Max Baucus

Mr. BAUCUS

Mr. BAUCUS. This is a semantic question. When you see the operational effects, as my good friend from Connecticut said----

Mr. BAUCUS. This legislation, if I may say, expressly states there will be no reduction in what is called guaranteed benefits under Medicare. No reduction, whether it is under Medicare Advantage, whether it is under fee for service--whatever it is, no reduction whatsoever. To be fair to my good friend, I used the words ``guaranteed benefits.'' Guaranteed benefits are the usual benefits seniors think of when they are under Medicare. They go to a doctor, hospital, so on. We have given, unfortunately, so many additional dollars to the so- called Medicare Advantage plans--way above what they should have received. MedPAC agrees. Senator Coburn totally agrees they have been paid way too much. They have taken advantage of that advantage by giving additional benefits, in addition to the guaranteed benefits. Those additionals are things such as gym memberships--a lot of extra stuff that, frankly, is not part of Medicare, is not directly related to health. I might say, too--I have said this a couple, three times and I will say it again--a reduction in the increase of payments to Medicare Advantage, the effect of those reductions is a decision made by the officers of that company. They could take those reductions and apply them anywhere. They could reduce their salaries. They could reduce their admin costs. They could take other actions that would reduce the rate of growth, the rate of return of their stockholders. They do not have to take it out of the beneficiaries. That is their choice. They do not have to.

Mr. BAUCUS. I wish to say something else to put this in perspective. That is according to analysis of Medicare Advantage plans from Oppenheimer Capital Fund, dated November 12 of this year, between 2006 and 2009. Their estimate is, Medicare Advantage accounted for nearly 75 percent of the increase in gross profits among the larger Medicare plans in the industry. Let me say this: . . . Medicare Advantage . . . has been a huge driver-- Quoting from the Oppenheimer Capital Fund-- a huge driver of earnings growth for the industry in recent years. 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-- That is basic health insurance, not Medicare Advantage plans but basic health insurance-- of nearly $600 million. Medicare Advantage probably won't be as much of a contributor in 2009-- But it is going to be a very large contributor in 2009 because of advantages they get.

Mr. BAUCUS. I might add, too, to remind us all, this legislation provides additional benefits for all seniors, including Medicare Advantage recipients--additional benefits. What are they? No copayment for certain preventive care--mammograms, for example, colonoscopies, screening benefits that are not in existence today. There are a whole host of other things that are additional. This legislation provides additional benefits to Medicare Advantage members that are not there today. When I say ``guaranteed benefits,'' I am talking about the usual benefits seniors think of under Medicare. It is hospital care, it is nurses, it is all medically necessary physician care, diagnostic testing, supplies. It is home health care, preventive care, skilled nursing, hospice--all the things that are basically related to health care. The only thing that might be trimmed back a little is, I call them the fringe stuff, the excesses, such as gym memberships. I wish I had the whole list because some of them are not related. As I said earlier, they may not be cut. They don't have to be. It is up to the private companies whether to cut. I have nothing against companies making profits. They should make profits. It is our responsibility as Senators to make sure the reimbursement rates Medicare pays providers are fair and reasonable and not excessive. We have been told they are excessive. So we are trying to find a way to make it fairer.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I ask unanimous consent that the Committee on Banking, Housing, and Urban Affairs be authorized to meet during the session of the Senate on December 3, 2009, at 10 a.m.

Mr. BAUCUS. Mr. President, I ask unanimous consent that the Committee on Commerce, Science, and Transportation be authorized to meet during the session of the Senate on December 3, 2009.

Mr. BAUCUS. Mr. President, I ask unanimous consent that the Committee on Energy and Natural Resources be authorized to meet during the session of the Senate to conduct a hearing on December 3, 2009, at 10 a.m., in Room SD-366 of the Dirksen Senate Office Building.

Mr. BAUCUS. Mr. President, I ask unanimous consent that the Committee on Foreign Relations be authorized to meet during the session of the Senate on December 3, 2009, at 9 a.m., to hold a hearing entitled ``Afghanistan: Assessing the Road Ahead.''

