Michael Enzi

Mr. ENZI

Mr. ENZI. I am on my time here.

Mr. ENZI. It is my understanding that the Senator from Montana is willing to take his time for the question.

Mr. ENZI. Absolutely.

Mr. ENZI. Yes.

Mr. ENZI. That is where the Senator runs into a dead end. If you take the money that would be from home health care and you put it into an entitlement that has nothing to do with home health care, nothing to do with Medicare, then you did not extend the life of Medicare.

Mr. ENZI. Reclaiming my time, I am the accountant in the Senate. If you take money from a program and you give it to something else, you have less money in that program. We admit that Medicare does have problems in the long term. Seven or eight years out there, it is going broke, and maybe we can extend it a year or two. If we took that money, that fraud and abuse--and I will say some more things about fraud and abuse here in just a minute--if we took that money and put it into the Medicare Program to extend the life of the program, we could give some assurance to seniors that we are doing something for them. That is where a lot of the concern comes from. On fraud and abuse, if there is all this fraud and abuse out there, how come we haven't been getting at that in the past and putting it to some kind of good use? All of a sudden, we are saying there is all this fraud and abuse and we are going to take this extra fraud and abuse and we are going to put it in there. I notice we have increased the amount of fraud and abuse we are capturing, but we did that by changing the definition. We just claimed more fraud and abuse. We didn't capture more money. That is one of the problems with having a government bureaucracy do things they really have no value in doing. If the government agency finds the money, it doesn't come back to their program, so they are not very excited about doing it. We keep passing fraud and abuse things around here, and the fraud and abuse never gets found to any extent. And the money can't be used if it can't be found. As an accountant, what I have always suggested is, we have a separate fund set up, and when we find this fraud and abuse, we put it in that fund. We would only be able to use the money from that fund in these areas where we say we are going to fund it with fraud and abuse money. Because we have no incentive in government to go out and collect the money. It is a huge problem around here. Some Democrats have argued that we are not creating a new entitlement program. They are simply wrong with that too. Just like Social Security, Medicare, and Medicaid, this bill will commit the Federal Treasury to paying for these new subsidies for the uninsured forever. When we start a program around here, we don't put an end date on it. As soon as we have passed it, the people say: Wow, thanks, that is really great. Now what are you going to do for us? We look around and we say: Maybe we can do like Medicare Part D. Then we pass that and they say: Yes, you gave us Medicare Part D, but you still have the doughnut hole. So we take care of that. Anytime we do an entitlement, we keep adding to the entitlement regardless of where the money is coming from. And that is how Medicare has gotten in trouble. Once subsidies are given, they are never taken back. They are only expanded. There is no appreciation for what has been done. Medicare Part D; now they want the doughnut hole closed. We are going to do kind of a phony thing to close that doughnut hole. PhRMA said they would give $50 billion that can be used as a subsidy as people go through the doughnut hole, but they said: You can only use the subsidy if we can pay it directly to the customer. That way, they keep in contact with the customer. And you can only use it if they stay with our brand name. OK, so they get through the doughnut hole. Then the taxpayer picks up the money, and they are stuck with the brand name. That is why the pharmaceutical companies can make so much money. If they can get them to not switch to that generic and make good economic decisions as they go through the doughnut hole, they can make a lot more money, once it is on the taxpayer outside of the doughnut hole. I am really upset with the pharmaceutical industry for doing that. That is the reason they are putting all the money into promoting this. That means that as Federal spending continues to grow, new programs continue to grow. It will crowd out other Federal spending priorities such as education or national defense. States will tell you it is already crowding out education. When we put these new Medicaid requirements in there and they have to pay for them, they have a limited budget too. What they have done is take money away from colleges, so colleges have had to increase tuition dramatically in order to cover the money they had to give to Medicaid. So when we do some of these things, we are affecting a whole lot of things, other spending priorities such as education and national defense. Any future attempts to modify or restrain this growth will be met by cries of indignation, arguing