Denny Hastert

Mr. HASTERT

Mr. HASTERT. They have to pay for their own prescription drugs; is that right?

Mr. HASTERT. I yield to the gentleman from New Mexico [Mr. Schiff].

Mr. HASTERT. I thank the gentleman. I yield to the gentleman from Oklahoma.

Mr. HASTERT. Let us make it perfectly clear for everybody here so we can understand a little bit about our provider service organizations. For instance, if you had 25 or 30 doctor in a large community, all specialists and general practitioners who you chose of the highest quality that you think are good practitioners of health care, and then you found one of the hospitals that was the best orthopedic hospital and another hospital that maybe is the best cardiac hospital, if you join together to provide those services to seniors, then you can give the seniors the best service at the lowest costs. Is that the whole idea behind this?

Mr. HASTERT. One of the things that we talked about as well as the choices that seniors have, and we talked about a couple of those choices out here, medical savings accounts, HMO's and PPO's, and then now the provider service organizations that we just got done talking about, we always thought also that there is a huge and historically huge amount of dollars, of Federal tax dollars, that go into Medicare that are wasted because of fraud and abuse. We estimate between 10 and 15 percent. That is a huge amount of money when you are talking about hundreds of billions of dollars. Now we have two experts here on fraud and abuse, certainly the gentleman from New Mexico [Mr. Schiff] from the Committee on the Judiciary who looks at that type of issue all the time, and our friend from Oklahoma is an expert on that, but let us talk, talk to us a little bit about the provisions in this bill and how we start to curtail fraud and abuse. I am happy to yield to the gentleman.

Mr. HASTERT. We hear stories all the time, Mr. Speaker, that a senior will get a bill, they usually do not get the bills from Medicare, hospital bills, but when they do get those bills and they look through there and they see that they have been charged a great deal of amount. Some of those dollars are cost-shifting, but actually, of course, the story that is going around the Capitol is the lady who looks at her bill and sees that she has been charged for an autopsy, and obviously, she did not receive the autopsy. She calls in and says, ``I did not receive this autopsy.'' And the person on the other end of the line says, ``It must have been for your quadruple heart bypass.'' She said, ``I did not receive one of those, either.'' What would a senior do under this bill when he gets into a situation like that?

Mr. HASTERT. How do they benefit?

Mr. HASTERT. And under these programs you are saying that they are more efficient, a better system of delivery, and that the can pick up these costs so seniors really save.

Mr. HASTERT. And sometimes pay for their own eyeglasses?

Mr. HASTERT. I certainly appreciate my colleagues joining me tonight to talk about this, Mr. Speaker. I think the bottom line is that we have our parents and grandparents, and we want to make sure Medicare is there for them, a good Medicare Program that could go beyond the bounds of what has traditionally been there and give them some choices, but most of all, to give them quality health care and give them the assurance that that health care is going to be there for the rest of their lives. Then on the other side, we have out children and our grandchildren, that we want to make sure that we are not wasting their dollars. That is why we are cutting that inflationary $270 billion that the Democrats just want to leave there, so that they do not have to pay those extra dollars out of what money they have to earn. It is estimated that a child that is born today has about $186,000 of debt that he has to work off or she has to work off in her adult lifetime. Let us hold that down. Let us be prudent in how we spend the taxpayers' money. I think this bill gives seniors choices. It secures health care and Medicare for their decision-making process for the rest of their lifetime, and it establishes and holds firm a principle of Medicare, something that seniors have had in this country for years to come. I certainly appreciate your participation in this special order tonight, and I know that the seniors of this country will join me in thanking you very much.

Mr. HASTERT. Is it not a fact, too, that HCFA, the huge Health Care Financing Agency of the Federal Government, a huge bureaucracy that has grown in the last 40 years here in Washington, they have not been very effective in weeding out fraud and abuse, have they?

Mr. HASTERT. That is one of the reasons in this bill, instead of throwing billions of dollars, again, at a huge Federal bureaucracy that is not very effective and certainly not efficient, that we have been going out in the private sector and finding those private CPA's who do a good job, who make a living doing that day in, and day out, and have to produce in order to be part of the system, to go out and do that job in fact also; is that correct?

