Senator BRADLEY. Let me thank all three of you for your moving testimony. The first panel were the caregivers and the recipients of respite care, and you all are the providers.

I just want to ask one question, and that may be best addressed to Mary Fran McFadden.

How many facilities do you serve in Ocean County through the Respite Care Program?

Ms. MCFADDEN. The funding that we received allows us to provide service to a minimum of 92 people.

Senator BRADLEY. Ninety-two. What would you say the unmet need is?

Ms. MCFADDEN. I think I could easily say 10 times that much. Senator BRADLEY. Ten times? So it is at least a thousand. Well, I think that that indicates one of the major issues.

Also, on home care, right now Medicare covers 21 days of home care, and that's woefully insufficient. We hope we will be able to increase that, maybe double it. Your stories, I think, will be an important part of our ability to do that.

Any time there is a human need that is being met, but perhaps only up to 10 percent of the human need, you are not meeting the human need. So each of you has given eloquent testimony-Mary Fran McFadden-to the need for reauthorizing the New Jersey Respite Care Program, at least, and then going to a National Respite Care Program; Many Jane Kegelman, to the importance of adult day care; and Barbara Vandenberge, to an eloquent and moving statement, I think, on the importance of home care.

I want to thank all three of you very much for sharing your views with the committee.

I noticed you had your microphone ready, Ms. Vandenberge. Did you want to say something?

Ms. VANDENBERGE. Just simply that I think everyone would agree with me at least I hope they would-that one of the problems in the past has been in the Government's effort to make our health care provision more economical. Many, many times belts have been tightened, but what has unfortunately been neglected, except by you, Senator Bradley, is the idea that home care is not part of the problem. It is, in fact, the solution to the problem. Only by giving it the recognition and the support that it deserves will we ever really be able to adequately meet the health care needs of our society.

Senator BRADLEY. Thank you very much for your last comment, with which I obviously agree.

Let me thank all three of you for your informative and powerful testimony.

Our last panel today moves from the beneficiaries and caregivers and the providers to those other interested parties. We are very fortunate today to have testifying Alan J. Gibbs, who is the Commissioner of Human Services for the State of New Jersey and someone who has a very large responsibility.

Welcome to the committee, Mr. Gibbs, and congratulations on your new job.

Mr. GIBBS. Thank you, Senator. I appreciate it.

Senator BRADLEY. And then we have Dudley Lesser, who is the VOTE State Coordinator for the New Jersey Chapter of the American Association of Retired Persons.

Mr. Lesser, welcome to the committee.

And Ruth Boer, who is the Past President of the Home Health Assembly.

Commissioner Gibbs, the microphone is yours. Thank you again for taking the time to come to this hearing. I think it indicates your own personal interest. I know that you are very busy. You have a lot to administer, and I think it means a lot to the senior citizens of New Jersey and to me personally that you would come to our hearing today. Thank you.

STATEMENT OF ALAN J. GIBBS, COMMISSIONER OF HUMAN SERVICES, STATE OF NEW JERSEY

Mr. GIBBS. Thank you, Senator. I am delighted to be here.

I am pleased to be here to testify about a real success story about human services in New Jersey, and that success story simply is the Respite Care Program. As a result of this program we are finding that families are better able to care for their elderly and disabled relatives, that institutionalization is being prevented or delayed, that family caregivers themselves are able to seek the medical care that they need, knowing that their loved ones are being cared for, that caregivers are experiencing lower stress levels, that married couples and families report that their relationships with each other have improved because they are receiving help to care for their elderly or disabled relatives.

We have served 1,900 families statewide in this program, and there are waiting lists in one quarter of our counties. Each month we serve about 1,200 families across the State.

Clearly, respite care is a much-needed program, and that's not just my opinion. The authors of the current best-seller, Megatrends 2000, cite elder care as one of the major directions of the 1990's. They report that almost one-third of all working adults are responsible for providing some care for an elderly person. In New Jersey, that's about 1.2 million people.

