[Congressional Record Volume 149, Number 76 (Wednesday, May 21, 2003)]
[Extensions of Remarks]
[Pages E1030-E1031]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




     INTRODUCTION OF THE MEDICARE OUT-OF-POCKET SPENDING LIMIT ACT

                                 ______
                                 

                        HON. FORTNEY PETE STARK

                             of california

                    in the house of representatives

                        Wednesday, May 21, 2003

  Mr. STARK. Mr. Speaker, I rise today to introduce the Medicare Out-
of-Pocket Spending Limit Act of 2003. This legislation protects 
Medicare beneficiaries from potentially ruinous medical bills by 
ensuring they will never have to pay more than $2,000 out-of-pocket for 
Medicare services. It does so without limiting seniors' choice of 
physician and without forcing seniors to leave Medicare and join a 
private plan. In short, it is real Medicare reform, the kind of reform 
that seniors and people with disabilities want and need.
  President Bush and many of my Republican colleagues portray Medicare 
as a disastrous program that is broken, bankrupt, and dumb. They think 
private insurers--the same ones who refused to cover seniors back in 
1965 when Medicare was created--can do a better job than Medicare has 
done for the last 38 years.
  More than 40 million seniors and individuals with disabilities know 
that President Bush and Congressional Republicans are wrong. They know 
that Medicare is a vitally important program that successfully protects 
some of the most vulnerable among us. They want us to strengthen 
Medicare, not undermine it. That is why I am introducing the Medicare 
Out-of-Pocket Spending Limit Act.
  The bill I am introducing today provides an essential Medicare 
improvement for all Medicare beneficiaries. Today Medicare covers about 
52% of seniors' health costs, leaving many to pay significant medical 
bills out of their own pockets. Medicare beneficiaries with chronic 
conditions or catastrophic illnesses face the greatest risk of 
potentially unlimited health costs. Most Medicare beneficiaries have 
incomes below $20,000 per year and cannot afford to spend a large share 
of their income on health care.
  The Medicare Out-of-Pocket Spending Limit Act will offer seniors the 
security of knowing that they will never have to pay more than 
$2,000 out-of-pocket on Medicare services per year. Current and future 
Medicare beneficiaries will have the option of enrolling in this new, 
voluntary benefit at an affordable premium. Beneficiaries with incomes 
below 175 percent of the federal poverty level would pay reduced or 
zero premiums.

  The benefits provided by the Medicare Out-of-Pocket Spending Limit 
Act are long overdue. In testimony before the Ways and Means Health 
Subcommittee this month, the Chairman of the Medicare Payment Advisory 
Commission identified the lack of a spending limit as a ``serious 
limitation of the Medicare benefit package.'' In January 2003, the 
National Academy of Social Insurance's Study Panel on Medicare and 
Chronic Care in the 21st Century recommended that Congress ``limit 
cost-sharing requirements by adding an annual cap on out-of-pocket 
expenditures for covered services.'' The Medicare Out-of-Pocket 
Spending Limit Act follows through on these expert recommendations.
  Importantly, the Medicare Out-of-Pocket Spending Limit Act provides 
these improvements in traditional Medicare. Unlike the President's and 
the Congressional Republicans' plan to ``reform'' Medicare by ending it 
as a defined benefit for all beneficiaries, my bill will guarantee that 
elderly and disabled Americans will never be forced to give up 
traditional Medicare in order to get crucial benefits. Beneficiaries 
will be free to choose between the traditional Medicare program and 
private plans. But it will be a real choice, not coerced through the 
lure of more generous coverage. Seniors should never have to choose 
between the doctors they know and trust and the coverage they need.
  This legislation is supported by beneficiary advocacy groups 
including: Families USA, the Center for Medicare Advocacy, the Alliance 
for Retired Americans, and the Medicare Rights Center. I urge my 
colleagues to join us in support of strengthening Medicare for all 
seniors and disabled Americans by cosponsoring the Medicare Out-of-
Pocket Spending Limit Act.
  Below is a more detailed summary of the legislation:

       Medicare Out-of-Pocket Spending Limit Act of 2003--Summary

       This bill would improve Medicare for all beneficiaries by 
     adding a new voluntary benefit to the traditional Medicare 
     program. Seniors and disabled Americans electing this 
     coverage would be protected from extraordinary out-of-pocket 
     costs when they need medical care. The additional benefit--
     created under a new Medicare Part D--would have the following 
     features:
       Out-of-pocket limit. Beneficiaries enrolled in the new 
     benefit would never pay more than $2,000 out-of-pocket per 
     year for services covered under the traditional Medicare 
     program. The out-of-pocket spending limit would be adjusted 
     each year by the growth in average per capita spending under 
     this new benefit.
       Eligibility and enrollment. Beneficiaries entitled to 
     Medicare Part A and enrolled in Part B would be eligible for 
     the new benefit. Current Medicare beneficiaries would have a 
     one-time six-month open enrollment period to elect this 
     coverage. Otherwise, normal Medicare enrollment rules would 
     apply.
       Premiums. Premiums for the new benefit would be calculated 
     in the same manner as Medicare Part B premiums (25 percent of 
     estimated program costs), with a late enrollment penalty for 
     beneficiaries who choose not to enroll during the open 
     enrollment period.
       Low-income beneficiaries. Beneficiaries with incomes up to 
     150 percent of poverty would be eligible for the new benefit 
     with no additional premiums. Beneficiaries with incomes 
     between 150 percent and 175 percent of poverty would be 
     eligible for the new benefit with a sliding scale premium. No 
     assets test would be used in determining eligibility for 
     these additional low-income protections. These low-income 
     benefits would be administered by the States but 100 percent 
     federally funded.
       Medicare+Choice. All Medicare+Choice plans would have to 
     provide the out of-pocket spending limit benefit. Plans would 
     be

[[Page E1031]]

     paid a geographic- and risk-adjusted rate, based on projected 
     national per capita costs of the out-of-pocket spending limit 
     benefit in traditional Medicare.

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