended and hopefully the quality improved, we all accept the notion that as we get older, we have greater needs physically. That certainly is something anyone over the age of 65 can tell you. So as the years progress, the quality of care, longevity tables increase, the number of people who will need some form of services or another will jump from 9 million today to roughly 14 million. Those numbers are apt to increase.

Many people who need long-term services and supports rely on unpaid family and friends to provide that care. They have children or grandchildren who are around to provide that kind of assistance. A lot can't, of course. But ultimately many of these individuals have to impoverish themselves to qualify for Medicaid. We know what happens. They transfer the house, their assets. They shove everything over to their children or someplace else so that they qualify for that title XIX window. They become desperately poor, so they can then qualify for Medicaid, which remains the primary payer for these services. The CLASS Act is designed to avoid that, if we can, in as many cases as possible by providing a lifetime cash benefit--voluntary, totally paid for by the beneficiaries--that offers seniors and people with disabilities some protection against the cost of paying for long-term care services and supports and helps them obtain services and supports that will enable them to remain in their homes, reside in their communities, and, in many cases, continue to work.

Let me tell you how the program works. The program is a totally voluntary, self-funded insurance program with enrollment for people who are currently employed. Affordable premiums will be paid through payroll deduction, if the individual's employer decides to participate. It is totally voluntary, nothing required whatsoever. If the employer does not want to participate, the employee would have to find some other way. If the employer decides to allow a payroll deduction, they can do that. Participation by workers, again, is entirely voluntary. Self-employed people or those whose employers do not offer the benefit will also be able to join this program through a government payment mechanism.

Individuals qualify to receive benefits when they need help with certain activities of daily living and they have paid premiums for at least 5 years and have worked for at least 3 of those 5 years. Beneficiaries receive lifetime cash benefits based on the degree of impairment, expected to average roughly $75 a day or roughly $27,000 a year. Benefits can be used to maintain independence at home or in the community and should be sufficient to cover typical costs of home care services or adult daycare. Benefits can also be used to offset the cost of assisted living and nursing home care.

Let me tell you how the improved version of this act protects the taxpayer. There have been issues raised about how they are going to be protected under this program. All CLASS Act benefits are paid by voluntary participants, not taxpayers. The CLASS Act actually would save taxpayer dollars by reducing Medicaid costs--according to CBO, almost $2 billion. CLASS Act premiums must be set at a level sufficient to guarantee actuarial soundness of the program.

We thank Senator Gregg for his amendment in the debate on the CLASS Act bill when it came up in committee.

The current CLASS Act includes significant improvements over earlier versions, such as tighter eligibility standards, a new reserve requirement, and an absolute prohibition on the use of taxpayer dollars to pay benefits. The Congressional Budget Office determined that the improved program is totally actuarially sound.

This bill, the Patient Protection and Affordable Care Act, creates a voluntary insurance program. Under the program, working people pay premiums for at least 5 years before it would vest. After that point, if the individual has paid in for 5 years and worked for at least 3 of those 5 years and develops a disability, they can receive a cash benefit of no less than $50 a day for as long as that disability persists. Contrary to popular belief, Medicare and most private health insurance only pay for long-term care for a short period, meaning that most people pay out of their own income or assets or their family's assets to provide this kind of benefit. Those with the most intense needs will frequently exhaust these assets and have to rely on Medicaid, thus impoverishing themselves in order to qualify.

The CLASS Act provides essential options for 65 percent of those age 65 and older who will need long-term care services at some point in their lives and for the 70,000 workers with severe disabilities in the Nation today who need daily assistance to maintain their jobs and their independence.

It has been said that this program is not financially stable and amounts to nothing more than a Ponzi scheme. This program, they say, will create a new government entitlement program. It is not a government entitlement program--anything but. The CLASS Act does not confer rights or an obligation on the government funding, nor does it affect receipt of or eligibility for other benefits. The program stands on its own financial feet.

CBO has estimated the program to be actuarially sound for the next 75 years. The CLASS Act is solvent, according to the CBO. The program would run only on its own cashflows. CBO estimates an average monthly premium of $123 for an average daily cash benefit of $75 for those who qualify. It may not seem like much, but over a year that would provide needed assistance for those who suffer under disabilities.

CBO uses very conservative participation rates. CBO assumes participation rates that do not consider that CLASS would offer a lifetime cash benefit, be endorsed by the government, and provide a convenient way for employees to auto-enroll through their employers with a voluntary opt-out. All of these features would increase participation rates, which will result in lower premiums, encourage enrollment, and make the program even stronger financially.

Solvency of the program is bolstered by flexibility to adjust the program. In their November 25 letter to the Congress, the CBO acknowledges that the legislation gives flexibility to the Health and Human Services Secretary to adjust premiums and benefits where or if ever needed. This provides a lever to ensure that the program stays solvent even if real life does not perfectly mirror the models of the CBO, as good as they are.

As the Congressional Budget Office discusses, the CLASS Act would function just like any other private long-term care insurance program which finances benefit payments from a premium reserve and interest income off that reserve. Due to budget scorekeeping, the CBO finds that premium revenue exceeds benefit payments in the third decade but does not take into consideration accumulated reserves and income off those reserves that keep the program fiscally independent.

Beyond being self-supporting and voluntary, this program can actually generate savings in Medicaid. Direct offset of the $75 daily benefit is applied toward any Medicaid long-term care costs. Beyond that, the CLASS Act program will help people live independently at home or in the community. When people with disabilities get the services they need, they are less likely to spend down to get Medicaid and less likely to enter a nursing home or hospital, all of which generates additional Medicaid savings.

Of course, what we don't calculate here, because I don't know how one would calculate it, is that notion of independence. I suspect maybe all of us

know people who are on Medicaid and know the frustration particularly of someone who is otherwise healthy but suffers from disabilities who would like to work and wants to keep independent. Yet if you go into the Medicaid Program, there are huge restraints on your ability to do so. So by this program, aside from financially reducing Medicaid costs, we are actually providing that additional sense of human dignity and decency that just because you have a disability and you need help doesn't mean you don't want to be self-sufficient and keep working. There is the gratification of knowing you are contributing in some way other than being shuttered away, having impoverished yourself, relying on others' assets to take care of you because you do not have those resources.

Senator Kennedy generated this idea years ago, and now I think it is improved because of the amendments and ideas that have been suggested by a number of our colleagues here, as well as others, and we have actually strengthened the concept to give it the kind of financial independence Members want it to have, sheltering these dollars against being used for other purposes, such as going off to some other program that people may have a great desire to fund by tapping into these resources. We prohibit that from happening.

If employers do not want to have a payroll deduction, they do not have to have that. No one is required to join the program. We believe, though, when members of our society and country see the benefits of this, they will gravitate to it as a wonderful way to ensure against that dreaded possibility all of us face; that is, becoming disabled, being unable to work as much as we would like to, needing additional assistance and help, and, of course, having very few places to turn to get it.

The disability groups and others that support this, 275 organizations, aging, religious groups, disability organizations across the country--I am not going to read all of them here because 275 names is a lot, but I have here the list of all 275 organizations that have strongly supported this proposal. I cannot think of any finer way to celebrate the memory of our former colleague, who cared so much about this bill we are now engaged in debating, who brought this idea to the table years ago, and who championed it for so many years.

Today, we have a chance to include this wonderful concept, this creative, innovative idea. It saves money. It provides independence for people. It gives them a chance to lead good lives. It provides support to their families who otherwise have to bear a lot of that burden. None of us want our children or our grandchildren to have to bear burdens as they are trying to raise their own families. So here is a little idea that has generated support, totally by voluntary contributions. There is no government money involved at all. And it is to give people a chance to live out the remaining time of their lives with decency and dignity, having the sense of making a contribution and making a difference.

All of those facts I cannot put a dollar amount on. I cannot tell you what the financial benefit is of someone getting up in the morning, getting a little help but going off to a job and knowing they are needed and have worth and value as a human being. What is the dollar amount on that? I cannot tell you, except I know it has value in our country. Or the alternative? Getting rid of all your assets, impoverishing yourself, relying on your family or friends to take care of you in order to try to survive, when you could be doing more.

So I hope my colleagues will support the Whitehouse amendment when it is offered to strengthen this program and that they will resoundingly defeat the effort to cut this program out of the bill altogether. I cannot think of a worse thing we could do with a piece of legislation that is designed to be creative, innovative, reduce costs, and make a difference for millions of our fellow citizens. And a growing number-- as was pointed out, by the year 2030, 14 million Americans in our country, and I suspect more--will be in need of services such as these.

I see my colleague and friend from Iowa on the floor, who has been as strong a champion as this Congress has ever had when it comes to the disabled in our country, having been the author of the Americans with Disabilities Act, along with others but nonetheless the principal architect of that effort, and he can speak more eloquently than any other human being I have ever known about why this program is important and what it means.

Mr. President, I ask unanimous consent that the list of 275 organizations that strongly endorse and support Senator Kennedy's CLASS Act be printed in the Record.

Before we go to our next speaker, I wish to ask if I could request that the next half hour be equally divided; is that OK?

Forty minutes, equally divided.

Yes. That would be under the same order as we had before, I would ask the Chair.

Mr. President, the Senator from Rhode Island wants to be heard.

