Copyright 1999 Federal News Service, Inc.
Federal News Service
FEBRUARY 25, 1999, THURSDAY
SECTION: IN THE NEWS
LENGTH:
914 words
HEADLINE: PREPARED STATEMENT OF
DIANE
ARCHER
DIRECTOR
MEDICARE RIGHTS CENTER
BEFORE THE
HOUSE COMMERCE COMMITTEE
HEALTH AND THE ENVIRONMENT
SUBCOMMITTEE
BODY:
My name is Diane Archer. I am
the Executive Director of the Medicare Rights Center, a national not-for-profit
organization based in New York City. MRC helps seniors and people with
disabilities on Medicare through telephone counseling, public education, and
public policy work. Under a contract with the New York State Office for the
Aging, with funding from the Health Care Financing Administration, we operate
New York State's Health Insurance Assistance Program hotline. Each year, we
field approximately 50,000 hotline calls from people with Medicare questions and
problems and provide direct assistance on a variety of Medicare issues to more
than 7,000 individual callers. I thank the Commerce Committee for this
opportunity to testify on the need to risk adjust payments to private Medicare
plans. Only through risk adjustment will these plans have the
incentive to develop and promote programs for enrollees with costly conditions
and to provide treatment information that consumers need to make informed health
care choices. MRC devotes considerable resources to counseling our clients on
how to choose a Medicare health plan. Our counselors tell people to choose
carefully because quality matters and quality varies between plans. But, we
cannot give callers information to help them choose a private Medicare plan
based on the health care they offer. Good information about how private Medicare
plans care for enrollees with costly health care conditions is unavailable. For
now, we know that many of our clients are forced to choose a health plan based
on out-of-pocket costs and additional benefits without factoring in quality. But
a choice based solely on costs and benefits is not an informed choice and does
not make for a competitive marketplace. To help ensure that seniors and people
with disabilities get good care from their health plans, health plans must be
encouraged to compete on their health performance.
We as a nation should
measure the success of the Medicare marketplace on how well health plans treat
those seniors and people with disabilities who need care the most. Currently,
75% of Medicare costs cover the health care needs of the sickest 10% of the
Medicare population. The Medicare program was founded to provide a safety net
for these vulnerable seniors and people with disabilities who would otherwise be
uninsurable. If we overlook the health care needs of the most vulnerable people
on Medicare, Medicare will no longer be the safety net it is intended to be.
Risk adjusting payments to health plans is essential if they are to compete
for members with costly health care needs. As a result of the current payment
system, some of the most vulnerable people on Medicare tell us they fear they
may not get the care they need from Medicare HMOs. And we have no evidence about
particular plans to allay their fears. Unfortunately, today, Medicare's
capitated payment system penalizes plans that develop and promote programs for
people with costly health care needs. If they attract too many people with
complex conditions, they will go out of business. As a result, health plans do
not compete on the quality of health care they provide to enrollees with costly
conditions. And without good risk adjustment, the federal
government winds up wasting taxpayer dollars by overpaying HMOs to enroll
healthy people.
We believe that even the most basic risk
adjustment will help the Medicare marketplace and provide an incentive
for plans to enroll people with costly conditions. By the year 2000, plans will
be paid slightly more for enrollees who were hospitalized in the previous year
to account for higher average projected total cost in the current year. This new
risk adjustment methodology is an improvement over the existing
system because we know that people with costly health conditions like cancer,
congestive heart failure, and diabetes are more likely to need extended hospital
stays than other enrollees. The new system will no longer reward health plans
with a disproportionate number of healthy members. Rather, it will begin to
compensate those private Medicare plans with higher numbers of members with
costly needs. Today, choosing a private Medicare plan is not a matter of
informed choice, and it can be as risky as a trip to a Vegas slot machine. We
will know that the Medicare marketplace is meeting the health care needs of
those who need it the most when Medicare HMOs and other private Medicare health
plans aggressively develop and advertise programs for people with cancer, heart
disease, and other serious illnesses. Because health plans want to attract as
healthy a membership as possible, they vie for clients with glossy pictures of
seniors riding bikes and swinging on swings with their grandchildren.
Risk adjustment would push the Medicare market in the right
direction, encouraging health plans to compete against each other on the quality
of their product - health care. And, improved risk adjustment
should encourage full disclosure by health plans of their treatment policies and
enable people on Medicare to make informed choices about which plan to join now
for when they become sick later. With risk adjustment, the most
vulnerable seniors and people with disabilities on Medicare would not need to
fear falling by the Medicare wayside. Instead, the Medicare program could become
a public-private partnership that we can all be proud of, and a legacy for
future generations. Thank you.
END
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February 27, 1999 
