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As my colleagues are aware, according to the National Bipartisan Commission on the Future of Medicare, the
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As I mentioned, all hospital, physician, and prescription drug costs would count toward this $675 deductible. Once it was met, the senior would receive regular, above-the-deductible Medicare coverage, just as you get now. Or if you worked out the numbers and decided against my plan, then you would not have to select it; it is your choice.
I believe the vast majority of seniors will benefit from
this plan. In fact, every senior with a Medigap plan will definitely benefit.
Any senior with a prescription drug expenditure of more than $15 a month will
benefit. Today, the Medicare Part A and Part B deductible totals $876, which
most seniors cover by an average $1,611 Medigap insurance premium.
DEAR SENATOR SMITH: This is in response to your letter of March 9, 2000, asking for my analysis of legislation you intend to introduce in the Senate. The proposed legislation establishes a voluntary prescription drug benefit, the Medicare Prescription Drug Plan, under the Medicare program.
Under the Medicare Prescription Drug Plan, the current Part A and Part B deductibles would be replaced by a single deductible of $675 which would also be applicable to the new prescription drug benefit. The Medicare program would pay fifty percent of the cost of prescription drugs, up to a maximum of $2,500 after satisfaction of the deductible.
He goes on to describe it.
Quoting further:
As you requested, I performed an analysis of the proposed legislation. This analysis is based on Medicare and prescription drug data I obtained from the Health Care Financing Admi nistration. My analysis indicates that the Medicare Prescription Drug Plan, as described above, would be cost-neutral to the Medicare program if it were made available on a voluntary basis to all beneficiaries except those also covered by Medicaid.
It is signed by Guy King.
Let me just conclude speaking on this bill by saying, the benefits in this plan are delivered by private companies and regional entities, such as pharmaceutical benefit managers. These entities would negotiate with large drug companies and provide the drugs to Medicare seniors.
Finally, according to the actuaries who reviewed the legislation, there will be no adverse selection. Both the healthy and the sick will have an incentive to choose this plan. Everybody is in.
There are many different methods of providing prescription drug coverage for seniors, but I urge my colleagues--I plead with my colleagues--to look to the revenue-neutral methods that fund this benefit by the elimination of waste in the present system. I urge my colleagues to resist the temptation to raise Medicare premiums on the people who can least afford it.
I have vivid memories of seniors rocking Mr. Rostenkowski's car a few years ago when he decided to raise Medicare premiums. Let's look at it more specifically. The House's fiscal year 2001 budget--this is important--sets $40 billion aside for prescription drugs.
In the Senate, we are expected to do a budget that is going to set aside $20 billion.
We don't need either under my plan. We don't need any more money. We don't need $20 billion. We don't need $40 billion. We don't need $2 billion. We don't need any billions. Let's use the money for debt reduction or tax credits for the uni nsured rather than providing for prescription drugs, when we could use my revenue-neutral prescription plan instead.
I must say, in all candor, some of the deflections I have had put in my way on this issue by some in this body are disturbing. I will not get into details. I want people to listen and look at this plan. It is a good plan. I would like to have the opportunity to be able to talk about it in more detail with some of my colleagues, because it makes no sense to take $40 billion max, anywhere from $20 billion to $40 billion, and put it into this prescription plan when we don't need to. Let's put it on the debt or let's buy something else with it that is worthwhile. We don't need it.
A neutral plan that does not raise premiums, that takes effect in 2001 is a good plan. It is a good idea. We need to implement it.
I urge my colleagues to take a look at this bill.
I ask unanimous consent that the letter from Mr. King be printed in the RECORD.
There being no objection, the letter was ordered to be printed in the RECORD, as follows:
KING ASSOCIATES,
Annapolis, MD, March 28, 2000.
Hon. BOB SMITH,
U.S. Senate,
Washington, DC.
DEAR SENATOR SMITH: This is in response to your letter of March 9, 2000 asking for my analysis of legislation you intend to introduce in the Senate. The proposed legislation establishes a voluntary prescription drug benefit, the Medicare Prescription Drug Plan, under the Medicare program.
Under the Medicare Prescription Drug Plan, the current Part A and Part B deductibles would be replaced by a single deductible of $675 which would also be applicable to the new prescription drug benefit. The Medicare program would pay fifty percent of the cost of prescription drugs, up to a maximum of $2,500 after satisfaction of the deductible. A beneficiary who chooses the Medicare Prescription Drug Plan would not be allowed to purchase a Medicare supplement policy that fills in the $675 deductible, so special Medicare supplement policies for those who choose the option would be allowed.