Mr. President, I yield whatever time we may have remaining to Senator Kirk of Massachusetts, who has done an incredible job in very difficult circumstances--replacing our beloved former colleague Ted Kennedy from Massachusetts. He has been a valuable contribution over these days he has been here. I know he wishes to say a few words as well.

Mr. President, I suggest the absence of a quorum.

Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. President, I am about to, on behalf of the majority leader, propound a unanimous consent request.

Mr. President, I ask unanimous consent that at 3:30 p.m. today, the Senate proceed to vote in relation to the following amendments and motion to commit, as listed in this agreement, with no other amendments, motions to commit, or any other motion except a motion to reconsider and table upon the conclusion of any vote, being in order during the pendency of this agreement; further, that prior to the second and succeeding votes, there be 2 minutes of debate, with all time equally divided and controlled in the usual form; that any amendment or motion covered under this agreement be subject to an affirmative 60-vote threshold, and that if any achieve that threshold, then it be agreed to and the motion to reconsider be considered made and laid upon the table; that if it does not achieve that 60-vote threshold, then it be withdrawn; that after the first vote in this sequence, the succeeding votes be 10 minutes in duration:

A Senator Whitehouse amendment re: Social Security fiscal responsibility; the Republican leader's designee amendment re: fiscal responsibility; Senator Stabenow's side-by-side amendment re: Medicare Advantage; and Senator Hatch's motion to commit re: Medicare Advantage.

Further, that once this agreement is entered, the Republican leader's designee be recognized to call up the fiscal responsibility amendment; and that once it has been reported by number, Senator Stabenow be recognized to call up the Medicare Advantage side-by-side amendment; that upon disposition of the amendments and the motion in this agreement, the next two matters for consideration will be a Senator Lincoln amendment regarding insurance executive compensation, and Republican leader's designee motion to commit regarding home health agencies; that for the remainder of today's session, no further amendments or motions to commit be in order, with the time until then being equally divided between the leaders or their designees, with Members permitted to speak up to 10 minutes each.

Mr. President, how much time remains?

Mr. President, I see my colleague from Minnesota. Does he wish to be heard? How much time does my colleague need?

Take 4.

How much time remains for both sides?

The Senator has 4 minutes.

Mr. President, I yield 4 minutes to the Senator from Michigan.

Mr. President, we are beginning our fifth day of consideration on the health reform bill. We will be in a period of debate only until about 11:30 a.m. Pending now is the

amendment by the Senator from Rhode Island, Mr. Whitehouse, on fiscal responsibility. Also pending is a motion to commit by the Senator from Utah on Medicare Advantage. It would be my hope that the Senate will vote on these matters today.

Mr. President, I suggest the absence of a quorum.

Mr. President, I ask unanimous consent the order for the quorum call be rescinded.

Mr. President, experts and economists of every political stripe agree that preserving America's long-term economic security means reforming the way we provide and pay for health care. Health care spending makes up one-sixth of the U.S. economy. Future generations can expect the burden of insurmountable debt if we fail to act.

The fiscal challenges we may face in years to come pale in comparison to the threat of uncontrolled Federal health care spending. The chart behind me essentially shows that. The chart shows the percentage annual growth rates beginning in 2004. The red is the economy, the blue is health care costs. Clearly, over time, especially as the economy dipped during this great recession, the gap between economic growth and health care spending has widened. Projections are that in future years they will widen more and more. As you can see out to 2018, the total economy is projected. Near 2018 the economy is above 4 percent and health care spending is 7 or 8 percent.

Doing nothing means health care spending continues to grow faster than our economy. That is what that chart shows quite dramatically. Doing nothing means entitlement spending more than doubles by the year 2050. That is taking one-fifth of our gross domestic product.

But it is not simply the Federal budget on the line, it is the family budget too. Incredibly, in total we are spending 80 times as much on health care today as we did five decades ago--80 times more on health care today than we did five decades ago. Now family budgets are breaking under the strain--already. That is going to get worse if we do nothing. The cost of the average family health care plan will reach $24,000 in the year 2016. That is not too many years away from now. This represents an 84-percent increase over 2008 premium levels. That means, if we do nothing, in fewer than 10 years most families would have to dedicate half of their household budget to health insurance. For years we have heard the warnings from Federal budget experts. Now we are hearing every day from folks back home who simply cannot afford the care they need.

We have an obligation to act. Now we have an opportunity to act. The country's leading economists and Federal budget experts laid out strategies and options for getting costs under control. We have taken their recommendations to heart. There is a lot of agreement among those who study these issues of what we must do. Now we have a bill that does what they suggest. It also passes the test of fiscal responsibility.

We have many reasons to vote for this bill. It protects and even increases Medicare benefits for seniors. It achieves near universal coverage in less than 10 years. That means it achieves the goal of virtually everybody having health insurance in that period of time. It slows the growth of Federal health care spending. It stops insurance industry discrimination and, based on independent, nonpartisan analysis, makes a serious dent in our Federal deficit.

This chart behind me represents what 2 weeks ago the Congressional Budget Office and Joint Committee on Taxation confirmed in no uncertain terms, that deficits go down under this plan. The official cost estimate reads as follows:

The Congressional Budget Office and the Joint Committee on

Tax estimates that on balance the direct spending and revenue

effects of enacting this Patient Protection and Affordable

Care Act legislation would yield a net reduction in Federal

deficits of $130 billion over the years 2010 to 2019. That is

represented by the green bar on the left. It is a net $130

billion reduction during the first 10 years of this bill.

In addition to reducing the Federal deficit, in the first decade, the CBO also tells us that the bill decreases the deficit by a much greater amount, by $650 billion, in the second decade.

According to the CBO, this bill also slows the growth of Medicare costs, which has been a principal goal in our Medicare debate since day one. Medicare spending would grow 6 percent annually instead of 8 percent annually. In other words, Medicare would continue to grow but, unlike today, it will grow at a sustainable rate.

Of course, no projections, even from the Congressional Budget Office, can be certain. We can safely say this bill will put us on the right track. We can safely say this bill is better than doing nothing. No honest assessment challenges the case for acting now to slow the growth of Federal spending. No honest assessment challenges the case. And no honest assessment of this bill challenges the CBO analysis. I have not heard one. I have not heard an honest challenge to the CBO analysis, nor have I heard of a good, honest case for not acting now to slow the growth of Federal spending, which means we have many reasons to pass health care reform, not the least of which is the long-term financial health of the economy and our Nation. But the reasons for passing this are much more than simply facts and figures. This is about Americans from every corner of this great country, struggling to make ends meet, forced into bankruptcy by medical tragedy. This is about stopping insurance industry discrimination; this is about saving Medicare for our seniors and reducing the deficit for our grandchildren.

I don't know which other Senators wish to speak. Senator Bingaman wishes to gain recognition in the time we have.

Let me ascertain how much time we have and how many speakers we have.

I yield 15 minutes to the Senator from New Mexico.

Mr. President, how much time remains under the control of the majority?

Mr. President, I yield 10 minutes to the Senator from Massachusetts.

We might be able to find extra time, too, if the Senator is looking for extra time. Right now, according to the number of Senators who

want to speak, that is all we have in this first block. But sometimes we can work things out--if the Senator wants to talk a little longer. But right now it is 10 minutes.

Mr. President, I yield 8 minutes to the Senator from Wisconsin, the chairman of the Special Committee on Aging.

Mr. President, how much time remains for the majority?

I ask unanimous consent that there be an additional 5 minutes on each side.

Mr. President, I yield the remaining time to the Senator from Oregon, which should be 10 minutes.

Mr. President, how much time is remaining on the majority side?

And on the minority side?

Mr. President, I reserve the remainder of the majority time.

Mr. President, if I may, I ask unanimous consent that we extend for an additional hour the period for debate only with no further amendments or motions in order during the hour; and that the time be equally divided between the two sides, with the Republicans controlling the first 30 minutes and the majority controlling the second 30 minutes.

I believe there is 3 minutes remaining on the first block, on the majority side?

Mr. President, I think I will use my 2 minutes 20 seconds.

OK. I want to make three basic points. The Senator from Arizona talks about, gee, all these Medicare Advantage plans have dental and vision coverage. He goes on to say, so do Members of Congress.

The fact is that is not automatically true. The fact is Members of Congress choose among various private plans. Some plans offer dental and vision, some do not. Aetna is a company that Members of Congress could choose from under FEHBP and others that Members of Congress can choose from. Those do provide dental and vision coverage. But there are others--I think Blue Cross and Blue Shield does not provide dental and vision coverage.

I make that point because this is exactly what we are trying to set up in these exchanges. People could participate in the exchanges, where they would buy private coverage and they could choose among various private plans which coverage they want. Do they want a plan that covers dental and vision, or not? That is exactly what we are trying to do in the exchange, as is the case for Members of Congress. Medicare Advantage plans do provide dental and vision. I think that is great.

I see my time has expired. At the appropriate time I wish to go into greater detail and explain why what we do in this bill I think makes eminent sense.

Mr. President, I understand we are now under the order where there is a half hour allocated to the majority side; is that correct?

Mr. President, I yield myself 10 minutes.

Mr. President, I just want to help people understand this legislation. I am sure many do, but I am sure there are some who do not with respect to the choices people will have.