that cuts would devastate access to health care. If anyone has any doubt, they should look at the transcripts from our debate on the Deficit Reduction Act. In 2005, Congress tried to reduce Medicare spending by about $20 billion and enact modest reforms to the Medicare Program. These reforms would have strengthened the long-term solvency of these programs which we are talking about now and helped reduce the Federal deficit. In response, Senator Reid called that bill an ``immoral document,'' and the junior Senator from California said she strongly opposed the cuts in the bill because they would ``cut Medicare and Medicaid by $27 billion.'' There are thousands of media quotes. The media quotes the majority more often, and here in DC the volume of quotes is equated with being right. Yet today these same Members and the rest of my Democratic colleagues want to create a new entitlement program that will spend hundreds of billions of dollars, and they would pay for it by cutting $464 billion from the Medicare Program. That is enough money to run the State of Wyoming for 320 years. We don't understand how much money we are talking about here. You can't take that kind of money from a program, give it to other programs, and expect the program to work. We recognize that. That is why we put this Medicare Commission in there that annually is supposed to suggest extra cuts. Let's see. We made a deal with the hospitals that we weren't going to cut them. We made a deal with the pharmaceuticals that we wouldn't cut them any more. We made a deal with doctors that we wouldn't cut them any more, although we never followed through on the doctor stuff because their deal--and these were all hidden deals--was supposed to be that they would either get a 1-year fix on the doc fix and medical malpractice or they would get a 10-year fix on the doc fix. That isn't in either of the bills. I don't know if they are going to stick with the hidden deal they made. I don't know what other hidden deals there were in this. I believe these facts highlight why we need to adopt the Gregg amendment. We should be very careful creating a new entitlement program which will permanently obligate our children and grandchildren to pay its costs. In fact, with the way we have maxed out our credit cards, we are now talking about the seniors actually having to pay for these other new entitlements. So grandpa and grandma will be paying for that, too, not just our grandkids and children. If my colleagues insist on doing it, however, at a minimum we need to guarantee that any new program has a stable and reliable source of funding. The Medicare cuts in this bill are neither stable nor reliable. My Democratic colleagues have spoken at length about how the Medicare provisions in this bill will bend the growth of health care spending. That, unfortunately, is far from accurate. If you don't believe me, listen to what the other nationally recognized experts have to say. According to the New York Times, the CEO of the world-renowned Mayo Clinic, which we use around here all the time, dismissed the reforms in the bill. Dennis Cortese said the Reid bill only took baby steps toward revamping the current fee-for-service system. The dean of the Harvard Medical School, Jeffrey Flier, said the bills being considered in Congress would accelerate national health care spending. I wish there were more actual reforms in this bill. I applaud some of the efforts Senator Baucus included that will create incentives for coordinated care and rewarding providers who provide higher quality. I believe those are exactly the types of things we should do to improve the Medicare Program. Unfortunately, the savings from these actual reforms are a few pennies compared to the dollars of the arbitrary payment cuts included in the bill. According to the Congressional Budget Office, all of the savings from the various policies to link Medicare payments to quality and encourage better coordination of care in the Reid bill provide less than $20 billion in total savings. In contrast, the Reid bill includes over $220 billion in arbitrary payment cuts to health care providers, including hospitals, nursing homes, home health agencies, and hospice providers. We have made a point of how much those are and what the effect is going to be, and it is going to take away service that people have come to expect. The Reid bill also includes an additional $120 billion in cuts to Medicare Advantage plans. Medicare Advantage is--we talked about wanting to provide catastrophic care for everybody. That was one of the goals. Well, Medicare people do not have catastrophic care. They can buy catastrophic care through Medicare Advantage. But we are talking about making some substantial cuts to that which are either going to decrease benefits or, in some cases, make the whole service go away. Those are not reforms. Instead, they represent the best efforts of folks in Washington to guess how much it actually costs real doctors and nurses to provide health care services to Medicare beneficiaries. We