Frank Pallone

Mr. PALLONE

Mr. PALLONE. So you could have a 20 percent copayment and then have this 40 percent out-of-pocket beyond the traditional copayment, which is incredible when you think about it. Who is going to be able to afford that? I mean, very, very few.

Mr. PALLONE. Probably tomorrow, but I guess we do not know for sure.

Mr. PALLONE. I thank the gentleman.

Mr. PALLONE. One of the things that I was going to get to tonight, and obviously there is so much to be said about Medicare and Medicaid that we could talk forever, but one of the things that Democrats have been critical of in the Republican changes to the Medicaid program is a provision that actually repeals statutory safeguards that have protected against some fraud and abuse. I think people have the notion that the reform proposals that have come forward on the floor here over the last year would somehow curb fraud and abuse, but in many cases they repeal existing statutory protections against fraud and abuse. For example, in the Medicaid program over the past 10 years the largest single abuse of Federal Medicaid funds has been the use by some States of what is called illusory financing schemes. This is where they have these fictitious payments to disproportionate share hospitals and then the State substitutes Federal for State dollars effectively reducing the State's share of program costs. In 1991 and again in 1993 Congress enacted legislation designed to curb these abuses where they set up these fictitious funds and the Republican bill expressly repeals these statutory safeguards essentially reopening the door to abuse of the Federal Treasury by States if they want to lower their own Medicaid spending without reducing the amount of Federal Medicaid funds that they would fall down on. So again, one would think when we are getting a reform proposal that we would be cutting back on the fraud and abuse, but in effect what this does, in block granting the money, it actually takes away some of the safeguards that have been used by the Federal Government to prevent the States from basically coming up with these illusory finance schemes. We might say what State would do that, but, of course, States do that because they are trying to save money and cut back on the amount of State dollars and use the Federal funds in ways they are not supposed to.

Mr. PALLONE. Because my father-in-law and mother-in-law both grew up, until they went off to college, lived in Endicott, and I have been up there a few times. It in many ways very similar to a lot of areas in my district where there is an aging population in many ways. You have a lot of the senior citizens, maybe a little out of proportion to some other areas of the State or other States. The problem that I see with all this, not only with Medicare and Medicaid, with the Republican proposals, is that if you cut people off the rolls or if you cut back the services that are covered by Medicare and Medicaid you cause, which is what they are doing basically, a lot more out-of-pocket expenses. What I see is the burden shifting increasingly to the children and the grandchildren of these senior citizens. Because many of them are not going to be able to afford the additional costs out of pocket. Some people have said to me, ``Oh, that's okay, let the children and the grandchildren pay for it.'' First of all, you have the phenomenon that some will not. But beyond that, how far can they go? A lot of younger people have their own children to raise and they are not expecting that they are going to have to shell out large amounts of money to pay for nursing home care for their parents or their grandparents or these other doctor and physician services. What we are talking about here is not just something that relates to senior citizens but relates to the population as a whole because of the cost shifts that would occur. I do not know that we have been able to get that out a lot, but I think that it is a phenomenon that we need to speak out about.

Mr. PALLONE. I am somewhat familiar with the gentleman's district, not so much with Binghamton but with Endicott, which is also in your district, I believe.

Mr. PALLONE. I appreciate the gentleman coming down and saying the things that he said. It is so true. I think it is really an ideological phenomenon that basically the Republican leadership does not favor Medicare or Medicaid, and that is essentially because I think that they believe that whether it is for seniors or it is for low-income people, there really should not be a government-funded or run health care program. The bottom line is that these programs were established because we knew that the majority of seniors were not able to get health insurance. When Medicare was established in 1965, the majority of seniors did not have health insurance coverage. Certainly people who are eligible now for Medicaid who are very low income, there is no way for them to get health insurance coverage unless the Government provides a program like Medicaid. But what the gentleman was saying about how the Republican leadership is trying to use this Medicare trustees' report as a way to justify their radical changes, if you will, that they are suggesting for Medicare, is so true. I just have some statistics here that show that right now the Medicare trust fund actually has a $125 billion balance and there is no danger that claims will not be paid. I have people coming up to me because they hear what the Republicans say, and they say, ``Is my Medicare going to be paid this year?'' As the gentleman points out, even though the trustees' report indicated that it would only be solvent for another 5 years, that is actually better than many previous trustees' reports which were only for 2 years. Also, when the gentleman was talking about the actions by the House, the Democrats in 1995 and 1996 actually proposed on the floor amendments to the budgets that would have corrected the problem. We had a vote on a proposal of the gentleman from Florida [Mr. Gibbons], the ranking member on the Committee on Ways and Means, the Democratic ranking member, last year during the budget debate to cut, I guess, $90 billion out of Medicare. That is exactly what the trustees' report said was necessary in order to keep the program solvent for the next decade. The President's budget was offered on the floor this year that would have achieved the same goal, and the Republicans voted against it. Basically what they are trying to do is, they are trying to increase the cuts significantly more, as the gentleman said, than what is necessary to keep the program solvent. I have maintained that is primarily in order to pay for these tax breaks that go primarily to very wealthy Americans. So I think it is only fair, as the gentleman is doing, to point out where this debate really is. What we are seeing are efforts on the part of Speaker Gingrich and the Republican leadership to make real changes in the Medicare program and also in Medicaid, as I was talking earlier that are essentially going to have a negative impact on these programs and ultimately force them to disappear or, as I guess the Speaker said, wither on this vine. I think that was his quote, that Medicare should wither on the vine.