We have a uniquely American system of health care in America. It is roughly half public, half private. The goal of this legislation is to retain what we have; that is, basically have that same balance of public and private. It has worked pretty well for America. It is uniquely American. We are not Canada. We are not Great Britain. We are not Switzerland. We are the United States of America. I think it is good to build on our current system and make our current system work better.

I am prompted to explain the choices, in part by the statements by the senior Senator from Arizona, who said Medicare Advantage plans enable people to get eyeglasses and dental care. And that is true. But he went on to say that, gee, shouldn't Members of Congress, who like all that and want to keep all that--that Members of Congress get free dental and free eyeglasses. Well, that is really not true. Members of Congress do not get that. But it is true Members of Congress participate in--all Federal employees, Members of Congress, people in the Forest Service, people all around the country--all Federal employees participate in the same system. It is called FEHBP. It is the Federal Employees Health Benefits Plan, where Federal employees and Members of Congress, all together, the same, can choose among many different private health insurance plans. There is an open enrollment season--in fact, we are in the midst of it right now--where Members of Congress and all Federal employees can look to see if they want to choose a different insurance company or not. Some of those companies do provide dental and vision coverage. Some do not. So if a Federal employee wants to choose a plan that covers dental and vision, he or she can do so. Just pay the premium, and you are covered with dental and vision.

We are setting up under this legislation an exchange that is very similar--almost identical--to the FEHBP, where people who do not have health insurance can go look on the exchange and choose, among private companies, which one makes the most sense for them. Some may have dental, some may have eyeglass coverage, some may not. That is just a choice people can make.

In addition to that, there is even more choice, because currently a Federal employee does not have to join FEHBP. A Federal employee can choose not to get health insurance if he or she does not want to or maybe they get it through their spouse someplace else. The same can be true with the exchange set up in this legislation. The person could buy among different competing private plans that offer health insurance on the exchange or a person can go outside the exchange because he or she thinks they can get a better deal, if that person wants to.

So I just want to make it clear that we are encouraging choice. We are encouraging competition. And I might say that under the legislation, Members of Congress who fully participate in this will be coequal with others. If there is a private option, Members of Congress can participate in that as well. In fact, we are requiring Senators and their staffs--they do not have to participate in the exchange, but it is certainly available to them, and they can opt out if they want to.

Let me just say a little bit about Medicare Advantage. What does MedPAC say about Medicare Advantage? Several years ago, Congress established an advisory board that is now called MedPAC to advise them on how Medicare should pay providers in traditional fee for service and private health insurers in Medicare Advantage. Again, Medicare Advantage is with private companies. They have executives. They have stockholders. They are private companies. MedPAC advises us how much Congress should pay MedPAC and other Medicare providers in traditional fee for service. It is an independent agency. Its experts are nonpartisan, highly respected.

Each year, they send a report to Congress that examines issues in Medicare. Here is what MedPAC had to say about the current state of Medicare Advantage in its 2009 June report. I am going to quote now from this independent advisory panel:

First, we estimate that in 2009 Medicare pays about $12

billion more for enrollees in Medicare Advantage plans than

it would if it were fee-for-service Medicare.

Second:

Current high payments have resulted in some plans that

bring no innovation but simply mimic fee-for-service Medicare

at a much higher cost to the program.

In other words, they are saying that Medicare Advantage plans get paid for a lot more but with no innovation compared to the fee-for- service Medicare.

MedPAC says:

This situation is unfair to taxpayers and beneficiaries not

enrolled in Medicare Advantage who subsidize the higher

costs.

Well, that is pretty obvious.

In addition, MedPAC goes on to say:

The excessive payments encourage inefficient plans to enter

the program, further raising costs to Medicare.

There are so many dollars currently given to Medicare Advantage plans, according to MedPAC, that encourages inefficient plans to enter the program. Why not? They are getting all of this extra money.

Further quoting:

The cost of Medicare Advantage subsidies is borne by

taxpayers who finance the Medicare program and by all

Medicare beneficiaries via Part B premiums.

Or to say it differently, about 78 percent of Americans who are not in Medicare Advantage plans are paying, in effect, a $90-per-year tax for which they get no benefit which goes into the Medicare Advantage plans.

In addition:

The Part B premium for all beneficiaries is increased by

about $3 a month, regardless of whether you receive the

benefit.

A couple of more quotes from MedPAC:

The additional Medicare Advantage payments hasten the

insolvency of the Medicare Part A trust fund by 18 months.

That is an interesting statement. The additional payments hasten the insolvency of the Medicare Part A trust fund by 18 months.

Going with quotes from MedPAC:

Although many plans are available, only some are of high

quality.

In addition, continuing the quote:

Only about half of the beneficiaries nationwide have access

to a plan that CMS rates as above average in overall plan

quality.

This is what MedPAC says. That is the nonpartisan expert that helps advise Congress on what reimbursement levels should be.

We have heard day after day that this bill is cutting Medicare benefits for our seniors. When my colleagues on the other side of the aisle realized this bill does not cut, reduce, ration, or eliminate a single guaranteed benefit, they turned their argument to Medicare Advantage. I think they finally recognize there are no guaranteed benefits cut in this legislation, so they turn to Medicare Advantage. They argue that the efficiencies and savings achieved by ending billions of dollars of overpayments to these private plans will either end the program or dramatically cut services to beneficiaries.

But let's just look at the numbers. I have a chart behind me. This chart shows the yearly spending for Medicare Advantage in billions of dollars. So you can see from the chart that in the year 2009, $110 billion will be spent on Medicare Advantage plans. That is the far left. Moving to the right, 10 years later, in the year 2019, about $204 billion is spent. So if we total it all up, about $1.7 trillion will be spent on Medicare Advantage plans over the next 10 years.

You see that little--what color is that? It is kind of orange, it is kind of an interesting sort of red--whatever it is, at the top of that chart. That represents the reduction in Medicare Advantage plan payments under this legislation. It is not very much, as you can tell by looking at the chart. It averages out, I think, to around a 10- percent reduction in Medicare Advantage payments.

So when we see these big crocodile tears, and we hear Medicare Advantage is being cut; when we hear all of these dramatic statements that so much is going to be taken away from seniors because Congress is cutting Medicare Advantage, the fact is, we are reducing the rate of increase in Medicare Advantage payments by only about 10 percent, and under this legislation about $1.7 trillion will be spent on Medicare Advantage plans. Remember, MedPAC says these are overpayments. MedPAC says this 10 percent reduction is what they should be paid.

Remember, too, these are private plans. These are private companies. It is not Medicare. These are private companies receiving these payments, and they are insurance companies. It is interesting to me that a lot of Members of Congress aren't too wild about insurance companies. Well, Medicare Advantage companies are insurance companies. That is what they are. They are private insurance companies. They are private insurance companies. They have their private insurance company chief executive. They have their private insurance company officer. They have their private insurance company stockholders. They have their private insurance company administrative costs and marketing expenses. They are private insurance companies. That is what they are. So we should not lose sight of all of that.

I wish to also point out that as private insurance companies, these Medicare Advantage plans are doing pretty well. Let me quote from an Oppenheimer Capital analyst in a November 12 report about Medicare Advantage plans. He said:

Between 2006 and 2009, we estimate that Medicare Advantage

accounted for nearly 75 percent of the increase in gross

profits among the larger plans in the industry, highlighted

by an estimated gross profit increase of $1.9 billion in

2009, relative to commercial risk earnings gains of nearly

$600 million.

Commercial risk earnings gains are the ordinary health insurance companies, but 75 percent of the gross profit increase was under Medicare Advantage plans, not traditional health insurance.

I might say, too--I don't have the papers; maybe I can find them. It is worth noting, it underlines the point that these are private companies. It is not traditional Medicare.

Here it is. Because it is interesting, let's look at the compensation of these insurance company executives of these Medicare Advantage plans, the CEOs. The total compensation of a CEO at Aetna is $24 million a year. The total compensation of the CEO at Coventry is $9 million a year; at Wellcare, $8 million; at Humana, $4.7 million a year; and at United Health Care, $3 million. Now, people should be able to make some money and officers of companies should be able to do OK, but here we are talking about very high salaries that these insurance companies pay to their top executives. Frankly, if there is a 10- percent reduction in the $1.7 trillion over 10 years, they could, you would think, take some of that 10 percent maybe in salary reduction or dividends to stockholders, make other cost savings. It doesn't have to come out of the beneficiaries. It is they, the executives, who are making these decisions of where the 10-percent reduction is allocated.

Bottom line, I just wish to say I am not opposed to Medicare Advantage plans. Frankly, I think it is good we have Medicare Advantage plans. Medicare Advantage plans provide the competition to Medicare. They help keep the system on its toes. But we have an obligation as Members of this Senate to the taxpayers and to seniors to cut waste and to cut overpayments in a way that does not harm beneficiaries. These are reductions recommended to Congress by the best advisory board of experts we could find. They didn't just come out of thin air and Members of Congress thought this up. This was recommended to us by the MedPAC advisory board.

