Max Baucus

Mr. BAUCUS

Mr. BAUCUS. 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. BAUCUS. Mr. President, I yield myself 10 minutes.

Mr. BAUCUS. 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?

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

Mr. BAUCUS. 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.

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

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

Mr. BAUCUS. Mr. President, the pending motion would strike the savings the bill achieves from Medicare Advantage. Why are we seeking savings from Medicare Advantage? Because MedPAC tells us that the government pays the private insurance companies that provide Medicare Advantage 14 percent more than we pay traditional Medicare; because these extra subsidies to Medicare Advantage cost the four-fifths of seniors in traditional Medicare $90 more a year in premiums even though they get no benefits from Medicare Advantage; because MedPAC says that ``the additional Medicare Advantage payments hasten the insolvency of the Medicare Part A trust fund by 18 months; because the private insurance companies that provide Medicare Advantage are making three-quarters of their profits from these government overpayments, and they can find some of the savings there; because private insurance companies that provide Medicare Advantage are paying their CEOs $24 million, $9 million, and $8 million a year, and they could find some of the savings there; and because nothing we do in our bill reduces benefits under Medicare. Therefore, I urge my colleagues to oppose the motion.

Mr. BAUCUS. Mr. President, I move to reconsider the vote.

Mr. BAUCUS. Mr. President, the Senator from Arkansas is to be recognized to offer an amendment. Amendment No. 2905 to Amendment No. 2786

Mr. BAUCUS. I yield Senator Klobuchar 10 minutes.

Mr. BAUCUS. Mr. President, I think we are going to go back and forth here.

Mr. BAUCUS. Sorry?

Mr. BAUCUS. Well, we are going to go back and forth. Here is Senator Kaufman.

Mr. BAUCUS. Back and forth, and forth and forth, and to and fro, and this and that it works fine for me.