Thanks to your help, Senator, we have been one of the few States that have been able to begin to meet this need for services, and we are the only State that is authorized to run this demonstration project. Because of your leadership, New Jersey ranks ahead of the Nation in providing respite care services.

We strongly support your introducing legislation to extend this Federal demonstration that expires this year, and to authorize another $2 million in Federal funds to continue to provide these critical services. As tight as the State budget is, Governor Florio has seen to it that the State match is available in the budget for next year.

Respite care is but one of several community-based services that New Jersey provides to the elderly and disabled. We also provide home health care, medical day care, and personal care assistance services. The total annual cost of these services is estimated at $87 million.

This year we were able to expand one of our other model waivers as a result of legislation you sponsored to increase the limit on the number of persons who could be served. That program allows mostly children to be cared for in the home rather than in the more costly hospital.

We are learning what works and what doesn't work in reducing the need for institutional care. Our system can expand to provide these services as an alternative to institutionalization, provided that there is sufficient Federal support. Quite simply, alternatives to institutional care usually cost less, are more humane, and more often, more effective than a hospital or nursing home. While the Federal Government provides almost unlimited funds for institutional care, many of the programs offering alternative care are capped. These programs include the Model Waiver Program, that I mentioned before; the AIDS Waiver; and the Community-Based Waivers for the Elderly and Disabled.

We have all the waivers we need. What we want is for the Federal Government to recognize that community-based care is not a luxury. It is a necessity, and it must become more available.

Your bill, the Medicare Home Benefits Improvement Act of 1990, would move the Nation further in the right direction. It would provide an additional 80 hours of in-home respite care, increasing nursing and homemaker/home health aide services, expand hospice benefits, and provide home intravenous drug therapy. We know from our experiences in New Jersey that these services will result in fewer families having to deplete their savings in order to make their loved ones eligible for nursing homes. It will also foster greater independence for the elderly and disabled.

It would do all of this as an entitlement under Medicare. It would not require the State to apply for lengthy waiver applications or appropriate additional State funds. It would not place a limit on how many persons could receive those services.

In 1988, home health care represented only 2 percent of the Medicare budget. Your bill would begin to more realistically address the need for community-based care nationwide.

Now, we will face some initial costs to expand community-based care while we reduce institutional care. Let me offer two suggestions about how we might find the resources to assume these costs. First, the Federal Government must allow States the flexibility they need to make the Medicaid Program more efficient, while maintaining quality care. The Medicaid budget in New Jersey, which is currently about $2 billion a year, is escalating at a rapid rate that is robbing us of our ability to develop new initiatives for other human services programs. Greater cost containment is possible in this program, but we need to help to cut through the red tape in Washington. For example, we need greater emphasis at the Federal level for managed medical care, such as through health maintenance organizations. Thanks to your legislative efforts, the Garden State Health Plan is now the first State-run HMO in the Nation recognized by the Federal Government.

Second, we need to set some new priorities nationally. The recent dramatic changes in Eastern Europe and the USSR may lead to significant arms reductions, enabling us to direct more of our

scarce resources to address major national needs, such as health

care.

In conclusion, Senator, it has been said that a journey of a thousand miles begins with but one step. Because of your vision and leadership, that step has been taken in New Jersey. We look forward to working with you to complete this journey, which will end only when every elderly and disabled person can receive the care they need with dignity, compassion, and hope.

Thank you.

Senator BRADLEY. Thank you very much, Commissioner, for coming to the committee today. We will go through the rest of the panel and then I will ask a few questions. I appreciate your support of the bills that you have enumerated.

Mr. Lesser.

STATEMENT OF DUDLEY LESSER, NEW JERSEY STATE COORDINATOR FOR AARP/VOTE, AMERICAN ASSOCIATION OF RETIRED PERSONS

Mr. LESSER. I am pleased to be here this afternoon on behalf of the American Association of Retired Persons to discuss the need for respite care and the other important benefits included in the Medicare Home Benefits Improvements Act of 1990.

