[Congressional Record Volume 146, Number 106 (Tuesday, September 12, 2000)]
[Senate]
[Pages S8407-S8408]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          THE MEDICARE BENEFICIARIES' CHOICE STABILIZATION ACT

  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.

[[Page S8408]]

  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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