Mr. BAUCUS. Mr. President, I have heard a lot here today about how this is going to hurt seniors and so on and so forth, words such as ``smokescreen.'' The fact is there is no smokescreen here whatsoever. This is a very well thought out, considered policy that I think strikes a very good balance between getting care to especially seniors at home, which is so important on the one hand, and making sure there is not waste on the other hand. That is our responsibility here, to make sure the program works and works well. I have sort of a special interest in this. My mother was in the hospital. It happened about 2 weeks ago. She fortunately is doing much better. She is out of the hospital. She has spent some time with a home health caregiver with whom I was very, very impressed. This home health person is doing a great job with my mother. I have seen other instances too, but personally I was very happy to see my mother getting very good care from a home health care nurse. I think it is also important to remind my colleagues that this amendment is generally a retread on the McCain amendment we debated over the last few days. That is, once again, the opponents of this bill are endorsing the status quo that leaves Medicare on the brink of going bankrupt and seniors facing higher costs. Let me remind my colleagues again what will happen if we stick with the status quo. The status quo, meaning no bill, which the other side is advocating, means Medicare will go broke in 8 years. That is the status quo. In our legislation, that will be postponed for at least 5 more years. The status quo, as in no bill, which the other side is advocating, means seniors will continue to pay higher and higher premiums and cost sharing due to wasteful overpayments to health care providers. There is so much waste in our system. We all know there is a lot of waste. I am quite surprised not all of our colleagues want to cut out the waste. In effect, they want to keep the waste that, unfortunately, is in our system. The status quo also means each year billions of Medicare dollars will continue to be wasted on lining the pockets of private insurance companies. That might be a bit of a strong statement, but the fact is, some chief executives of private insurance companies are paid tens of millions of dollars to manage Medicare Programs, especially Medicare Advantage, and the status quo means that will continue. The status quo also means seniors will continue struggling to pay for prescription drugs. The stakes for seniors in the Medicare Program have never been higher. We have a choice. It is a very simple choice: either endorse the status quo or strengthen Medicare. Let's talk a little bit about home health care. Regarding Medicare changes for home health providers, let me describe what is in the Senate bill. I don't think our colleagues know specifically what is in the Senate bill. That may be a strong statement to make. But if they knew what was in the bill, I think some of the statements made tonight might be a little bit different. As most of my colleagues would agree, home health care is an extremely important benefit in the Medicare Program. We are all very strong advocates of home health care. Across the country, there are more than 9,800 home health agencies providing care to seniors in their homes. This helps seniors get better and helps them to avoid expensive rehospitalizations. We are all champions of home health care. We would like people not to be institutionalized. It is much more appropriate to have care in the home, and home health care agencies provide that. In Montana, home health care providers go the extra mile--literally-- to provide care to patients across vast distances. In some cases, in rural areas they have to drive 100 miles just to see one patient. They are dedicated people. They go great distances and travel a long way to see very few patients. Home health providers make a real difference in improving seniors' health, and we should support their efforts. We all very much support their efforts. While I have great respect for the services of home health providers, we also have a responsibility to protect the Medicare Program. Unfortunately, there is almost always waste somewhere. It is a matter of judgment as to how much is waste and how much is not. We must make sure Medicare is paying appropriately; that is, that Medicare is not overpaying for Medicare services. We must take action to root out fraud and abuse in the Medicare Program generally and where it may occur in the home health industry as well. I think the policies in the Senate bill achieve both goals. First, the Senate bill would ``rebase'' home health payments to ensure payments reflect actual costs of providing care. These changes are based on recommendations by MedPAC, which is the independent advisory commission that advises Congress on Medicare reimbursement. It is a nonpartisan group. MedPAC advises that we rebase. What do we mean by ``rebase''? When the current home health payments were set, seniors received an average of 31 visits per episode. Today, they receive 22 visits; that is, they get paid about the same for doing less. We are trying to make sure the payment reflects the actual services provided. The Senate bill directs CMS to rebase payments to reflect this change. It is common sense. MedPAC recommended it and thinks it has to keep up with the times. Times have changed over the years, and the payment system should reflect that change. There is something else I think is pretty important, and most of my colleagues would agree, the Senate bill roots out fraud that, unfortunately, exists in home health care as well as in other areas of Medicare spending. It tries to root out the fraud in Medicare payments for outlier cases. Medicare provides an extra payment today for providers--home health folks--who treat sicker people, otherwise known as outlier patients-- really sick, outliers. Unfortunately, the GAO found that some providers were gaming the system and getting much more outlier payments than they deserve. For example, the GAO found that in one Florida county alone, home health providers were receiving 60 percent of all total outlier payments. That is nationwide. One county was getting 60 percent, even though they had less than 1 percent of the total Medicare population. I don't want to just single out Florida. Other counties in the southern part of the country clearly have a grossly disproportionate amount of high outlier payments. The Senate addresses this problem by placing a cap on the amount any individual provider can receive in outlier payments. Another change is the bill makes ``market basket'' changes in 2011 and 2012. That was recommended by MedPAC. Why is that important? MedPAC is actually much tougher. They wanted to start in 2010. We said we will hold off a bit. We wanted to be fair to the home health providers. In addition, the bill establishes a productivity adjustment for home health providers beginning not right away, not next year or the following year but in 2015. These changes ask home health providers--like all other providers--to offer more efficient and higher quality care over time. We are being fair about it. Very importantly, in making these changes we worked closely with the home health industry to ensure these changes were reasonable and fair. What do we do with respect to the agencies to make sure we are fair? On the rebasing policy, MedPAC recommended that we fully implement these changes in 2011. To ensure that providers can adapt to the new payment rates, we in the Senate decided we would phase in these changes over 4 years. The home health providers support this phase in. They think it is a good idea. On the outlier policy and the fraud changes, these policies were actually suggested to us by--guess who--the home health industry. They came to us and suggested we make some changes in outliers because too many agencies are gaming the system. They asked us to make some outlier changes and stop that gaming, to make changes to stop the fraud. They came to us and gave us some ideas. Obviously, the home health industry fully supports the changes they recommended to us. They are in this bill. On the market basket and productivity changes, the Senate bill holds off on applying these reductions while the rebasing policy is taking effect. This bill gives home health agencies extra time--much more time than is recommended by the very aggressive proposed changes by MedPAC, the House bill, and the administration. We say those are too aggressive. We in the Senate decided to give agencies extra time to adapt to the payment changes in the bill rather than having all these implemented at the same time as MedPAC and the House and the administration all recommended. Finally, with respect to rural home health providers, we are all very sensitive to the special needs of rural America. What did we do about that? From 2010 to 2015, rural providers will receive a 3-percent extra payment each year. This payment will ensure that rural providers are protected as we reform the home health system. In total, the home health changes in the Senate bill, I believe, strike a fair balance between ensuring seniors have access to home care, while also rooting out inappropriate payments from the system. I hear some of my good friends say: Gee, these changes are going to hurt seniors. They are not going to hurt them. In fact, most of the changes are suggested by the home health care industry. I think all of us want to root out fraud and waste. Also, it is claimed that Medicare beneficiaries will be harmed by this bill. This is a scare tactic. Let me say what the American Association of Retired Persons says about these claims that these changes in Medicare reimbursement are going to harm seniors. AARP says: Opponents of the health reform won't rest. [They are] using myths and misinformation to distort the truth and wrongly suggesting that Medicare will be harmed. After a lifetime of hard work, don't seniors deserve better? That is AARP. I don't suggest tonight that any of our colleagues are using myths and misinformation to distort the truth. The point is, AARP claims that is not true. They support the bill strongly. I will remind my colleagues of some of the positive changes in the legislation. This legislation improves the solvency of the Medicare Program by 5 years. It puts $30 billion back into the pockets of seniors in the form of lower Medicare premiums. It makes prescription drugs more affordable, which is an added benefit in this bill that would not be available if the legislation is not passed. The bill guarantees that seniors can continue to see a doctor of their choosing. The bill provides free wellness and prevention benefits. Those are new benefits. They don't currently exist. It will also include fair and appropriate changes for home health that protect access to care. I don't question the motives of my colleagues. They believe they are standing up for seniors in opposing the home health changes. But in truth they will harm them because they are hurting the Medicare Program. I don't think we want to hurt the Medicare Program. We are trying to help the Medicare Program by making these changes. There is one other point I want to make. This is kind of interesting. I thought when I saw it--if I still have it--it is kind of interesting. The growth rate in home health care spending will continue to be very high after this legislation passes. Currently, the growth rate of the home health care industry is almost 11 percent per year. After the legislation, it will be almost an 8-percent annual growth in the home health care industry. That is much faster than the national health expenditures. I think most things in life are a judgment call. I think one fairly decides that the changes in this bill are good for seniors and home health care providers because they are sensitive to the needs of the industry, sensitive to patients, frankly, but also responsible to the American taxpayers by making sure we are rooting out waste.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I ask unanimous consent that the Senate proceed to a period of morning business, with Senators permitted to speak up to 10 minutes each.