Mr. PALLONE. Mr. Speaker, on previous occasions during these special orders I have talked about the impact of the Republican cuts in Medicare and the fact that the Republican leadership proposals on Medicare would cut the Medicare Program so much that most of the money, or a good percentage of the money that would be cut, would be used for tax breaks for wealthy Americans and also that the changes in the Medicare Program that have been proposed by the Republican leadership would negatively impact the Medicare Program by essentially depriving many senior citizens of their choice of doctor, pushing them into managed care programs; if they did not go into managed care of HMO programs, they would actually experience rather large increases in out-of-pocket expenses because the protections that exist under current law whereby a doctor can charge only 15 percent more than what Medicare pays would basically be repealed. I have been very critical of the various components of the Medicare Program that the Republicans have proposed. Well, tonight I wanted to repeat some of that, but perhaps even more so, go into some of the changes that are being proposed for the Medicaid Program because tomorrow we are likely to take up on the House floor the Republican budget bill, the conference bill that comes back from both the House and the Senate, and that includes major provisions and incorporates the changes, if you will, in the Medicare and the Medicare programs that the Republican leadership has proposed. In addition, starting tomorrow and after tomorrow, once that budget is adopted, as I expect it will be by the Republicans or by the Republican majority, we will start seeing individual committees take up different components of that budget proposal, including the Medicare and the Medicaid components, and actually come forward, the committees will come forward, with legislation that provides a lot more details about exactly how the Republicans and the leadership plan to make changes in Medicare and Medicaid. Specifically, tomorrow my committee, the Committee on Commerce, which has a Subcommittee on Health and the Environment, will actually have a hearing on the Medicaid changes that would likely be brought up and voted on in the committee some time later this week. The problem that I have with the Medicaid Program in some ways is very similar to the problem that I have with the Republican Medicare proposal. The cuts are too deep, they negatively impact the program because the money is taken away from the program and used for other purposes, primarily tax breaks for wealthy Americans, but in the case of the Medicaid Program, unlike the Medicare program, the Medicaid Program is essentially repealed outright because its entitlement status, the guarantee that Medicaid recipients have now that they will receive certain health care coverage or even health care coverage, is basically taken away, and the program is what we call block-granted to individual States. The States get a certain amount of money. They can decide pretty much on their own how they decide to disburse that money. If they decide that certain categories of people should no longer be eligible for Medicaid, it is pretty much up to them to make that decision, and even those who continue to be covered by Medicaid in many cases will find that the scope of their coverage or services that are rendered available to them are significantly less or significantly poorer quality. Now, many people think of the Medicaid Program as a program for poor people, and that is essentially true, and the Medicare Program, of course, is for all seniors regardless of their income status. Medicaid, on the other hand, is for people of any age who fall below a certain income. But in this country, in these United States, most of the Medicaid Program money, most of the money that the Federal Government and the State governments contribute to Medicaid, actually pays for senior citizens who are staying in nursing homes. So Medicaid is, although it is not exclusively for senior citizens by far, the majority of the money goes to pay for senior citizens services, and it is just as important to the seniors of this country, almost as important, I should say, as Medicare itself. I want to keep stressing that, that Medicaid is primarily a program, or at least financially a program, that pays for seniors' health care, primarily again in nursing homes. Mr. Speaker, I wanted to talk about some of the reasons more specifically why I oppose this Republican Medicaid Program and the changes that are being proposed by the Republican leadership. The budget that we will be voting on most likely tomorrow would reduce Federal spending on Medicaid over the next 6 years by $72 billion. This means that compared with what the Congressional Budget Office, or the CBO, estimates is necessary to maintain the program's current level of coverage, the Federal Government would be spending $72 billion less, a cut in Federal Medicaid spending would be 16 percent below the amount CBO estimates is necessary or needed to maintain the program at its current level. So once again you are going to be hearing from the other side of the aisle, and they are going to be saying, well, we are actually increasing the amount of money that we spend on Medicaid in the same way that we are increasing the absolute amount of money that we are spending on Medicare. But if you look at inflation and the actual cost to take care of the people that are in the Medicaid Program now, just as in Medicare, and project how many people would be in those programs over the next 5 or 6 years, you realize very quickly that the amount of money that is going to be made available will not cover the needs of those Americans who would normally be eligible for Medicaid or Medicare. In addition, Medicaid, unlike Medicare, is 50 percent paid by the States. So what the Federal Government does in how it relates to what the States pay is also significant, and under the Republican budget, which we will be voting on most likely tomorrow, the States would be allowed to decrease their spending, and State Medicaid spending would fall by $178 billion over the next 6 years, more than twice as much as the Federal spending would be cut. So we could say that the total cut in Medicaid spending, both Federal and State, would be $250 billion, or 18 percent. There is no way, Mr. Speaker, this program can continue to cover this same number of people and provide the same level of services with that level of cut. It is unprecedented. Of course, it is not intended to cover the same amount of people. The anticipation has to be that a lot of people will simply not be eligible for Medicaid anymore. As I said, the Republican bill would repeal the Medicaid Program and replace it with a block grant to the States. More specifically, the Republican bill repeals the individual Medicaid entitlement effective October 1 of this year. What does that mean when we talk about entitlements? Entitlements historically have been if you are eligible because of income or other criteria for a program, you are guaranteed that you would have that health care coverage. Essentially what this Republican bill does is take away the entitlement status of Medicaid, so no one is actually guaranteed that they are going to have health insurance. Basically, States would be entitled to fix the amounts of Federal dollars and could vary the benefits they offer from person to person and area to area. I want to stress again, and I do not think I can stress enough, that we are primarily here, in terms of dollars, talking about nursing home coverage for senior citizens. The Republican bill puts the elderly, especially the frail elderly in nursing homes, and their families at risk of paying large amounts of out-of-pocket expenses for needed care and of losing much of their current coverage altogether. The Republican bill repeals the current entitlement that low-income Americans have needed nursing home care, again effective October 1. Again, if you were below a certain income now, you are guaranteed nursing home coverage. You will not be under this bill. The bill repeals the current requirement that nursing home services and other benefits be sufficient in scope, allowing States to limit coverage to, say, 14 days per month, or 2 months per year. Elderly nursing home patients and their families would have to pay for the care received during those periods the States chose to cover. Not only can the States decide not to cover certain people for nursing home care, but they can decide they will only cover them for 14 days, half a month, or a certain number of months per year, and basically say you have to pay; and since these people do not have the money to pay themselves, their families, their children, their grandchildren, would have to pay those expenses in the nursing home. The Republican bill also repeals the current law requiring that States pay nursing homes reasonable and adequate rates for the services they provide to Medicaid patients, and it prohibits nursing homes from suing States in Federal court to enforce the reasonable and adequate payment standard. Oftentimes what happens now is that States will decide that in order to save money, they will reduce the reimbursement rate that goes from Medicaid to the nursing homes. A lot of times in the past the nursing homes could get together and say, look, that is not enough money to pay for care. We would have to cut back on the amount of nurses that are available. We would have tot cut back on various services. They sue in the Federal court and they say, ``This is not enough to pay for the proper services that we offer,'' and many times they win. Sometimes that do not. They would not be able to bring suit anymore, and there would not be a requirement anymore that the States set a rate at what is reasonable to actually cover the costs of the nursing home care. The Republican bill also repeals the current law prohibition against the imposition of cost-sharing requirements on Medicaid nursing home patients. So, as a result, I will give an example, States could require each beneficiary to contribute $25 per day, say, toward the cost of nursing home care. Since most of the beneficiary's income is already applied towards the cost of care, because we are talking about low- income people, the burden of this additional cost-sharing would, as a practical matter, fall on the individual's family. Mr. Speaker, what we are seeing here is a major shift historically. When seniors were not able to afford nursing home care, the State and the Federal Government contributed and paid for that care. What we are going to see increasingly is that the burden will fall more and more on the children and the grandchildren. I think some people say that is fine, let the children or the grandchildren pay; but when we think about the fact that those children may have the educational expenses for their children or may have other costs that they incur in order to pay for their children or their regular lives, it is very difficult for many of them to now have to shell money out of pocket to pay for nursing home care for their parents or their grandparents. Mr. Speaker, I wanted to talk a little bit about what this Republican Medicaid plan does for children. The bill basically strips over 18 million poor children of the health insurance coverage which they are guaranteed under current law, children with disabilities or health conditions that are expensive to treat, and their families are at a particular risk of losing coverage. The bill repeals the current entitlement to a basic benefit package for every American child under 13 living in a family in poverty. This repeal, which will essentially terminate health insurance coverage for over 18 million children, would become effective October 1. The bill also repeals the current requirement that States provide basic health care coverage to children age 13 up to 18, living in poverty, and under the Republican bill, coverage to these children would be at the option of each State. Finally, the Republican bill repeals the current law requirement that physician, hospital, and other so-called guaranteed benefits be sufficient in scope for children. As a result, States would be allowed to limit children to, say, one physician visit per month or 5 hospital days per year. Just as with the seniors in the nursing homes, the children, the coverage for children, could be limited by just taking out whole categories of children who would not have health insurance, and would then be among the ranks of the uninsured, or basically by limiting the kinds of services that the children would receive under the program. I see that my colleague, the gentleman from New York [Mr. Hinchey], is here. I yield to him to talk about Medicaid or Medicare, which I know is very important to him and his district.