The Medicare Prescription Drug Plan would be available, on a voluntary basis, to any Medicare beneficiary not also covered by Medicaid. The possibility of anti-selection is an important consideration for a plan that is available to all Medicare beneficiaries as an option. I believe that the design features of the Medicare Prescription Drug Plan, as outlined in your legislation, minimize the impact of anti-selection.
As you requested, I performed an analysis of the proposed legislation. This analysis is based on Medicare and prescription drug data that I obtained from the Health Care Financing Admi nistration (HCFA). My analysis indicates that the Medicare Prescription Drug Plan, as described above, would be cost-neutral to the Medicare program if it were made available on a voluntary basis to all beneficiaries except those also covered by Medicaid.
If you should have any questions regarding my analysis, please don't hesitate to call.
Sincerely,
Roland E. (Guy) King,
President.
By Mr. JEFFORDS (for himself, Mr. BREAUX, Mr. FRIST, Mrs. LINCOLN, and Ms. SNOWE):
S. 2320. A bill to amend the Internal Revenue Code of 1986 to allow a refundable tax credit for health i nsuranc e costs, an d for othe r purposes; to the Committee on Finance.
HEALTH COVERAGE, ACCESS, R ELIEF, AND EQUITY (CARE) ACT
Mr. JEFFORDS. Mr. President, today, I am pleased to join with my colleagues in introducing the Health Coverage, Access, R elief and Equity Act or Health CARE Act. This legi slation will provide low-income Americans with a refundable tax credit for the purc hase of health insurance coverage. This effo rt marks the first major bipartisan, bicameral, market-based initiative on behalf of the uninsured since 1994.
I believe the issue of access to health coverage for the un insured must be a top national
priority. The uninsured often go without needed health care or face unaffo rdable medical bills. Insurance
coverage guarantees providers
reimbursement for their services, and it helps contain costs by encouraging more
appropriate use of the health care system.
&nb
New Census Bureau data indicate that there are now 44 million Americans with no health coverage, an increa se of one million from last year. This number is unacceptable for a prosperous nation with a strong economy.
A new poll indicates that our bill is consistent with the main health care concern of ave rage voters. When asked what they think is the most important problem about our health care system that th e government should address, the top choice--selected by 29 percent of those sampled--was universal coverage.
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I believe the legislation we're introducing today can provide the necessary foundation for achieving the goal of expanded health coverage. The Healt h CARE tax credit is targeted to thos e who are most in need of help, due to their lack of income, access to subsidized employment-based coverage, and ineligibility for public programs.
About one-half of the full-time working poor were uninsured last year. Many of these individuals work for small firms. In my own state of Vermont, only 27 percent of workers in firms employing fewer than 10 people are offered health insurance.
These uninsured working Americans have one thing in common: they are low wage workers--with nearly 70 percent making less than two times the minimum wage. Without additional resources, health insurance coverage is either beyond their reach or only purchased by giving up other basic necessities of life.
The Health CARE Act will provi de a refundable tax credit to help low and mod erate-income individuals and families purchase health insurance.
The legislation will provide a refundable tax credit of $1,000 for the purchase of individual coverage to those with adjusted gross incomes of up to $35,000 and it will provide a $2,000 credit for the purchase of family coverage for those with AGI of up to $55,000.
The initial estimates show that this proposal will help
almost 9 million Americans. It will provide health coverage for 3.2 mi llion Americans who are presently
uninsured and give needed financial relief to another 5.5 million low-income
Americans who are using their scarce dollars to buy individual health insurance
policies.
& nbsp; We must do whatever we can to ensure that the Safety Net already in place becomes stronger and more reliable. Just last week, the Subcommittee on Public Health held a hearing on t hree of our nation's safety provider programs--the Consolidated Health Centers program, th e National Health Service Corps, and the Community Access program.
I look forward to working with Senator FRIST on
shoring up the Safety Net, and together we plan to introduce an additional
component to the CARE Act on Safety Net providers that will become part of the
larger health CARE Package.
&n
The Health CARE Act will incre ase the number of Americans who have health insurance coverage by filling key gaps in the current system and supporting a system of health care financial and delivery that complements the employment-based system.
Mr. President, I ask unanimous consent that the text of the bill be printed in the RECORD.
Mr. President, I hope my colleagues will take a look at this. I hope they will join me in making sure we do what must be done to make sure the people who need it the most gets it.
There being no objection, the bill was ordered to be printed in the RECORD, as follows:
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Health Coverage, Access, R elief, and Equity (C.A.R.E.) Act''.