Second, there is no reduction in guaranteed benefits to seniors. That is absolute. There is no reduction in guaranteed benefits to Medicare Advantage participants. So A, we are being fair. This chart shows it. We are trying to find the right level of reimbursement set up in a way so there is no reduction in beneficiaries' benefits. In fact, in this legislation, we add more benefits for Medicare participants, Medicare Advantage, as well as traditional fee-for-service Medicare. I might add in this legislation we give an increase to Medicare Advantage plans that show demonstrated improvement in quality.

As I mentioned, MedPAC said a lot of these plans are totally inefficient. A lot of these plans have no coordinated care. A lot of these plans don't have any quality, but they get the extra money. So we are saying let's get to a compensation level that is fair. We do it on a competitive bidding basis, take the average bid for an area, and we also say let's make sure there is no reduction in guaranteed benefits at the same time. I think that is a responsible thing to do.

So all of these arguments, these sound bites, frankly, that you hear from the other side of the aisle are just that, they are sound bites. They are not the honest analysis of what is going on.

So I encourage us to keep in mind, keep in perspective what we are doing so we can help provide a better health care system for our country. This is only one part of it. There are many other parts, but this is just this one part.

How much time do we have remaining, Mr. President?

I see Senator Dodd is on the floor. At this time I yield to the Senator from Michigan.

Mr. President, we are playing things by ear. I ask unanimous consent that the Senator from Wyoming be recognized to speak for debate only, and at a later point, we will figure out allocation of time on both sides, if he wishes to speak now.

I might modify that so this side gets the next 30 minutes after that.

Mr. President, I yield 5 minutes to the Senator from Wisconsin.

Yes, Mr. President, I wish to speak.

Mr. President, it is my understanding that I would be in charge of the next 30 minutes and then it would revert to the other side for 30 minutes after that.

It is also my understanding that at any time there is an agreement to vote, we will cancel out what we are doing. But there is no agreement yet.

I thank the Senator from Connecticut for setting up my speech so well. He said there was not anyplace that anybody can show any decline in guaranteed benefits. With what I am about to say, I will try to do that. Of course, the words ``guaranteed benefits'' do not show up anywhere in what we are doing. ``Benefits'' does but not ``guaranteed benefits.'' In my opinion, getting to be in a nursing home or being able to see a doctor, some of those ought to be considered guaranteed benefits. I will get into that a little bit in my speech and cover some of these areas that I think are very important to seniors. I am opposed to the $\1/2\ trillion of Medicare cuts in the Reid bill that are not going only to solve Medicare.

Some of my Democratic colleagues have attempted to argue this bill does not cut the Medicare Program. They further said that such cuts are justified and will not harm the program. They have also argued that no beneficiaries will lose their benefits--their guaranteed benefits. They are very careful on that, and I understand why they are careful on that because there are other benefits that are being cut that will be considered by those people who will lose that benefit to be a guaranteed benefit.

Unfortunately, all of those statements are false. It does not matter how many times my colleagues repeat these claims, they do not become any more accurate. This bill cuts $464 billion from the Medicare Program. It slashes payments to hospitals, nursing homes, home health agencies, and hospices. These are cuts to the Medicare Program, and I even have the page numbers on those.

The moneys from these cuts do not go to shore up Medicare. The money goes to new programs for others. These cuts will affect the care provided to Medicare beneficiaries.

The American Health Care Association, which represents nursing homes, said the cuts in the Reid bill would force layoffs, lower salaries, reduce benefits, and ultimately would hurt patients' quality of care. A commission was set up to make even more cuts to save Medicare. It is in the bill. There is a commission in there.

So with the side deals that have been made with lobbyists, the only place these cuts can come from is from seniors. I will cover that in a little more detail later. I have heard similar statements from home health providers, that is more than $40 billion in cuts; hospice providers, which is $8 billion in cuts; and hospitals, which is $130 billion in cuts. If these Medicare cuts go into effect, it could drive many providers out of the Medicare Program. That will mean patients do not have the care they expect and they need.

Some of my Democratic colleagues have accused us of trying to scare Medicare beneficiaries. If seniors are scared by our statements, they should be terrified by what the administration has to say about the Democrats' health reform bill. The administration's own chief actuary, Richard Foster, recently wrote that the steep Medicare cuts in the House-passed health reform bill would make it difficult for many providers to remain profitable and cause them to end their participation in Medicare. He went on to note this could jeopardize Medicare beneficiaries' access to care.

As the senior Senator from Tennessee noted yesterday, it is the Medicare cuts in the Reid bill that are actually scaring seniors. Medicare beneficiaries understand that if providers are no longer able to take Medicare patients, they--the seniors--will not get care. A lot of grandmas and grandpas have figured it out, and they are not going to stand for it.

The chairman of the Finance Committee has repeatedly said this bill will not cut or reduce any guaranteed Medicare benefit. That statement seems to ignore what this bill will do to providers. If a Medicare patient cannot get into a nursing home, they do not have nursing home benefits. If they can't find a home health aide willing to take Medicare patients, they do not have home health benefits. So the promise for coverage, when you can't get a doctor to see you, is not health care. You don't have benefits if you can't get a provider to treat you. Unfortunately, that is exactly what this bill will do.

Some of my Democratic colleagues have also attempted to justify the Medicare cuts in the Reid bill by arguing that many of the trade associations

representing health care providers have endorsed this bill. They are correct that several Washington-based trade associations and their lobbyists have endorsed the Reid bill. It is probably worth exploring why some of the groups have chosen to endorse this legislation.

In some cases, motivation is obvious. Some drug manufacturers are clearly motivated by self-interest and greed. They negotiated a secret deal with the White House that will actually increase what Medicare spends on brand-name drugs--brand-name drugs. They didn't touch the generics. They are interested in the brand-name drugs.

Under the terms of their deal, the drug manufacturers will provide discounts on brand-name prescription drugs when the seniors are in the Medicare coverage gap--known as the doughnut hole. They make the payments directly to the customer. It doesn't go through Medicare but directly to the customer. That way they can maintain the customer contact and keep them addicted to the brand name.

Generics are cheaper. A lot of people, when they go to the doughnut hole, switch to generics because that saves them money, and it saves us money. When they get through the doughnut hole, they will stay with whatever they are on while in the doughnut hole. So if they are forced to stay on a brand name to get a little extra discount as they go through the doughnut hole, they will stay with the brand name when the taxpayers are paying for it when it goes above the doughnut hole, which is the rest of the year. That could be a huge number. So while it looks generous by the drug companies, beware; their generosity is suspect with what they will make when it gets through the doughnut hole.

Under the terms of the sweetheart deal between the White House and the drugmakers, discounts are provided for these brand-name drugs. This will encourage seniors to continue to get those more expensive drugs, and it will actually cost the taxpayers $15 billion because the deal will actually increase Medicare costs.

In other cases, provider groups were promised special deals if they agreed to support the Reid bill--or whatever bill we were working on at that time. For instance, recent press reports have described how the American Medical Association was promised a permanent fix to the Medicare payment formula for doctors if they agreed to support this bill or a 1-year fix if there was an end to junk lawsuits. Under current law, doctors' Medicare payments are scheduled to be cut by more than 40 percent over the next decade. That is already in place. That is not a part of the bill. The cost of fixing the flawed government- mandated formula will be more than $250 billion. We know that because we have debated it on the Senate floor, and we decided we were going to have to pay for that if we were going to do it.

So let's see, $464 billion in Medicare money we are using on other things. That is why I keep saying Medicare money only ought to go to Medicare benefits, and that $250 billion for the doctors' fix might make it possible for people to see the doctors.

I can understand why doctors want to fix this flawed government price-control system--and that is what it is because they are telling the doctors what they can charge a customer, regardless of how long a time it is going to take them to take care of that patient. For a lot of them, they have discovered it costs more than what they are able to get. If they continue to do that, they have to go out of business. That is kind of the small business philosophy: You take in less money than what it costs to be in business, and you are out of business. So I don't think they like that kind of a government price-control system.

As a result, 40 percent of the doctors will not take a patient on Medicaid, and it is growing in percentage now on Medicare in the same way. When you fix the price, some people can't afford to provide it for that, so they can't take those patients.

I was talking to a friend of mine from Florida who said: Every time you call a doctor now, they say: Are you on Medicare? If you say yes, they say: We are not taking any new patients.

If you can't see a doctor, you don't have a benefit. It shows the exact problems that result from letting government bureaucrats use price controls to set payment rates. What I don't understand is why the AMA continues to support the bill when they got nothing for their deal. We didn't fix the $250 billion problem, and we haven't fixed the junk lawsuit problem.

I remember the President appearing at the National Convention of the American Medical Association and promising that there would be tort reform; that there would be an end to these junk lawsuits. All of our attempts, either in the HELP Committee or in the Finance Committee, to even bring that up have been either voted down or denied. As a result, there is nothing in this bill that is going to solve that problem. The bill does nothing to fix the Medicare payment formula for the doctors. Instead, it cuts $464 billion from Medicare and uses that money to cover the uninsured.

Even if these cuts can be made without hurting seniors, the Republicans are saying: Use the money only for Medicare. Medicare money for Medicare. Medicare funds should be used to fix Medicare's problems, such as this flawed payment formula that keeps doctors from taking seniors. Taking hundreds of billions of dollars out of the Medicare Program now will only guarantee that it will be much harder to permanently fix the doctor payment issue in the future.