Mr. BAUCUS. Mr. President, I ask unanimous consent that the Committee on Homeland Security and Governmental Affairs be authorized to meet during the session of the Senate on December 3, 2009, at 10 a.m.

Mr. BAUCUS. Mr. President, I ask unanimous consent that the Committee on Indian Affairs be authorized to meet during the session of the Senate in Room 628 on December 3, 2009, at 2:15 p.m. of the Dirksen Senate Office Building.

Mr. BAUCUS. Mr. President, I ask unanimous consent that the Committee on the Judiciary be authorized to meet during the session of the Senate on December 3, 2009, at 10 a.m., in Room SD-226 of the Dirksen Senate Office Building, to conduct an executive business meeting.

Mr. BAUCUS. Mr. President, I ask unanimous consent that the Select Committee on Intelligence be authorized to meet during the session of the Senate on December 3, 2009, at 2:30 p.m.

Mr. BAUCUS. Mr. President, I ask unanimous consent that the Subcommittee on National Parks be authorized to meet during the session of the Senate to conduct a hearing on December 3, 2009, at 2:30 p.m., in Room SD-366 of the Dirksen Senate Office Building.

Mr. BAUCUS. Mr. President, I ask unanimous consent that the Subcommittee on Water and Wildlife of the Committee on Environment and Public Works be authorized to meet during the session of the Senate on December 3, 2009, at 2 p.m. in Room 406 of the Dirksen Senate Office Building.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I ask unanimous consent that Stacey Sachs, a detailee in the Senate HELP Committee Majority Health Office, be granted the privileges of the floor for the duration of H.R. 3590, the Patient Protection and Affordable Care Act.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I noted that the other side, in the last couple, 3 days, has tried to make the case that seniors' Medicare benefits are in jeopardy because ``this legislation cuts Medicare.'' I have heard that statement over and over and over and over again. In fact, the last speaker on the other side made that same point. I am confounded, I am very surprised, when I hear those statements. Why am I very surprised? Because it is totally, patently false. It is false. It is untrue. There are no benefits cut here, none. One could say that with the private plans, the Medicare Advantage plans, which are vastly overpaid--the nonpartisan MedPAC organization states they are vastly overpaid by about 14 percent--one could say those private plans--it is not Medicare; those private plans, Medicare Advantage; those are not Medicare plans, those are private plans, private insurance plans--they may be overprescribing some nonguaranteed benefits for beneficiaries, things such as eyeglasses or something like that, which might be cut back. That is true. But none of the guaranteed benefits--the basic benefits under Medicare that every senior knows about when he or she goes to the doctor; and it is care under Medicare--is reduced. None. Nothing is cut. In fact, this legislation adds benefits to seniors. For example, it virtually fills up this thing we call the doughnut hole. That is the portion of prescription drug payments that seniors otherwise would have to pay. But we say $500 of that is going to be paid for, and the rest of it is going to be paid for at least for 1 more year. So that is an additional benefit. Then all the screening provisions that are in this bill, that is an additional benefit. There are many other benefits that are added onto the ordinary benefits seniors have. So it is not true--it is not true--that the basic guaranteed benefits under Medicare are cut. None of the guaranteed benefits under Medicare are cut--none. So it is totally untrue. It is false when people make the claim that ``Medicare is being cut.'' They are being very clever, the people who are making those claims. What they are saying when they say Medicare will be cut--they want you to think they mean benefits will be cut--but deep in their mind, what they are holding back in their mind--well, when pressed, they will agree, well, it is the Medicare providers, it is the hospitals, it is the medical equipment manufacturers, it is the pharmaceutical industry. That is being cut. That is ``Medicare'' that is being cut and, therefore, that will hurt seniors. That is kind of the way they get around it. Well, the fact is, the way you preserve the solvency of the trust fund is to make sure there are not so many payments, frankly, by Uncle Sam going to pay for all the doctors and hospitals and so forth so the solvency of the trust fund is extended. Right now this legislation extends the solvency of the Medicare trust fund. If this legislation were not to pass, the Medicare trust fund would probably go insolvent in about the year 2017. But this legislation extends the solvency of the trust fund for at least 5 more years to 2022. So I wish to make it very clear that this legislation we are considering does not cut Medicare benefits. In fact, the hospitals and docs, I would say, are going to find at least a 5-percent increase in growth over the next 10 years in payments to them under the Medicare Program--growth. I have a chart which I showed yesterday on the floor. It showed, for each of the various years, it is a 5-percent increase in growth for all those industries. They are being cut 1.5 percent, but that is from a 6.5-percent growth, to net down to a 5-percent growth for each of the years. You ask analysts on Wall Street how hospitals are doing. They are doing great under this legislation. You ask analysts on Wall Street how the pharmaceutical industry is doing. They are doing great under this legislation. You ask any analyst about other industries--home health care, hospice care, you name it--they are all doing OK. Wall Street analysts say they are doing fine. Why are they doing fine? Why, objectively, are they doing fine? Why do the CEOs of these organizations not grumble too much? Because they know what they may lose in a little bit of a reduction in their payments--they will still get big, hefty payments--they will make up in volume because so many more people will have health insurance. They know that. They are going to make a lot of money. So they are OK. So it is not true that Medicare is going to go broke under this legislation. First of all, there is no reduction in benefits. That is very clear. Senator Dodd read a letter from AARP making that very clear. Also, the reductions are not reductions in provider payments; they are reductions in the rate of growth of provider payments, and they are going to do fine. Providers do not care that much because they are making it on volume because everybody is going to have health insurance. They have quite a bit--a 5-percent growth rate anyway. So it is not true--it is not true--that Medicare is in jeopardy because of this legislation. It is not true that benefits are going to be cut. In fact, just the opposite is true. This legislation strengthens benefits, increases benefits, extends the length of the Medicare trust fund to a future date further down the road, so it stays solvent for many years than otherwise is the case. This legislation helps seniors. It helps seniors, contrary to what you are hearing on the other side that it hurts seniors. If you just look at the facts, not the rhetoric--not the rhetoric but just look at the facts, look at the facts and look at who the supporters of this legislation are and objective groups and what they say about this legislation--you cannot help but be compelled to the conclusion that this legislation is not only good for seniors, it is very good for seniors. Recognition of the Minority Leader