Mr. HASTERT. Just the provisions that you gentlemen put in the bill on fraud and abuse, if you can squeeze $10 billion or $12 billion out of fraud and abuse every year and put that back into health care for seniors, what a positive thing this is, just in that one small aspect.

Mr. HASTERT. Mr. Speaker, I thought we would take some time this evening to talk about the bill that we passed today, the Medicare bill where the Republican proposal to save and preserve Medicare for generations to come was passed in this House. It was interesting to listen to some of the previous speakers and some of the shameless rhetoric that we have heard through the last hour or so about some of the proposals that were supposedly proposed in the Medicare bill, and in the next hour I would like to talk about some of those fallacies that were presented here and talk about why Republicans decided that we had to look at a system that has been in place for 25 years, or actually 30 years, since 1965. Mr. Speaker, what happened last April, the President's Board of Trustees for Medicare came forward and said that Medicare is going to go broke, that we start going into arrears next year, in fiscal year 1996, and by the year 2003 or 2004 Medicare would be totally bankrupt. So we had a choice. Basically, Democrats and others today had a choice in this Chamber. You could vote for a program that was going to save Medicare, preserve Medicare and give seniors choices, or you could vote no and let Medicare go bankrupt so there would be no Medicare system in the next year or 2 years or 7 years, and let seniors down, take away a promise that has been there for a number of years. In developing the Medicare plan that we had before us today, I would just like to take a minute and say that I think we went beyond the traditional square of how politicians think. We brought in health care recipients, organizations like AARP and other consumer organizations for seniors. We brought in management, risk managers of the Fortune 500 companies, we brought in hospital folks, we brought in nursing home folks, we brought in doctors and other providers to listen to what their problems were and how to design a Medicare system for the future. We asked people to do one thing, and that was to think beyond either cutting down the benefits that have always been there to squeeze down the dollars that we spend on Medicare and hold back those benefits, or hold back the dollars that the providers got, or those types of traditional ways that the previous leadership in this House has behaved towards Medicare, or to try to think beyond the traditional square. How do you create a new system, how do you create a Medicare system that will reach into the future that will give people better services, better choices, and be a system that really starts to move towards the private sector? Well, we decided that the fee-for-service system that has always been the traditional Medicare delivery system in this country was near and dear to many people. We did not want to upset seniors, and we wanted to make sure that that system was always there if people chose to take it. Also then, we wanted to offer an array of choices, and those choices, one of them is about 10 percent of our seniors in Medicare today already take the choice of managed care, or what we call HMO's, or Health Maintenance Organizations. [[Page H 10477]] Along with that, they do not have those choices today, but PPO's are also part of that choice system. In this system, a health maintenance organization may offer somebody prescription drug benefits, prepaid, and they offer to do away with copayments and they even offer to pick up part B premiums. So there is a real incentive to give people a better product at a lower price. Of course, that is the real market system starting to develop. People also might want to develop what we call a provider service organization, where doctors and hospitals get together and offer a new system to health care recipients, to the Medicare recipients in this country. Of course, people may want to go to a medical savings account that we are going to talk about here tonight, where people can make choices of where they want to keep their traditional doctor, what kind of health care they want to buy, and if they do not spend a prescribed amount of money they get to keep it. That is certainly a unique idea in this country, especially when you deal with huge bureaucracies that formerly controlled the health care in this country. Then, finally, the seamless coverage, that if you have had a health care insurance system where you worked for the last 30 years, you liked that system but all of a sudden you are reaching 65 years of age and, my gosh, you have to give up the insurance you have always known and try to find some other kind of a fee-for-service system in the Medicare system, that is a very traumatic experience to some folks. If your insurance company has agreed to stay within the system, now you can have that seamless coverage and stay with that traditional insurance that you have always had. Those are the choices. But some of the things we want to talk about here tonight, talk about some of the fallacies that one friends on the other side of the aisle have brought up but also some of the positive things about those positive choices that people will enjoy and at the same time trying to squeeze out the fraud and abuse that we have in health care. We think up to 10 to 15 percent of the dollars that we spend in Medicare today are wasted in fraud and abuse under the present system. We need to change that. We have brought in tough new provisions to make that happen. I would like to defer, first of all, to my friend, the gentleman from Connecticut [Mr. Shays], who has also been on the ground floor of putting this program together; and we are going to talk about the inception of the change, the new system of Medicare. Plus we have with us the gentleman from New Mexico [Mr. Schiff] and the gentleman from Oklahoma [Mr. Coburn]. It will be interesting to hear from these gentlemen as well.

