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Copyright 1999 Federal Document Clearing House, Inc.  
Federal Document Clearing House Congressional Testimony

August 04, 1999

SECTION: CAPITOL HILL HEARING TESTIMONY

LENGTH: 1018 words

HEADLINE: TESTIMONY August 04, 1999 MICHAEL BILIRAKIS HOUSE COMMERCE HEALTH AND ENVIRONMENT MEDICARE AND CHOICE

BODY:
Statement of The Honorable Michael Bilirakis Subcommittee on Health & Environment Hearing on Medicare+Choice: An Evaluation of the Program August 4, 1999 The hearing will come to order. In February, this Subcommittee focused on efforts by the Health Care Financing Administration (HCFA) to implement a risk adjustment model for the Medicare+Choice program. Today, we will reexamine the impact of HCFA's planned risk adjuster - and its effect on the continued viability of this important program. Two years ago, Congress established the Medicare+Choice program as part of the 1997 balanced budget law. The legislation was enacted with strong bipartisan support to increase the health care options available to America's senior citizens. Today, about 17 percent of Medicare beneficiaries participate in a Medicare+Choice plan. Many of these plans provide benefits - such as prescription drug coverage - which are not available through traditional, fee-for-service Medicare. Since our last hearing, the July 1st deadline has passed for plans to inform HCFA of their intent to alter or terminate their contracts. Nearly 100 plans have decided to withdraw from the Medicare+Choice program, reduce their service areas, or scale back their benefit packages. Many of these plans cited cuts in funding proposed by HCFA as a major factor in their decisions. As a result, 327,000 beneficiaries will lose their current health coverage next year. For 79,000 of these beneficiaries, no other Medicare managed care plan will be available in their area. In Florida alone, 29,000 beneficiaries will be affected by plan withdrawals, and 10,000 will have no alternative but to return to fee-for-service Medicare. The 1997 Balanced Budget Act required HCFA to establish a process for adjusting Medicare+Choice payments based on the likelihood or "risk" that enrollees will use health care services. The risk adjustment process was intended to distribute funds based on the health status of Medicare+Choice enrollees. Neither Congress nor the Congressional Budget Office assumed that implementation of the risk adjuster would result in funding cuts. It was intended to redistribute monies based on the health status of beneficiaries, without reducing overall funding for the program. Unfortunately, HCFA has proposed a risk adjustment model that would impose deep spending cuts in the Medicare+Choice program. Estimates indicate over $11 billion may be drained from the program under HCFA's proposed risk adjuster. In response, my colleague Peter Deutsch of Florida joined me in introducing H.R. 2419, the Medicare+Choice Risk Adjustment Amendments of 1999. Our bill will ensure that the risk adjuster is implemented on a budget-neutral basis - consistent with congressional intent. I am deeply concerned about the impact of any instability in the Medicare+Choice program on our most vulnerable seniors. Choosing a health care plan can be a difficult task for all of us, and it is particularly hard for the frail elderly. They deserve the health care options we promised them when we created the Medicare+Choice program. If HCFA is allowed to go forward with its ill-advised proposal, Medicare beneficiaries will face devastating consequences, particularly low-income seniors. In addition to increased costs and reductions in benefits, many beneficiaries will lose the option of participating in a Medicare managed care plan altogether. For many seniors, Medicare+Choice is an important source of prescription drug coverage. Clearly, we must preserve this option for beneficiaries who choose to participate in a Medicare managed care plan. However, we must do more to increase access to prescription drugs for seniors who need them. No senior should be forced to choose between buying groceries and filling a prescription. A nation is judged by how it treats its most vulnerable citizens, and we must help our neediest seniors obtain prescription drugs. Over the past several months, I have been working to develop a plan that meets this objective. Specifically, my proposal would: Assist states in establishing and expanding programs to help low- income beneficiaries obtain prescription drugs; Preserve seniors' health options - including prescription drug coverage - available through the Medicare+Choice program and create incentives for plans to expand prescription drug coverage, at no additional premium for seniors; and Establish a federal stop-loss program to protect beneficiaries who have high annual prescription drug costs. By contrast, the President's plan is overly broad and spreads resources too thin. As a result, it provides only a limited benefit to individuals. By targeting assistance to beneficiaries who are low-income or have high drug costs, we can more effectively help seniors in need. Furthermore, the President's plan would not even take effect until 2002 and it would not be fully implemented until 2008, because of the time needed to create the new bureaucracy of a Medicare Part D. It would do nothing for the poorest and sickest seniors who need help right now. Even after it is fully implemented in 2008, the President's plan will force seniors who have high annual drug costs to fend for themselves. I was proud to serve on the National Bipartisan Medicare Commission, and I remain committed to enacting comprehensive reforms to protect the program for the future. I believe we can help the neediest seniors while preserving and strengthening Medicare for current beneficiaries and future generations. We can accomplish both goals without increasing beneficiaries' premiums or jeopardizing the fiscal stability of Medicare. I look forward to working with my colleagues on both sides of the aisle to further refine my plan. I hope that it can serve as a vehicle for a bipartisan effort to help seniors obtain the prescription drugs they need. Again, I want to thank all of our witnesses for joining us today to discuss the important role of the Medicare+Choice program in providing health care options for seniors. I now yield to the Ranking Member from Ohio, Mr. Brown.

LOAD-DATE: August 6, 1999




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