Mr. BAUCUS. Mr. President, the Republican leader a few moments ago said this bill raises costs. With all due respect to my good friend from Kentucky, that statement is false. Just this week, the nonpartisan Congressional Budget Office, the organization that analyzes legislation--and both sides, both bodies depend on it; it is a very professional outfit, I might add--said our bill would reduce premiums, not increase but reduce premiums for 93 percent of Americans. And for all Americans, it would make sure that better quality insurance is available. Let me state that a little bit differently. The Congressional Budget Office said that for 93 percent of Americans, premiums would be reduced. It is true that for 7 percent that is not the case. Those are Americans whose incomes are too high to qualify for subsidies; that is, the tax credits, buying insurance in exchange. But those 7 percent would get a lot better insurance, a lot higher quality insurance than they get today because of the insurance market reforms that are in this legislation. The provisions prevent insurance companies from denying coverage based on preexisting conditions, health status, the committee market rating provisions, no rescissions, et cetera. So for all Americans, it is true that this legislation will provide better quality insurance comparing apples with apples. There is a reduction for 93 percent of Americans. The other 7 percent would be in the individual market and they would have a lot higher quality insurance. So if the quality is much higher, it would exceed the increase in premiums. They would be getting a better deal than they would otherwise be getting. CBO looked at this for the year 2016. They didn't look at it for other years, but at least that is the case for 2016: a reduction, not an increase but a reduction. In fact, for many in the nongroup market, those who individually buy insurance, they would find their premiums would be reduced about 40 or 50 percent. About 60 percent of those in the nongroup market are finding their insurance premiums would be reduced. I don't have the exact figure in front of me, but it is in the neighborhood of a 40- or 50-percent reduction in premiums. That is due to tax credits. Again, CBO says those tax credits would cover nearly two-thirds of premiums. So I guess I was a little conservative. It is a little more than 40 or 50 percent. It would cover two-thirds of premiums. CBO said those getting these tax credits would pay for roughly 56 percent to 59 percent lower premiums than they would without our bill. Those are real savings. That is with respect to the premiums. What about out-of-pocket costs? This legislation has absolute limits on out-of-pocket costs. Today insurance companies can sell you a policy, you pay certain premiums, but there is no limit on the out-of- pocket costs you might have to pay. Your deductible is so high, for example. This legislation puts an absolute limit so no policy can be sold that allows you to have out-of-pocket costs above a certain amount. I think it is $6,000 for an individual, and it might be double that for a family. But there is a limit. So this bill does not, as stated by the minority leader, raise costs. In fact, it reduces costs. In addition, there are many people who say, Oh, gosh, this is a $1 trillion bill. Some people even say it is a $2.5 trillion bill. Senators on the other side of the aisle make those statements and they say this to try to scare us. I will be honest with you. I don't know if they believe it. They like saying it because it is a nice, good scare tactic. I say I am not sure they believe it. I wonder if they believe it, because when you read the legislation, it is deficit neutral. It does not add to the deficit. We have a budget resolution. Under that budget resolution, health care legislation for the next 10 years has to be deficit neutral. It cannot add one thin dime to the deficit. So I am a little curious when people talk about a $1 trillion bill. In fact, it reduces the deficit by $130 billion over a 10-year period. That is what the Congressional Budget Office says, the professional nonpartisan budget office. In the second 10 years, the CBO says our bill reduces the deficit by a one-quarter of 1 percent of the gross domestic product. That is roughly $\1/2\ trillion. In the second 10 years, this legislation reduces the deficit by $\1/2\ trillion. That is a reduction in the deficit. I don't know why these people are saying on the other side that this is a trillion-dollar bill. One said--and I will not mention his name-- the other day that this is a $2.5 trillion bill. That is not true. It is just not true because it is paid for. It would only be fair for them to say it is paid for. I think it is fair to get both sides of the story, not just one side. It does cost $1 trillion over 10 years, but it is more than paid for over 10 years. Those who say $2.5 trillion-- they start at 2014 up to 2020, and say that is why it costs so much. It is paid for during those years, too. Let me make it very clear this bill doesn't raise costs. In fact, it lowers costs, and the CBO says so. It doesn't add to the Federal deficit. In fact, it reduces the Federal deficit. I urge everyone to look at the facts closely whenever we hear statements made by anybody, including me. I urge people to listen to the words and read between the lines and see what is really going on. Like my father used to say: Don't believe everything you read and only half of what you hear. Take everything with a few grains of salt.

