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Opposition to Medicare Cuts

December 4, 2009

Mr. President, I rise today to oppose the half trillion dollars in Medicare cuts in the Reid bill.
Some of my Democratic colleagues have attempted to argue that this bill does not cut the Medicare program.  They have further said that such cuts are justified and will not harm the program.  They have also argued that no beneficiaries will lose their benefits as a result of these cuts.
Unfortunately, all of these statements are simply false.  It does not matter how many times my colleagues repeat these claims, they do not become any more accurate.
This bill cuts $464 billion from the Medicare program.  It slashes payments to hospitals, nursing homes, home health agencies and hospices.  These are cuts to the Medicare program.  The money from these cuts does not go to share up Medicare- the money goes to new programs for others.
These cuts will affect the care provided to Medicare beneficiaries.  The American Health Care Association, which represents nursing homes, said that the cuts in the Reid bill would force layoffs, lower salaries, reduce benefits and ultimately would hurt patient’s quality of care.
A commission to set up to make even more cuts “to save Medicare” with the side deals made with lobbyists, the only place these cuts can come from is seniors, more on that later.
I have heard similar statements from home health providers (more than $40 billion in cuts), hospice providers ($8 billion in cuts) and hospitals ($130 billion in cuts).
If these Medicare cuts go into effect, it could drive many providers out of the Medicare program.  That will mean that patients will not be able to get the care they need. 
Some of my Democratic colleagues have accused us of trying to scare Medicare beneficiaries.  If seniors are scared by our statements, they should be terrified by what this Administration has to say about the Democrats health reform bill. 
The Administration’s own chief actuary, Richard Foster, recently wrote that the steep Medicare cuts in the House passed health reform bill would make it difficult for many providers to remain profitable and cause them to end their participation in Medicare.  He went on to note that this could jeopardize Medicare beneficiaries’ access to care.
As the senior Senator from Tennessee noted yesterday, it is the Medicare cuts in the Reid bill that are actually scaring seniors.  Medicare beneficiaries understand that if providers are no longer able to take Medicare patients, they will not get care. A lot of grandmas and grandpas have figured it out and they are not going to stand for it.
The Chairman of the Finance Committee has repeatedly said that this bill will not cut or reduce any guaranteed Medicare benefit.  That statement seems to ignore what this bill will do to providers. 
If a Medicare patient cannot get into a nursing home, they don’t have nursing home benefits.  If they can’t find a home health aide willing to take Medicare patients, they don’t have home health benefits.
The promise of coverage, when you can’t get a doctor to see you, is not health care.  You don’t have benefits if you can’t get a provider to treat you, and unfortunately, that is exactly what this bill will lead to.
Some of my Democratic colleagues have also attempted to justify the Medicare cuts in the Reid bill by arguing that many of the trade associations representing health care providers have endorsed the bill. 
They are correct that several Washington based trade associations and their lobbyists have endorsed the Reid bill.  It is probably worth exploring why some of the groups have chosen to endorse this legislation.
In some cases, the motivations are obvious.  Some drug manufacturers are clearly motivated by self interest and greed.  They negotiated a secret deal with the White House that will actually increase how much Medicare spends on brand name drugs.
Under the terms of their deal, the drug manufacturers will provide discounts on brand name prescription drugs when seniors are in the Medicare coverage gap, known as the Medicare doughnut hole. They make the payments directly to maintain the customer contact and to keep them addicted to the brand name. Generic makes a difference.
Under the terms of the sweet-heart deal between the White House and the drug makers, discounts are only provided for brand name drugs.  This will encourage seniors to continue to use these more expensive drugs.  This will actually cost the taxpayers $15 billion, because the deal will actually increase Medicare costs.
In other cases, provider groups were promised special deals if they agreed to support the Reid bill.  For instance, recent press reports have described how the American Medical Association was promised a permanent fix to the Medicare payment formula for doctors, if they agreed to support this bill. Or a one year fix with an end to junk lawsuits.
Under current law, doctors’ Medicare payments are scheduled to be cut more than 40 percent over the next decade.  The costs of fixing this flawed government mandated formula will be more than $250 billion.
I can understand why doctors want to fix this flawed government price control system.  It shows the exact problems that result from letting government bureaucrats use price controls to set payment rates.  What I don’t understand is why the A-M-A continues to support the bill, when they get nothing for their deal. 
The bill does nothing to fix the Medicare payment formula for doctors.  Instead it cuts $464 billion from Medicare and uses the money to cover the uninsured.
Even if these cuts can be made without hurting seniors, the Republicans are saying “Use the money only for Medicare.” Medicare money for Medicare.  Medicare funds should be used to fix Medicare’s problems, such as this flawed payment formula.  Taking hundreds of billions of dollars out of the Medicare program now will only guarantee that it will be that much harder to permanently fix the doctor payment issue in the future.
I cannot understand why the A-M-A continues to support this terrible deal for doctors.  If you can’t see a doctor your benefits have been cut. Apparently the members of the A-M-A don’t like the “deal” either.  At a recent convention, up to 40 percent of the current membership of the A-M-A voted to reject this deal. Most associations survive by consensus agreement by almost all their membership. Now their membership is less than 20 percent of all doctors- a dwindling association.
Finally, many provider groups have been reluctant to speak out against this bill because they have received threats from the White House and Congressional Democrats.  Nursing homes, home health agencies and hospice providers have all reportedly been threatened with further cuts, if they speak out against the bill.  Is that freedom of speech – or just bad ethics?
 They have reportedly been told that any public statements of opposition to the Reid bill will lead to even more severe cuts.  These providers have had to make the choice to silently accept devastating cuts, rather than oppose them and risk being utterly destroyed. Take Humana for example, CMS said they couldn’t let their customers know what was about to happen.
I hope my colleagues and the American people will take these facts into account, when they hear Senators talk about the provider groups supporting this bill.  Unfortunately, health care provider support for this bill is being driven primarily by greed or stupidity or fear. 
We know that this bill will not fix the problems in the American health care system.  It will not lower health care costs.  It will not lower insurance premiums.  It will still leave 25 million people uninsured. 
What this bill will do is spend $2.5 trillion and guarantee a much bigger role for the government in dictating how health care will be provided in this country.   If you are not   Medicare, yes, your government is going to tell you what is adequate coverage- force you to buy it or pay a penalty.
Given the recent experiences that doctors have had with Medicare price controls, this is not an outcome that bodes well for America’s health care providers or their patients.