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Reed talks to Chamber about Medicare

June 6, 2011

LINCOLN — If Republican plans to change Medicare from an entitlement to a voucher or “premium support” system are successful, “it will be harder and harder for seniors to get health insurance,” Sen. Jack Reed told the Northern Rhode Island Chamber of Commerce Monday.
Reed harkened back to the early 1960s, before the Medicare law was passed, telling the business group that, “when you would go to a friend’s house and you would see at least one grandparent in the front room on a hospital bed, getting health care.” That is what health care was like for senior citizens back then, he said.
“Ask yourself,” Reed told the business group, “particularly as the American population ages, how some people, many people, I would argue most people, are going to afford health care when they get to be 70, 75, 80 years old.”
Medicare responds to what Reed called “a market failure. The market does not provide coverage for these people.”
When he took questions, Reed was immediately challenged by Peter Adams, owner of Ocean State Printers in Pawtucket, who was advocating for smaller government and lower taxes.
“I would like my government to spend within its means to collect taxes,” Adams told the senator. “I would like the government to stop taxing me, period. I am done with that, senator, I am taxed to death. I don’t want to pay any more taxes in relation to the amount of money I have. I don’t want the government coming up with more ways to tax me, locally, the state and the federal government. I would like the federal government and the state to live within their means, simple as that. Senator, I told you that 20 years ago, I told you that about seven years ago. This is the third time I’ve had to tell you. I’m done with bigger government.
Reed used Medicare to illustrate the question of what the size of government should be, noting that Republicans want to end Medicare as a way to shrink government.
“Let’s shift it away from the government, we’ll just give an $8,000, they suggest by 2022, voucher.
“The question is,” Reed said, “what do the American people want government to do? Personal responsibility is an important concept, but when you get to be 75-years-old and you have health care problems, you will not get private insurance. And you could be the most accountable person in the world; you could have worked every day of your life, you’re not going to get it.”
Asked afterwards if he was satisfied with Reed’s answer to his question, Adams said, “No, not at all. He was obtuse and he tries to scare people with Medicare. OK, you need Medicare, but don’t throw that red herring out every time someone asks you shrink the size of government. He also said something else that’s not right, with regard to the entrepreneurial spirit. He wants to tax the profits so that you can’t re-invest.”
Adams didn’t like Reed’s ideas on taxing major corporations.
“He mentioned Exxon, who made hundreds of billions of dollars, do you know how many billions they paid on taxes on employees’ payroll and everything they did and everything they bought? They paid billions and billions to operate, now you want to tax the little bit they have left?”
Reed, Adams said, “the senator is an expert on foreign policy and he’s very engaged on many things and he’s very, very smart. But he doesn’t know jack about business at all.”
After the speech, Reed acknowledged, “we do have to do something” about Medicare, which experts say is destined to run out of money decades down the road if changes are not made. “And we have already taken steps on health care reform to provide, within the context of Medicare, more preventive care. We are also looking at ways going forward to reduce the cost of Medicare.
“One of the problems with the Republican proposal,” the senior senator said, “is just shifts the cost to individuals, it doesn’t address fundamental cost increases. If we don’t deal with the cost increases, just given the number of seniors, the demographics, we’ll never be able to stabilize that budget.
“I hope what is going to happen is a more conscientious and thoughtful approach to ways we can reduce cost without affecting access to care for seniors,” he said. “That’s the challenge.
Reed suggested that Medicare has been part of the American political landscape for so long now that people have planned their lives based on it being there for them when they reach 65 years of age.
“I don’t know anybody who is in their 50s at least, individual workers, small business men and women who don’t assume they are going to have access to a good Medicare plan. That’s been the history of the country since 1965 and they have planned since they were in their 20s, 30s and 40s, to put money aside for retirement,” Reed explained, “but they weren’t putting aside the extra hundreds of thousands you would need to buy private health insurance. So that would be a huge shock.”
Besides that, he said, just given the natural aging process, “insurance companies will not write insurance on you. So what do you do?” That means people would have to go on Medicaid, he added, which is also the target of cuts.
“So it’s tough stuff,” Reed concluded.

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