Liberal Democrats really do not want to solve the problem of Medicare
I am new to this.
I have been in this town 9 months. I have been in
this body 9 months. I have never been in politics in my life. I come
from what I think is one of the professions that may be one of the most
respected professions in the country, and I am saddened to say that I
have moved into one of the professions that is least respected in the
country, but then I understand more why today than I did a year ago.
I think probably our first vote in this great body should not be for Speaker of the House. We should take an oath here to tell the truth. Having been on the Committee on Commerce, having been on the Subcommittee for Health and the Environment, I have heard more distortion, more mistruths in the last 2 days than I have heard, I believe, in my entire lifetime.
It is unfortunate that the America people will find it so difficult to find the truth when we have one group, the liberal Democrats, who really do not want to solve the problem of Medicare. They want to make darn sure we do not solve it. That is not what we should be about. We should be working together to solve one of the great problems at the end of this century.
This was a senior citizens coalition. This was led by a paid lobbyist. This lobbyist is being paid by American citizens tax dollars
I was sitting
in the Committee on Commerce meeting room
yesterday morning, and we were informed that there were a group of
citizens in the lobby that wanted to come in and be heard, wanted to
come in and disrupt our committee meeting, the people's business, and
would in no way consider leaving unless they were handcuffed.
They did come into the committee, and they were very disruptive, there is no question about it. The lady came right up to the podium. I was standing right there, and she was yelling and screaming. Not interested in what she was saying, only interested in being disruptive as we tried to do the people's business.
Our chairman was very kind, and was very gentle with this lady. He tried every way he knew how to ask them to leave, because that was not the point in time of the government to be disrupted, because we were going through this bill line by line. Finally, they would not leave and the Capitol Police were brought in and very, very, very gently escorted away.
What is so absolutely distressful about this is there was only one point in that, and that was to be disruptive, to get on television, and show blown-up pictures like we saw in this body tonight in order to misrepresent actually what happened.
This was a senior citizens coalition. This was led by a paid lobbyist. This lobbyist is being paid by American citizens tax dollars. The liberal Democrats have funded them for years. Ninety-six percent of their income comes from tax dollars. Their purpose for being there was to be disruptive, to get on television, and allow people to bring in big pictures here tonight to mislead the public about the facts.
In addition to that, I heard tonight, I do not know how many times, that we have had no hearings; that all we have talked about is to special interest groups. Well, this bill is being marked up by the Committee on Commerce and by the Committee on Ways and Means. We have had over 10 hearings in the Committee on Commerce, of the subcommittee. I was there. I know we had those hearings.
It is true, not many of our liberal Democrat friends bothered to come, but we had the hearings and that was their opportunity to be heard. Ways and Means has had over 30. I think 36 hearings. A lot.
And, by the way, I will be delighted to be corrected tonight if I misspeak or have anything wrong, because I am trying to tell the American people the truth as best I know it. So if I misspeak on anything, I hope my colleagues will jump right in and correct me, because we need the truth to come out.
Mr. CHAMBLISS. The gentleman is talking about these number of hearings, 10 in the Committee on Commerce, 36 in the Ways and Means. Is the gentleman talking about 30 minute hearings, or hour-long hearings?
Mr. NORWOOD. No, and I thank the gentleman for asking, many of those hearings lasted all day. What I noticed most of all was that the loyal opposition failed to come. We have had all summer to discuss this bill, and we have done that.
A special interest group is when President Clinton puts 500 people in a room who will do exactly what he wants to try to determine the health care of this Nation
I know what
my other colleague from Georgia has been doing. I am from
Georgia, too. We have been going home and talking to our senior
citizens, having time after time town hall meetings.
Mr. TIAHRT. I would ask the gentleman, Mr. Norwood, who were some of the groups that came to the committee and testified in respect to the Medicare preservation plan?
Mr. NORWOOD. We have tried very hard, Mr. Tiahrt, to hear from all people involved in health care. That means the patient, that means groups represented by AARP, that means the hospital and the hospital administrators. They are involved in health care. They should be involved. They should have some input into this great bill. It certainly means the providers of health care, meaning the physicians. They are involved. This bill affects their lives tremendously.
