STATEMENT ON MEDICARE
Senator Al Franken
As Prepared for Delivery

M. President, I rise today to talk about Medicare. You and I pay into Medicare every month, and so we are entitled to Medicare benefits when we reach age 65. The fact that we are entitled to these benefits is not a bad thing. In fact, it's a very important thing for millions of American seniors. And the fact that many call it an "entitlement" only means that we have a right to expect to get the benefits we paid for. Entitlements, in this case, should not be a pejorative.

We've heard a lot about entitlement programs recently, and about the place of Medicare in the conversation about our federal deficit. But in these conversations, a critical component is missing: we already reformed Medicare. And these reforms extended the life of the program by eight years, while expanding benefits for seniors.

You may have seen the many ads about the so-called $716 billion dollars in "cuts" to Medicare, and how terrible that was, is, and will be. Well, let me take a minute to explain what these savings were.

The two biggest sources of the $716 billion were insurance companies overcharging the government for Medicare Advantage, and savings in payments to hospitals.

First, Medicare Advantage. Now, as you might know, seniors can choose to get their Medicare benefits directly from the Medicare program, or to get them through a private insurance program that gets paid by Medicare, which is called Medicare Advantage. Well, before we passed the health care law, we were overpaying these private insurers by 14 percent. These insurers were getting much more than they should have been, based on the benefits they were providing to seniors.

So we cut what Medicare gives to these private insurance companies. Over the next 10 years, we are going to cut these insurance payments by 14 percent, which CBO scored in 2010 as saving Medicare 136 billion dollars over ten years. And we were told by some of our colleagues that insurance companies were going to leave the market, that we weren't going to have Medicare Advantage anymore. Well so far, enrollment in Medicare Advantage has gone up by 11 percent. So that's many, many billions of dollars that we put toward extending the life of Medicare.

Second is lower reimbursements to hospitals. Now, why does that work for hospitals? Well, when you insure 31 million people who previously didn't have insurance, hospitals are no longer on the line for uncompensated care when those 31 million people go into the emergency room. The hospitals aren't left holding the bag for all the costs. So that's why it works out for them.

When people talk about the $716 billion in savings, this is a huge part of what they're talking about. It's not cuts to benefits. It's not shifting costs to seniors. It's streamlining the program and making it more efficient. And we took these savings, and we reinvested that money in the program, which overall extended the life of Medicare by eight years. That's entitlement reform-extending the life of the program. When people talk about entitlement reform, that's what they mean-and that's what we did.

And not only that, but we expanded benefits for Medicare beneficiaries. Now, I go to a lot of senior centers and nursing homes in my home state of Minnesota. And I have to tell you, seniors are very happy about their new benefits. They're very happy about the new free preventive care they get-the wellness checkups, and the colonoscopies, and the mammograms. They know, and we know, that an ounce of prevention is worth a pound of cure.

And you know what else we're doing with that money? We're closing the prescription drug donut hole. And I have to tell you, seniors are very happy about that. For more than one-third of seniors, Social Security provides more than 90 percent of their income, and for one-quarter of elderly beneficiaries, Social Security is the sole source of retirement income. So when they hit their donut hole, that's pretty serious. And sometimes they have to decide between food, and heat, and medicine. Well, because we're closing the donut hole, they don't have to make that kind of impossible choice anymore.

When I was running for the Senate, a nurse in Cambridge, Minnesota told me that when a senior was hospitalized, the doctors would treat her so that she was well enough to leave the hospital, and they'd make sure that she had the prescriptions that she needs.

And after a few days, this nurse would call the pharmacy and ask, has Mrs. Johnson come in and filled these prescriptions? No. Why? Because she's in the donut hole. And guess what-Mrs. Johnson shows up again in the hospital ten days later, or two weeks later. But now, because we're closing the donut hole as part of the health care law, these seniors are able to get their medicine. This is improving their health-and saving us all money. So we've increased benefits and extended the life of Medicare-that was done as part of health care reform. That is Medicare reform.

Now, in the election, we had a discussion about this. There were a lot of ads about it. We know what Governor Romney would have done to Medicare-he said very explicitly that he would restore those billions and billions of dollars in overpayments to private insurance companies for no reason, and to no effect. Just more profit for insurers. Now, we reinvested it in Medicare, but he would have given it to insurance companies. He would have repealed the health care law, which would have made the eight years that we extended Medicare just vanish.

Governor Romney supported raising the Medicare eligibility age. But if we raise the age from 65 to 67 - as he suggested - that means that many of the seven million seniors who would no longer have access to Medicare would end up receiving federal subsidies in the Exchanges, and some of them would get Medicaid. And they would be older and sicker than most of the other people in the Exchanges and on Medicaid, so they'd make both of those programs more expensive. So although it sounds like a reasonable compromise, trust me, it's a bad idea. It would cost the healthcare system twice as much as it would save Medicare. This is the kind of bad idea that explains why we pay twice what other developed countries pay per person for health care-in many cases with worse outcomes.

Medicare reform was an issue in the campaign. But we already did it. We extended the program by eight years. It's not like it was a secret-it was a part of the conversation during the election. And in the election, the American people voted to keep those reforms. As we continue this conversation about our fiscal future, I would love to hear from my colleagues across the aisle about how they would reform Medicare its life by eight years while expanding - or at the very least not cutting - benefits.

And I would ask my colleagues why before the election, they were attacking us, inaccurately, for making cuts in Medicare, but since then they have been insisting that we make cuts in Medicare. So, going forward, we need to move from talking points to taking a thoughtful look at policy and working together to tackle our nation's fiscal challenges.

Thank you, and I yield the floor.