[Congressional Record Volume 145, Number 84 (Tuesday, June 15, 1999)]
[Extensions of Remarks]
[Pages E1251-E1252]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


             INTRODUCTION OF THE MEDICARE EARLY ACCESS ACT

                                 ______
                                 

                        HON. FORTNEY PETE STARK

                             of california

                    in the house of representatives

                         Tuesday, June 15, 1999

  Mr. STARK. Mr. Speaker, as this Congress debates Medicare reform, we 
need to ask ourselves what kind of reform do we want? Is Medicare a 
program that has worked for our nation's seniors? Is it something we 
should build upon or is it something we should tear down and start 
over?
  I stand here today with 80 of my colleagues to say that Medicare is a 
program that works and that can and should be improved. In that vein, 
we are introducing the Medicare Early Access Act, legislation that was 
first introduced in the last Congress with the support of President 
Clinton. Rather than raise the eligibility age of Medicare like some in 
this Congress would seek to do, this bill would expand access to 
Medicare's purchasing power to certain individuals below age 65.
  The Medicare Early Access Act is self-financed, through enrollees' 
premiums; it is not a publicly financed program. It simply would enable 
eligible individuals to harness Medicare's clout in the marketplace to 
get much more affordable health coverage than they are able to purchase 
in the private sector market that currently exists.
  The bill would provide a very vulnerable population (age 55-64) with 
three new options to obtain health insurance:
  Individuals 62-65 years old with no access to health insurance could 
buy into Medicare by paying a base premium (about $300 a month) during 
those pre-Medicare eligibility years and a deferred premium (per month, 
about $16 for each year of participation in the early access program) 
during their post-65 Medicare enrollment. The deferred premium is 
designed to reimburse the early access program for the extra costs for 
the sicker than average enrollees. It would be payable out of the 
enrollee's Social Security check between the ages of 65-85.
  Individuals 55-62 years old who have been laid off and have no access 
to health insurance, as well as their spouse, could buy into Medicare 
by paying a monthly premium (about $400 a month). There would be no 
deferred premium. Certain eligibility requirements would apply.
  Retirees aged 55 or older whose employer-sponsored coverage is 
terminated could buy into their employer's health insurance for active 
workers at 125 percent of the group rate. This would be a COBRA 
expansion, with no relationship to Medicare.
  Through these changes, the Medicare Early Access Act would provide 
health insurance for some 400,000 people at a vulnerable point in their 
lives when the current health care marketplace is leaving them out. 
These are not people whom the current health care marketplace is 
scrambling to cover. Insurance companies don't want them and we are 
increasingly seeing employers drop coverage as well. It is time for the 
federal government to step forward and solve the problem of diminishing 
access for early retirees and workers who simply cannot buy adequate 
insurance in the private market.
  In addition, the Medicare Early Access Act has only a small start-up 
cost that is fully financed through companion legislation to curb 
waste, fraud and abuse in Medicare that I am concurrently introducing 
today. In this way, we will expand coverage options to people between 
the ages of 55 and 64 at no cost to the American taxpayer.
  The Medicare Early Access Act isn't the total solution for people age 
55-64 who lack access to health insurance coverage. However, if passed, 
it would make available health insurance options for these individuals 
at much less than the cost of what is available today. This is a 
meaningful step forward in expanding health insurance coverage to a 
segment of our population that is quickly losing coverage in the 
private sector. It is a solution that has no cost to the federal 
government. The Medicare Early Access Act is legislation that we should 
be able to agree upon and to enact so that people age 55-64 have a 
viable option for health insurance coverage.
  A more detailed summary of the Medicare Early Access Act follows:

               Medicare Early Access Act of 1999 Summary


                  title: help for people aged 62 to 65

       Sixty-two to sixty-five year olds without health insurance 
     may buy into Medicare by paying monthly premiums and repaying 
     any extra costs to Medicare through deferred premiums between 
     ages 65 to 85.
       Starting July, 2000, the full range of Medicare benefits 
     (Part A & B and Medicare+Choice plans) may be bought by an 
     individual between 62-65 who has earned enough quarters of 
     coverage to be eligible for Medicare at age 65 and who has no 
     health insurance under a public plan or a group plan. (The 
     individual does not need to have exhausted any employer COBRA 
     eligibility).
       A person may continue to buy-into Medicare even if they 
     subsequently become eligible for an employer group health 
     plan or public plan. Individuals move into regular Medicare 
     at age 65.
       Financing: Enrollees must pay premiums. Premiums are 
     divided into two parts:
       (1) Base Premiums of about $300 a month payable during 
     months of enrollment between 62 to 65, which will be adjusted 
     for inflation and will vary a little by differences in the 
     cost of health care in various geographic regions, and
       (2) Deferred Premiums which will be payable between age 65-
     85, and which are initially estimated to be about $16 per 
     month for each year or part of a year that a person chooses 
     to enroll between age 62-65. For example, if one enrolls for 
     only two years, the Deferred Premium will be roughly $32/
     month [2 x $16] between age 65-85. The Deferred Premium will 
     be paid like the current Part B premium, i.e., out of one's 
     Social Security check.
       Note, the Base Premium will be adjusted from year to year 
     to reflect changing costs

