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The Solutions

The Commission strongly believes that the logical conclusion drawn from the evidence presented is that a federal system of universal health care is necessary. Such a system would most efficiently unify cost containment and full access. If the federal government fails to acl, the Commission recommends that New Jersey pursue its own universal systems in the future. The Commission believes that the recommendations that are made in this Report will significantly address issues of access, quality, cost containment, and the affordability and availability of health insurance for the majority of those who are currently uninsured.

There are no perfect solutions.

There are those who will say that we have not reached far enough, and others who will say our recommendations go too far. With an issue as complex as this one, that is to be expecied.

This Report contains over 90 ręcommendations that are specific, targeled, and implementable. Together they represent a comprehensive rather than piecemeal approach to the growing health care crisis in New Jersey. However, much of the Commission's work may be lost in the vigorpus debate that is likely to be generaled by the recommendations surrounding the reform of the Uncompensated Care Trust Fund. This would be unfortunate.

This Nation is entering a period of economic uncertainty. The slowing down of the economy is evident. This economic pressure represents a compelling reason to address the oppressive costs of health care without substantial delay.

The data regarding health care costs, most notably the Uncompensated Care Trust Fund, is lacking in several areas, flawed in others. A year from now, we will have better statistics. Are these beller statistics likely to provide us with a major solution for which no money is needed or a series of choices quite similar, if not identical to those we face today?

The Commission concluded that the evidence dictated that this crisis should be addressed as soon as possible in as comprehensive a fashion as possible. It does not make these recommendations unaware that they will, and should, generale debate. Through this debate, an evaluation of this Plan, and the offering of Skerative approaches and modifications, we, in New Jersey, can reach the consensus necessary to move forward together to resolve this crisis.

The Commission, therefore, recommends the implementation of the following comprehensive 10 point plan.


Reform hospital sate setting to set one fair, adequate, but final, rate per year.
Patients and insurers alike are harmed by the current system, that allows wide
swings of rates during each year.


Reform the health planning process. Only facilities and services that are needed
should be approved for construction, where they are needed. The containment of
capital expenditures, through a yearly cap on approved projects, will also serve
to reduce future operating costs by eliminating the construction or continuance
of unnecessary facilities.


Instituic insurance reform to require community rating, limit pre-existing illness
cxclusion, and encourage primary care and wellness coverage.


Expand Medicaid to the limits allowed by federal law, lo permii full utilization of fedcral dollars for health care and enroll all Medicaid palicnts into a managed carc system.


Encourage managed care for all health benefits plans, to improve "well care" and
reduce the cost of "sick care."



Split Blue Cross and Blue Shield to create a large-group endry, and a new entity
dedicated to serving the public purpose of making insurance affordable to
individuals and small businesses...


Eliminate the existing tax on hospital bills, now approximately 17 • 19 percent,
which adds hundred of millions of dollars to hospital bills each year,


lasciwic a broad-based employer tax (1 percent on the first $14,400) of each
employee's wages. Charge employers who do not provide health insurance at a
rate of $1,000 per employee.


Apply the funds achieved through employer taxes and penalties toward providing
residual uncompensated care and insurance subsidies.


Increase the opportunities for individuals and small businesses to obtain
insurance by creating a low-cost, basic managed care produchl available either
with or without a needs-based subsidy. Create more opportunity for coverage
through a Medicaid buy-in program and the new Blue Cross public purpose"

These points are fully described in this Report. Al its essence, the recommendation of the Commission is for uniting the disparaic pieces of the health care delivery puzzle around the goals of cost containment and appropriate access to care for all. We Dow provide care for all in New Jersey in an inefficient, haphazard and fragmented way. If some tough choices are made, bele care can be provided in a more cosi-effective, equitably financed system.

Mr. PALLONE. Thank you, Mr. Riordan.

The next and last speaker of our panel is Mr. Frank Laracy, who is from Toms River, and he is President of the United Auto Workers Shore Council of Retirees, of which we have quite a few in Ocean County, and he's representing the National Council of Senior Citizens.

Mr. Laracy.



Mr. LARACY. Thank you, Mr. Congressman. I thank you for this opportunity. I appreciate the invitation to spend this time with you this morning. However, I must apologize for one thing your letter to me inviting me to this panel discussion was only received last Friday, and in that letter it says "Please provide an unstapled copy of your testimony for review.” I am unable to produce that for you.

