July 14, 2003

I rise in support of this motion to instruct the Conferees to reject privatization of the Medicare program. Republicans seek to turn the program into a voucher program with private plans. Why? To end the Medicare entitlement and to cut spending on seniors. They make no secret of their desire to end Medicare as we know it. And Republicans in the House already voted this year to cut 100 billion dollars from Medicare and Medicaid. Privatization is the linchpin of these efforts.

Why are Democrats opposed to leaving seniors naked and defenseless to the "magic" of the marketplace and competition? It is because the only magic that will come from privatization is the magical disappearance of federal taxpayer dollars into the coffers of insurance industry and drug company pockets -- with nothing for beneficiaries but increased costs and fewer choices. And because failures in the marketplace and competition necessitated Medicare in the first place.

We already know that private plan options are not dependable and available for all. Only 13 percent of people in rural areas have the option of enrolling in a private plan today. Over the last five years the number of private plans in Medicare dropped by half and enrollment declined by 27 percent.

We also know private plans will not save Medicare any money. Premiums for private insurance plans in the employer and individual markets have increased as much as 15 percent or more in recent years -- and these increases would have been higher but for the fact that the insurance companies also increased co-payments and deductibles, and reduced benefits.

And, in Medicare too, the existing private plans have not been more efficient. For example, a 2000 GAO report found that Medicare paid plans an average of 13.2 percent more than Medicare would have spent had enrollees received care under traditional Medicare. Seniors are paying more too, because private plans require higher cost-sharing by seniors for certain benefits.

Under a privatized Medicare, seniors and taxpayers will be forced to pay more out of their own pockets. The privatization provisions of H.R. 1 that begin in 2010 would give Medicare beneficiaries a fixed voucher that forces seniors and individuals with disabilities to pay more for the Medicare coverage they have today. Last month, the Chief Actuary at the Centers for Medicare and Medicaid Services estimated that fee-for-service premiums could increase by as much as 25 percent under this model.

Privatizing Medicare would also take away important choices. Seniors today are guaranteed access to their doctor, hospital, home care agency, or nursing facility. They know how much they will pay for their care, and what care is covered. But under this privatized Medicare model, insurance plans would determine which doctors you could see and which drugs you could take. Insurance companies would determine which benefits and treatments would be covered and how much you would have to pay for them. All this could change each year -- or even more frequently than that if the insurance company changed its mind.

My Republican colleagues are using the promise of a meager drug benefit as a vehicle to force draconian changes in Medicare that will unravel the program for the millions of Americans who rely on it for their health insurance. The pillars of Medicare that make it an unequaled success -- universality, access to care, and affordability -- would be taken away. I urge my colleagues to reject privatization and to support this Motion to Instruct.

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