Representing North Carolina’s Ninth District                                                                        

Very early last Saturday morning, Members of the House of Representatives took what will probably be one of the most important votes of our careers.  For the first time since the program’s inception in 1965, this Congress passed a reform bill to take Medicare into the 21^st Century.

I voted for the bill because, among other things, I felt if we didn’t do anything we would be in much worse shape.  As everyone knows, the Medicare program is going bankrupt.  Unless the program is modernized as the baby-boom generation retires, the combination of increasing costs and the growing number of beneficiaries will cause the program to collapse under its own weight.

The most fundamental change to the program will be the addition of a prescription drug benefit.  This is a voluntary program.  Seniors who are happy with their existing coverage can keep it and do not have to participate in the new Medicare prescription drug plan.  For retirees who do choose to participate, savings of 15%-25% will be felt almost immediately through a prescription drug discount card that will be available in 2004 and 2005.  The entire drug benefit begins in 2006. 

This bill also offers more choices for cost-effective, free-market health care delivery.  Beginning in 2010, Medicare will be required to compete with private insurers in six demonstration projects nationwide.  This is a limited, but necessary, free-market reform that will drive down taxpayer costs through competition.  Many are concerned that since Congress doesn’t have a stellar track record with turning demo projects into national policy, it will get buried with the numerous other demo projects that have been attempted over the years.  It doesn’t have to be that way.  When I was Mayor of Charlotte in 1988, we were one of 8 cities nationwide to participate in a welfare-to-work demonstration project.  We successfully ran a program that moved people out of public housing and into home ownership and watched as it became one of the cornerstones of the federal Welfare-to-Work law of 1996.  If people are committed, demos can work.

I’ve heard from some seniors who are concerned that their employer will drop them from their plan and force them into the government-run Medicare program.  Two-thirds of seniors currently have drug coverage through an employer-sponsored plan.  We need to keep it that way.  That’s why this bill contains incentives for employers to continue providing retirees with coverage.  Employers will be allowed to fold into their current retiree plans the new features of Medicare to make it more affordable for them to offer coverage.  Without it, 12 million retirees would be at risk of losing coverage.

One of my biggest goals from the beginning was to avoid implementing a massive, no-end-in-sight entitlement program.  I worked extensively on a cost containment provision that would kick in when Medicare spending exceeds 45% of the general revenue.  Both Presidential and Congressional action, by law, would be required.  We have never before attempted anything remotely like this, so I was pleased when I succeeded in getting this provision included in the final bill.  It should go a long way towards reigning in spiraling costs.

Another necessary provision was the establishment of Health Savings Accounts (HSA).  HSA’s will allow individuals to have control over their own health care dollars by allowing all Americans – regardless of income level – to save money for their health care needs tax-free.  Employers can also contribute for their employees.  This will allow our children and grandchildren to have control over their own health care.

I’m also pleased that this bill switches the focus of Medicare from reactive disease treatment to proactive disease prevention.  21^st Century medicine can prevent, preempt and predict illnesses through advanced screenings and innovative tests.  For example, under the plan, a senior with diabetes will be more likely to control the illness—and  the costs associated with it—by taking Glucophage (monthly cost of about $30) rather than waiting for a renal kidney failure hospitalization (cost: $6,700).

This bill is not perfect, but it does have some good things in it that will go a long way towards helping seniors.   Seniors need help now -- and future generations need reform.

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