AARP commends you, Senator Bradley, for your efforts to focus attention on the continuing need for Medicare coverage of longterm care services. In this regard, we applaud your leadership in the development and enactment of a respite care benefit as part of the Medicare Catastrophic Coverage legislation. It is our hope that with your help we will see the reinstatement of a respite benefit. My remarks today center on three areas: one, the effect of rising health care costs on older Americans' ability to obtain needed health care; two, the importance of the four new and expanded benefits included in S. 2246-respite care, home IV therapy, and expanded coverage of both home health care and hospice care; and three, financing these proposed new benefits.

To understand fully how important Medicare coverage of these benefits is, it is necessary to look how increasing health care costs have widened the gaps in Medicare's protection of older beneficiaries.

When it was created in 1965, Medicare dramatically increased access to acute health care services and reduced out-of-pocket medical expenses for most elderly people. But over the years, rising health care costs have gradually widened the gaps in Medicare's protection. Beneficiaries are faced with higher deductibles and coinsurance for services covered by Medicare, as well as increased costs for necessary services not currently covered by the program. In many cases these escalating costs have created insurmountable financial barriers to essential medical services.

Coverage of the services included in your legislation is a small but important step toward closing these gaps in Medicare protection. Let me briefly explain why.

A Medicare respite benefit, although limited in nature, is an important step toward long-term care and is the type of support service that caregivers most frequently want and need, as we heard

today. Right now, fewer than one in five older Americans who need long-term care are in nursing homes. Most of these people remain in their communities and depend on families and friends for their care. The burdens on those who provide informal long-term care, both financial and emotional, are tremendous.

The ability to take a needed break from caregiving, secure in the knowledge that a loved one is well-attended, will significantly reduce the burden on these caregivers.

Your efforts to extend the New Jersey Respite Care Program are to be commended. From a policy perspective, experience with a small-scale respite benefit can provide critical information which will be essential to the future development of a more comprehensive long-term benefit.

While demonstration projects like the one here in New Jersey are extremely valuable, AARP believes that respite care is needed on a much broader scale so that caregivers nationwide can enjoy the important benefits currently found in the Garden State.

The extension and clarification of the Medicare home health care benefit in S. 2246 is also an important step toward simplifying Medicare. Current law limits the scope and accessability of Medicare home health coverage. This limitation has stemmed both from strict eligibility requirements and inconsistency in the interpretation of the definition of "intermittent care." This legislation helps to clarify the definition of intermittent care and, in doing so, ensures that beneficiaries will now have a greater access to the home care that they most need.

AARP is also pleased that S. 2246 provides Medicare coverage of home intravenous drug therapy. While this expanded Medicare coverage of prescription drugs is very narrowly defined, it is a step in the right direction. Prescription drug prices continue to increase. Between 1980 and 1989, prescription drug prices rose by 128 percent, compared with an increase in the overall Consumer Price Index of just over 50 percent. Medicare coverage of home IV therapy will begin to ease this burden for some older Americans by enabling beneficiaries to receive treatment that might be more costeffectively provided in the home, the setting they prefer.

Finally, the expansion of the Medicare hospice benefit beyond the current 210-day limit will ensure that terminally ill Medicare beneficiaries can continue this unique form of care without interruption and without loss of self-respect or dignity.

S. 2246 proposes to finance these new and expanded benefits through an increase in the monthly Part B premium paid by beneficiaries, estimated to be from $0.55 the first year, and rising to $1.57 in the fifth year. It is the intent of the bill to generate enough revenue to cover the estimated cost of the four new and expanded Medicare benefits.

Beneficiary-only financing is not what AARP would want to see used for future benefit expansion. The Association views the additional financing of Medicare Part B, which spreads the costs of the program across the entire population, as the fundamental tenet of the Medicare Program, which should not be breached lightly. Any revenue shortfall which might occur as the result of such financing should be offset by income from such sources as increased tobacco taxes, or inclusion of all State and local workers in Medicare.