are not experts in the health care field, but we are going to guess at how much extra revenue they are getting. I want to emphasize that word ``revenue'' because, again, as an accountant, there is a difference between profit and revenue. We are going to cut substantially into the revenues, which is going to eliminate profits, which is the point at which people say: Why am I doing this? So doctors and nurses are going to--people who are looking at being doctors and nurses are going to say: Why would I want to do that? Well, there is going to be a huge demand because the baby boomers are coming up, and they are going to need services. So cuts like the ones to doctors and nurses and home health, and all of those, are an excellent example of how government price controls do not work. Medicare does not negotiate payment rates with providers like private insurers do. Medicare uses price controls to set payment rates. When I first went into the shoe business, President Nixon suggested we should have price controls; that the cost of goods was going out of sight. At that time, one could buy a pair of men's dress shoes for $10. They put in price controls--like this--but they could not put the price controls in immediately because it takes a while to pass a bill. So what did everybody who was manufacturing shoes do? They raised their prices, which forced us at the retail end to have to raise our prices too. By the time that went into effect, that $10 pair of shoes was $20. So price controls do not work. I have experienced it. It was dramatic, and it was terrible for the customer. We are talking about customers again. Medicare uses price controls to set payment rates. Experts in Washington then look at various reported costs, revenues, and profits of health care providers, and then decide how much we should pay health care providers. I have often said everyone thinks they know everything about a business until they actually have to run it. Unfortunately, we have been taking over a lot of businesses, and our expertise is showing. I am kind of fascinated by the Cash for Clunkers. That was a little business we decided we would set up on behalf of the government, and we said it would last for 4 months. It went broke in 4 days. So as to any of the numbers anybody around here is considering, you ought to take a look at it because as a former small business owner, I want to assure them, it is actually a lot harder to run a business than it looks. For the simplest business you can think of out there, if you scratch the surface just a little bit you will find out those people are making dramatic decisions on a daily basis just to keep in business, which means, hopefully, paying themselves, but definitely paying their employees because that is not an option. If it was as easy as we think around here to do a business, everybody would be going into business. The Medicare cuts in this bill are based on the efforts of folks in Washington to decide how much it costs to run a nursing home in Cheyenne or a home health agency in Gillette or any of these businesses in much smaller communities than that. Based on the past track record of Washington, I do not have much confidence in their abilities, and I do not think America does. I think that is showing up in the polls. I think that is showing up in the town meetings. In 1997, Congress passed the Balanced Budget Act. It contained Medicare payment cuts. Lots of smart folks in Washington made arguments similar to those we are hearing today about how those cuts would not harm the providers or beneficiaries. That was historic. Well, let me show you the historic arrogance of that time. What happened after these cuts went into effect? Within 2 years, these cuts had driven four of the largest nursing home chains in the Nation into bankruptcy. Vencor, Sun Healthcare, Integrated Health Services, and Mariner Post-Acute Network all filed for bankruptcy. Between them, they operated 1,400 nursing homes that provided care for hundreds of thousands of Medicare beneficiaries. Similarly, the bill also included cuts in payments to Medicare+Choice plans. After these cuts went into effect, one out of every four plans pulled out of the Medicare program. Millions of beneficiaries lost the extra benefits these plans had provided. Given this track record, I have grave concerns about what the Medicare cuts in the Reid bill would do to Medicare beneficiaries and the doctors, hospitals, and other providers who treat them. I have even greater concerns about using any estimated savings from these cuts to fund this new entitlement program for the uninsured. That is why we should pass the Gregg amendment. Rather than relying on cuts that could devastate the Medicare Program, let's find a stable and reliable funding source that we could use to pay for health care reform. The Gregg amendment says that savings from any Medicare cuts should be reserved for the Medicare Program. That way, if the Washington experts again got it wrong, we will not have already spent all the savings on another program.