I cannot understand why the AMA continues to support this terrible deal for doctors. If you can't see a doctor, your benefits--your guaranteed benefits--have been cut. Apparently, the members of the AMA don't like the deal either. At a recent convention, up to 40 percent of the current membership of the AMA voted to reject this deal. I know that is not a majority, but most associations survive by consensus agreements. That means almost all of their membership agrees with the tack they are taking, not just slightly more than half. Their membership is less than 20 percent of all doctors. It is a dwindling association.

Let's see, less than 20 percent of the doctors had 40 percent that opposed it. We are getting down to some pretty small percentages of those who supported what the AMA did in their deal.

Finally, many provider groups have been reluctant to speak out against this bill because they have received threats from the White House and congressional Democrats. Nursing homes, home health agencies, and hospice providers have all reportedly been threatened with further cuts--further cuts--if they speak out against the bill. Is that freedom of speech, or is it just bad ethics? They have reportedly been told that any public statements of opposition to the Reid bill will lead to even more severe cuts.

These providers have had to make the choice to silently accept devastating cuts rather than oppose them and risk being utterly destroyed. One of the Medicare Advantage providers is Humana, and I will use them as an example. CMS said they couldn't let their customers know what was about to happen, and chastised them for sending out a letter. I thought the customer deserved to know and that we were in a new era of transparency. That doesn't sound very transparent to me. So how can that happen in America?

At any rate, I hope my colleagues and the American people will take these facts into account when they hear Senators talk about provider groups supporting this bill. Unfortunately, health care provider support for this bill is being driven primarily by greed or stupidity or fear. We know this bill will not fix the problems in the American health care system. It will not lower health care costs. It will not lower insurance premiums. It will still leave 25 million people uninsured.

What this bill will do is spend $2.5 trillion and guarantee a much bigger role for the government in dictating how health care will be provided in this country. If you are not under Medicare, yes, your government is going to tell you what is adequate coverage, and they are going to force you to buy it or pay a penalty.

Given the recent experiences that doctors have had with Medicare price controls, this is not an outcome that bodes well for America's health care providers or their patients. I remind everybody that in August there was an uproar, and that uproar continues. We don't notice it as much because we are not going to get to go home this weekend to talk to our constituents. That

might be by design because we already know what our constituents are saying.

They are saying: This bill is a bad deal for us. Where is the promise that you were going to cut costs for us? Where are the other promises that were made with this health care reform?

I would mention that the CBO found that premiums in the individual market will rise by 10 to 13 percent more than if Congress did nothing. That is CBO. Family policies under the status quo are projected to cost $13,100 on the average, but under this health care bill it should jump to $15,200. That is not very good news for the people in my State or any other State. No big cost rise in U.S. premiums is seen in the study, said the New York Times.

The Washington Post declared: Senate health bill gets a boost. The White House crowed that the CBO report was more good news about what reform will mean for families struggling to keep up with skyrocketing premiums under the broken status quo. The Finance chairman, the Senator from Montana, chimed in from the Senate floor that health care reform was fundamentally about lowering health care costs.

Yes, lowering costs is what health care reform is designed to do-- lowering costs.

But then he said: And it will achieve this objective. Except that it won't.

CBO says it expects employer-sponsored insurance costs to remain roughly in line with the status quo. That is the failure of this bill. Meanwhile, fixing the individual market is expensive and unstable, largely because it does not enjoy the favorable tax treatment given to job-based coverage. You know, if you are buying insurance on your own, you are not getting a tax break on it. If companies buy insurance for the people working for them, they are getting a tax break.

In my 10 steps to solving health care, I mentioned and worked on making that fair. You have to be fair for both sides.

The Wyden-Bennett bill concentrates on making it fair for both sides. That is one of the issues people in this country are concerned about, making it fair for both sides. This bill doesn't make it fair for both sides.

Talking about fixing the individual market, that is expensive and it is largely unstable, I will say again, due to the favorable tax treatment given to job-based coverage which was supposed to be the purpose of reform. But CBO is confirming that new coverage mandates will drive premiums higher.

Democrats are declaring victory, claiming these high insurance prices don't count because they will be offset by new government subsidies. About 57 percent of the people who buy insurance through the bill's new exchanges that will supplant today's individual market will qualify for subsidies that cover about two-thirds of the total premium so the bill will increase cost but then disguise those costs by transferring them to taxpayers from individuals. Higher costs can be conjured away because they are suddenly on the government balance sheet.

The Reid bill has $371.9 billion in new health taxes that are apparently not a new cost because they would be passed along to consumers. Or perhaps they will be hidden in lost wages. This is the paleoliberal school of brute force wealth, redistribution and a very long way from the repeated White House claims that reform is all about bending the cost curve. The only thing being bent here is the budget truth.

Moreover, CBO is almost certainly underestimating the cost increases. Based on its county-by-county actuarial data, the insurer WellPoint has calculated that this bill will cause some premiums to triple in the individual market. I don't go by WellPoint, I go by what I found out in Wyoming itself and that is an accurate picture, particularly for the young people in our State. Those who are young and healthy will see a 300-percent increase. I think they are going to notice that. I don't think they are going to be happy with it. Other associations have come to similar conclusions. The reason for that is the community rating, which forces insurers to charge nearly uniform rates regardless of customer health status or habits. Habits is an important one on that. CBO does not think this will have much of an effect, but costs inevitably rise when insurers are not allowed to price based on risk. That is why today some 35 States impose no limits on premium variation and 6 allow wide differences among consumers.

That is not just WellPoint that is saying that. I have some peer- reviewed documents that also show that same thing from people from different colleges. They have found that the State community rating laws raise premiums in the individual market by 21 percent to 33 percent for families and 10 to 17 percent for singles. In New Jersey, which also requires the insurers to accept all comers, so-called guaranteed issue, premiums increased by as much as 227 percent.

Let's see, we just had some elections in New Jersey and things didn't go well there. It probably wasn't just tied to insurance costs.

The political tragedy is that there are plenty of reform alternatives that would reduce the cost of insurance. According to CBO, according to the Congressional Budget Office which we quote a lot, they did an evaluation on the relatively modest House GOP bill. The Republicans in the House were limited to one amendment. There were three amendments total in a 1-day debate and passage of the health care bill over there. That roused a lot of people in America, too. If you only get one amendment, they had to do what we have avoided doing. We have four different bills out there that solve what the President said he wanted solved. That is not counting the Wyden-Bennett bill that also solves what the President said, that is not included in this bill.

What the House put together--it is relatively modest, but it would actually reduce premiums by 5 percent to 8 percent in the individual market in 2016 and by 7 to 10 percent for small businesses. It would not increase the premiums, it would decrease the premiums.

The GOP reforms would also do so without imposing huge new taxes. We have concentrated in the last few days about talking about the Medicare money that is being stolen to provide for the changes. We have not talked yet about the extra taxes that are going to be put into place. That is the other half of the package. But the Democrats do not care because this bill, they say, is about lowering costs. No, it is about putting Washington in charge of health insurance at any cost.

I see the Senator from Wyoming is here. We have 10 minutes remaining on our time. If the Senator wishes to make some additional comments? He and I have been traveling in Wyoming.

I yield the time to my colleague.

That is the way I read it. That is the way the people in Wyoming are reading it and that is apparently the way people all over the country are reading it, particularly seniors. Seniors are the ones upset about what is happening and it is easy to see why. Even though the AARP says this is a good bill, they are saying: Wait a minute. I know people in the nursing home. I know people--some of them are saying I am in the nursing home. I am hearing what is going to happen at my nursing home if these cuts go into place.

As I said continually, we can call them anything we want but the seniors are saying those are cuts. Those are cuts in my benefits. Those are cuts in what I expect. Those are cuts in what I have been getting. Whether you call it guaranteed benefit or just plain old

benefits or whatever it is, they are saying, yes, we are being cut.

The Senator from Wyoming is absolutely correct. We are getting a lot of calls and mail, letters about that. Another thing the President promised, of course, is that everybody would have catastrophic coverage. It fascinates me that the Wyoming people and the people across America have figured out that Medicare doesn't have catastrophic coverage. But Medicare Advantage provides catastrophic coverage as well as a number of other things that Medicare does not cover. I think they realize, too, that if Medicare Advantage goes away, yes, they can get Medigap but Medigap is more expensive. It is also interesting that the AARP sells Medigap.

I am seeing what you are seeing. I am noticing some people do not know what an entitlement actually is. That is a bill that goes on forever, that the Secretary of Health and Human Services has to make sure that it is paid in perpetuity unless there is some other major Congressional action that happens. We keep paying that bill over and over again. I think the Senator from Wyoming recognizes entitlements and some of the difficulties involved with that.

We are being notified our time is up. We will continue. I have several letters from Wyoming organizations that I want to have printed in the Record, and I will do that at a later time.

I thank the Chair and yield the floor.

Mr. President, let me thank Senator Baucus for his leadership on this issue. I have mentioned to him many times that I strongly believe without his leadership, we would not be where we are today in our effort to reform health care. I congratulate him on the superb effort he has made.