[[Page E1252]]

     (and individuals will be told that number each year before 
     they choose to enroll), but the 20 year Deferred Premium will 
     not change from the dollar figure that the beneficiary is 
     told when they first enroll between 62-65--they will be able 
     to count on a specific dollar deferred payment figure.
       The Base Premium equals the premium that would be necessary 
     to cover all costs if all 62-65 year olds enrolled in the 
     program. The Deferred Premium repays Medicare for the fact 
     that not all will enroll, but that many sicker than average 
     people are likely to voluntarily enroll. The Deferred 
     Premiums ensure that the program is eventually fully financed 
     over roughly 20 years. Savings from the anti-fraud proposals 
     (introduced separately) finance the start-up of the program 
     and protect the existing Medicare program against any loss 
     (see Title IV).


        TITLE II: HELP FOR 55 TO 62 YEAR OLDS WHO LOSE THEIR JOBS

       55-62 year olds who are eligible for unemployment insurance 
     (and their uninsured spouses) may buy into Medicare through a 
     premium.
       The full range of Medicare benefits may be bought by an 
     individual between 55-62 who:
       (1) has earned enough quarters of coverage to be eligible 
     for Medicare at age 65,
       (2) is eligible for unemployment insurance,
       (3) before lay-off had a year-plus of employment-based 
     health insurance, and
       (4) because of the unemployment no longer has such coverage 
     or eligibility for COBRA coverage.
       A worker's spouse who meets the above conditions (except 
     for UI eligibility) and is younger than 62 may also buy-in 
     (even if younger than 55).
       The worker and spouse must terminate buy-in if they become 
     eligible for other types of insurance, but if the conditions 
     listed above reoccur, they are eligible to buy-in again. At 
     age 62 they must terminate and can convert to the Title I 
     program. Non-payment of premiums is also cause for 
     termination.
       There is a single monthly premium roughly equal to $400 
     that will be adjusted for inflation. It must be paid during 
     the time of buy-in; there is no Deferred Premium. This 
     premium is set to recover base costs plus some of the costs 
     created by the likely enrollment of sicker than average 
     people. The rest of the costs to Medicare are repaid by the 
     anti-fraud provisions (see Title IV).


 TITLE III: HELP FOR WORKERS 55+ WHOSE RETIREE BENEFITS ARE TERMINATED

       Workers age 55+ whose retirement health insurance is 
     terminated by their employer may buy into their employer's 
     health insurance for active workers at 125% of the group rate 
     (this is an extension of COBRA health continuation coverage--
     not a Medicare Program).
       This title is an expansion of the COBRA health continuation 
     benefits program. If a worker and dependents have relied on a 
     company retiree health benefit plan, and that protection is 
     terminated or substantially slashed during his or her 
     retirement, but the company continues a health plan for its 
     active workers, then the retiree may buy-into the company's 
     group health plan at 125% of cost.


                          TITLE IV: FINANCING

       Titles I & II of the Early Access to Medicare Act are 
     totally financed. Title III is not a Medicare or public 
     program.
       The existing Medicare program is protected by placing these 
     programs in their own trust fund. The Medicare Trustees will 
     monitor the program to ensure that it is self-financing and 
     does not in any way burden the existing Medicare program.
       Most of the cost is paid by the enrollees' premiums.
       Payment of Start Up Costs: While the Deferred Premiums are 
     being collected and for any costs not covered by premiums, a 
     package of Medicare anti-fraud, waste, and abuse provisions 
     has been introduced as a separate bill, the Medicare Fraud 
     and Overpayment Act of 1999. This bill provides for a number 
     of reforms, including:
       (1) improvements in the Medicare Secondary Payment 
     provisions,
       (2) a reduction in Medicare's reimbursement for the drug 
     EPO used with kidney dialysis so that Medicare is not paying 
     much more than the dialysis centers are buying the drug for;
       (3) Medicare payment for pharmaceuticals, biologicals, or 
     parenteral nutrients on the basis of actual acquisition cost 
     rather than the average wholesale price which is often far 
     above the price at which the drug can really be purchased,
       (4) setting quality standards for the partial 
     hospitalization mental health benefit, so as to week out 
     unqualified, abusive providers, and
       (5) allowing Medicare to get a volume discount by 
     contracting with Centers of Excellence for high volumes of 
     complex operations at hospitals which have better than 
     average outcomes.

     

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