October 10, 1973
Page 35910
SOCIAL SECURITY ACT AMENDMENTS OF 1973 – AMENDMENT NO. 640
(Ordered to be printed and referred to the Committee on Finance.)
MEDICARE DEDUCTIBLE FREEZE AMENDMENT TO H.R. 3153
Mr. MUSKIE. Mr. President, on behalf of myself and Senators CHURCH, CLARK, WILLIAMS, TUNNEY, HUMPHREY, HART, Moss, HARTKE, HUGHES, METCALF, MCGEE, RIBICOFF, PELL, MCGOVERN, EASTLAND, STEVENSON, EAGLETON, CHILES, ABOUREZK, MCINTYRE, MONDALE, STEVENS, JACKSON, MAGNUSON, JAVITS, BAYH, CASE, HATHAWAY, BURDICK, and BIBLE, I offer an amendment to H.R. 3153, the Social Security Act Amendments of 1973, to freeze the medicare part A hospital insurance deductible at its current $72 level for 1974 as a temporary relief measure.
The Department of Health, Education, and Welfare announced last month that the deductible – the amount a hospital patient must pay before medicare takes over – would increase from $72 to $84 in 1974. This increase in the hospital deductible would also have the effect of raising by 17 percent the medicare coinsurance charges – the portion of the costs that patients must pay for hospital stays longer than 60 days and for nursing home extended care after 20 days.
If the increase is allowed to take place, it would affect some 51/2 million aged and disabled medicare beneficiaries who are expected to be hospitalized in 1974. It would add yet another burden to the aged who have limited incomes and still must somehow cope with ever-rising prices. It would also come hard on the heels of an increase in the monthly premium charge under the medicare supplementary medical insurance program, which has just risen from $5.80 to $6.30 per month.
These additional medicare charges are robbing the aged of the small amount of discretionary income that they have. For many of the aged, food and shelter and medical costs consume almost their entire income. Even relatively small increases in medicare charges can have a major impact on their personal finances.
The deductible for medicare hospital insurance was $40 when medicare went into effect in July 1966. Raising the deductible to $84 would mean that it has more than doubled since the program began. At the same time, the coinsurance payments, which are linked to the deductible, would also more than double. Next year, if a medicare beneficiary required more than 60 days' hospitalization, the coinsurance payment per day for the 61st through 90th day would be $21 a day as compared to $18 currently and $10 when medicare was enacted. For a post-hospital stay of more than 20 days in a nursing home the coinsurance would be $10.50 a day compared to $9 currently and $5 when medicare began.
As things now stand, this increase is mandatory because the law requires the deductible to be determined annually according to changes in average per diem hospital costs covered by medicare. Under section 1813 (b) of the Social Security Act, each year the medicare inpatient hospital deductible for the following year is set – in multiples of $4 – at $40 multiplied by the ratio of average per diem inpatient hospital costs, for the previous year compared to the average per diem cost for 1966. For instance, the deductible for 1974 is set in 1973 based upon inpatient hospital rates in 1972.
My amendment would declare a 1-year moratorium on the ever-increasing hospital deductible and coinsurance charges. The amendment requires that the deductible remain at $72 during 1974, thus also freezing coinsurance at current levels. In addition, the amendment modifies the cost increase formula by changing the base year from 1966 to 1972, thus providing that increases from the $72 level would be based on the percentage increase in the average per diem rate for hospital services since 1972. Under the amendment, for example, the deductible and coinsurance for 1975 would be set during 1974 based on hospital cost increases in 1973.
This temporary relief for medicare recipients can easily be borne by the hospital insurance trust fund. The estimated additional cost of the amendment would be $103 million for 1974, but in that year the hospital insurance trust fund is projected to have a surplus of almost $10 billion.