I want to spend a few minutes talking about health care reform both as it affects the country but also as it affects my home State of New Mexico. First, I would like to discuss the context for this health reform bill, and that is the very serious problem we face in the country with the growing cost of health care, if the Congress fails to act. We have a chart I will put up, since everyone has charts. This is a chart that shows what is happening to all health care costs and has been happening since 1960. We can see that as a percent of the gross domestic product, back in 1960 we were spending right at 5 percent of GDP on all health care. Today we are spending much more like 16 percent of the gross domestic product on health care. The projections for the future, if we do not act to reform the health care system, are very serious indeed.

Let me allude to an article in the morning New York Times. This is by Nobel award-winning economist Paul Krugman of Princeton University. He talks about this issue of fiscal responsibility and the impact of health care reform on the deficit. It talks about how some Senators have concerns about going ahead with this health care reform bill because of what it might cost. He makes the point:

But if they're really concerned with fiscal responsibility,

they shouldn't be worried about what would happen if health

reform passes. They should, instead, be worried about what

would happen if it doesn't pass. For America can't get

control of its budget without controlling health care costs--

and this is our last, best chance to deal with these costs in

a rational way.

I ask unanimous consent that the full column from the New York Times

of this morning be printed in the Record following my remarks.

As this chart demonstrates, according to the Congressional Budget Office, if we don't act to deal with the growth in health care costs, Federal spending on Medicare and Medicaid combined will grow from 5 percent of GDP today to almost 10 percent by 2035. By 2080, the government would be spending almost as much as a share of the economy on just its two major health care programs as it has spent on all of its programs and services in recent years.

Let me put up another chart that demonstrates that most of this increase in cost is not the result of our aging population. We do have an aging population; that does add to the cost of health care because as people get older they tend to need more health care. The dark blue shows the increase expected in health care costs by virtue of aging. But the lighter blue talks about the effect of excess cost growth that is not related to aging; that is, the growth in health care cost is out of control in our current system. Such spending is unsustainable. It has led the Congressional Budget Office to say:

Slowing the growth rate of outlays for Medicare and

Medicaid is the central long-term challenge for fiscal

policy.

Moreover, across the country, premiums continue to increase. They are becoming more and more unaffordable for individuals and for businesses. I hear on a regular basis when I go around New Mexico--and I am sure all my colleagues hear from their constituents as they travel in their States--that people cannot continue to pay more and more each year for their health care coverage. According to an August report by the Commonwealth Fund, nationally, family premiums for employer-sponsored health insurance increased 119 percent between 1999 and 2008. If cost growth continues on its current course, those premiums could increase another 94 percent to an average of $23,842 per family by 2020. I am not sure what the circumstance is in many States, but I know in New Mexico there are many families who cannot afford to pay $23,800 in health care premiums.

Nowhere is the unsustainable growth felt more acutely than in my home State. Without health reform, in my State we are projected to experience the greatest increase in health insurance premiums of any State in the Union. For example, the average employer-sponsored insurance premium for a family in New Mexico was about $6,000 in the year 2000. By 2006, this rate had almost doubled, or the cost had almost doubled to $11,000. By 2016, the amount is expected to rise to an astonishing $28,000. In addition, health insurance premiums in New Mexico make up a larger percentage of New Mexico's income, the income of the average New Mexico family, than almost all other States. We are paying 31.18 percent. Over 31 percent of the average income of a family in New Mexico is going to pay for health care. This is expected to grow to 56 percent if we do not reform our health care system.

It is important to highlight that the higher spending on health care in the United States does not necessarily prolong lives. I hear a lot of speeches about how we have the greatest health care system in the world. We are the envy of the world. People would just love to have access to our health care system. This chart illustrates that in 2000, the United States spent more on health care than any other country in the world, an average of $4,500 per person. That was in 2000. Switzerland was the second highest at $3,300, substantially less. Essentially, its cost per person was 71 percent of what it was in the United States during that year. Nevertheless, the average U.S. life expectancy comes out at 27th in the world. Our life expectancy average is 77 years. Many countries, 26 to be exact, achieve higher life expectancy rates with significantly lower spending on health care.

Data from the McKinsey Global Institute clearly indicates there is a considerable level of waste in our current system. McKinsey estimates that the United States spends nearly $\1/2\ trillion annually in excess of other similarly situated nations. Of this, about $224 billion in excess costs are found in hospital care. About $178 billion are found in outpatient care. Together these account for more than 80 percent of U.S. spending above the levels of other nations.

Here is one other chart. This is one I have used before on the Senate floor. Not surprisingly, as costs and inefficiencies continue to build, access to health care is becoming more and more difficult for middle- and lower-income Americans. This chart indicates the rate of uninsurance throughout the country. First, on the left-hand side is the year 2000; on the right-hand side is 2008. We can see the dark blue States are States where 23 percent or more of the population ages 18 to 64 are uninsured. Back in the year 2000, New Mexico and Texas were the only two States where the rate of uninsurance exceeded 23 percent. Now we can see the rate of uninsurance exceeds 23 percent for many of the States, particularly across the southern part of the country.

We have a very serious problem that needs addressing. It is clear that the U.S. health care system is failing many Americans. The situation is becoming more and more urgent. According to a study published by the Harvard Medical School in August, medical costs have led to almost two-thirds of the bankruptcies in this country. More than 26 percent of bankruptcies are attributable to health care problems. The study found that most medical debtors were well educated, owned their own homes, had middle-class occupations and, shockingly, three quarters had health insurance. So these were people who had coverage, but the coverage was not adequate to meet the needs. Unfortunately, for many individuals, the very high cost of medical care leads them to delay or to avoid receiving medical care altogether.

The Urban Institute reports that 137,000 people in this country died between 2000 and 2006 because they lacked health insurance. That includes 22,000 people in 2006. Clearly, the need for national health reform has never been so great.

The Patient Protection and Affordable Care Act, the legislation we are debating, introduced by Senator Reid and others a few weeks ago, includes the key reforms we have come up with and that the experts have come up with, aimed at addressing these very serious problems, while protecting the aspects of our health system that are working today.

First, this bill includes long-overdue reforms to increase the efficiency and quality of the health care system while reducing overall cost. For example, the legislation includes payment reforms that I have championed to shift from a fee-for-service payment system to a bundled payment system. This will reshape our health care reimbursement system to reward better care and not simply more care as it currently does today.

Second, it includes a broad new framework to ensure that all Americans have access to quality and affordable health care. This includes creation of a new health insurance exchange in each State which will provide Americans a centralized source of meaningful private insurance as well as refundable tax credits to ensure that coverage is affordable.

Finally, these new health insurance exchanges will help improve choices by allowing families and businesses to compare insurance plans on the basis of price and performance. This puts families, rather than the insurance companies or the government bureaucrats, in charge of health care. It helps people to decide which quality, affordable insurance option is right for them.

The Congressional Budget Office, which is cited here--quite frankly, I notice that the Congressional Budget Office is cited by both Democrats and the Republicans in this debate, and that is a credit to the CBO. They are seen as nonpartisan, and they are nonpartisan. I congratulate Doug Elmendorf for the good work CBO has been doing in support of our efforts to come to the right answer on health care reform--the CBO forecasts that this legislation would not add to the deficit.

As the chart Senator Baucus had a few minutes ago clearly indicates, the deficit would be reduced in the first 10 years by $130 billion. It would be reduced in the second 10 years, going up to 2029, by something over $600 billion.

Let me also point out the contrast. We are talking about a bill which the

Congressional Budget Office says will reduce the size of the deficit in future decades. I can remember a couple Congresses ago when we had a debate on adding subpart D to Medicare, Part D to Medicare. There are many on the floor who are concerned about cost today--at least they say so in their speeches--who were very anxious to add that legislation to Medicare, adding another $500 billion. That was estimated by the CBO at that time: another $500 billion over a 10-year period to the cost that Medicare was bearing.

The efforts we are making in this legislation to bring under control the cost growth in Medicare is essential if we are going to keep Medicare solvent in the future, and part of the solvency problem Medicare has in the future, frankly, is related to what we did in subpart D.

On the subject of premium cost, CBO has also found that in the individual market, the amount that subsidized enrollees would pay for non coverage would be roughly 56 percent to 59 percent lower, on average, than the premiums charged in the individual market under current law. Among enrollees in the individual market who would not receive new subsidies, average premiums would increase by less than 10 to 13 percent. The legislation would have smaller effects on premiums for employment-based coverage. Its greatest impact would be on smaller employers qualifying for new health insurance tax credits. For these businesses and their employees, CBO predicts premiums would decrease by about 8 percent to 11 percent compared with their costs under current law.

This is consistent with estimates of the impact in my home State of New Mexico, where average families may see a decrease in premiums of as much as 60 percent. In addition, about two-thirds of New Mexicans could potentially qualify for subsidies or Medicaid and nearly a quarter would qualify for near full subsidies or Medicaid.

An overall decrease in premium costs also is consistent with the experience in Massachusetts where there has been an enormous reduction in the cost of nongroup insurance in the State after they enacted similar reform to what we are considering now in the Senate. After reform the average individual premium in Massachusetts fell from $8537 at the end of 2006 to $5143 in mid-2009, a 40 percent reduction while the rest of the Nation was seeing a 14 percent increase.