Mr. BAUCUS

Mr. BAUCUS. I ask unanimous consent that the Committee on Homeland Security and Governmental Affairs be discharged from further consideration of S. 2129 and the bill be referred to the Committee on Environment and Public Works.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I ask unanimous consent that the Senate proceed to the immediate consideration of Calendar No. 212, S. Res. 341.

Mr. BAUCUS. I ask unanimous consent that the resolution be agreed to, the preamble be agreed to, the motions to reconsider be laid upon the table, with no intervening action or debate, and any statements relating to the resolution be printed in the Record.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I ask unanimous consent that Sarah Allen, Ryan Nalty, and Grant Jamieson, staff of the Finance Committee, be granted the privilege of the floor for the duration of debate on the health care bill.

Mr. BAUCUS. Mr. President, I ask unanimous consent that Sara Velde of Senator Harkin's staff be granted the privilege of the floor during the duration of today's session.

Mr. BAUCUS

Mr. BAUCUS. I ask unanimous consent that when the Senate completes its business today, it adjourn until 10 a.m. on Saturday, December 5; that following the prayer and pledge, the Journal of proceedings be approved to date, the morning hour be deemed expired, the time for the two leaders be reserved for their use later in the day, and the Senate resume consideration of H.R. 3590, the health care reform legislation, with the first 3 hours following any leader remarks equally divided between the two leaders or their designees and controlled in 45-minute alternating blocks of time, with the majority controlling the first block, and with no other motions or amendments in order during the controlled time.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, Senators should expect rollcall votes tomorrow afternoon. There will be no rollcall votes prior to 1 p.m.

Mr. BAUCUS

Mr. BAUCUS. If there is no further business to come before the Senate, I ask unanimous consent that it adjourn under the provisions of S. Res. 370, as a further mark of respect to the memory of the late Paula Hawkins, a former Senator from the State of Florida. Thereupon, the Senate, at 6:50 p.m., adjourned until Saturday, December 5, 2009, at 10 a.m.