[Congressional Record Volume 147, Number 104 (Tuesday, July 24, 2001)]
[Senate]
[Page S8124]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. ALLARD:
  S. 1224. A bill to amend title XVIII of the Social Security Act to 
extend the availability of Medicare cost contracts for 10 years; to the 
Committee on Finance.
  Mr. ALLARD. Mr. President, I am pleased to introduce the Medicare 
Cost Contract Extension Act of 2001.
  For decades, the Centers for Medicare and Medicaid Services (formerly 
the Health Care Financing Administration), has successfully offered 
health insurance providers two contracts to choose from: a Medicare 
risk contract, (Medicare+Choice), and Medicare cost contract. In an 
effort to expand and refine the Medicare+Choice program, the Balanced 
Budget Act of 1997 terminated the Medicare cost contract program 
effective December 31, 2002. To prevent this termination, in 1999 
Congress passed the Balanced Budget and Refinement Act, which extended 
cost contracts for two years through 2004.
  I am pleased that Congress passed into law this two-year extension of 
Medicare cost contracting. This extension will help Medicare 
beneficiaries in rural communities in the United States keep the 
quality health care they currently receive under their cost contract 
plans.
  Congress should work to extend further Medicare cost contracts. The 
Medicare Cost Contract Extension Act of 2001 would accomplish this by 
extending by ten years the cost contract sunset date of December 31, 
2004 to December 31, 2014.
  Currently 298,683 Americans, and 18,050 Coloradans receive health 
care through Medicare cost contracts. Of the 18,050 Coloradans with 
cost contract plans, 16,075 (89 percent) of them live in rural 
Colorado, where few Medicare and Medicare+Choice providers operate. If 
Medicare cost contracts are eliminated, essentially two health care 
options for Medicare beneficiaries would remain: traditional Medicare 
fee-for-service, which can include Medigap, and Medicare+Choice. If 
Medicare cost contracts are eliminated, as scheduled in 2004, then 
thousands of seniors will be forced into these other Medicare programs.
  Basic Medicare and Medicare+Choice providers, however, are few in 
rural Colorado, where health care demands are great. In addition to the 
fact that 89 percent of Colorado's seniors with cost contract plans 
live in rural areas, 6,358, 35 percent, of Colorado Medicare managed 
care beneficiaries live in counties in which Medicare+Choice is not 
even available. Further, cost contract plans are more widely used 
across the State than are Medicare+Choice plans: Medicare+Choice is the 
Medicare option of beneficiaries in only 20 of Colorado's 64 counties, 
while Medicare cost contracts are enjoyed by seniors in 46 counties in 
Colorado.
  In addition to accessibility, basic Medicare has fewer benefits than 
cost contract plans, and Medigap has higher out-of-pocket expenses than 
cost contract plans. Cost contract plans often provide more benefits 
than Medigap, such as preventive care and prescription drug benefits, 
and Medicare Part B deductible coverage. In addition, some cost 
contract plans offer one rate for older Medicare beneficiaries, while 
Medigap plans charge higher premiums for beneficiaries who are older.
  Further, beneficiaries under Medicare cost contracts value the 
services cost contracting companies offer. According to a 1999 U.S. 
Department of Health and Human Services study, the Medicare Managed 
Care Consumer Assessment of Health Plans Study, CAHPS, Medicare 
beneficiaries gave Medicare cost contract health insurers higher 
ratings than non-cost contract providers. Beneficiaries noted cost 
contracting HMOs solved problems, provided care, and provided customer 
service better than the majority of non-cost contracting providers. 
These ratings demonstrate that cost contract insurers provide the 
quality service seniors want and the health benefits they need.
  While the goal of the Balanced Budget Act of 1997 was to provide an 
alternative to basic Medicare through Medicare+Choice, Medicare+Choice 
has not accomplished this goal in rural America. One of the objectives 
of President Bush and Tommy Thompson, the Secretary of Health and Human 
Services, is to increase in the near future Medicare+Choice enrollment. 
I support and have confidence in this effort. Until Medicare+Choice 
coverage is readily available to rural cost contract recipients 
Congress should extend the current cost contract sunset for an 
additional ten years.
  Medicare beneficiaries deserve a choice in how they receive their 
health care. Congress should allow one of these choices to remain 
Medicare cost contracts. On behalf of the 298,683 U.S. and 18,050 
Colorado Medicare beneficiaries who obtain their health care from cost 
contract plans, I urge my colleagues to extend Medicare cost contract 
plans for ten years.
                                 ______