FLOOR STATEMENT OF SENATOR JOHN McCAIN ON THE FEDERAL EMPLOYEES LONG-TERM CARE INSURANCE ACT OF 1989
Jan 25 1989
Mr. President, today I join my colleague from California, Senator Wilson, in offering the Federal Employees Long-term Care Insurance Act of 1989, legislation to make long-term care insurance available to Federal employees.
Mr. President, sooner or later, virtually every family in America will be confronted with a catastrophic illness. Whether it's a grandparent with Alzheimer's disease, a spouse hit by a stroke, a worker in the prime of life disabled by an accident, a relative stricken with cancer, or a child born with cerebral palsy--the expense for needed care could result in destroying, if not severely taxing, a family's financial security. Catastrophic illness seems to impact most dramatically on three groups: older Americans who face hospital bills which exceed their medicare coverage; those who need expensive, long-term care services; and working Americans who lack adequate health insurance. Such an illness can require treatment or care so costly that many families can only pay by impoverishing themselves.
Last year, this body adopted legislation addressing the first group--older Americans who face hospital bills which exceed their medicare coverage. The Medicare Catastrophic Illness Coverage Act of 1988--which has now been signed into law. The legislation will provide for a cap in the out-of-pocket costs that a Medicare beneficiary can incur during a year for hospital and physician charges, and it provides coverage of out-of-pocket prescription drugs for the first time in medicare's history. In addition, it allows elderly couples--faced with huge nursing home bills--to hang on to more of their resources before Medicaid kicks in, thus avoiding being reduced to poverty as a result of the magnitude of the expenses.
As I communicated with seniors in Arizona about the Medicare Catastrophic Illness Coverage Act I found that, by a 3-to-1 majority, seniors in my State felt that through some of the benefits in the bill would be nice, most of the benefits are not truly catastrophic-related. What's more, most of the benefits are available through the private sector. In doing so, this legislation will significantly increase the premiums that many seniors are responsible for under the medicare program.
The resounding sentiment of Arizona's seniors seemed to be that they would have preferred that Congress address what they saw as the true catastrophic health need seniors face--protection from the financial ravages of long-term care expenses. They are willing to pay for the cost of a new program, but only if it provides coverage of those services which they feel they need. Needless to say, many seniors in my State are upset. They are deeply concerned that the Government has just established a new public program--which, for the most part, duplicates benefits that are currently available through the private sector. What they expected is that the Government would work to make sure that they were able to protect themselves from what is their true catastrophic concern--and not widely available through the private sector--protection from the enormous cost of long-term care services.
Due to a lack of affordable long-term care protection available in the private sector, most are unable to insure themselves and at the point that they need nursing-home services they have to pay for the services out of their pockets. That is, until they have exhausted their resources--at which time they become eligible for Medicaid benefits (or in Arizona's case, the counties--and soon to be AHCCCS). The result is that many end up impoverishing themselves and their spouses, prior to being eligible for public assistance. Included in the Medicare Catastrophic Illness Protection Act was a provision providing spouses with some measure of protection. This is, indeed, a true catastrophic benefit--and will be helpful to many Americans.
The numbers are alarming, and perhaps best tell the story.
Americans spend about $38 billion a year on nursing home care. Seventy percent of all single people admitted to a nursing home go broke within 3 months; close to 90 percent of single older Americans will be impoverished within a year; and 50 percent of all couples are impoverished within 6 months after one spouse is admitted.
Over 60 percent of American families have already had direct experience with the need for protection from long-term care expenses. Millions of Americans suffer from chronic conditions that limit their ability to function on their own. Some need help preparing meals. Others need assistance in feeding themselves, bathing, getting dressed, or just getting around. Most of the help they need is nonmedical--referred to as custodial care. It is little wonder that the need for protection from the cost of such care is such a concern--with the cost of a year's nursing home stay ranging from $20 to $35,000. Many of the needed services can also be provided at home. Delivery of such services at home is often the less costly, and is better for the family and individual in need of care. But, like services provided in the nursing home, there really is not much protection available from the cost of these services--unless the individual is eligible for Medicaid, or AHCCCS is in Arizona's case.
It is my belief that Congress must work hard to tackle, this session, the need to provide older Americans with protection from the expenses of long-term care services. But, this task is not going to be easy.
Give the need to exercise fiscal restraint--in light of the Federal budget deficits, and the increased financial burden that will be placed on medicare beneficiaries as a result of the Medicare Catastrophic Illness Coverage Age--I believe the most responsible approach would be the development of a public/private partnership. Addressing the long-term care coverage issue requires the involvement of all segments of our society. We must develop a partnership--if you will--among individuals, families, private organizations and all levels of government.
Based on my discussions with Arizonans, I believe a responsible public/private partnership approach to dealing with the need for enhanced long-term care coverage is what's needed. Certainly, any approach with regard to providing long-term care coverage must include both services provided in nursing homes and those provided at home.
While, we probably will not get there overnight, I believe that forging a private/public partnership approach to meeting the long-term care coverage needs of older Americans will assure greatest success.
This legislation, which I am offering today with Senator Wilson, is one step in that direction. It would permit Federal employees, who have reached the age of 50 and particated in the life insurance program [FEGLI] for 10 years, to convert their life insurance to long term care insurance. Eligibility for participation would not be effected at all by the health status of the individual. The process of determining which company would actually offer the policy would be handled through a competitive bidding process. And, because there is a cost difference between life insurance and long-term care insurance, employees would have to pay nominal premiums in addition to what they already pay for their life insurance benefit. This change will not result in new cost to the Federal Government, it will merely expand the insurance options available to Federal employees.
I believe this legislation, which was first offered at the end of last session, represents a responsible approach to providing access to long-term care protection for one group--Federal employees. For that, Senator Wilson and those at the Office of Personnel Management are to be commended.
But, Mr. President, we must not stop here. Building a comprehensive, responsible, approach to long-term care is like piecing together a puzzle. With a puzzle, each piece is an integral component--and without all the pieces, a puzzle is not complete. This legislation is one of the pieces to that puzzle.
Last year, I offered legislation designed to make it possible for workers to transfer their pension benefits from employer to employer as they change jobs. One of the important components of this legislation, S. 1349, the Pension Portability Act--and relevant to the attempt to develop a comprehensive long-term care policy--is a provision making it possible for individuals in the private sector to tap their pension benefits to help meet long-term care expenses. Mr. President, I believe this, too, is a piece to the puzzle, and I will be offering it again this session.
Providing our Nation's citizens with protection from the financial ravages of a long-term care needs in a responsible way will only be accomplished as a result of a lot of individuals working together to creatively craft the various pieces to the puzzle. While there are obstacles, such as our Nation's budget deficits, I believe we can be successful.
This legislation, which we are offering today, is evidence of the fact that we can be successful. If enacted, this legislation will assist Federal employees in obtaining long-term care coverage. And, due to the large pool of individuals that will be participating, the cost to the individual will be lower under this approach than if they were to purchase the plan on the open market. The cost to the Federal Government will be negligible, because the Federal Government's role is not the funding of a new government program. It's role will merely be that of coordinating, and overseeing, a new program. In my opinion, this proposal is a responsible piece to the puzzle, I am pleased to join my distinguished colleague from California in offering this legislation.
I hope that my colleagues will take a hard look at this proposal. And, I look forward to timely consideration of this measure during the 101st Congress.