Mr. HASTERT. So you are saying that deductibles, this is something plus. I mean before a traditional fee-for-service health care and Medicare seniors have to pick up a copayment; is that right?

Mr. HASTERT. So what the Democrats are saying, that we are cutting Medicare, actually, we are expanding Medicare 40 percent over the next 7 years, is that correct?

Mr. HASTERT. If the gentleman would yield, one of the interesting things when they are talking about a $270 billion cut, what they are talking about is they want the inflationary rate of over 10.5 percent to go on unfettered. Our good Democrat friends on the other side of the aisle, who just got done speaking, are saying, let us not try to hold in inflation. Of course, we know what inflation does, especially to seniors. But they want that inflation to go at 10.5 percent. That is how they get to $270 billion more spending. [[Page H 10478]]

Mr. HASTERT. The other part of the tax cuts for the wealthy that our friends on the other side talk about, and it is somewhat laughable, because part of those tax cuts are for senior citizens who want to work that earn under $30,000 a year and ones who do not have all the income coming in and rents or interest rates or dividends from stocks or people who have to really go out and work for a living and people who have done that their whole life. But if you earn under $30,000, you do not have to pay that extra income tax or that deduction that you get on your Social Security.

Mr. HASTERT. It is interesting. When we talk about growing Medicare, and the gentleman from Connecticut [Mr. Shays] talked about how much more dollars that we are going to put in the system over the next seven years, we base that at about 5.5 percent, which is even less than what the private sector medical growth has been. When you look at the rate of inflation that the Federal Employees Benefit Plan has had across the country, they have had an average under 5 percent in the last couple of years. We are giving the people the benefit of the doubt, and we are letting Medicare grow at about 5.5 to 6.3 percent. But the amazing thing is when we say that, no, we are not going to hold in inflation completely, that we are going to let it go, our friends on the other side have said, ``Well, we will let it go, we will let inflation go up to 10 or 15 percent.'' That is where they get the $270 billion. That is wasted money. That is inflation. That is money that never was, never will be, but people would have to pay extra out of their pockets and not get any more in return.

Mr. HASTERT. If the gentleman would yield, we paid for those tax cuts.

Mr. HASTERT. Can I ask you a question and then let the gentleman from New Mexico ask, too? The Democrats are saying this is a tax break for the rich. You are saying tax breaks here are for families with children.

Mr. HASTERT. They would have to pay, pick up a deductible; is that right?

Mr. HASTERT. One of the things that when we looked at our system and what we have tried to do, the rate today is 31.5 percent. And we keep that tax rate in place. Now, there is a proposal or under law that this would drop to 25 percent. And if it did, indeed, drop to 25 percent, then taxpayers would have to pick up that extra amount and taxpayers would be subsidizing the part B premium about 75 percent. So the other side of the story, as some people use that terminology, our friends on the other side would actually have a tax increase for those people.

Mr. HASTERT. I think one of the most important things that we want to get to and I think we should walk through the choices that people have. traditional fee-for-service and the other choices are there, part of this Medicare Program.

Mr. HASTERT

Mr. HASTERT. Mr. Chairman, the question before us today is simple. Do we give seniors more choices or do we choose, do we choose, to let Medicare go bankrupt without any choices for anybody at all? Under the Republican plan to save Medicare, seniors get more choices. One new choice, for instance, that is not offered today is preferred provider organizations. Many Americans are familiar with this option. In fact, it is available under the congressional medical insurance plan. Mr. Chairman, under a preferred provider organization or PPO, seniors are part of a managed care plan but they can see any doctor they want, even a doctor outside the network through a point of service arrangement. That means if my father, who lives in Illinois, wants to see a cataract specialist at the Mayo Clinic, he would be able to do that and still receive his health care coverage. All I want to emphasize is one important point; that under the Republican plan PPO's are required to take any senior who wants to sign up. If an individual happens to be diagnosed with cancer and wants to enroll in a PPO offered in their area, they have that option under this bill. Nobody can keep them out. They have to accept all comers. Under the current Medicare system, PPO's are not available. Under the Medicare reform plan, PPO's are an option under this plan.