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COMMITTEE PRINT

RISING OUT-OF-POCKET HEALTH CARE

COSTS FOR OLDER AMERICANS: HOW FAR
CAN CONSUMERS STRETCH THEIR

THEIR RE-
SOURCES?

A BRIEFING

BY THE

SUBCOMMITTEE ON HOUSING AND CONSUMER

INTERESTS

OF THE

SELECT COMMITTEE ON AGING
HOUSE OF REPRESENTATIVES

ONE HUNDRED FIRST CONGRESS

SECOND SESSION

Gianford Law Library

GPO Depository

MAY 8 1991

OCTOBER 29, 1990, TOMS RIVER, NJ

Comm. Pub. No. 102-797

Printed for the use of the Select Committee on Aging
This document has been printed for informational purposes only. It does

not represent either findings or recommendations adopted by this Com-
mittee.

U.S. GOVERNMENT PRINTING OFFICE

37-5285

WASHINGTON : 1991

For sale by the Superintendent of Documents, Congressional Sales Office

U.S. Government Printing Office, Washington, DC 20402

n

SELECT COMMITTEE ON AGING

EDWARD R. ROYBAL, California, Chairman THOMAS J. DOWNEY, New York

MATTHEW J. RINALDO, New Jersey, HAROLD E. FORD, Tennessee

Ranking Minority Member WILLIAM J. HUGHES, New Jersey

JOHN PAUL HAMMERSCHMIDT, Arkansas MARILYN LLOYD, Tennessee

RALPH REGULA, Ohio MARY ROSE OAKAR, Ohio

NORMAN D. SHUMWAY, California THOMAS A. LUKEN, Ohio

OLYMPIA J. SNOWE, Maine BEVERLY B. BYRON, Maryland

THOMAS J. TAUKE, Iowa HENRY A. WAXMAN, California

JIM COURTER, New Jersey MIKE SYNAR, Oklahoma

CLAUDINE SCHNEIDER, Rhode Island BUTLER DERRICK, South Carolina

THOMAS J. RIDGE, Pennsylvania BRUCE F. VENTO, Minnesota

CHRISTOPHER H. SMITH, New Jersey BARNEY FRANK, Massachusetts

SHERWOOD L. BOEHLERT, New York TOM LANTOS, California

JIM SAXTON, New Jersey RON WYDEN, Oregon

HELEN DELICH BENTLEY, Maryland GEO. W. CROCKETT, JR., Michigan

JIM LIGHTFOOT, Iowa IKE SKELTON, Missouri

HARRIS W. FAWELL, Illinois DENNIS M. HERTEL, Michigan

JAN MEYERS, Kansas ROBERT A. BORSKI, Pennsylvania

BEN BLAZ, Guam BEN ERDREICH, Alabama

PAUL B. HENRY, Michigan NORMAN SISISKY, Virginia

BILL SCHUETTE, Michigan ROBERT E. WISE, JR., West Virginia

FLOYD SPENCE, South Carolina BILL RICHARDSON, New Mexico

WILLIAM F. CLINGER, JR., Pennsylvania HAROLD L. VOLKMER, Missouri

CONSTANCE A. MORELLA, Maryland BART GORDON, Tennessee

PATRICIA F. SAIKI, Hawaii THOMAS J. MANTON, New York

JOHN EDWARD PORTER, Illinois
RICHARD H. STALLINGS, Idaho

JOHN J. DUNCAN, JR., Tennessee
JAMES MCCLURE CLARKE, North Carolina CLIFF STEARNS, Florida
JOSEPH P. KENNEDY II, Massachusetts CRAIG T. JAMES, Florida
LOUISE M. SLAUGHTER, New York
JAMES H. BILBRAY, Nevada
JIM JONTZ, Indiana
JERRY F. COSTELLO, Illinois
HARLEY O. STAGGERS, JR., West Virginia
FRANK PALLONE, JR., New Jersey
JOLENE UNSOELD, Washington
PETER A. DEFAZIO, Oregon
JOHN LEWIS, Georgia
WAYNE OWENS, Utah

RICHARD A. VELOZ, M.P.H., J.D., Staff Director

PAUL SCHLEGEL, Minority Staff Director

SUBCOMMITTEE ON HOUSING AND CONSUMER INTERESTS

MARILYN LLOYD, Tennessee, Chairman BEVERLY B. BYRON, Maryland

JIM COURTER, New Jersey, TOM LANTOS, California

Ranking Minority Member HAROLD L. VOLKMER, Missouri

JOHN PAUL HAMMERSCHMIDT, Arkansas BART GORDON, Tennessee

THOMAS J. RIDGE, Pennsylvania THOMAS J. MANTON, New York

HARRIS W. FAWELL, Illinois JAMES H. BILBRAY, Nevada

BILL SCHUETTE, Michigan FRANK PALLONE, JR., New Jersey

PATRICIA F. SAIKI, Hawaii JOLENE UNSOELD, Washington

JOHN J. DUNCAN, JR., Tennessee EDWARD R. ROYBAL, California,

CRAIG T. JAMES, Florida (Ex Officio)

MATTHEW J. RINALDO, New Jersey,

(Ex Officio) BRIAN W. LINDBERG, Staff Director (VACANT), Minority Staff Director

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RISING OUT-OF-POCKET HEALTH CARE COSTS FOR OLDER AMERICANS: HOW FAR CAN CONSUMERS STRETCH THEIR RESOURCES?

MONDAY, OCTOBER 29, 1990

U.S. HOUSE OF REPRESENTATIVES,

SELECT COMMITTEE ON AGING,
SUBCOMMITTEE ON HOUSING AND CONSUMER INTERESTS,

Washington, DC. The subcommittee met, pursuant to notice, at 10:54 a.m., at the Holiday City Phase II Clubhouse, 1846 Yorktown Boulevard, Toms River, NJ, Hon. Frank Pallone, Jr. (acting chairman of the subcommittee) presiding.

Members present: Representative Pallone.

Staff present: Brian Lindberg, Staff Director, and Molly Brault, Professional Staff, Subcommittee on Housing and Consumer Interests. Jim McCann, District Representative, Congressman Pallone's Toms River Congressional District.

STATEMENT OF REPRESENTATIVE FRANK PALLONE, JR. Mr. PALLONE. We are about to begin. I want to apologize that I was late today. I guess many of you probably know that Congress has been in session now, I guess, about 3 weeks straight, including over the weekend, and we've finally resolved the budget, I guess it was yesterday in the early morning hours, Sunday morning, so things have been a little hectic.

But one of the reasons that we wanted to have this hearing today was basically because of what has been happening in Washington with regard to the Federal budget and how that might affect seniors, particularly with regard to the Medicare issue.

Really, the whole purpose of this hearing today is to try to pinpoint how far we can go with Medicare in terms of seniors' ability to pay for services and how far we can stretch the program with cutbacks that have been proposed and still have a viable Medicare or health care program for seniors.

Now, I'm sure you know that during the recent debate over the budget, Medicare was targeted as a primary source of deficit reduction. And, as you may recall, the original budget deficit reduction package that was negotiated by congressional leaders and President Bush relied heavily on cuts in the Medicare program, some $60 billion-over half of all the entitlement cuts.

Under that original plan, Medicare recipients would be required to pay 30 percent of the cost of the Medicare Part B program—the present premium is based on 25 percent of the program's cost—and

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