Finally, much of the debate on health care reform has focused on insurance coverage but it is important to recognize that as we expand coverage to include more Americans, the demand for health care services will also increase. A strong health care workforce is therefore essential for successful health reform. Within the United States, approximately 25 percent of counties are designated health professions shortage areas--a measure indicating that there is insufficient medical staff to properly serve that geographic area. The problem is even more apparent in rural States such as New Mexico. For example, 32 out of 33 counties in my State has this shortage designation. As a result, New Mexico ranks last compared to all other states with regard to both access to health care and utilization of preventative medicine.

The Patient Protection and Affordable Care Act we are debating contains key provisions to improve access and delivery of health care services throughout the Nation. These provisions include increasing the supply of physicians, nurses, and other health care providers; enhancing workforce education and training; and providing support to the existing workforce.

I applaud Senators Reid, Baucus, Dodd, Harkin, and many other colleagues who have worked so hard on this bill. This legislation represents true healthcare reform. It is time for the Senate to put partisanship aside and enact this critical and long overdue legislation.

I see my time is up and there are others waiting to speak. I yield the floor.

Exhibit 1

[From the New York Times, Dec. 4, 2009]

Reform Or Else

(By Paul Krugman)

Health care reform hangs in the balance. Its fate rests

with a handful of ``centrist'' senators--senators who claim

to be mainly worried about whether the proposed legislation

is fiscally responsible.

But if they're really concerned with fiscal responsibility,

they shouldn't be worried about what would happen if health

reform passes. They should, instead, be worried about what

would happen if it doesn't pass. For America can't get

control of its budget without controlling health care costs--

and this is our last, best chance to deal with these costs in

a rational way.

Some background: Long-term fiscal projections for the

United States, paint a grim picture. Unless there are major

policy changes, expenditure will consistently grow faster

than revenue, eventually leading to a debt crisis.

What's behind these projections? An aging population, which

will raise the cost of Social Security, is part of the story.

But the main driver of future deficits is the ever-rising

cost of Medicare and Medicaid. If health care costs rise in

the future as they have in the past, fiscal catastrophe

awaits.

You might think, given this picture, that extending

coverage to those who would otherwise be uninsured would

exacerbate the problem. But you'd be wrong, for two reasons.

First, the uninsured in America are, on average, relatively

young and healthy; covering them wouldn't raise overall

health care costs very much.

Second, the proposed health care reform links the expansion

of coverage to serious cost-control measures for Medicare.

Think of it as a grand bargain: coverage for (almost)

everyone, tied to an effort to ensure that health care

dollars are well spent.

Are we talking about real savings, or just window dressing?

Well, the health care economists I respect are seriously

impressed by the cost-control measures in the Senate bill,

which include efforts to improve incentives for cost-

effective care, the use of medical research to guide doctors

toward treatments that actually work, and more. This is ``the

best effort anyone has made,'' says Jonathan Gruber of the

Massachusetts Institute of Technology. A letter signed by 23

prominent health care experts--including Mark McClellan, who

headed Medicare under the Bush administration--declares that

the bill's cost-control measures ``will reduce long-term

deficits.''

The fact that we're seeing the first really serious attempt

to control health care costs as part of a bill that tries to

cover the uninsured seems to confirm what would-be reformers

have been saying for years: The path to cost control runs

through universality. We can only tackle out-of-control costs

as part of a deal that also provides Americans with the

security of guaranteed health care.

That observation in itself should make anyone concerned

with fiscal responsibility support this reform. Over the next

decade, the Congressional Budget Office has concluded, the

proposed legislation would reduce, not increase, the budget

deficit. And by giving us a chance, finally, to rein in the

ever-growing spending of Medicare, it would greatly improve

our long-run fiscal prospects.

But there's another reason failure to pass reform would be

devastating--namely, the nature of the opposition.

The Republican campaign against health care reform has

rested in part on the traditional arguments, arguments that

go back to the days when Ronald Reagan was trying to scare

Americans into opposing Medicare--denunciations of

``socialized medicine,'' claims that universal health

coverage is the road to tyranny, etc.

But in the closing rounds of the health care fight, the

G.O.P. has focused more and more on an effort to demonize

cost-control efforts. The Senate bill would impose

``draconian cuts'' on Medicare, says Senator John McCain, who

proposed much deeper cuts just last year as part of his

presidential campaign. ``If you're a senior and you're on

Medicare, you better be afraid of this bill,'' says Senator

Tom Coburn.

If these tactics work, and health reform fails, think of

the message this would convey: It would signal that any

effort to deal with the biggest budget problem we face will

be successfully played by political opponents as an attack on

older Americans. It would be a long time before anyone was

willing to take on the challenge again; remember that after

the failure of the Clinton effort, it was 16 years before the

next try at health reform.

That's why anyone who is truly concerned about fiscal

policy should be anxious to see health reform succeed. If it

fails, the demagogues will have soon, and we probably won't

deal with our biggest fiscal problem until we're forced into

action by a nasty debt crisis.

So to the centrists still sitting on the fence over health

reform: If you care about fiscal responsibility, you better

be afraid of what will happen if reform fails.

Will my colleague yield for a quick point?

The Senator was making the point that you cannot take $120 billion out of the program without hurting folks. Those on the other side of the aisle said we can do that--we can cut it by $120 billion and it still won't hurt anybody. My colleague asked the Senator from Tennessee exactly what some of the benefits were and he repeated them. I went to get the actual statistical number of how much it will actually reduce benefits in terms of actuarial value. According to the Congressional Budget Office, in the year 2019, when fully implemented, here is the statistic: The actuarial value of the reduction in benefits under Medicare Advantage is 64 percent; in dollar terms, it goes from $135 a month down to $49 a month. In other words, the very things my colleague talks about--vision care, dental, all of those things----

The last point. I want to say that I hear my colleague loudly and clearly. I hope the American people do too because you cannot call a $120 billion cut something that doesn't hurt people, and especially when the Congressional Budget Office itself says, yes, that reduces these very benefits from a value of $135 a month down to $49 a month. That is a huge cut in the value of the services they receive under Medicare Advantage. That is what we are trying to prevent by this amendment.

I had hoped to take the next half hour, but if we could do 40 minutes, equally divided, I could take 20.

Would I be able to take the first 20 minutes then?

Mr. President, we are discussing the Hatch motion to preserve Medicare Advantage. I wish to give a little bit of background about the Medicare Advantage Program. It was established with the goal of ensuring that beneficiaries all across the country would actually have Medicare choices. Under the program, private health plans receive government payments in order to serve Medicare beneficiaries. In addition to offering comparable coverage to Part A, which is for hospitals, and Part B, physician services, Medicare Advantage plans can also offer Part D coverage, prescription drug benefits.

The central goal of the Medicare Advantage provisions was to ensure that beneficiaries across the Nation, not just those in populous areas, would have access to health plan options. Under the law, Medicare Advantage plans must provide all physician and hospital Medicare benefits.

Here is the key. I hope my colleagues will think about this for a moment because this has been a little bit perhaps distorted in the conversation we have had. If a plan's costs to provide all the Medicare benefits is less than the government payment, then by law, the plan must apply the difference to provide additional benefits to the beneficiary or to reduce premiums.

It seems to me that is what this whole reform was about in the first instance, to try to ensure quality care and reduce the cost of insurance to beneficiaries.

But what are these extra benefits? We have heard them discussed. They include, first of all, lower cost sharing, including out-of-pocket limits on beneficiary cost sharing, as well as specific health benefits such as vision, dental care, hearing services, routine physical, cancer screenings, and so on. Plans can also offer management services, which can be particularly important to beneficiaries with chronic illnesses, and that is a protection, by the way, that does not exist in regular fee-for-service Medicare.

Today, every beneficiary has health plan choices. Since 2003, the number of Medicare beneficiaries enrolled in private plans has nearly doubled from 5.3 million to 10.2 million in the year 2009, according to the Kaiser Family Foundation. So these are very popular plans and growing in popularity.

Let's go back in time just a little bit to consider the history, back to 1972, because in past years my colleagues on the other side of the aisle were all for Medicare Advantage. Over the years, Congress has tried to control spending by reducing payments to private Medicare plans. One problem was, severe payment reductions resulted in the elimination of plan options. For example, in 1997, the Balanced Budget Act reduced plan payments by $74.5 billion over 10 years. What happened? Well, about three-quarters of a million beneficiaries, from 1999 to 2003, had to change plans or else lose their health plan altogether. This included not only less populous and more rural areas of the country but also areas such as Long Island, NY.

Well, Congress heard from these seniors loudly and clearly. They were angry about losing their coverage. Many remember that the Medicare Modernization Act was a landmark achievement which provided seniors with prescription drug coverage, but it was necessary for another reason as well and that was to respond to the call of the seniors who wanted their private options back.

So, in 2003, the Medicare Modernization Act expanded plan options to include regional PPOs and restore plan payments. It was a deliberate, bipartisan decision to increase the plan's payments so they could enter rural areas of the country and even some of the urban areas--as I mentioned, Long Island. If my colleagues don't remember, let me remind them.

Former Senator Clinton from New York, for example, said that these Medicare+Choice plans--that is now what we call the Medicare Advantage plans, and I am quoting:

. . . are feeling the squeeze in a system caught between

rapidly exploding costs and rapidly imploding finances. While

we debate the future of Medicare, we need to recognize that

there are people right now in our States who depend on these

plans today.