I also have noticed that most of the previous speakers have given you enough details and information to keep you busy for quite a while.

I don't have those available right at the moment, but I just want to go over the problems of the elderly. You know, the elderly are on what's known as fixed incomes. When most people retire, they receive a pension and that pension remains constant for the rest of their lives. It never keeps up with the cost of living, even though we do receive Social Security increases each year; they are more than eaten up by the increase in the Medicare premiums.

So we are confronted almost daily with cost of living increases for food, for gas, for lawyers, for real estate taxes and it gets a little bit frightening after a while when you're on a fixed income.

We now find that there are so many cases, such as panel number one that was here today—they all have problems that will eventually lead them to give up any plans for the future they may have had earlier because sickness is going to eat up all their income. They may even have to, on occasion, apply for Medicaid, meaning giving up all their insurance, their Social Security, possibly homes at times and it's a frightening thought for them.

You know, we have bills before the legislature in Trenton; we have them being considered in Washington but very few people realize the difficulty in getting any progress in health care coverage.

Let me just for one moment go back to the beginning of health care coverage, which very few people are familiar with in this country.

I went to work for the Ford Motor Company in 1930 and for the next 16 years, there was no such thing as coverage for health care. We had no Blue Cross. There was nothing. Unions came into being and in 1947, we felt it was time that we had some kind of group coverage.

The Chrysler Corporation workers struck for 105 days just to establish the principle of Blue Cross coverage or any kind of private health care coverage. It took us 105 days of strike to get just the company to check out the premium from our pay for group coverage. The company resisted because they maintained that once they gave in to recognizing Blue Cross or any other private plan, we would eventually ask them to pay for the cost of it. And they were right because we did.

Two years later, we made the same proposal and they agreed eventually, after a 23-day strike, to pay half of the premium. Two years later, Ford Motor Company workers struck for 21 days and were able to win concession from the company to the effect that they would pay the entire cost of coverage.

The coverage in those days was not very complete and eventually we went to work for a Medicare program. It took us over 5 years of heavy lobbying and meetings all over the Nation. We finally got Medicare in 1965.

Shortly after that, we realized that that was not the answer to complete coverage and those who testified here earlier at this late date, 1990, give testimony to the fact that something has to be done to give protection to elderly people in this country.

We have been fighting for universal health care coverage through Washington for any number of years now. We go down, we lobby once a year when we have a legislative convention. We lobby with Congressmen, Senators and it's very discouraging in talking to some Senators and Congressmen because we know as long as they're alive, they will not support a universal program such as this. We have many friends in Washington but unfortunately not enough.

So we are going to keep fighting for universal health care coverage. I'm glad to hear Mr. Riordan indicate he's been doing the same thing for years. And there are many other groups. The National Council of Senior Citizens was formed in the early 1960s for the sole purpose of fighting for Medicare. The same organization is fighting today for a universal health care program.

And it's amazing to me that there are only two nations on the face of the Earth that do not have universal health care, the United States and South Africa. We're in very poor company in that respect.

But we are going to keep working for that. We hope someday to accomplish it. Right now, we have two issues with the State. We're trying to get the Medicare assignment legislation which Mr. Riordan has already spoken about. You know, several States have that. It means that when you go to a doctor that he must accept the reasonable payment which Medicare will make as payment in full. He or she will not have to make any additional payments. That's been in the works for 2 years and it's going to be-we're going to start all over again next year when the legislature returns to try and see if we can't get some relief there.

The other issue we're trying to accomplish for seniors is the home health care for older citizens. That also there are two bills in Trenton on that, the senior bill 371 and the assembly 2937. We have been trying to get some action on that and it's going to take a while before we accomplish it. But we're not going to give up.

Now, most everyone-and I know you're very familiar with the universal health care bills that have been submitted. They would guarantee-especially those that spoke on panel one today—they would not have the problems they have if we had a universal health care bill. And it would mean that we would be able towe

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senior citizens would be able to plan and enjoy our future years by not having to worry about medical expenses being drained from us.

And we're going to pursue that, Mr. Chairman, we hope that someday you'll have the opportunity to vote for that bill and I know you will. Thank you very much for the time. [Materials of National Council of Senior Citizens follow:]

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