Mr. PALLONE. I am glad you mentioned this. I was actually assuming, which I see from the document I have, which is similar to yours from this Physician's Payment Review Commission, I was assuming that that 40 percent included the copayment, but that is actually beyond the copayment.

Mr. PALLONE. I agree. And the other thing that has really been, I think, not exposed enough is this whole way in which they go about adding more out-of-pocket expenses under Medicare. Last year when we had the Medicare proposal, they were actually increasing the costs of the part B premium, the amount that seniors pay under Medicare for their physician's care. Those premiums were skyrocketing over the next 5 or 6 years, and we managed to basically scuttle that because the President said he would not sign it. I guess he actually vetoed the bill. But now what they are trying to do in this bill that is going to come to the floor tomorrow is essentially say that if an individual refuses to join an HMO or a managed care system, and they want to stay in the traditional Medicare Program where they choose their own doctor or their own health provider, then they no longer have the guarantee that the doctor or provider cannot charge them 15 percent beyond what Medicare pays. There is actually no limit. So when I hear my colleagues on the other side say, well, you are given all the choice you want here; you can stay in traditional Medicare or go to an HMO, or you can have all the choices you want, what kind of choice do you have if you stay in the traditional Medicare program and then the doctor can charge you an unlimited amount of copayment? You are not going to be able to stay with this very long unless you have unlimited resources, which obviously most seniors do not. I have been trying to explain that as much as possible to my own constituents because I think they cannot imagine a situation where the doctors can charge an unlimited amount beyond what Medicare bills. But that is only forbidden now because of the statutory restrictions on it.