We brought in people and experts to hear what they felt about it. In addition, we also had senior citizens, who are on Medicare, come into the hearings and speak to us.
The other side talks about special interest groups. A special interest group is when President Clinton puts 500 people in a room who will do exactly what he wants to try to determine the health care of this Nation.
I think we have done this right. We have talked to as many people as we possibly could to have their input. The AMA? Sure. They have had input into this. Of course, they should have had input into this, just as AARP should have had input.
We have been very fair with this. We have met with many, many people, and I think that we have come up with a solution to one of the most difficult problems we have to face in the 104th Congress.
Mr. TIAHRT. I hope my colleagues will stick around for a while. I want to involve the gentleman from Pennsylvania [Mr. Greenwood] in the discussion.
I have been sitting in my office just boiling over what we have heard from some of the Democrats
to thank the gentleman from
Kansas, and each of the gentlemen for participating in this and
organizing this special order on Medicare.
I, with Mr. Norwood, sit on the Committee on Commerce, and together, before the hour is out, we will get into a lot of details, hopefully, about Medicare, but I really want to comment about the previous hour and about yesterday's activities, because I have been sitting in my office just boiling over what we have heard from some of the Democrats.
For the past hour, from I guess about eight o'clock to nine o'clock, we had some very entertaining theater on the part of the Democrats. If there were not so much at stake, I guess the American people might shrug this off as bad theater. But the fact is there is a great deal at stake, and what is at stake is something no less precious than the health of our country's elderly.
Members of Congress are not elected to be entertainers. They are not elected to be actors. But it looks like when some Members of Congress cannot accept reality, they figure out how to escape reality and create their own reality by creating their own theater. That is what happened yesterday and today in Washington.
Mr. Norwood and I went to our Committee on Commerce meeting scheduled to begin at 10 o'clock. The meeting finally did come to order, and it went until way after midnight, while we took amendment after amendment after amendment on the Medicare bill from the Democrats. But when we got there, the lawyers for the committee informed us that they had been informed that a group of protestors was planning to disrupt the meeting and that they would not leave unless they were handcuffed and arrested.
They did that precisely because they wanted to create for the television cameras a visual image of senior citizens being arrested so that somehow that would reflect on the Medicaid bill.
Mr. NORWOOD. The lobbyists that organized this, did the gentleman tell me earlier that this lobbyist is the public relations person for the seniors coalition?
Mr. GREENWOOD. It is even worse than that. I will get to that in a minute, however, Mr. Norwood.
What happened was, we then consulted with the lawyers and with the Capitol Police and said, well, what do we do if when this meeting comes to order a group comes forward and just is disruptive and refuses to abide by the rules of the House? We were told there is a procedure. The procedure is the chairman should ask the parties if they would please have a seat in one of the seats where the rest of the public sits, because this was a markup where we amend the bill.
Then the next procedure, if they refuse to do that, is to recess the committee and everyone is to leave the room, including Members of Congress, and then the Capitol Police come in and clear the room.
So we said, we hope this does not happen, but if it does, we will do that. We sat down, the chairman banged the gavel, and immediately, if you remember, immediately, on cue, a woman who was formerly the full- time paid political relations director for this seniors citizens group, the senior citizens group, by the way, which last year received in excess of $70 million in Federal funds, something like 99 percent of all its funds were Federal funds, she got up with her script, went around to the front of the room, and reading her script began to scream at the chairman.
She did not want to be heard. She did not have a message. She did not want to listen or have a dialogue or have a conversation. She just wanted to scream and scream and scream.
Mr. TIAHRT. I have a couple of questions to ask the gentleman about that, because we heard earlier that these were seniors that came to the hearing asking to be heard in a very polite manner and were mistreated by the chairman of that committee. The gentleman is telling us that was not exactly how it happened. The gentleman was there?
Mr. GREENWOOD. Unfortunately, it was anything but that. It was political theater. It was scripted. It was planned. It is sort of the latest in political guerilla warfare. You create a media event that works for you on television.
