February 12, 2003

Thank you, Mr. Chairman. I welcome Secretary Thompson here today, but wish it were under better circumstances. Important health programs are on the verge of being seriously damaged, and critical guarantees sacrificed, rolling back decades of progress. For example, the Administration’s proposed budget directly imperils two crown jewels of the health care safety net – Medicare and Medicaid – in the name of more tax cuts for the most fortunate among us. And important public health priorities are critically underfunded. I like Secretary Thompson, but I do not like what he and others in the Bush Administration are doing to those most in need.

First, Medicaid is under enormous strain, but insufficient resources are promised. The States are in a financial crisis, due to a recession, increasing costs of prescription drugs and the growing elderly population. The result of this crisis is that States are having to cut almost two million people from Medicaid, leaving them uninsured. Others are losing their insurance as a result of the Nation’s economic woes. The President’s budget for Medicaid would offer states $3.25 billion in 2004, but only if the states agreed to accept permanent block grants and give the money back in the long run. The President claims that his proposal would provide fiscal relief to states by giving them more flexibility.

Flexibility, according to President Bush’s budget, is defined as ways to make cuts to the program -- shifting the burden of the hard political choices. Under the President’s proposal, there is no other way to help the states out of their financial dilemma. This kind of flexibility would jeopardize the health of every single person who depends on Medicaid. We are talking about the low-income woman who has just been diagnosed with breast cancer and may no longer be able to count on Medicaid to pay her chemotherapy bills. We are also talking about the 85 year-old widow living in a nursing home who may lose her Medicaid coverage and have no place to go. Finally, we are talking about every single child living in poverty who is at risk of losing essential benefits, such as prescription drugs and physical therapy. When the block grant money runs out – and it most certainly will – the states’ flexibility will have boiled down to a few harsh choices: cut payments to providers, cut eligibility, cut benefits, or raise taxes.

Second, Medicare should include a prescription drug benefit under the traditional program, but the tax cuts have left too few resources. The President’s budget includes an interim drug benefit for low-income seniors in 2004 and 2005, but seniors would have to join a Medicare+Choice plan or sign up for a discount card in order to get it. Similarly, when the "real" drug benefit begins in 2006, seniors would have to join private insurance plans to receive coverage. Despite the President’s proclamation in support of "choice," he is denying seniors the most fundamental choice of all, which is to stay in the Medicare program with their family doctor.

Nor does the President’s budget tell us what kind of premiums these private insurance plans would charge, what benefits they would offer, or what areas of the country they would serve. The President’s proposal rests on the blind faith that competition would bring seniors better health care coverage at a better price. Many of us remember Medicare’s past experiences with "competition" in the Medicare+Choice experiment, and the fact that Medicare was created because the private insurance market would not serve seniors. Before the President dismantles the Nation’s most successful health insurance program by forcing seniors out of Medicare, he ought to check and see whether his solution really gives them someplace else to go.

Third, more money is needed for the public health budget. We need adequate resources for biomedical research, strengthening of the health care safety net, and increased vigilance over the myriad products regulated by the Food and Drug Administration (FDA). This is, at best, a timid budget. The resource needs throughout the HHS public health policy portfolio are great, but this budget does not meet them.

Let me mention a few items. The Administration is requesting no increase for the Centers for Disease Control and Prevention and the Health Resources and Services Administration grant programs that are the primary federal resource for the public health system of this country to plan, prepare, prevent, and respond to public health emergencies and terrorists attacks. All of us know that there are enormous unmet needs and that it will take much more before it can be said that our citizens are getting the full protection that they expect and deserve. Many of these same public health institutions are also bearing the burden of a sagging economy. The public health care safety net is badly strained, and I regret to say this budget ignores that fact.