Mr. PALLONE

Mr. PALLONE. Mr. Speaker, last week, the Subcommittee on Health and Environment held a hearing on issues surrounding managed care that I hope will lead to passage of much-needed legislation. The focus of the hearing came down to choice. Patients want to be able to choose their own doctor. They want to be able to know of all of the treatments that are available to them. They want to be able to rely on the expertise of a medical specialist for a very specific medical problem. And as we continue to consider proposals to restructure Medicare, I would like to add that many seniors do not want to give up their choice of providers. Real problems do exist and I believe that there are many legislative vehicles before Congress that will work to ensure quality care, while preserving choice. I am a cosponsor of the Family Health Care Act, H.R. 2400, which would set a ground floor, a minimum set of standards that all health plans would have to follow, including important point-of- service options and quality assurance mechanisms. This legislation will enable patients to see the providers of their choice, including nonphysician providers, such as opticians who provide quality care services to their patients. I would like to include in the Record the statement of Paul Houghland, Jr., CAE, executive director, Opticians Association of America that was presented before the subcommittee on May 30, to further shed light on issues surrounding choice in a managed care setting. Statement by Paul Houghland, Jr., CAE, Executive Director, Opticians Association of America On behalf of the Opticians Association of America (OAA), which represents the interests of more than 35,000 dispensing opticians throughout the United States, I am pleased that the Subcommittee on Health and Environment has convened hearings on managed care issues. As the panel with jurisdiction over health insurance it is important that you hear the view of all participants in the health care delivery system including nonphysician providers. OAA wishes that these hearings had provided more of an opportunity for nonphysician providers to participate. This group of health care providers is responsible for many of the most cost-effective approaches to health care delivery. Yet nonphysician providers have had many difficulties being included in many managed care organizations (MCOs). For this reason OAA and many other nonphysician providers have joined the Coalition for Health Care Choice and Accountability (CHCCA), a group dedicated to making MCOs more accountable for their actions and more patient and provider friendly. OAA wishes to associate itself with the written statement provided to this subcommittee by CHCCA and also to associate itself with the testimony presented by the American Dental Association, a CHCCA member. The concerns raised by these organizations reflect legitimate issues that should be addressed legislatively by this subcommittee at its earliest convenience. OAA believes that many of the managed care problems that nonphysician providers in general and opticians in particular face are corrected by HR 2400, the ``Family Health Care Fairness Act'' introduced by Representative Charlie Norwood of Georgia, a member of this subcommittee. OAA commends Representative Norwood for his leadership in calling attention to aspects of the managed care industry which need modification. We thank Representative Bill Brewster of Oklahoma for being the prime cosponsor of this measure. As a pharmacist, Representative Brewster understands well the struggles which far too many nonphysician providers have had with MCOs. OAA also appreciates the bipartisan support expressed for HR 2400 by its Republican and Democratic cosponsors. The health subcommittee could prove its commitment to innovative solutions to health care problems by favorably reporting the Norwood bill to the full committee within the next 60 days. While aware of the shortness of the 1996 legislative calendar and the numerous demands upon your time, managed care issues are too important for Congress to abandon this year without significant action. Market-based solutions are not adequate to correct abuses within the managed care industry. HR 2400 provides fair and equitable solutions to real problems. Many of managed care's shortcomings are discussed in the ADA and CHCCA testimony. After reading the stories collected by the CHCCA I am certain this panel will agree that action on HR 2400 will benefit the public interest. What more positive message could you take back to your constituents this fall than news that you approved a bill to make managed care more accessible, more accountable, more patient friendly? OAA's national legislative agenda can be summarized very concisely: maximize competition within the health care market place and maximize freedom of choice for consumers. We support HR 2400 because it promotes equity for both consumers and providers. It contains nondiscrimination language which would assure that both those using the health care system and those providing the services are treated fairly. A second major component of HR 2400 would require all MCOs to offer a point-of-service (POS) option to all subscribers. The health care marketplace has confirmed that a POS option is very popular and cost effective. Approximately three- quarters of the managed care plans offer this option. OAA and the CHCCA believe that all plans should include this option with a reasonable cost-sharing formula so that it is a viable alternative. The POS issue was debated last fall in the Commerce Committee during the Medicare reform debate. Two members of the Health and Environment Subcommittee offered POS amendments supported by OAA and the CHCCA members. OAA appreciates the efforts of Representatives Greg Ganske of Iowa and Tom Coburn of Oklahoma. Unfortunately, both the Ganske and Coburn amendments were defeated because most members of the majority party refuse to support maximizing freedom of choice for consumers. In a discussion of managed care issues last week on WPFW-FM in Washington, DC, Cindy Elkin, a Northern Virginia optician, described her experiences with managed care programs. She pointed out that many managed care vision programs referred eyewear customers for dispensing purposes to personnel who are often unlicensed, or uncertified, in short to persons who are not well trained or in a position to provide quality service. And this lesson is not lost on customers. Frequently, persons with managed vision care programs have found the quality to be so low compared to their previous service that customers frequently vote with their feet. However, by choosing to forego a benefit provided by their employer these persons wind up with a self-chosen POS option with a 100 percent copayment. OAA and its members strongly support competition and free market solutions within the health care sector. Because OAA believes so strongly in the principle of competition within the marketplace it will unveil a managed vision care program for its members next month at its national convention in St. Louis. The OAA managed vision care program, unlike so many vision care programs currently available, will be open to all vision care providers willing to meet the terms and conditions of the program. We welcome participation by our friends in the ophthalmological and optometric community. We not only support the concept of provider equity, but we practice it in our own managed care initiatives. While opticians are willing to compete within the free market for managed vision care business, we are well aware that a start up vision care plan offered by opticians will not level the playing field overnight. Our members still face numerous instances of disciminatory practices by managed vision care plans which simply exclude independent opticians. This deprives the consumer of freedom of choice and the opportunity to shop for eyewear at the provider of choice. It also frequently denies the consumer a least-cost alternative. Congress can level the playing field for opticians and all nonphysician providers who wish to compete within the managed care system by passing HR 2400. OAA calls upon this panel to begin the legislative process by sending this bill to the full committee for consideration with a strong endorsement.