Mr. TIAHRT. Excuse me for interrupting, but this is a group, the gentleman said, that received more than $70 million in tax dollars, which is in excess of 95 percent of their budget?
Mr. GREENWOOD. That is correct.
Mr. TIAHRT. So they are, in fact, using the tax dollars from people, in my case, the fourth district of Kansas, and they are trying to disrupt the plans to preserve and protect Medicare. So that is kind of like trying to push the system into bankruptcy. I am having a hard time understanding what motivation one would have to push Medicare into bankruptcy.
Mr. GREENWOOD. The motivation is a political agenda, of course. And that is, as we all know, after 40 years of the Democrats controlling the House. Republicans were elected in the last election, and I think we were elected, frankly, because the country finally said a $5 trillion deficit is serious. A Medicare program spending at inflation rates that are unsustainable is serious. We have to elect a team that is ready to go in and deal with that.
We are dealing with it. It is a big change for the country. The party that is out now wants to come back in, and if it takes cheap political theater to do it, they will.
Why would they stoop so low as to get frail, elderly senior citizens, who may not have even known where they were, and wheeled them into an event like this?
of what was done was they used political
props. The political props were people. They were little old ladies,
many in wheelchairs, whom the young professional staff wheeled up to
the front of the room for the TV cameras and turned them just right for
the TV. I do not think these little old ladies knew where they were,
some of them were that frail, and then the paid professionals left the
room so they would not get in the camera's view.
We all left the room, the public left the room, and six times the Capitol Police said to the ladies and gentlemen, "Please, you really need to leave. You cannot interrupt a committee of Congress in session." They refused, because they wanted to be arrested, and, ultimately, they were.
Then, act two of this very bad political theater was acted out on the floor of the House tonight, where Member after Member stood up and pretended that this was somehow a spontaneous event in which just average citizens came forward and wanted to be heard and could not.
It was political guerrilla warfare, and I hope for the sake of the country, and I hope for the sake of the Medicare program that the vast majority of Americans watching tonight and watching this play out can see through it, and see it for the desperate, cheap political theater that it is.
Mr. TIAHRT. Let me introduce the gentleman from Florida [Mr. Weldon], a physician who is joining us to enter the discussion on Medicare.
Mr. WELDON. I did want to inquire of the gentleman from Pennsylvania, and he basically alluded to the reason at the tail-end of his comments, but I think it is something worth stressing, why would the Democrats do this? Why would they stage an event? Why would they stoop so low as to get frail, elderly senior citizens, who may not have even known where they were, and wheeled them into an event like this? Why are they doing this? And the gentleman answered that, really. They are really desperate.
This is really a desperate team. They know they are on the losing end here. The gentleman from Georgia [Mr. Norwood], I think clearly made the case, and the gentleman from Georgia [Mr. Chambliss], as well, that the people in our districts, the people in those hometowns, realize the system is broke. They realize something needs to be done, and they are really looking to us to make the changes, to make sure that Medicare is there for their parents, to make sure that Medicare is there for themselves. And we have a plan that makes sense and that is a rational plan.
If that insurance company offers a product for senior citizens, that they can select that option
from Kansas [Mr. Tiahrt] was correct when he alluded to
the fact that I am a physician. I made a commitment to the voters of my
district when I agreed to run and serve and come here, and that is that
I would serve for 8 years, and respect Florida's 8 year limit on
service, and then I would go back to my hometown. And my plan is to go
back to practicing medicine.
Fully 50 percent of my patients were senior citizens. I had a substantial Medicare practice and, indeed, I have to say, this issue of the importance of Medicare hit home for me in a very personal way about 4 weeks ago, when my father, 75-year-old combat war veteran from World War II, a retired postal worker, had a stroke. Now, fortunately, thank God, it was a small stroke, and he is looking at making a good recovery. But I am very happy that he has a good health insurance plan in the Medicare system and that will be there for him to provide him the coverage that he needs for physicians and for hospital care to see him through this event so that he can get back to home and return to independent living, as he had before.
