February 26,2008

Baucus introduces Medicare “trigger” legislation

MEMORANDUM

To: Reporters and Editors

From: Carol Guthrie for Senate Finance Chairman Max Baucus (D-Mont.)

Re: introduction of President’s Medicare “trigger” legislation

Pursuant to statutory requirement, Finance Chairman Baucus today introduced legislation proposed by President Bush to comply with the requirements of the 2003 Medicare Modernization
Act. The 2003 law that created the Medicare prescription drug benefit also requires the White
House to submit Medicare legislation to Congress if general revenues are predicted to finance at
least 45 percent of the program’s expenditures in the next six years.

The Finance Committee has jurisdiction over the Medicare program. As Baucus introduced the
required legislation today, his statement for the Congressional Record made clear that the
President’s proposal does not have his support. Baucus intends to introduce his own Medicare
reform legislation this year, and also to launch a Finance Committee review of health care reform
options to deal with rising health care costs – the root of Medicare’s financial troubles.

“I am required by law to introduce the White House’s legislation on Medicare today, but I’m compelled by my commitment to America’s seniors to insist on better solutions,” Baucus said. “Where the President’s bill cobbles together ill-conceived or premature proposals to check the box on curbing Medicare costs, I intend for the Senate to consider a carefully crafted, thoughtful package of real improvements to the Medicare program overall – and to spend the rest of this year preparing for a time when real health reform is within our grasp. Working together, we can do better by America’s seniors.”

The full text of Baucus’s statement for the Congressional Record is below.
The text of the White House legislation as introduced can be found at:
http://www.finance.senate.gov/

 


Statement of Finance Chairman Max Baucus
February 25, 2008


Under a provision of the 2003 Medicare bill, the Medicare trustees are required to
determine the point at which general revenues will finance at least 45 percent of
Medicare’s total outlays. If for two consecutive years, the trustees predict that this 45
percent threshold will be exceeded in the next six years, they are required to issue a
“Medicare Funding Warning,” which they did last April. As a result, the law requires the
President to submit and Congress to receive a legislative proposal to reduce general
revenues as a share of total Medicare spending.

The President has now submitted proposed legislation to Congress in response to the
funding warning, and I am therefore required to introduce the President’s proposal. So
today, Senator Gregg and I will introduce a Bill to Respond to a Medicare Funding
Warning. But I do so while emphasizing that the President’s proposal, contained in this
very bill, is not the answer to the Medicare program’s problems.

Everyone agrees that Medicare faces a serious long-term financing problem that must be
addressed. But the challenge facing Medicare is not what share of its funding comes from
general revenues. The problem is rising health care costs in the health care system as a
whole. Medicare’s costs are increasing because costs throughout the health care system
are skyrocketing. Addressing the causes of these system-wide costs will be the key to
addressing Medicare’s long-term financing.

With health care costs increasing much faster than wages and inflation, Congress must
find ways to control these rising costs in order to ensure the long-term financial viability
of the Medicare Program. We must also address current Medicare policies – such as
overpayments in the Medicare Advantage program – that exacerbate the problem.

While I am statutorily required to introduce the President’s Medicare bill at this time, I still
fully intend to pursue real Medicare reform legislation in the coming weeks. That bill will
increase access to preventive benefits and primary care, and will improve the quality of
care delivered under the program. I will also seek to help low-income seniors with the
costs of rising Medicare premiums, and to offer timely, appropriate improvements for the
prescription drug benefit.

Beyond advancing a more realistic Medicare reform bill this year, I also intend for the
Finance Committee to launch an aggressive look at comprehensive health care reform.
Working together, my colleagues and I will examine the underlying causes of rising health
care costs in the entire health care system and explore solutions that can be the
foundation for system-wide reform – the only way truly to control costs in the Medicare
program.

I am required by law to introduce the White House’s legislation on Medicare today, but I’m
compelled by my commitment to America’s seniors to insist on better solutions. Where
the President’s bill cobbles together ill-conceived or premature proposals to check the
box on curbing Medicare costs, I intend for the Senate to consider a carefully crafted,
thoughtful package of real improvements to the Medicare program overall – and to spend
the rest of this year preparing for a time when real health reform is within our grasp.
Working together, we can do better by America’s seniors.

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