Mr. PALLONE

Mr. PALLONE. Mr. Speaker, I rise to congratulate the U.S. Army Communications-Electronics Command [CECOM], Logistics and Readiness Center in receiving the 1996 Quality Improvement Prototype [QIP] Award for the President's Quality Award [PQA] Program. This is truly a great accomplishment and reflection of the dedicated and professional staff employed at the CECOM Logistics and Readiness Center, at Fort Monmouth, NJ. It is, moreover, a deserved recognition of the center's quality accomplishments and team-work in the fields of communications and electronics. Mr. Speaker, the work done by the people at CECOM's Logistics and Readiness Center is not an easy undertaking, and the significance of winning the QIP cannot be underscored enough. Despite the demands placed on the shoulders of those tasked with maintaining the U.S. Army's communications and electronics equipment, the Logistics and Readiness Center, year-in-and-year-out, runs a well-planned system that spans all levels of the organization--the true hallmark of a first- class, quality-managed operation. The panel of judges responsible for designating the recipient, which is comprised of representatives from both the Federal government and the private sector, conducted a rigorous selection process. And as the quality and number of the other organizations vying for this prestigious award indicates, the competition was keen. In short--as is evidenced by the list of previous recipients of the QIP--to win this award is to be designated as among the best America has to offer. In closing, I once again commend the people of the CECOM Logistics and Readiness Center for their efforts. By winning the 1996 Quality Improvement Prototype Award, the center has undeniably established itself as a model of excellence for all to follow. I congratulate the hardworking people of the CECOM Logistics and Readiness Center for a job well done.

Mr. PALLONE

Mr. PALLONE. Mr. Speaker, this afternoon I want to talk again about the issue of Medicare and my concern over what the Republican leadership is trying to do to the Medicare Program and in the context of the budget or the budget resolution which is likely to be voted on between the two Houses sometime in the next week or two. I wanted to point out again the reason that I feel so strongly about Medicare and the changes, the negative changes that I see the Republican leadership proposing, is because I believe that Medicare is really one of the best programs that we have in the Federal Government. When it was established in the early 1960's by then President Johnson and the Democratic Congress that was in the majority at the time, it was established because of the realization that so many senior citizens did not have health insurance and that it was very difficult for them to either obtain health insurance, either because they could not afford it or because of their condition. And now, today, and certainly for the last 30 years, we have had Medicare on the books and those who are over 65 or even others in some cases are able to know that they will be guaranteed a health insurance, that if they go to a hospital or if they go to a doctor, that most of the services that they need for health care purposes will be provided in a relatively high quality way. That is a significant fact and when those on the other side of the aisle, when Republican leaders get on the floor and propose changes that I consider very radical in the Medicare Program, the reason that I and a lot of the other Democrats are opposed to those is because we think that Medicare works, and we do not want to see it downgrated to a second class program or perhaps not even exist for many senior citizens. I point that out today by way of introduction, because I think it is important to note that many of the Republican leaders have actually expressed themselves on the floor of this House or in the Senate or on other occasions over the years as actually being opposed to the very idea of Medicare. One of the things that we often quote is the statement by the Republican Presidential candidate on Medicare, which he made in October 1995. He said, I was there fighting the fight, voting against Medicare, 1 out of 12, because we knew it would not work in 1965. So he is making reference to the time back when he was in this House of Representatives, when Medicare first came up and he voted against it. Again, a very strong indication of the fact that in this case the Republican Presidential candidate and many of the Republican leaders are very much opposed to the very idea of Medicare. We also had another quote, which we frequently cite, from Speaker Newt Gingrich on Medicare. This one is from October 24, 1995, last year, where he says, and I quote, Now we don't get rid of it in round one because we don't think that that is politically smart and we don't think that is the right way to go through a transition period. But we believe it is going to wither on the vine, because we think people are voluntarily going to leave it. Once again, a strong indication, in this case the Speaker of the House of Representatives, that Medicare as a program is not something that they support. That is why many of us on the Democratic side of the aisle feel very strongly that we must continue to speak out on the issue of Medicare, because this is a program that has worked, that protects America's seniors so that they know that they have health care insurance, they have health care coverage. If we let the Republican leadership basically do what they will with the Medicare Program, we are very concerned, a lot of us, that it may simply wither on the vine or not exist for many senior citizens. Now, yesterday the Medicare trustees came out with their annual report where they talk about the financial state of Medicare, and once again the Republican leadership and many Republicans on the floor have taken advantage of that report which came out and indicated that Medicare would be insolvent by the year 2001. Well, I said before that many times when the trustee's reports come out, they talk, in the past they have talked, about insolvency for even a shorter period than that, in some cases maybe 2 or 3 years. So this is not a new phenomena, and Democrats in the Congress have traditionally dealt with that by making some changes in the Medicare Program so that it remains solvent in future years. And, in fact, we have already, both last year as well as this year, voted on Democratic proposals, most recently the President's proposed budget, that actually would continue the solvency of the Medicare Program well into the next decade; I believe at least until 2005. So we, as Democrats, know how to deal with the Medicare trust fund; we have had to tinker with it in the past. But the Republicans, instead of saying, OK, we will support President Clinton's proposals and we will make some changes that are necessary in the Medicare Program to keep it solvent, instead they have been proposing very radical changes in the very substance of the program and also deep cuts, deeper cuts than are necessary for Medicare to remain solvent. In fact, the level of cuts right now in the Republican proposal are $168 billion in cuts in Medicare, whereas President Clinton, talks in the proposal, in his budget, about $116 billion. The difference basically goes to pay for tax cuts for the wealthy; that is what the Republicans have in mind. But, in addition to that, they have been talking about major changes in the Medicare Program that would push seniors into managed care, that would make it so that they cannot choose their own doctor and even, in some cases, their own hospital, and also those who refuse to go into managed care, those who stay in the traditional fee-for-service program, the current Medicare program, would be basically faced with tremendous over charges. Right now the most that your doctor can charge you beyond the Medicare reimbursement rate is 15 percent of the bill. But this under the Republican proposal would be unlimited, and basically the doctor could charge you essentially whatever he or she wanted beyond what Medicare pays. Those types of overcharges would essentially force people into HMO's or managed care because they would say, well, how can I continue to stay in a traditional program where I can choose my own doctor if I face those kinds of unlimited charges? Another thing that the Republicans have proposed is to basically break down the Medicare Program and the insurance pool, if you will, so that the wealthy and the healthier senior citizens could opt for what we call medical savings accounts, which basically allows them to take a catastrophic health care coverage and then to pay out of pocket, if you will, for health care needs that are not of a catastrophic nature. Well, the problem with that is that people who do not have a lot of money and cannot pay a lot of money out of pocket will not opt for the catastrophic health insurance, and as a result the insurance pool which depends on the healthier and wealthier people being part of it in order to be solvent essentially would be broken up and the people that would be left in the pool who did not get the catastrophic coverage would tend to be the poorer people and the less healthy people, and the result would be that Medicare would end up costing more because the insurance pool would have a much poorer and sicker group of people in it. Some of these things get a little complicated, and I do not mean to complicate things, but the point I am trying to make is the Republican proposals not only cut Medicare a lot more than is necessary under the President's proposal, but also make major changes in the Medicare Program that ultimately are going to cost seniors a lot more money out of pocket and are going to make it so they cannot choose their own doctor or again, in many cases, their own hospital. I would like at this point, if I could, to yield to the gentlewoman from Connecticut [Ms. DeLauro] who has been on the floor of the House over the last 18 months repeatedly pointing out how the Republicans are trying to basically destroy Medicare, and I know that she has been a leader on trying to bring this issue to the attention of the American people.