Mr. BAUCUS. Will the Senator yield for a question?

Mr. BAUCUS. Is it paid for?

Mr. BAUCUS. That is a second question I would love to debate with the Senator. But on the first question only, the Senator admits it is paid for?

Mr. BAUCUS. One more question. I think we all know the House has taken action on physician reimbursement, and the Senate will also do so before we adjourn. That is the so-called doc fix. That is a separate issue. That will be paid for. Putting the doctor issue aside, health care reform--and I say that because we take up the doc fix virtually every year. We don't take up health care reform every year. That is an entirely separate proposition, separate legislative endeavor. If the Senator will bear with me and take the doc fix off the table for a second--we can address that later--health care reform--to use a 10-year number, or when you start in 2010 or in 2014, wherever you are starting--either there is $1 trillion or $2.5 trillion, depending where you start, not getting into how it is paid for. Is it paid for and therefore it is not deficit; am I not correct?

Mr. BAUCUS. One more question on my time. Is it true there are no cuts in guaranteed beneficiary payments--none whatsoever--in this legislation--in guaranteed benefits?

Mr. BAUCUS. Is it true those provisions are not guaranteed provisions? I am talking about guaranteed benefits that seniors expect to get when they go to the doctor, fee for service, expected benefits, under ordinary Medicare, not benefits that a private plan may pay in addition.

Mr. BAUCUS. One more question. Does the Senator agree this legislation will extend the solvency of the Medicare trust fund for 5 years, and failure to pass this would mean the solvency of the Medicare trust fund would not be extended for 5 years?

Mr. BAUCUS. Which colleague is the Senator asking that?