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Mr. SANTORUM. Mr. President, I rise today to address a matter of critical importance to our Nation's 39 million Medicare beneficiaries, 2 million of whom live in Pennsylvania alone. I speak of the current erosion of the Medicare+Choice program, a situation which demands attention by Congress and this administration.
Currently, more than 6.2 million Medicare beneficiaries are enrolled in the Medicare+Choice program, receiving high quality, affordable health care services through HMOs and other private sector health plans. Beneficiaries are choosing these plans because they typically provide a more comprehensive package of benefits (including coverage of prescription drugs), lower out-of-pocket costs, and a stronger emphasis on preventive health care services than the old Medicare fee-for-service system.
As my colleagues well know, for more than ten years Medicare beneficiaries have had access to this array of enhanced health benefits and options through the Medicare's risk contract program, and the success of this program was evidenced by the fact that beneficiaries signed up for Medicare HMO coverage in large numbers. From December 1993 through December 1997, enrollment in Medicare HMOs increased at an average annual rate of 30 percent. In states such as Louisiana, Pennsylvania, Ohio, and Texas, enrollment in Medicare HMOs increased even more rapidly. In December 1997, shortly after the enactment of the BBA, Medicare HMO enrollment stood at 5.2 million, accounting for 14 percent of the total Medicare population--up from just 1.3 million enrollees and 3 percent of the Medicare population in December 1990.
The success of the Medicare HMO program inspired Congress to establish the Medicare+Choice program in 1997 through the enactment of the Balanced Budget Act (BBA). In establishing the Medicare+Choice program, Congress had three goals in mind: (1) to build on the success of the Medicare HMO program; (2) to give seniors and persons with disabilities the same health care choices available to Americans who obtain their health coverage through the private sector; and (3) to further expand beneficiaries' health care choices by establishing an even wider range of health plan options and by making such options available in areas where Medicare HMOs were not yet available. Three years later, however, the Medicare+Choice program has not fulfilled its promise of expanding health care choices for Medicare beneficiaries. Instead, a large number of beneficiaries have lost their Medicare+Choice plans or experienced an increase in out-of-pocket costs or a reduction in benefits.
This disturbing trend is especially harmful to low-income beneficiaries, who are almost twice as likely to enroll in Medicare HMOs as are other Medicare beneficiaries. For many seniors and persons with disabilities who live on fixed incomes, having access to a Medicare HMO means that they can spend their limited resources on groceries and other daily essentials. Beneficiaries also like Medicare HMOs because they provide coordinated care and place a strong emphasis on preventive services that help them to stay healthy and avoid preventable diseases.
Mr. President, when Congress enacted BBA in 1997, plans were still joining the Medicare+Choice program and 74 percent of beneficiaries had access to at least one plan. But today, access dropped to 69 percent, with 2 million fewer beneficiaries having access to a plan. Next year, 711,000 Medicare beneficiaries will lose access to health benefits and choices as a result of Congressional underpayment and burdensome HCFA regulations.
In addition, many Medicare HMOs have curtailed benefits, increased cost-sharing and
raised premiums. Average premiums have increased $11 per month in 2000.
Two major problems are responsible for this outcome: (1) the Medicare+Choice program is significantly underfunded; and (2) the Health Care Financing Administration (HCFA) has imposed excessive regulatory burdens on health plans participating in the program. The funding problem has been caused by the unintended consequences of the Medicare+Choice payment formula that was established by the BBA, as well as the Administration's decision to implement risk adjustment of Medicare+Choice payments on a non-budget neutral basis. Under this formula, the vast majority of health plans have been receiving annual payment updates of only 2 percent in recent years--while the cost of caring for Medicare beneficiaries has been increasing at a much higher rate.
When plans withdraw from communities, beneficiaries are forced to switch plans, or in some cases revert back to the traditional Medicare program, which does not cover additional benefits like eye and dental care, or, more importantly, prescription drugs.
It is in response to this crisis in the Medicare+Choice program that I am pleased to be introducing The Medicare Beneficiaries' Choice Stabilization Act. This legislation will make numerous changes to the way Medicare+Choice rates are calculated and will seek to sensitize the funding mechanisms in the current Medicare system to the difficulties of health care delivery in all communities, and particularly in rural areas.
As the costs of providing care in some areas can be higher than the payments from Medicare, The Medicare Beneficiaries' Choice Stabilization Act will also give plans the opportunity to negotiate for higher payment rates based on local costs.
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Realizing the importance of assuring that the benefits of programmatic regulations outweigh their costs, my legislation will also provide Medicare+Choice providers regulatory relief from overreaching HCFA dictates. Rather than devoting substantial human and financial resources toward compliance activities, which leaves fewer resources available for paying for health care services provided to beneficiaries, Medicare+Choice plans ought to be left to the fullest extent possible to the business they know best: providing high quality and cost effective health care to our Medicare beneficiaries.
Congress must devote more adequate funding to the Medicare+Choice program, and work to ensure that resources are allocated in such a way as to assure that the Medicare+Choice program is viable in areas where beneficiaries have already selected health plan options and that the program can expand in areas where such options are not yet widely available. I am sponsoring Beneficiaries' Choice Stabilization Act with just these goals in mind, and I hope my colleagues will join me in a bipartisan effort to save and strengthen the Medicare+Choice program and the valuable health benefits it provides for our Medicare population which relies on them.
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