And this reform plan, this proposal that we have, I think is an outstanding proposal. I am very happy that both of you gentlemen from the Committee on Commerce that have worked so hard on this program are here to talk about it because it is a good plan.
It allows senior citizens the option to stay in standard Medicare. It allows senior citizens who are already in HMOs that they are happy with to stay in that HMO. It allows physicians and communities to set up provider-sponsored networks so that they can form managed care networks if they want. It also has an option in there for medical savings accounts so that seniors who want to set up a medical savings account time option will be able to do that. There is also an option in there for those people who are approaching retirement and they have much like the insurance plan that they currently have with their employer, if that insurance company offers a product for senior citizens, that they can select that option and stay with that plan and stay with those providers in that plan.
So we have a host of options in this. It has been scored by the Congressional Budget Office as realizing the savings necessary to keep the program solvent and it has been declared by the Clinton administration that the program is going to go insolvent. I think this is an excellent plan.
My hat is off to those members of Ways and Means and Commerce, such as the distinguished gentlemen from Georgia and from Pennsylvania, who have worked very hard, very diligently, I believe, on this. And I think when all is said and done and the American public sees the plan, they are going to like the plan. And they are also going to realize how desperate our opposition really was to resort to the kind of cheap tricks like they did yesterday in the Committee on Commerce.
I think it was a sorry day in the annals of Democrat political history that they had to stoop that low, and I think we have got a good plan. I think the plan is going to pass. I think we are going to have Democrats voting for our plan in the end because they know it is a good plan. I think the public is going to support it.
I very much want to compliment you, Mr. Tiahrt, for putting together this discussion to talk about this very important thing, because this is a very important issue. We need to take the time to make sure that this is properly spelled out to the public and they understand it.
I was sitting in my office listening to this absurd, sort of UFO show about what happened yesterday
briefly, you make an excellent point. The point
being that the folks on the other side that are opposing this plan have
stooped to an all time low level.
I happened to be in the chair a little bit earlier in the evening when Jim Greenwood came down, after sitting in the office and, as you said, boiling for a while, you came down to the floor. You could have sat up there and just turned your TV off, but you did not do that. You wanted the American people to know the truth.
You came to the floor of the House to engage the folks on the other side of the aisle who were not telling the truth about what happened and how it happened. I would like for you to comment on what reaction you got from the folks when you offered to come down here and engage in debate tonight.
Mr. GREENWOOD. I appreciate the gentleman for commenting about that. I was sitting in my office listening to this absurd, sort of UFO show about what happened yesterday. And I said, I have got to go down to the House and straighten this out. They are telling the Americans things that are just not so.
So I took the microphone. I said, we are going to have an hour between 9 and 10. And how about if instead of Democrats doing an hour and have things their way and then the Republicans do an hour and have things our way, why do we not share time and we can have a dialogue back and forth and maybe the American people who are paying for this might actually learn something instead of getting the propaganda approach. I asked for some time and they refused. They yielded me 15 seconds, which was enough to make the request, and then they said they would not do it.
I could just see the Democrats huddling around and saying, OK, all that bad stuff is in here, right?
is, why are they so desperate. And the fact, if you look
back just a few weeks, after we had 38 hearings in the Committee on
Ways and Means on Medicare, another 10 hearings in the Committee on
Commerce, 48 hearings on Medicare, countless hours of hearings, we then
said, now it is time. We heard from all the senior citizens groups, all
the professionals, all the experts, it is time to do the hard work of
drafting the bill.
While we were doing that, day after day, sometimes until 2 o'clock in the morning, crafting the bill, the same folks we just heard from were coming down here and telling you, I will tell you what the Republican bill is going to do. It is going to raise the cost of Medicare thousands of dollars for senior citizens. And then they are going to raise their co-pays. Then they are going to raise the deductibles. Then they are going to push them into managed care. Then they are going to lower the quality of care and take benefits away from them. And we would have press conference after press conference. And the Democrats would say, wait until you see this horrendous plan.
We quietly, carefully went to work putting together a plan that, as has been said, does not raise the cost of Medicare for anyone. Co- payments are the same; deductibles are the same, still pay 31 percent of the premium in part D. Taxpayers pick up the rest. Benefits package is exactly the same. If you want to stay where you are, you can stay where you are. New opportunities in managed care and Medisave accounts.