SEC. 2. REFUNDABLE HEALTH INSURANCE COSTS CRE DIT. ``SEC. 35. HEALTH INSURANCE COSTS. >
``(b) LIMITATIONS.--
``(1) MAXIMUM DOLLAR AMOUNT.--
``(A) IN GENERAL.--The amount allowed as a credit
under subsection (a ) to the
taxpayer for the taxable year shall not exceed the sum of the monthly
limitations for coverage months during such taxable year.
``(B) MONTHLY LIMITATION.--The monthly limitation
for each coverage month during the taxable year is the amount equal to 1/12 of--
``(i) in the case of self-only coverage, $1,000, and
``(ii) in the case of family coverage, $2,000.
``(2) PHASEOUT OF CREDIT.--
&nbs p;
``(A) IN GENERAL.--The amount which would (but for this paragraph) be
taken into account under subsection (a) shall be reduced (but not below zero) by
the amount determined under subparagraph (B).
``(B) AMOUNT OF REDUCTION.--The amount determined
under this subparagraph is the amount which bears the same ratio to the amount
which would be so taken into account as--
``(i) the excess of--
``(I) the taxpayer's modified adjusted gross income for
such taxable year, over
``(II) $35,000 ($55,000 in the case of family coverage),
bears to
``(ii) $10,000.
``(C) MODIFIED ADJUSTED GROSS INCOME.--The term
`modified adjusted gross income' means adjusted gross income determined--
``(i) without regard to this section and sections 911,
931, and 933, and
``(ii) after application of sections 86, 135, 137, 219,
221, and 469.
``(3) COORDINATION WITH DEDUCTION FOR HEALTH INSURANCE
COSTS OF SELF-EMPLO YED INDIVIDUALS.--In the
case of a taxpayer who is eligible to deduct any amount under section 162(l) for
the taxable year, this section shall apply only if the taxpayer elects not to
claim any amount as a deduction under such section for such year.
``(c) COVERAGE MONTH DEFINED.--For purposes of this
section--
``(1) IN GENERAL.--The term `coverage month' means,
with respect to an individual, any month if--
``(A) as of the first day of such month such individual is
covered by qualified health insurance, and
&n ``(2) EMPLOYER-SUBSIDIZED COVERAGE.--
``(A) IN GENERAL.--Such term shall not include any
month for which such individual is eligible to participate in any subsidized
health plan (within the me aning
of section 162(l)(2)) maintained by any employer of the taxpayer or of the
spouse of the taxpayer.
``(B) PREMIUMS TO NONSUBSIDIZED PLANS.--If an
employer of the taxpayer or the spouse of the taxpayer maintains a health plan
which is not a subsidized health
plan (as so defined ) and which
constitutes qualified health insurance, employee contribut ions to the plan shall be
treated as amounts paid for qualified health insurance.
&nbs p; ``(3) CAFETERIA PLAN
AND FLEXIBLE SPENDING ACCOUNT BENEFICIARIES.--Such term shall not include
any month during a taxable year if any amount is not includible in the gross
income of the taxpayer for such year under section 106 with respect to--
``(A) a benefit chosen under a cafeteria plan (as defined
in section 125(d)), or
``(B) a benefit provided under a flexible spending or
similar arrangement.
``(4) MEDICARE AND MEDICAID.--Such term shall not
include any month during a taxable year with respect to an individual if, as of
the first day of such month, such individual--
``(A) is eligible for any benefits under title XVIII of
the Social Security Act, or
``(B) is eligible to participate in the program under
title XIX or XXI of such Act.
``(5) CERTAIN OTHER COVERAGE.--Such term shall not
include any month during a taxable year with respect to an individual if, as of
the first day of such month, such individual is eligible--
``(A) for benefits under chapter 17 of title 38, United
States Code,
``(B) for benefits under chapter 55 of title 10, United
States Code,
``(C) to participate in the program under chapter 89 of
title 5, United States Code, or
``(D) for benefits under any medical care program under
the Indian Health Care Improvement
Ac t or any other provision of law.
``(6) PRISONERS.--Such term shall not include any
month with respect to an individual if, as of the first day of such month, such
individual is imprisoned under Federal, State, or local authority.
``(d) QUALIFIED HEALTH INSURANCE.--For purposes of this section, the term
`qualified health insurance' means
he alth insura nce coverage (as define d in section 9832(b)(1)(A)),
including coverage under a high deductible health plan (as defined in section 220(c)(2)) or a COBRA
continuation provision (as defined in section 9832(d)(1)).
``(e) MEDICAL SAVINGS ACCOUNT CONTRIBUTIONS.--
``(1) IN GENERAL.--If a deduction would (but for
paragraph (2)) be allowed under section 220 to the taxpayer for a payment for
the taxable year to the medical savings account of an individual, subsection (a)
shall be applied by treating such payment as a payment for qualified health
insurance for such individual .
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