The fund is expected to have increasing surpluses in later years because: First, the hospital insurance fund portion of the payroll tax has been raised from 0.6 percent in 1972 to 1 percent in 1973; second, the amount of wages which are covered by social security, and thus taxed, will go from $10,800 to $12,600 in 1974; and third, the number of employed persons continues to go up, which provides additional revenues. My amendment would not jeopardize the short-term or long term actuarial balance or safety of the trust fund, and would require no further financing.
Finally, there is no policy justification for allowing the medicare deductible and coinsurance to increase. Hearings I have conducted, as chairman of the Subcommittee on Health of the Elderly of the Special Committee on Aging, show that increased "cost-sharing" under medicare would not increase the efficiency of the program, but would merely impose financial hardship on millions of the elderly, and possibly discourage needed preventative health care leading to increased long-run costs.
Mr. President, this amendment is enthusiastically supported by the National Council of Senior Citizens and the National Retired Teachers Association-American Association of Retired Persons. Together they represent almost 9 million aged and aging Americans who are more than a little concerned about escalating medicare charges.
Now is the time to provide at least temporary relief from yet another stiff medicare increase. I urge the Senate to adopt this medicare deductible freeze amendment. I ask unanimous consent that the text of this amendment be reprinted in the RECORD.
There being no objection, the amendment was ordered to be printed in the RECORD, as follows:
AMENDMENT No. 649
At the appropriate place in the bill, insert the following new section:
LIMIT ON MEDICARE INPATIENT HOSPITAL DEDUCTIBLE
(A) by striking out "$40" and inserting in lieu thereof "$72"; and
(B) by striking out "1969" and inserting in lieu thereof "1975".
(2) Section (b) (2) of such Act is amended
(A) by striking out "1968" and inserting in lieu thereof "1974";
(B) by striking out "$40" and inserting in lieu thereof "$72"; and
(C) by striking out "1966" and inserting in lieu thereof "1972".
(b) The Amendments made by subsection (a) shall be effective with respect to services provided after December 31, 1973.
Mr. RIBICOFF. I am cosponsoring with Senator MUSKIE an amendment to freeze at present levels the medicare deductibles and copayments which patients have to pay. Under present medicare law these payments go up annually as the average daily cost of hospital care goes up.
It was recently announced that on January 1, 1974 these deductibles will go up again.
There is no doubt that the cost of hospitalization has increased since medicare was enacted in 1965. But we cannot keep putting heavier cost burdens squarely on the shoulders of the poor, sick elderly members of our population whose incomes are frozen.
The average out-of-pocket payment for Americans aged 65 and over has grown from $234 in 1966 to $276 in 1972, the latest year for which complete statistics are available.
In Connecticut alone over 290,000 older Americans enrolled in medicare would have to pay more for hospital care. This would completely wipe out the benefit of my 5.9-percent social security increase which Congress recently enacted into law.
If this bill is not enacted, medicare patients will have to pay the first $84 of these hospital bills rather than the first $72.
Because of the increase in the hospital deductible present law also requires other cost increases.
Thus, when a medicare beneficiary has a hospital stay of more than 60 days he will be forced to pay $21 a day for the 61st through the 90th day, up from the present $18 per day. If he has a posthospital stay of over 20 days in an extended care facility he will be forced to pay $10.50 per day instead of the present $9. And if a medicare beneficiary ever needs more than 90 days of hospital care, his "lifetime reserves" of 60 days will cost him $42 a day instead of the present $36 per day.
Under our proposal the deductibles would be kept at their present level. That means the 1st day of hospital care will cost $72 instead of $84. The deductible for the 61st to 90th day will cost $18 instead of $21. The deductible for extended care after 20 days will cost $9 instead of $10.50. And the deductible for the medicare lifetime reserve will cost $36 instead of $84.
It is time once and for all to put an end to these additional cost burdens on older Americans who cannot afford to shoulder them.
Our proposal will provide long overdue relief to millions of older Americans.
I ask unanimous consent that certain tables be printed at this point in the RECORD.
There being no objection, the tables were ordered to be printed in the RECORD, as follows:
[Tables omitted]