So we got the bill all put together very carefully and introduced it, and the Democratic staff took it and looked at it. And I could just see the Democrats huddling around and saying, OK, all that bad stuff is in here, right? All those horrible things we said they are going to do to seniors, tell us what to say. And the analysts must have said, well, they did not do that. They did not do those terrible things. So now what are we going to do?
The Democrats say, what are we going to do? We have to destroy their plan because if we do not destroy their plan, they will succeed and they will save Medicare and they might get reelected or something and we will not take the House back. So what do they have left? Cheap political desperate theatrics. If Americans fall for that, if Americans cannot see through that kind of ridiculous, childish, adolescent behavior, this country is in trouble. But I do not think it is.
We are going to offer senior citizens many choices and we want to hit all those choices
We need to talk
a little bit about the
specifics. I think that, if there is anything good that has come out of
the Committee on Commerce markup over the last 2 days, at least we have
the Democrats admitting that part A of the trust fund is in fact going
bankrupt in 7 years. That is the best we can get out of them.
They will admit that the hospital part of the fund, that paid for by payroll taxes, is doing broke in the year 2002. They say to us, however: Well, you do not need to save $270 billion because part B, which is the part paid basically for physician services, is just great. It is fine. It is doing super.
Well, patients today pay 31.5 percent of their part of the premium in part B. Guess who pays the 68.5 percent? The Treasury, the American people. That is subsidized. We are glad to do that as long as we can. We want to help people as much as the other side does. But, my colleagues, I will have to tell you, the part that comes out of the Federal Treasury, that 68.5 percent, is growing unbelievably out of control.
And think of this: That Treasury that they never considered that this country can ever run out of money, that is the Treasury that owes $5 trillion. This is the Treasury that borrows a trillion dollars every 4 years, if we do not change what they are doing.
We are going to be borrowing a trillion dollars every 3 years when we hit the 21st century. The price of medicine is going to continue to go up as long as we do not go into this program and we rework it, as we have.
So it is not fair to say that the part B part of the trust fund does not have just as serious a problem as the part A part of the trust fund.
Now, I think if I could only have one message go out of here tonight, it would be this: We are going to offer senior citizens many choices and we want to hit all those choices. But the think I would like for my mother-in-law to hear and remember more than anything else is that, if you like Medicare as it is today, part A, part B, Medigap, messing with HCFA, if you like all of that, you can stay with it. You do not have to do one thing to change that. Is the co-payment going up? No. Is the deductible going up? No. It is going to be exactly next year like it was last year, if you make that choice.
Many seniors will look at the different great options that we are going to give them, and some are going to take different choices
Now, I believe
many seniors will look at the different great options
that we are going to give them, and some are going to take different
choices. But any senior citizen who wants to stay on Medicare precisely
as it is today can do so without any increase in cost.
Let me conclude one thought about that. I think that it is wrong for us to stand here and not say to senior citizens, that 31 percent that you pay for your premium in part B, it is going up. It is going to increase.
It has doubled over the last 7 years under the present Medicare plan. It has gone from around 20 bucks up to 46 bucks a month. I will stay here right now and tell anybody who wants to know, it is probably going to go up in the neighborhood of about $90 a month by the year 2002. But that has nothing to do with our reforms. That increase in the part B premium is going to occur whether we reform Medicare or whether we leave it exactly as it is today.
So in general, and I know it is someone else's time, but in general, anybody who wants to keep Medicare as they have it today with no increased cost in part A and an increase in your premium cost in part B because of inflation, then you can stay right there.
Mr. WELDON. I just want to clarify a couple of the points that the gentleman made. The deductible right now, that stands at $100 per year per beneficiary.
Mr. NORWOOD. Yes.
Mr. WELDON. That is going to stay the same.
Mr. NORWOOD. That is correct. It is not going to increase.
Mr. WELDON. Now, the co-pay, that is the 20 percent that Medicare does not cover. So Medicare is going to continue to cover the 80 percent, and it is not going to decrease at all; correct?