Mr. PALLONE. Mr. Speaker, I yield to the gentlewoman from Hawaii.

Mr. PALLONE. Mr. Speaker, I think the gentlewoman makes her point very well, particularly with regard to what happens if seniors become shifted to managed care HMO's. If I could just make one point, and then I will yield further, following up on what the gentlewoman said, a lot of times the Members of the other side, the Republican Members, get up and say, ``Under our plan, there is still going to be choice. You do not have to go to an HMO, you can stay in the traditional system of Medicare where you can stay in the traditional system of Medicare where you choose your own doctor, choose your own hospital.'' But the key there are the overcharges, because if you say to someone, ``You can stay in your traditional Medicare system but now the doctor or hospital can charge you whatever they want as a copayment,'' then most people cannot afford to do that. Then they are forced essentially to move to the managed care, the HMO, whatever the alternative is. Then the other thing is that by cutting and constantly reducing the reimbursement rate for the HMO or the managed care system, the Republicans essentially forced those systems to do the types of things that the gentlewoman mentioned; in other words, they do not allow people to get specialty doctors or specialty care unless they go through some bureaucratic rigamarole because they do not want to pay the cost of that specialty care. At both ends of the spectrum, essentially, people are being squeezed. They either stay in the traditional system and then they have these tremendous out-of-pocket expenses, or they go into the managed care HMO where the dollars are constantly squeezed, and therefore the level of care and the type of care that you can get is more limited.

Mr. PALLONE. Mr. Speaker, that is a perfect example.

Mr. PALLONE. Mr. Speaker, I thank the gentlewoman for joining us. I yield to the gentleman from Texas [Mr. Doggett].

Mr. PALLONE. Mr. Speaker, I am familiar with it, and I was making mention of some other aspects of it before. But I really appreciate the gentleman bringing that particular section up, because I think it points out one of the things that I and I know you have been saying from the beginning, which is this whole idea of dealing with Medicare in the context of the budget. That in itself is wrong. In other words, if we are going to restructure or make changes in the Medicare Program, why is it that we are dealing with it in the context of the budget? In my opinion, the reason for that is very simple: Because they want to use the cuts in Medicare for tax breaks for wealthy Americans. They want to be able to use the money for that to achieve whatever their other goals are. It is not because they are trying to save Medicare or restructure Medicare in a way that is actually going to help the program. They are funneling that money into tax breaks. So every time we deal with the budget, we get the Medicare cuts once again.

Mr. PALLONE. I appreciate the gentleman's comments. Mr. Speaker, before we move to the gentleman from Washington, I just wanted to say it is particularly important, and I thought that you mentioned, I guess it was Ed, one of your constituents who you said had a very large prescription drug bill. Mr. Speaker, I naively thought when we started to deal with Medicare in this Congress and the possibilities for some changes that we would actually look towards positive changes such as preventive measures, like covering prescription drugs, because I have always felt that if we add certain services to Medicare, like prescription drugs, like home health care, that we actually would save money in the long run, because they are preventive measures that prevent people from having to go to a hospital or be otherwise institutionalized. But we do not get any of this from the Republican proposals. Everything that they propose basically would cut the program, reduce services, force seniors to pay more out of pocket. So when I hear statements from them about how they want to save Medicare or change Medicare, it is never in a positive way; it is always in a way that is actually going to make it more difficult, in my opinion, to get health care and to get quality health care. I appreciate the gentleman's comments.

Mr. PALLONE. I thank the gentleman and I would now yield to the gentleman from Washington, Dr. McDermott.

