Health care reform


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By Chuck Hagel

The 2008 American presidential election flows into a historic confluence of events. Our nation finds itself bogged down in two wars with record high energy prices; deep devaluations and displacements in the housing, financial and credit markets; record private and public debt; inflation on the rise; the future of health care uncertain for millions; and intense economic pressures for many in a combustible, unpredictable and dangerous world.

For America to remain the largest and most productive economy, we must continue to pay close attention to all of the factors that helped keep our economy the world’s most powerful for over a hundred years. America’s competitive position and strength in the world requires that we address the domestic challenges that are eroding our economic strength and consuming our government budgets. Our next president will be faced with a long list of important issues that touch every American and will require serious reform.

On October 9 at the University of Nebraska-Lincoln, former U.S. Senator Bob Kerrey and I will participate in a public forum, “Ensuring Health and Financial Security for All—Can We Identify Reasonable Solutions to these American Challenges?” sponsored by AARP, the University of Nebraska Public Policy Center, and Prairie Fire Newspaper. The goal is to bring people together to find common ground for bipartisan policies to address our nation’s serious health care and financial-security challenges. I commend the organizers of this forum, as it is critical for all Americans to participate in an open and honest debate on America’s health and financial security.

Health care is an issue that affects every Nebraskan. Whether it is senior citizens struggling with the Medicare Prescription Drug Benefit, small business owners trying to provide affordable health insurance for their employees, or access to health care services in rural Nebraska, I hear concerns about health care more than almost any other issue. The issue is vital to the future well-being and prosperity of America.

At the heart of America’s health and financial security lie our three entitlement programs.

Social Security, Medicare and Medicaid have played a vital role for millions of Americans to cope with the financial burdens of retirement and health care costs. Unfortunately, all three are on trajectories that cannot be sustained. Each year the percentage of the budget obligated to fund entitlement programs grows larger and larger—taking away taxpayer dollars from other important discretionary government programs such as defense, research, intelligence, education, roads, parks, housing programs, etc. The Congres­sional Budget Office concluded that over 60 percent of the $2.7 trillion budget was obligated to mandatory spending, of which 44 percent, or $1.2 trillion, was for these three programs. The current unfunded liability for Social Security over the next 75 years is almost $5 trillion. Medicare’s unfunded liability during this same period is nearly $35 trillion, and Medicaid faces an $8.4 trillion shortfall. That’s an unfunded total of $49 trillion.

Because of these entitlement programs and runaway federal government spending in other areas, America, with the world’s largest economy, paradoxically finds itself in long-term financial trouble. Our national debt held by the public is over $5 trillion. About half is held by foreign investors and governments.

We have dug ourselves a very deep hole. But the problems can be addressed.

With great promise, we live in a time when more people are living longer, healthier and more active lives than ever before. Fulfilling our health care needs will require a new, comprehensive and innovative regimen of both prevention and treatment.

In the last two Congresses, I have introduced bipartisan and bicameral legislation to establish the Entitlement Reform Commission to comprehensively review Social Security, Medicare and Medicaid and make recommendations to sustain the solvency and stability of these three programs. As the forum on October 9 recognizes, we need a bipartisan solution to our looming entitlement crisis, in order to ensure the solvency and stability of these programs for future generations.

In February 2006, I impanelled a health care commission comprised of 15 health care professionals from across Nebraska and the country. The commission’s mandate was to review the current state of health care in the United States and present recommendations for developing an accessible and sustainable system for the 21st century. Based on this commission’s findings, in 2007 I introduced the Federal Health Care Board Act as a framework for health care reform. The legislation would create an independent federal government agency, modeled after the Federal Reserve Board, to define and guide the transformation of the nation’s health care system. This agency, the Federal Health Care Board, would establish a national standard for a basic health plan, including a basic minimum policy and regional cost for this policy.

Social Security is not in crisis today, but there is clearly a crisis on the horizon. There is no escaping the fact that Social Security is necessary, and there is also no escaping the fact that something needs to be done about the future of Social Security. I have introduced comprehensive legislation to preserve, protect and improve Social Security in the last two Congresses. No matter how we choose to restructure Social Security, we need to reenergize the idea of individuals taking some personal responsibility for their own retirement. We need to create a system that encourages and provides incentives for people to save and build their personal wealth. It is within our power to preserve the social safety net of this nation.

Addressing these challenges will not by themselves ensure that America remains the only economic superpower. We are competing in a bruising global marketplace. There is no question, however, that failing to address these challenges will increasingly hobble the United States. The earlier we confront the financial challenges that exist within our entitlement programs, the more options we will have to come up with a sustainable course of action. Entitlement and health care reform are two of the most difficult and far-reaching political issues we face. There should be vigorous debate that produces political tension. But we must not allow this reality to control the process, thereby obfuscating the serious discussion of serious and specific issues so critical to the future of American prosperity.

I encourage Nebraskans to attend and participate in the October 9 forum in Kimball Hall on the campus of UNL at 10:00 a.m. CT. The event is free and open to the public. For more information, please visit


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