Mr. NORWOOD. Exactly as we do it today.
Mr. WELDON. Now, the premium that we are talking about for the average senior right now I think that is at $46.
Mr. NORWOOD. Per month.
Mr. WELDON. Okay. The Clinton administration was talking about letting that increase to about $75 per month over the next 5, 6 years, as I understand it, and his attempt to balance Medicare. And what will the Republican proposal be doing?
Mr. NORWOOD. Our proposal increases that $7 a month.
Mr. WELDON. Only $7 more a month.
Mr. NORWOOD. Seven dollars per month.
Mr. WELDON. That is as I understand it. I think that is an important point worth stressing here, that we are not going to be raising co-pays, and we are not going to be raising deductibles. Actually what we are planning on doing with the Medicare premium basically is the same thing that our Democrat President over in the White House is proposing doing. That is to let it increase gradually with the cost of inflation.
We did take input from the seniors' groups. I know I went back to my district and I met with AARP people three times
This is one
of the reasons why I think this reform proposal is really
an excellent proposal because for those seniors on a limited budget who
are very dependent on making sure that they have good quality medical
care because they have heart disease, they have arthritis, they have
diabetes and they have to make sure they get in to see the doctor every
month or every 2 months or every 3 months, they are trying to get by on
the Social Security check.
We are not going to be putting increased burdens on those seniors. We are going to be making sure that the resources are available for them so that they can continue to see their physician. We are also going to be giving them that continued freedom of choice so that if they are happy with their practitioner that they will be able to continue to go see the doctor that they have been comfortable with for many years. I think that is extremely important.
I know that in my practice, when I took care of seniors, I knew that it was important to them to be able to know that, if they got sick and they were in the emergency room, that their doctor was going to be there for them and that they were going to have their Medicare to pick up the tab. They were not going to be bankrupted by an excessively large medical bill that they could not afford to pay. Our proposal, the Republican proposal that we are putting forward, preserves that for senior citizens.
I think it is a good plan. I think it is a well-balanced plan. I think it was a real sorry state of affairs to see how desperate our opponents were in trying to score political points to do what they have done with this cheap political shot.
I think the gentleman from Pennsylvania [Mr. Greenwood] really revealed something when he came down here to the floor and said, Let us have an open debate and let us really debate the issues," and I would put forward to members of the minority party who may be watching these proceedings that I would be delighted to appear on the floor of this House with the Members gathered here today and debate those people openly and fairly. Let us have an open hour where we can really exchange issues and really talk about this plan because this is a good plan. This is a plan that I think meets the needs of our seniors. It is a well-balanced plan.
We did take input, as the gentleman from Georgia [Mr. Norwood] said. We did take input from the seniors' groups. I know I went back to my district and I met with AARP people three times, and I showed them our product. They were afraid of change. I have to say there was some concern in the room. But they understand that something has to be done to preserve this program, that it is going to be insolvent and that it is starting to go insolvent next year.
So they know some changes need to be made, and they believe that this is a good proposal and it is something they can live with and that will help to make sure Medicare is there for all seniors in the future.
If I find a television for sale for $500 and it is in one store, I go to another store
That is the thing that has been so astonishing is the
comment that somehow we have not been listening to the seniors on this.
I know I have had meeting after meeting after meeting with seniors in
all the senior centers. I have had big town meetings for the whole
county to come. I have had a senior citizen advisory committee, and
despite the fact there is this constant barrage of scare tactics coming
out of Washington, we call it "Mediscare," the Democratic Party had a
great leader who said, "We have nothing to fear but fear itself." Now
we are seeing that they have nothing to offer but fear itself. That is
a pretty sad state of affairs.
Despite all the fear-mongering that is going on, everytime I have been able to take our bill and sit down with senior citizens one at a time, five at a time, 200 at a time and walk through what we are offering, they all go, "Oh, that sounds great. You mean I can stay where I am, and you guys are not going to cut Medicare?" They keep saying, "You are going to cut Medicare." The chart shows we are not going to cut Medicare. We are going to increase the expenditures for the average citizen from over $4,800 a year where it is now over the 7 years to $6,700 a year plus for a senior citizen. That is a lot of money. That will buy a lot of health care. That is a 40-percent increase.