Mr. ENZI. Madam President, I yield the floor.

Mr. ENZI. Madam President, I wasn't going to take any part of this 30 minutes, but I can't help it. I will allocate myself 5 minutes. I keep running into this comment that the Republicans were willing to cut $481 billion from Medicare. Would somebody show me where we cut $481 billion from Medicare? We didn't do it, and this bill won't cut $464 billion. Seniors won't let you do that. We didn't even propose it; the President proposed that. We knew it wasn't going to happen. You cannot cut Medicare without having the seniors all upset because they understand their program is going broke--going broke. That is why we have had this series of amendments. We have tried to come up with one that would actually solve the problem. We have been emphasizing the problem. The Gregg amendment takes care of the problem. That is why we brought up the Gregg amendment and why we should pass it. Rather than relying on cuts that can devastate the Medicare Program, we can find a stable and reliable funding source to pay for health care reform. The Gregg amendment says that savings from any Medicare cuts should be reserved for the Medicare Program. That is saying that if these things are all possible that we are talking about as being possible and as being cost savers, if they really work, put it into Medicare. If you really want to extend Medicare, don't just say you are going to extend Medicare and then overlook a few things. I have a little chart I haven't had a chance to use yet. It was reiterated here that this bill is ``deficit neutral.'' Yes, according to CBO, it is--if you assume that Medicare physician payments will be cut 20 percent in 2011 and that they will be cut 40 percent over the next 10 years. We hold the physicians hostage every year, 1 year at a time, to get something out of them, and then we keep the cuts from happening. These cuts aren't going to happen. If they did happen, it would not be deficit neutral. The bill makes no provision for paying this 20 percent that will be cut in 2011 or for the 40 percent over the next 10 years. There is no provision. So that part is going to be false as to having a deficit- neutral bill. A massive new tax will be imposed on employer health benefits, hitting 31 percent of American family plans by 2019, if that does not happen--and I think people will notice the tax in a whole bunch of different ways--then this assumption is wrong and it is not deficit neutral. Also, it relies on us cutting $464 million from Medicare. The Actuary said this level of cuts would bankrupt hospitals and threaten patient care. I have a typo on the chart. It is supposed to be $464 billion, not million. I am still having trouble with that. That amount would fund the State of Wyoming for 320 years. It is a big number. We are talking about cutting it by that much. If we don't cut this and we use this to pay for the other entitlement, the bill is not deficit neutral. CBO says that. Everybody is entitled to their own opinions, but the facts are there. The facts say that if, if, if. We are not going to do those ``ifs.'' I will not go into that point, even though I am a little upset.

Mr. ENZI. Yes.

Mr. ENZI. The Senator from New Hampshire is absolutely correct. I am glad he came here to make that point on the amendment we are going to vote on this afternoon. It is critical. If you want to save Medicare, this amendment will save Medicare. It doesn't prohibit their programs from happening. They can still do the entitlements, but they have to be sure they are paid for. That is one of the problems. To say they are going to take the $464 billion from Medicare and put it into these other entitlements, that is not fair.

Mr. ENZI. Madam President, I yield 10 minutes to the Senator from Idaho.

Mr. ENZI. Madam President, may I inquire as to the time arrangement?

