Rep. Garrett: Medicare Bill is Bad Medicine for Seniors
Medicare Reform Tough Pill For Future Generations to Swallow
December 1, 2003, Washington, D.C. - Throughout my legislative career, I have remained steadfast in my support for senior citizens. This past June, I voted for the House Medicare reform bill with the hopes that through negotiations with the Senate, the House bill would emerge to better address the true needs of our seniors. Unfortunately, the conference bill that emerged and passed the House early the morning of November 22, fails to meet the needs of our seniors today and the needs of our seniors tomorrow. I could not support this legislation that would create additional fiscal burdens, not less, and in many cases is both unnecessary and potentially harmful for most seniors who already have prescription drug coverage.
This inadequate conference report will create a universal drug benefit that provides a government entitlement for every American over the age of 65, whether they need it or not. This population of some 37 million today will grow to 70 million by the year 2030 and will create an unsustainable burden on our nation. While the need for affordable prescription drug coverage for seniors is real, the need for this expensive universal entitlement is not.
Today, 76% of seniors are already covered under an existing prescription drug plan. With this new Medicare bill, Congress will spend hundreds of billions of dollars for drug coverage that essentially, someone else is already paying for. Not only is the need for a universal public subsidy questionable, but adding a universal drug benefit to Medicare may have certain unintended consequences. The Congressional Budget Office recently estimated that thousands of seniors could lose the coverage they currently enjoy for a plan that is more costly to the senior and offers less benefits than what they had before.
Under the new plan, seniors will have to pay a $35 a month premium, a $250 annual deductible, and 25% of their next $2,250 in drug expenses - all for a plan they may have not needed in the first place. A senior with $999 in drug costs will still have to pay $771 out of their own pocket. A senior with $5000 in drug costs, will still pay $3976 out of their own pocket. The new plan proves to be more costly to seniors who are already on a very limited income.
The Medicare debate has focused almost exclusively on what form of drug benefit to provide to senior citizens, and not upon what this fiscal liability will mean to the American taxpayer. Future taxpayers - our grandchildren - will be forced to pick up this fiscal burden for our senior citizens. It is estimated that the bill that passed will cost over $400 billion over the next 10 years and will accelerate substantially beyond the 10-year budgeting window. In the following 10 years, from 2014 through 2023, the drug benefit is projected to cost $772 billion. We can expect to see rapid growth years beyond that. Medicare spending is on pace to double in the next decade, and that growth rate will accelerate when the baby boomers begin retiring. With the payroll tax already insufficient to fund Medicare's costs, the program will run a $5 trillion deficit through 2030. Adding an expensive new drug benefit will substantially worsen Medicare's already shaky finances and create financial distress for future generations.
To fully appreciate what this will mean for our grandchildren, Americans should consider the fact that the unfunded portions of the Medicare drug bill will cost taxpayers a total of $2 trillion through 2030 alone, with escalating costs thereafter. This means that a 40-year-old head of household in 2003 could expect his or her family to pay $16,127 in extra taxes until retirement to pay for other people's drug benefit before paying for his or her own drug coverage. This is on top of taxes already needed to pay for existing unfunded Medicare obligations, as well as taxes for the Social Security shortfall.
We need a plan that will save Medicare and provide the options and benefits our seniors need. Just to hastily do something for the sake of taking action - isn't enough. I advocate for a plan that will promote greater competition between providers, which would create lower health care prices and ultimately, higher quality health care for everyone. Creating the costly, federally run entitlement program, with an overregulated "private sector" market option is doomed to fail. Basic free market principles allow for businesses to thrive and succeed. A dynamic free market has helped to make America an economic superpower. Why let excessive government spending that is fiscally undisciplined threaten Medicare, our federal budget, and the quality of life for our grandchildren?
Health savings accounts promote a free market, personal responsibility for our own health care needs and encourage us to not depend upon the government to care for our personal health plans. Health savings accounts move us away from a socialized government-run Medicare program and would introduce us to market forces, competing to provide the best care for our seniors, at the lowest cost available. In the end, more seniors would have better coverage for their prescription drugs, preventative care and serious illness needs.
Sensible reforms must be put in place to ensure Medicare is sustainable for tomorrow's seniors. Now is not the time to turn our back on them. We must remember that passing the wrong plan does not help anyone. Rather, it just speeds us towards bankrupting the system - leaving every senior now and in the future without coverage.
Rep. Scott Garrett (NJ-05) represents portions of northern New Jersey including Bergen, Sussex, Warren and Passaic counties.