What we are not going to do is we are not going to continue to waste money in the program, so the inflation rate is 10 percent a year. If we can hold the inflation rate to 5 percent a year, every senior citizen in the country knows what 5 percent a year, they would like to get that on the CD's back home after all these years. Five percent is a pretty good inflation rate. That is plenty of money.
The theory the other folks keep putting out, you know, if I find a television for sale for $500 and it is in one store, I go to another store, it is $400, I guess I ought to spend $500 for the same TV; otherwise, I am getting cheated out of $100. I think seniors are better shoppers than that.
Mr. TIAHRT. I would like to explore some of the details, and I yield to the gentleman from Georgia to cover some of the details in the Medicare plan that we have to preserve and protect cover Medicare.
The marketplace comes into this. The marketplace is going to bring these costs down
have been one of the leaders in devising this
plan. I sort of know the highlights of it. I would appreciate it if you
and the gentleman from Georgia [Mr. Norwood] who serve on the
committee, would pitch in. As I understand it, what we are going to do,
No. 1, we are going to offer every senior citizen the same Medicare
program they have got right now. We have mentioned that a couple of
times. That is an absolute.
Secondly, we are going to provide what is called a provider service network, where hospitals and physicians will be able to get together and form a group, and they will be able to offer certain services to individuals. They will be able to sell those services to any group out there.
Mr. GREENWOOD. If I may, what will happen, the Medicare program would pay a figure, let us say $5,000, for each senior citizen in that community right to the hospital and doctor network. That would be, we would basically be paying the insurance premium for that. In exchange for that, the hospitals and doctors and surgeons and specialist say, "We will meet all the health care needs of the seniors who sign up in our program." It is a great idea. It is innovative.
You know, the hospitals and doctors like it because they leave the insurance companies out of the deal and save some money that way for them. The insurance companies are not wild about it, but it makes it competitive.
Mr. NORWOOD. The networks may be just a group of physicians who are offering part B. It may be a group just of hospitals that are offering part A. Or it may be a combination of physicians and hospitals who get together and achieve the efficiencies that medicine could have done for years had it not been for the Justice Department up here. It is going to be a great move in the right direction, cut the middle man, lower the costs, and let people be involved in their health care with their doctor, not with HCFA.
Mr. CHAMBLISS. Is that going to cost senior citizens any more money than what they are paying today?
Mr. GREENWOOD. No. it is probably going to save them money. My mom and dad have chosen in our area, where we have managed care programs already, they have chosen to obtain their Medicare benefits through the managed care program. You know what happened to them, they are saving a thousand dollars each a year because they do not have to buy the Medigap policy anymore. They have got a prescription drug program now which seniors know in regular Medicare you do not get, and they have no copays and no deductibles; it is a great deal for them. They like it. They are happy there, and there is going to be an opportunity for seniors, and the other great thing is that we are setting this thing up so the seniors can get into the kind of plan, try it out, if they are happy and love it and their doctors are the best doctors in the community, great. If they decide they do not like it, in any given month----
Mr. NORWOOD. Every 30 days.
Mr. GREENWOOD. They can just walk out and go back to Medicare.
Mr. NORWOOD. Go back to what they have got right now.
Mr. CHAMBLISS. If they like it or try it and do not like it, they can go back. You alluded to HMO's, health maintenance organizations as being in effect right now in your area. Is that another option that we are going to broaden under our plan?
Mr. GREENWOOD. Yes. What we are doing, we are increasing between 5 and 10 percent the financial incentives for the managed care companies to go and aggressively market their product. So what they will be doing is going to the senior centers, advertising on television, saying, "If you come to our plan, get your Medicare through us, we will get you a prescription drug program with maybe a $2 copay. If you come to ours, we will give a membership in the gym." It will be very competitive.
Mr. NORWOOD. The marketplace comes into this. The marketplace is going to bring these costs down.
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