[Congressional Record Volume 153, Number 1 (Thursday, January 4, 2007)]
[Senate]
[Pages S126-S127]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. ALLARD (for himself and Mr. Salazar):
  S. 130. A bill to amend title XVIII of the Social Security Act to 
extend reasonable cost contracts under Medicare; to the Committee on 
Finance.
  Mr. ALLARD. Mr. President, currently American seniors enjoy Medicare 
health plans called cost contracts. Under legislation I am introducing 
today, seniors will be able to continue utilizing these valued health 
plans.
  Medicare cost contract plans are vital to America. Cost contracts 
provide Medicare beneficiaries in many rural areas and small cities 
throughout our country with an affordable, high-quality option to the 
traditional Medicare fee-for-service plan. For many of these 
beneficiaries, Medicare Advantage plans do not provide access to 
physicians in the community.
  Medicare cost contracts are managed care plans that are reimbursed on 
a cost basis for providing health services. Under current law, cost 
contracts are one option for Medicare beneficiaries. Cost contract 
premiums cover Medicare deductibles and additional benefits not covered 
by basic Medicare. Further, for the costs of a normal Medicare fee-for-
service copayment, seniors with cost contracts can use any Medicare 
provider regardless of whether they participate in the health plans 
network. This is critical in rural areas where physicians are scarce.

  Cost contracts are vital to seniors who have them. From New York to 
Oregon, and even to Hawaii, America's seniors are enrolled in cost 
contract plans. Cost contracts are especially important in rural 
Colorado. Of the Coloradans with cost contract plans, 89 percent live 
in rural Colorado, where few physicians will see patients under 
straight Medicare or Medicare Advantage.
  Many beneficiaries who are enrolled in Medicare cost contract plans 
live on limited incomes. Under the traditional Medicare program, 
beneficiaries incur considerable out-of-pocket expenses. In addition, 
Medicare supplemental insurers frequently age-adjust premiums

[[Page S127]]

and either refuse coverage or impose coverage restrictions for pre-
existing conditions. Medicare cost contract plans provide an affordable 
alternative.
  Unfortunately, under current law cost contracts soon will terminate.
  I believe Congress should work to extend Medicare cost contracts 
further. My bill, the Medicare Cost Contract Extension and Refinement 
Act of 2007, would accomplish this by extending by five years the cost 
contract sunset date of December 31, 2007, to December 31, 2012.
  Cost contracts have been a bipartisan issue, with bipartisan support 
in the past. Senator Wyden of Oregon worked to get an extension for 
cost contracts in the 109th Congress, and I look forward to working 
with him again during the 110th.
                                 ______