[Congressional Record Volume 145, Number 114 (Thursday, August 5, 1999)]
[Senate]
[Pages S10419-S10420]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. ALLARD:
  S. 1517. A bill to amend title XVIII of the Social Security Act to 
ensure that Medicare beneficiaries have continued access under current 
contracts to managed health care by extending the Medicare cost 
contract program for 3 years.


                the medicare cost contract extension act

 Mr. Allard. Mr. President, I am pleased to rise today to 
introduce the Medicare Managed Care Cost Contract Extension Act of 
1999.
  The Medicare Program traditionally offers participating HMOs two 
contracts to choose from: Medicare risk (Medicare+Choice) and Medicare 
cost. In an effort to expand and refine the Medicare+Choice program, 
Section 4002 of the Balanced Budget Act of 1997 terminates the Medicare 
cost contract program effective December 31, 2002. This termination of 
cost contracts will leave two options for a Medicare recipient, that of 
traditional Medicare fee-for-service and Medicare+Choice.
  As of June of this year 358,658 Americans receive Medicare HMO 
service through Medicare cost contracts. The vast majority of these 
Americans live in rural areas where there are no Medicare+Choice 
options. In my house state of Colorado, 97 percent of Medicare cost 
contracting beneficiaries live in a county that does not currently have 
another Medicare HMO option. If the intention of the Balanced Budget 
Act and Medicare+Choice is to provide a standard, reliable option to 
Medicare fee-for-service coverage it has not yet accomplished this in 
rural areas. It appears to me that until Medicare+Choice coverage is 
available to rural cost contract recipients Congress should re-consider 
this sunset.
  While I agree with the wisdom of the Balanced Budget Act, we have 
discovered a number of areas where the Act has not produced the results 
that Congress intended. As well meaning as the sunset provision for 
cost contracts may have been, I am confident that Congress has no 
intention of leaving rural Americans without a choice in their Medicare 
coverage.
  The legislation I am introducing will postpone the sunset date by 
three years to December 31, 2005. I believe that this extension 
accomplishes a

[[Page S10420]]

number of things consistent with the Balanced Budget Act as it concerns 
cost contracting.
  The Medicare Managed Care Cost Contract Extension Act of 1999 will 
not change current requirement that the Health Care Financing 
Administration produce a study on the impact of cost contracting 
termination. This study is currently due in January 2001. I think it is 
important that this report be delivered to Congress while there is 
still time to establish a permanent extension or another sensible 
solution that will maintain choice for Medicare recipients.
  As we have seen in my home state of Colorado, Medicare+Choice options 
have not developed in rural areas currently served by Medicare cost 
contractors. The Balanced Budget Act may have intended to replace cost 
contracting services with Medicare+Choice options, but these options 
are not yet available. I believe it would be irresponsible to continue 
to move cost contract beneficiaries toward an option that is 
unavailable. If Medicare+Choice can effectively serve rural areas they 
should have time to establish themselves. Based on current trends in 
rural health care I do not believe that Medicare+Choice will be a 
viable option in 2002, and perhaps not any time in the foreseeable 
future.
  I believe that Medicare beneficiaries deserve a choice in how they 
receive their health care, and for a few people in our nation the only 
nation to Medicare fee-for-service is through a cost contract. I hope 
that as we consider various proposals for Medicare reform that we will 
consider the 358,658 Americans who are facing the elimination of the 
Medicare option they chose to provide their health care.
                                 ______