[Congressional Record Volume 141, Number 105 (Monday, June 26, 1995)]
[Senate]
[Pages S9087-S9088]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                            MEDICARE SELECT

  Mr. ROCKEFELLER. Mr. President, because I know a lost cause when I 
see one, I concede that the majority leader is succeeding in passing 
what is known as the Medicare select legislation tonight. The 
conference report will pass tonight. Nobody else will comment on it, 
but I will. I just hope I will not be tempted into saying, ``I told you 
so'' a year from now if some troubling signs turn out to be an omen of 
serious problems.
  For some reason, many of my colleagues on the other side of the aisle 
are adamant about rushing to expand a pilot project limited to 15 
states into one for all 50 States. The conference report is an 
agreement to make this extension, but only for 3 years instead of the 5 
years that had been passed by the House. I still think 3 years is too 
long, but I have assurances from the chairman of the Finance Committee 
that we will have a hearing or hearings, and a good faith process, to 
consider whether any changes are warranted.
  What is Medicare select? Medicare select is a managed care insurance 
policy that is sold to senior citizens to fill in the gaps of Medicare 
coverage, of which there are many. It differs from other MediGap 
policies because it only pays Medicare's cost sharing amounts if the 
senior citizen receives his or her medical care from an insurer's 
selected network of health care providers.
  What bothers me is the rush to expand this limited program before an 
evaluation of this demonstration project, done at the direction of 
Congress is completed and reviewed in oversight hearings. As the 
proponents of this push to expand the program know, the independent 
researchers evaluating the pilots will have their analyses completed by 
mid-August and a draft final report submitted by October.
  Leapfrogging over a careful effort to review a demonstration project, 
in order to decide if and how to expand the approach, is not the way to 
do business with Medicare and its beneficiaries. I think it is a 
mistake. I think it is bad precedent. I have to wonder whether it has 
to do with special interests eager to see this program quickly 
expanded. I think it is a mistake to ignore emerging signs that this 
approach to the marketing of medigap policies may be costing Medicare 
rather than achieving savings. When the majority of this body has just 
told senior citizens of America they want to cut Medicare by $270 
billion, where is the sense in also extending a program for 3 years 
that might drain Medicare even more.
  Just in recent days, another yellow line started flashing. Based on 
reports routinely submitted to the Government from the top notch 
research firms conducting the Medicare select study for HCFA, some 
startling findings have been reported on how the Medicare select 
program is operating. They are finding that Medicare select enrollees 
had significantly higher Medicare costs in comparison to seniors with 
regular medigap insurance. The Congressional Budget Office agrees that 
the new study raises serious questions about the operation of the 
Medicare select program.
  On average, Medicare's costs have increased 17\1/2\ percent--higher--
under Medicare select, which we are expanding to all 50 States. Only 
one State, Missouri, experienced lower Medicare costs for its Medicare 
select enrollees. Mr. President, 8 States had higher Medicare costs for 
its Medicare select. Alabama, 12 percent higher; Arizona, 23 percent; 
Florida, 8 percent; Indiana, 57 percent higher; almost 6 percent in

[[Page S9088]]

Kentucky; 7.5 percent in Minnesota; 12 percent higher in Texas; and 14 
percent higher in Wisconsin. And so it goes. Researchers believe the 
bulk of these cost increases were a result of greater hospital costs.
  This information was not available to the Congressional Budget Office 
when it did its cost estimate of the original Medicare select 
legislation. At that time, CBO was forced to rely on very preliminary 
research that was done by these same researchers. The information then 
was limited to case-study information and did not include actual 
analyses or a comparison of utilization data.
  Mr. President, this is why I remain troubled about this legislation, 
this conference report, which will be passed tonight and then become 
the law of the land. Serious questions have been raised about the 
operation of the Medicare select program, yet a conference report is 
about to be passed that gives the green light to 3 years of taking this 
program to every single State.
  It is maddening that just when there is all the railing about the 
Medicare trust fund and its solvency, some of my colleagues are so 
anxious to expand this program with a disregard for its potential drain 
on the part A trust fund.
  There are all kinds of questions to answer before I would be 
comfortable expanding or extending this program. That is why Congress 
for this evaluation. That is why I believe we wait for the final report 
and take 3 hours out of our day in the Finance Committee to hold a 
hearing on what was learned. Instead, we are seeing this rush to pass a 
bill.
  The independent researchers have a full year of data from 1994 and 
are currently in the process of analyzing this data. It will take them 
about a month to complete their analysis of this insurance data. The 
data cited previously mostly reflects Medicare's cost experience in 
1993. While the researchers have already controlled form many 
variables, they plan to try to better pinpoint the reason for these 
very significant Medicare cost increases. This additional information--
which will be available in only 1 month--would provide Congress with 
much better information and will tell us if the Medicare cost increases 
of Select enrollees are a one-time phenomena or a continuing trend. It 
would also help us figure out the reasons for the higher Medicare costs 
of beneficiaries enrolled in Medicare select plans. It would provide us 
with information which would make sure we didn't enact a major new 
expansion that primarily benefits insurance companies without making 
sure the Part A trust fund was not going to be drained of funds.
  Are sick seniors merely signing up for Medicare select managed care 
products in record numbers? This would be an unexpected finding since 
people with serious health care problems normally avoid managed care 
plans, if they can. Or, are sick seniors somehow being steered into 
Medicare-select plans by insurance companies and away from risk-based 
HMO's? In addition to analyzing 1994 utilization data, the research 
team is also completing work on beneficiary survey which will include 
beneficiaries' own stated reasons for signing up with the Medicare 
select plan.
  Mr. President, it is not often that legislators are able to have 
research of this caliber available on a Medicare legislative 
initiative. Yet, we are choosing to ignore the red flag that these 
research findings have raised.
  According to the Congressional Budget Office, the Medicare Program is 
currently overpaying HMO's by about 5.7 percent per person because of 
Medicare's payment methodology which does not take into account the 
tendency of healthier seniors to sign up with HMO plans. This 
legislation before us today could--because of the special advantages 
Medicare select insurers have been granted in obtaining discounts from 
hospitals--have a similar effect. Insurance companies make money while 
the Medicare Program loses money.
  Mr. President, the legislation before us today is preferable to the 
House bill that was originally brought to the Senate floor. Instead of 
extending the Medicare select program to 50 States for 5 years, this 
legislation expands it to 50 States for 3 years. This is still longer 
than I would have liked. It is longer than the original Senate bill 
which was the result of a compromise reached between myself and the 
majority leader, Senator Dole, and Senators Packwood and Chafee. The 
legislation will also allow the HHS Secretary to discontinue the 
program if the Secretary determines that the Medicare select programs 
is resulting in higher premium costs to beneficiaries or in higher 
program costs to the Medicare Program.
  Mr. President, I look forward to an oversight hearing in the Finance 
Committee on the Medicare select program which--under a prior agreement 
with Senators Dole and Pakcwood--will be held once the final evaluation 
study has been completed. And I am committed to working with the 
chairman of the Medicare Subcommittee, Senator Dole, on any legislative 
modifications that may be necessary based on the committee's oversight 
hearing, the RTI study, or from the results of a GAO study--that was 
added to the Senate bill and retained in the conference agreement--that 
requires a study of the medical underwriting practices of Medigap 
insurance policies. Again, I hope I will never have to say ``I told you 
so'' on behalf of the Medicare Program and the senior citizens who 
count on us to look before we act.
  Mr. President, I yield the floor.

                          ____________________