Mr. PALLONE. I appreciate the gentleman's comments because you really managed to put a lot of this in common sense terms and explain it for the average person, which is what we really need to do. I thank the gentleman for joining us tonight. Again, as I said in the beginning, the reason why we are here is because we do believe that the Medicare Program is so important and we believe that the promise of Medicare, which is to provide quality health care coverage for senior citizens, the promise that a Democratic Congress and President Johnson made over 30 years ago must be continued, and that it really is not fair for today's seniors or future seniors to suggest to them that they cannot have the same kind of quality health care that we have now for senior citizens. That is what we are afraid as Democrats will happen with this Republican leadership plan to change Medicare, that it will be so drastically changed that eventually it will simply disappear as a valuable program to provide health care coverage for all of America's seniors.

Mr. PALLONE. Absolutely, Mr. Speaker. There is absolutely no question that what the gentlewoman is saying is correct. I think the bottom line is that the policy changes that the Republican leadership is proposing are all money driven in some way. When we talk about this whole notion of the Speaker saying that this is not really a cut, we are actually increasing the program, but it is not a cut. The reason for that, there is this new book out, I do not think the gentlemwoman made mention of it. It is called, ``Tell Newt to Shut Up,'' a new book by award winning Washington Post Journalist David Marins and Michael Westkopf, which says that avoiding the word ``cut'' became part of a coordinated Republican strategy after pollster Linda Duvall said that the public reacted negatively when told that the Republicans would cut Medicare. Basically what these two people are saying, that the Republicans vowed from then on that they would not allow reductions in the rate of growth to be called cuts. But it is nothing but semantics. We all know that if you do not allow a certain amount of money to be available, and you have to go out and buy the same thing because of inflation or because more people are in the program, that not allowing a significant level of growth essentially is a cut. That is what the Speaker, what the gentleman from Georgia [Mr. Gingrich], actually said in the context of the defense budget when he wanted to use it for his own advantage. Mr. Speaker, the other thing that I think is really crucial also in that respect is where are these costs being shifted to? That is why I think the issue of the overcharges is so important, because basically last year, when they wanted to shift costs, they essentially raised the part B premium. I think we had some figures that last year's Republican proposal actually doubled the Medicare part B premium from $46 in 1995 to about $89 in 2002, so it would have increased the Medicare premium by $440 per couple per year. That did not work, because seniors became aware of the fact they were going to have to pay these incredibly high premiums, so they dropped that. Now, this year, they are coming back with the overcharges, and they are saying that if you stay with the traditional Medicare system and do not move into managed care or HMO's, then the doctors can charge you whatever they want. Mr. Speaker, we had some statistics from the Physician Payment Review Commission, which is a nonpartisan panel of experts that advises Congress on Medicare policy, and they said and I quote, that: This could lead beneficiaries to be exposed to substantial out-of-pocket liability in the range of 40 percent of the bill. So if you essentially go into this for a certain operation or procedure, you could end up paying 40 percent right out of your pocket.

Mr. PALLONE

Mr. PALLONE. Mr. Speaker, I wanted to point out that the Republican Medicare plan would drastically increase out of pocket costs for seniors citizens. Basically, it is the same thing we had last year. Last year the Medicare bill the Republicans passed doubled the Medicare part B premium from $46.10 in 1995 to about $89 in 2002. It would have increased the Medicare premium by $440 per couple per year. Well, that did not work so now the Republican leadership comes up with another proposal. This year the new Republican proposal would allow doctors to overcharge seniors for standard medical procedures. According to the Physician Payment Review Commission, a nonpartisan panel of experts that advises Congress, this could leave beneficiaries exposed to substantial out-of-pocket liability in the range of 40 percent of their Medicare bill. Under the Republican plan, a senior needing major surgery, for example, could end up facing thousands of dollars in medical bills which neither Medicare nor Medigap policies would cover. So once again the Republicans are substantially increasing out-of-pocket expenses for seniors. That is what their Medicare plan is.

Mr. PALLONE

Mr. PALLONE. Mr. Chairman, I move to strike the requisite number of words. Mr. Chairman, I rise in opposition to the amendment offered by the gentleman from Indiana. This amendment is not a cutting amendment, rather, it is strictly an attempt to stigmatize India and I think the gentleman from Indiana has essentially said as much. This amendment will unfairly tie the hands of those agencies, including nongovernmental organizations, religious relief efforts, and AID receive U.S. Government assistance. This is the wrong amendment at the wrong time. Recently the Congressional Caucus on India and Indian-Americans, which I cochair with the gentleman from Florida [Mr. McCollum], hosted a briefing presented by Linda Morse, the India program director from United States AID. Miss Morse also briefed staff of the Asia and Pacific Subcommittee. What we learned was that the AID program in India supports economic growth, child survival, and environmental protection. At a time when India is 5 years into a economic reform program, the AID program in India is helping with privatization, deregulation, increased foreign investment, and development of capital markets and encouraging competition. In the past, the gentleman from Indiana has criticized India on human rights and he does so again tonight. Let me report that India's human rights record is steadily improving. An independent National Human Rights Commission with unprecedented powers has been established. The commission has been lauded by many international agencies, including our State Department, for its aggressiveness and independence. Again last year, the chairman of the Human Rights Commission, a former chief justice of India's Supreme Court, came to Capitol Hill, again under the auspices of the India Caucus and addressed Members and staff. I only wish the gentleman from Indiana had been there to hear about the great progress and what was said. This is the kind of development we would like to see happen in many of India's Asian neighbors. The Indian Human Rights Commission has won praise by our State Department. Assistant Secretary of State Robin Raphel says the commission ``has surprised the skeptics and begun to establish itself as an effective advocate for human rights.'' During his visit to the United States last year, Mr. Misra, the chairman of India's National Human Rights Commission, met with representatives of Asia Watch, Amnesty International and the International Red Cross. He indicated that there will be progress on these organizations sending representatives to India. Clearly the steps taken by India to remedy human rights problems are far superior to the efforts of India's neighbors; I particularly mention Pakistan and China. Whether it is market reforms, democracy or human rights, time and again, it is India that is taking the lead in providing a model for other developing countries in Asia and throughout the world. What I find most disturbing about this amendment is that it set its sights on the wrong target. Under the guise of sending a message to the government of India, the amendment frustrates our ability to work with the Indian people to aid the poorest and neediest people in that country, and to make important economic reforms. An amendment offered in the name of human rights should not go after the humanitarian programs. This is not the right way to make America's moral persuasion felt around the world. Mr. Chairman, I am also concerned that the debate over human rights in India, and specifically in Punjab and Kashmir, seems to focus entirely on one side of the issue. I do not want to get into a debate over which side did what, or who struck first or why. The important distinction is that the Indian Government is being held accountable for actions by its security forces while the separatist groups operate with no accountability at all. By cloaking themselves in the mantle of freedom fighters, these organizations reserve unto themselves the right to strike at civilian targets with impunity. Many of the militant organizations receive support, both moral and financial as well as arms, from other nations. Most importantly, Pakistan has frequently had links to terrorist organizations in India in a direct attempt to destabilize its neighbor. Under these conditions, imposing punishment on the Government of India will have the unmistakable effect of encouraging and emboldening those groups which seek by violent means to pursue their separatist agendas. This is the type of behavior we are going to be rewarding with this amendment. Mr. Chairman, this amendment has nothing to do with what is really going on in India today, in 1996. We should reject this amendment. If it is necessary to make spending cuts and restructure AID, so be it. But let us base it on fair criteria, not unfairly singling out India for a symbolic slap on the wrist that this emerging country clearly does not deserve.

