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