The current senior Senator from Massachusetts said at the time, and I quote:

I urge my colleagues to support the additional funding that

is urgently needed to strengthen the Medicare+Choice program

for seniors. This should be among our highest priorities in

this year's Medicare debate.

It was, and we did. So this is not something bad that we provided this money to these plans. We provided it so the plans could provide the benefits to seniors, particularly in areas where otherwise they wouldn't have those choices.

So why has this all of a sudden become unpopular with our friends on the other side of the aisle? Well, obviously, first and foremost, they need trillions of dollars to fund their bill, so they look around for where they can get some money and decide: Well, we can get $120 billion from here; this is one way we can help pay for the new entitlements under their bill. But to them, there has to be some kind of justification to take that money, so the idea is: Well, it is not fair that the government would pay money into this program for extra benefits for seniors when that money could be spent on regular fee-for- service Medicare. Of course, that argument presupposes that government health care is always superior to the plans offered in the private market, which these seniors have made clear, by doubling the enrollment in the private plans, is not the case. As I said, they have made their preference clear.

They asked us for choices, as Members of Congress enjoy. They want access to private plans and these additional benefits, and we delivered as promised. We gave them the choices, Republicans and Democrats alike. Now they need the money, so they decide this is a way to get some money to pay for their new entitlement.

Our friends on the other side of the aisle have been talking about overpayments. There is no such thing as an overpayment in this program under the law. No money goes to the plans. It is not as if the insurance companies get the money from the government. The insurance companies, if their bid is under what the traditional Medicare bid is, have to return 25 percent of it to the U.S. Government and the other 75 percent, by law, must go to their beneficiaries, either in the form of lower premiums or additional benefits. So these aren't overpayments to the plans, as has been represented. As I said, 75 percent of the additional payments must be used to provide seniors with extra benefits, which could include lowering premiums, including chronic care management, and so on. The other 25 percent is returned to the government, so there is no overpayment.

Some on the other side argue that they are protecting guaranteed benefits. Well, this is semantics. Nobody is going after the benefits Medicare has traditionally supplied. What we are pointing out and what this amendment would prevent from happening is, the benefits under Medicare Advantage would not be cut, and there is no question--nobody can deny--that those benefits would be cut. In fact, according to the CBO, by the year 2019, they will have been cut by 64 percent, a huge-- almost $90--over $90 in actuarial value. So my point is, seniors, of course, would like to keep what they have.

What about this promise if you like what you have, you get to keep it. Sorry. Not if you are on Medicare Advantage. As I said, according to the Congressional Budget Office, the legislation would cut benefits from $135 a month actuarial value to $49 actuarial

value. That is a real cut. It may not sound like much to some people, but to our seniors, it is a huge hit. They are asking what happened to this promise to let them keep what they have.

There is an interesting memo by James Capretta and Robert Book, who write for the Heritage Foundation, on the Medicare Advantage cuts, and here is what they say:

Reform should mean more patient choice and health plan

accountability. But these current proposals would lead in the

opposite direction--toward a system of less choice, less

accountability, and eventually lower-quality health care.

That is what the Hatch motion is attempting to prevent, to preserve these benefits for seniors.

I have gotten tons of calls, about 500 calls just in the last several days, opposing cuts to Medicare Advantage. I haven't, by the way, received a single call from a senior citizen asking us to make these cuts. I have been reading from these letters. I have read about a dozen of these letters. Let me read a few from constituents who tell us the real effect these cuts would have on them. Bear in mind, in my State we have about 329,000 seniors who are enrolled in Medicare Advantage plans.

One constituent from Phoenix says:

For the past month I have heard a lot about proposed

Medicare cuts. Finally, after years of being self-employed

and being able to afford only high deductible insurance, I am

now in Medicare and have a Medicare Advantage plan. Please

tell me you are not cutting Medicare Advantage. Have a heart.

Leave Medicare and Medicare Advantage alone.

We are trying.

A constituent from Peoria, AZ, says:

I oppose cuts to Medicare Advantage. I have two family

members receiving health care under this program. The care

has consistently been outstanding due to the efforts of our

case manager in coordinating patient care between providers

and patients. We have a voice in determining type and scope

of our care. Please do not cut Medicare Advantage!

Here is a note from a constituent from Apache Junction:

I have heard reports that if passed, the new government

health care plan would do away with or cut Medicare

Advantage. If so, it would nearly double my health care costs

with my present health care provider. I do not want any

legislation passed that would take away the Medicare

Advantage option for seniors.

Another constituent from Peoria:

President Obama has said we can keep the insurance we have

if we like it, but has said he wants to cut or eliminate

Medicare Advantage. What happens to the millions of people

who have Medicare Advantage? These are all seniors, many of

whom cannot afford to pay more. Why should so many seniors

have to sacrifice in order to help pay for universal

coverage? Why do we not hear more debate on this issue?

Well, to my constituent from Peoria, that is what this debate is all about. We are trying to prevent these cuts.

Here is a constituent from Prescott Valley:

I have Medicare Advantage. My husband wants to retire from

his job where he has excellent health coverage for some

serious health concerns. So long as he has good medical

coverage, he does well. Should Medicare Advantage be cut, his

health would necessarily suffer after his retirement. We

cannot afford higher supplemental coverage. I don't want to

lose my husband. I have spent many a sleepless night

wondering how to keep my husband healthy once he retires. I

have several friends currently undergoing chemotherapy and

they are wondering if their health would be in jeopardy if

Medicare Advantage were cut. Are we not worth saving?

Clearly, there are many who want to spend our money on their

own priorities. God bless you, sir, for advocating on our

behalf!

These are real concerns from real people. They don't want us to cut Medicare Advantage.

The final point I wish to make is one of our colleagues was saying: Well, there are bad Medicare Advantage plans and good Medicare Advantage plans. How do we know which ones are good and bad? It turns out the senior Senator from Florida devised a formula which protects a lot of folks in his State, especially in Broward County, Miami Dade County, and Palm Beach but doesn't protect very many other folks.

Maybe this is the definition of good versus bad. There are a few that are protected in Colorado, Maryland, Mississippi, Oklahoma, and Texas. In my State of Arizona, with a lot of retirees, very few are exempted from the cuts. This is not going to go over well--to exempt only a few in certain key areas, and none of the others.

Again, what happened to the promise that everyone gets to keep what they have?

My bottom line in supporting the Hatch amendment is that we should not punish seniors who signed up to have the choice of Medicare Advantage. There are better ways to reform health care. We have talked about those ways. Our senior citizens have paid into the program. They have asked us for this program. Democrats and Republicans have supported it in the past. Now, simply because somehow or other we have to scrape up money for the new entitlements in this legislation, we are going to attack the very program all of us have supported in the past.

It is unfair, it is not right, and we need to defeat those cuts in Medicare, and that is why the Hatch motion to preserve Medicare Advantage should be supported by my colleagues.

Mr. President, the Community Living Assistance and Services and Supports Act, known as the CLASS act, is a new, government-run, government-funded program for longterm care, intended to compete with long-term care plans provided by private insurers.

One of the oft-repeated arguments we have heard in favor of the CLASS act is that it would reduce budget deficits between 2010-2019.

First, when has a government program ever reduced budget deficits?

Second, the Congressional Budget Office tells us that this program will actually add to future Federal budget deficits. The CBO writes: ``The program would add to future federal budget deficits in large and growing fashion.''

Why would it do this?

The program offers returns that payments made into the system cannot cover--just like a Ponzi scheme, as Senator Conrad said. Participants would have to pay into the system for five years before they start collecting benefits. Under the Senate proposal, only active workers could enroll in the program. So this would not be a program that would not benefit seniors or the currently disabled. So, if a worker began making payments in 2011, he or she could not collect benefits until 2016. So, for a time, the program would generate surplus receipts for the government while Americans are paying in and not collecting benefits. But eventually, we will reach a point when payments made into this program cannot sustain promised benefits.

As the CBO tells us, the program would ``lead to net outlays when benefits exceed premiums.'' (By the third decade of program operation-- 2030-2039--CBO assumes that CLASS begins to generate net increases in Federal outlays. The net increase in Federal outlays is estimated to be ``on the order of tens of billions of dollars for each (succeeding) ten-year period.''

CBO notes that the increase in net Federal outlays which will begin to occur after 2029 results despite the requirement that premiums be set to ensure the program's solvency over 75 years. The solvency requirement counts interest income paid to the program's trust fund as available to pay future benefits. However, CBO notes that those interest payments are an intra-governmental transfer within the Federal budget. Thus, CBO notes that from a budget scorekeeping perspective, the CLASS program would inevitably add to future deficits (on a cash basis) by more than it reduces deficits in the near term, even though the premiums would be set to ensure solvency of the program.

The administration's chief health actuary said the CLASS Act would result in ``a net federal cost in the longer term.''

Bottom line, this program is not sustainable outside the 10-year window.

That is why the Washington Post called it, ``a gimmick . . . designed to pretend that healthcare is fully paid for.''

The Post goes on:

Money that flows in during the 10-year budget window will

flow back out again. These are not `savings' that can

honestly be counted on the balance sheet of reform.