Mr. PALLONE

Mr. PALLONE. Mr. Speaker, the congressional Republicans today began once again to distort the issues surrounding the Medicare trustees' report, basically in order to attempt to justify their extreme and damaging cuts in the Medicare program. It is the same thing they did last year. If you think about over the last 18 months, the congressional Republicans have refused to cooperate with President Clinton and congressional Democrats to make responsible adjustments to Medicare and extend the solvency of the trust fund. In fact, if you look at the votes over the last 18 months, congressional Republicans have repeatedly voted for deep cuts in the Medicare program in order to pay for their massive tax cuts for the wealthy and against bipartisan reforms that would extend the solvency of the trust fund. I just wanted to point out some of the key votes on this issue because once again we heard today that there was no effort by the President or by the Democrats to solve the problem with the trust fund. The President actually stated today, mentioned on several occasions when there were votes in this House to try to deal with the solvency issue, and he actually asked the congressional Republicans, the Republican leadership, to come out and support similar type proposals once again before the end of this Congress. Back in May of 1995, about a year ago, the House Republicans brought up their budget resolution for the fiscal year, and that vote basically provided $288 million in Medicare cuts to pay for $345 billion in tax cuts targeted to the wealthy. This was the first major time when we saw the Republican leadership move on these massive cuts in Medicare and propose major changes that I think negatively impact the Medicare program. Now, the Medicare cuts in that first budget resolution, the one that they passed last year, were more than 3 times larger than the $90 billion in Medicare cuts that the trustees stated were necessary to extend the solvency of the trust fund through 2006; in other words, another 10 years. According to the Treasury Department, 52 percent of the tax cuts in that proposal went to the top 12 percent of American households, those making over $100,000, and it not only made these cuts that basically was transferring money to wealthy Americans, but it also undermined the current Medicare program. Among other things, the deep GOP cuts would have doubled the monthly Medicare part B premium paid by all Medicare beneficiaries, drastically reduce the reimbursement paid to providers under the Medicare program, which would result in hospitals closing and also, I believe, jeopardize the general quality of health care available to seniors. Now, some have said, well, what was the Democrats' alternative? Well, in October 1995 the gentleman from Florida [Mr. Gibbons], a Democrat who is the ranking member of the Committee on Ways and Means, brought up a vote on exactly or proposed an amendment on exactly the $90 billion in Medicare reforms; in other words, the level of cuts that the Medicare trustees said was necessary to make sure the program remains solvent into the next century. Well, 233 House Republicans voted against the Gibbons substitute, again a strong indication of the fact that they were not really interested in dealing with the solvency issue but wanted to make the larger cuts that would have primarily been for tax breaks for the wealthy and the substantive changes in the Medicare program. We had other votes. We had a vote on October 19 also. This was a motion offered by the gentleman from Missouri [Mr. Gephardt] to recommit the budget or to recommit the GOP Medicare Revisions Act and basically would have removed the increase in the monthly part B premium paid by all Medicare beneficiaries. So once again Republicans on record, in this case 233 Republicans who said that it was okay to significantly increase part B premiums for every Medicare beneficiary who opted for the part B program, which pays for doctor bills. Now, this year we see the same thing happening again. On May 18, just really a few weeks ago, the gentleman from Minnesota [Mr. Sabo], who is the ranking Democrat on the Committee on the Budget, he brought up the Clinton budget, the President's budget that essentially contained $116 billion in Medicare reforms and would have again solved the solvency problem and extended the Medicare program and kept it solvent into the next century. This was again something that was 225 House Republicans voted against. So when someone says to me, what are the Democrats doing, what is the President doing to try to deal with the solvency problems, those votes have come up, the President's budget came to the floor, and once again the Republicans voted it down. Instead what we got on May 18 was the new Republican budget resolution for the next fiscal year. Again the same thing again. It called for $168 billion in cuts in the Medicare program, too much unless you want to use it for tax breaks for the wealthy. parliamentary inquiry