Mr. ENZI. Madam President, I usually don't say much at these debates, but today I am going to make that an exception. I allocate the rest of our time to me. There have been a lot of comments here and they need to be clarified. I do want to pass a bill that decreases health insurance premiums. I have traveled thousands of miles across the State of Wyoming, and every time I talk with somebody about health care, they ask me to do something to lower their health care costs--to lower their health care costs. That is what most people in America want. American families cannot afford to pay ever increasing health insurance premiums. Small businesses cannot afford premiums that increase twice as fast as inflation. Earlier this week, CBO issued--actually, it was last week--its long awaited report on the impact the Reid bill would have on insurance premiums. CBO said the premiums for individuals and families purchasing their health insurance will increase by 10 to 13 percent. That means if the Reid bill is enacted, these folks will pay 10 to 13 percent more--more--for their health insurance. The legislation that its sponsors say is intended to lower health care costs will actually increase insurance premiums. We should not be surprised by this finding. Several well-known actuarial business consulting firms have already issued reports that said the exact same thing: The bill increases health insurance premiums. What is surprising is that some of my Democratic colleagues have argued that this CBO report provides support for enacting health reform. The New York Times even described this as ``Good News on Premiums.'' These statements defy logic and common sense. The bill attempts to completely restructure the nonemployer insurance market and impose massive new government mandates. Is anybody surprised that as a result the costs will go up? Yet some of my Democratic colleagues have attempted to cherry-pick data and use selective quotes to try to mask what CBO said. For instance, some of them have pointed out how CBO said the Reid bill would lower premiums by 7 to 10 percent because of changes in the rules governing the insurance market. As the Senate's only accountant, I take offense to these kinds of misrepresentations. Giving my Democratic colleagues the benefit of the doubt, I will assume they do not understand the differences between gross and net numbers. I am not going to try to do a lot of numbers here. I did that once in committee and my staff watching back at the office--I got to ask the accountants at the SEC important questions at the time Enron was failing. You could see this little wedge of people seated behind the people testifying, and they were all asleep. I want to use this chart instead. CBO did say the premiums would go down 7 to 10 percent due to insurance market changes. They also said premiums would go down another 7 to 10 percent because healthier people would sign up for insurance. What my colleagues forgot to mention or do not want to mention is that CBO also said that premiums would go up by 27 to 30 percent because the bill has so many mandates and requires most Americans to purchase more expensive coverage. Yes, the Federal Government is going to tell you what you need for insurance, and then they are going to fine you if you do not get it. Maybe this chart helps to explain it. We can see the net impact. Here is the 27 percent in increases because of the mandates and the requirement to purchase more expensive coverage. This is the decrease that I mentioned. But you cannot just talk about this decrease and you cannot just talk about this decrease. You can talk about the net, and the net is a 13-percent increase in premiums. I urge anyone who questions what I am saying to read the CBO letter. It is on the CBO Web site. Page 4 of the letter clearly states premiums will increase by 10 to 13 percent. That amounts to $2,100 for families purchasing coverage on their own. That does not meet the requirement that people in Wyoming think they are going to get. And the younger they are, the more surprised they are going to be because we get rid of the ratings, and young people will be paying considerably more. They are already paying into Medicare for seniors without getting any promise that will last until the time they become seniors, unless we pass something like the Judd Gregg amendment. We have to protect that Medicare money to make sure it goes to Medicare and only Medicare if we are going to make sure Medicare stays solvent. We have to make that as a promise to the kids paying into the system now. They and their employers, and the amount the employers pay in, is the amount they could have in their own pocket if the employer did not have to pay it. But they are paying that so seniors can have the Medicare benefits, and we want them to have those benefits. We should not at this point take money from Medicare and build new entitlements and expect those same young people to pay an increased amount on while they pay an increase in their insurance premiums. Their insurance increase is going to be a lot more than 27 percent. In Wyoming, it was estimated to be around 300 percent. I think they will notice. I think they will be upset. If this bill passes, there will be a revolution in this country when people realize what has been thrust on them in this bill. I yield the floor and keep the remainder of my time.

Mr. ENZI. Mr. President, I ask unanimous consent that following the comments of the Senator from Massachusetts, an article be printed in the Record called ``The Coming Deficit Disaster'' by Douglas Holtz- Eakin, the same Congressional Budget Office Director to whom he was referring. That goes into a number of these points I probably will do later, but I want it at this moment because I want to relinquish such time as the Senator from Oklahoma might want.

Mr. ENZI. Senator Sessions?

Mr. ENZI. Mr. President, I yield up to 20 minutes to the Senator from Alabama.

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

Mr. ENZI. Mr. President, I allocate the balance of our time to the Senator from Tennessee.

Mr. ENZI. I think we are in alternating modes, so I could yield some time to the Senator from Tennessee.

Mr. ENZI. Mr. President, I reserve the remainder of our time for the Senator from New Hampshire, but I will allow the Senator to speak now.

Mr. ENZI

Mr. ENZI. Mr. President, I yield 5 minutes to the Senator from New Hampshire and 10 minutes to the Senator from Texas.

Mr. ENZI. Mr. President, I yield such time as they need to several Senators for the purpose of a colloquy.

Mr. ENZI. Mr. President, the time for the colloquy has, unfortunately, expired. The balance of the time goes to the Senator from Iowa. I thank everybody for their participation.

Mr. ENZI. What is the status of the time?

Mr. ENZI. I will reserve the remainder of my time.