Modernizing Medicare for the Next Generation

U.S. Chamber of Commerce
March 6, 2003

Good morning, ladies and gentlemen. Welcome to the Chamber of Commerce of the United States. I'm Tom Donohue, the Chamber's president and CEO, and I'm very pleased to kick off today's discussion on modernizing the Medicare program.

Events such as these happen only with the help of sponsors. I'd like to thank the National Association of Chain Drug Stores, the American Association of Health Plans, Advanced Medical Technology Association, and the law firm Greenberg Traurig for their support.

The National Chamber Foundation prides itself as an organization that identifies solutions to issues today in order to prevent a crisis from occurring tomorrow.

If we don't take immediate steps to modernize the Medicare program, our employers, workers, seniors, and health care providers will pay a terrible price in the years to come.

38 years ago, the creators of Medicare designed a program that was well suited for the times.

People didn't live as long as they do today, the population was more evenly balanced between workers who paid into the system and those who received benefits, and the availability and effectiveness of prescription drugs were nowhere near the levels they've reached today.

Extraordinary advances in health care technology, disease treatment, and pharmacology have significantly increased the average life expectancy as well as health care costs, putting extraordinary financial pressure on the Medicare program—pressure that will only grow in time if we don't act.

The first of 77 million Baby Boomers will begin collecting Medicare benefits just eight years from now.

If we do nothing, the government-sponsored health insurance program that many of you—younger than I—have paid into over the course of your working life will not be available to you.

This conference is meant to be a statement to the government that we need comprehensive Medicare reform now…reform that relies on enhanced market competition, less centralized planning and price regulation, and more choices for beneficiaries…

Reform that decentralizes provider reimbursement and reduces administrative burdens so that our best health care providers choose to participate in the program.

Above all, Medicare beneficiaries should have access to prescription drugs and the latest advances in medical innovation – but only as part of comprehensive reform – not tacked on to a program that is on the fast track to insolvency.

Beneficiaries should also have alternatives to the single-payer, government-run Medicare system.

On Tuesday, as you know, the president introduced his framework for improving Medicare. We applaud the Administration for taking this important first step toward comprehensive, fundamental reform and for challenging Congress to address the issue this year.

So why is the business community, led by the Chamber of Commerce, playing a role in the Medicare reform debate?

Because employers have been at the center of the nation's health care system for decades.

Private businesses meet the health care and prescription drug needs of 136 million Americans, including more than 12 million Medicare beneficiaries.

Their valuable technical expertise and practical knowledge will be of enormous value as we move closer to comprehensive Medicare reform.

In addition, 6% of general tax revenues—together with the nearly 3% payroll tax employers and employees pay on all earned income—finances the bulk of Medicare expenditures.

Employers have an obligation to make sure that they and working Americans are paying into a system that is structured to meet our needs and the needs of future generations.

As part of our efforts to facilitate comprehensive reform, the Chamber last month helped to create the Employers' Coalition on Medicare.

This group of businesses and associations will work closely with the administration and congressional leaders to ensure that the Medicare program will be there for our children and grandchildren.

At this time, I'd like to introduce our first panel of experts. Two are leaders driving the Medicare reform debate in Congress; the other is a former member of Congress who stays engaged in the Medicare debate from the world of academia.

I will introduce all three now and invite each of them to make a few minutes of remarks, followed by a roundtable discussion that will give you a chance to ask questions.

Our first speaker is Louisiana Senator John Breaux. Senator Breaux long ago established a reputation on Capitol Hill as an expert on healthcare policy and entitlement reform.

In 1998, he was selected by the White House and House and Senate leaders to chair the National Bipartisan Commission on the Future of Medicare.

The first meeting of that Commission took place exactly five years ago today.

Under Senator Breaux's leadership, the commission developed a number of sound recommendations for improving the Medicare program, but unfortunately lawmakers have yet to heed those recommendations.

Senator Breaux has also leveraged his role as ranking Democrat on the Special Committee on Aging to highlight the importance of protecting and strengthening Social Security and other programs that are essential to the health of older Americans.

In addition, Senator Breaux is the ranking Democrat on the Finance Subcommittee on Social Security and Family Policy and also serves on the Finance Committee's Health subcommittee.

In these roles he was instrumental in helping to forge the compromise that led to passage of the landmark welfare and health insurance reform bills of 1996.

Next, we have Congresswoman Nancy Johnson from Connecticut. Like Senator Breaux, Representative Johnson has earned a reputation as an expert in health care reform over her 20-year career in Congress.

Currently chairwoman of the House Ways and Means Health Subcommittee, Representative Johnson successfully sponsored legislation guaranteeing health insurance to millions of American children and also helped write the law that saved Medicare from bankruptcy.

In addition, she has worked for reimbursement reforms to strengthen community hospitals, home health agencies and other providers, and has introduced legislation that would address the looming long-term care crisis.

Our third and final panelist is former Nebraska governor and senator as well as presidential candidate, Bob Kerrey.

Mr. Kerrey decided not to seek Senate re-election in 2000 so that he could serve as president of New School University in New York City, an institution devoted to the study of social science.

While a member of the Senate, Mr. Kerrey served with his colleague Senator Breaux on the Bipartisan Commission for the Future of Medicare.

Mr. Kerrey has always been a strong voice for entitlement reform, and we're pleased to welcome him back to Washington for a good 'ole fashion policy debate.

Ladies and gentlemen, please join me in welcoming all three of our panelists.