[Congressional Record Volume 154, Number 85 (Thursday, May 22, 2008)]
[Senate]
[Pages S4780-S4781]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                                MEDICARE

  Mr. BURR. Mr. President, for the last 8 weeks, a group of Republican 
Senators, led by Senator Vitter, have come to the floor to talk about 
health care. Thus far Senators Vitter, Thune, Isakson, and DeMint have 
spoken about health care particularly the choice we are facing this 
November in electing our next President. I don't think there has ever 
been such a clear difference in opinions between parties on an issue 
that issue is health care.
  One side would like the Government to run health care. The other side 
would like to give individuals and families the resources to access 
their own health care that they can control and take with them from job 
to job. In a nutshell--big government v. individual and family choice.
  This week I am responsible for talking about the most tangible area 
we see this dichotomy--Medicare. Under Medicare, beneficiaries either 
have fee-for-service or Medicare Advantage. The Government sets prices 
and makes coverage decisions under fee-for-service. Multiple private 
sector companies offer comprehensive coverage under Medicare Advantage. 
But the best example of individual choice and private sector 
competition is seen under Medicare's drug benefit--Part D. Let me first 
talk about Medicare Advantage.
  In 2008, Medicare Advantage plans are offering an average of 
approximately $1,100 in additional annual value to enrollees in terms 
of cost savings and added benefits. Some examples of extra benefits 
available through Medicare Advantage plans are; No. 1, coordination of 
care; No. 2, special needs services; No. 3, predictability in out-of-
pocket costs; No. 4, reduced cost-sharing for Medicare covered 
services; and No. 5, vision and dental benefits.
  Competition in the Medicare Advantage Program has created significant 
value for beneficiaries. Medicare Advantage enrollees typically benefit 
from reduced cost-sharing relative to FFS Medicare. All regional PPO 
enrollees have the protection of a required catastrophic spending cap 
and a combined Part A and B deductible. Sixty-seven percent of plans 
have coverage for eye glasses. Eighty-three percent have coverage for 
routine eye exams. Eighty-six percent cover additional inpatient acute 
care stay days. Ninety percent waive the 3-day hospital stay 
requirement for skilled nursing facility care.
  Many Medicare Advantage plan enrollees also receive basic Part D 
prescription drug coverage at a lower cost than stand-alone Part D 
plans can provide. Enrollees in Medicare Advantage plans that include 
Part D coverage save money on drug coverage in two ways: No. 1, 
Medicare Advantage plan drug premiums for basic coverage in 2008 were, 
on average, about $6 less than average Part D premiums for basic 
coverage; and No. 2, the Medicare Advantage payment structure allows 
Medicare Advantage with Part D to use rebates to further reduce Part D 
premiums. On average, Part D premium savings from rebates was more than 
$16 per month in 2008. In 2007 it was reported that 99 percent of 
Medicare beneficiaries have access to Medicare Advantage plans with 
zero added premiums, while 86 percent have access to plans that would 
cover prescription drugs with a zero premium through Medicare 
Advantage.
  Some say Medicare Advantage is not needed because Medicare meets all 
the needs of the beneficiaries, but if this was true, millions of 
seniors would not purchase supplemental Medigap coverage to add 
benefits and pick up some costs. If Medicare Advantage plans were no 
longer available to those currently enrolled, 39 percent of the 
beneficiaries would go without supplementary coverage because they 
could not afford it. According to the NAACP, Medicare Advantage plans 
have been able to provide low income beneficiaries more comprehensive 
benefits and lower cost-sharing than if they just had Medicare alone.
  Medicare Advantage enrollees report on their experience in Medicare 
Advantage plans through the Consumer Assessment of Health Plan Survey, 
CAHPS. Scores from CAHPS are consistently high. Eighty-six percent of 
respondents give their plan a rating of 7 or higher, on a scale of 10. 
Ninety percent of respondents indicated that they usually or always 
received needed care. And 88 percent of respondents indicated that they 
usually or always received care quickly.
  As I said earlier, the greatest example of individual choice and 
private sector competition is found in Medicare Part D. The overall 
projected cost of the drug benefit is $117 billion lower over the next 
10 years than was estimated last summer due to the slowing of drug cost 
trends, lower estimates of plan spending, and higher rebates from drug 
manufacturers. Compared to original Medicare Modernization Act 
projections, the net Medicare cost of the new drug benefit is $243.7 
billion, or 38.5 percent, lower over the 10-year period, 2004 to 2013.
  Ninety percent of Medicare beneficiaries in a stand-alone Part D 
prescription drug plan, PDP, will had access to at least one plan in 
2008 with lower premiums than they were paying in 2007. In every State, 
beneficiaries had access to at least one prescription drug plan with 
premiums of less than $20 a month. The national average monthly premium 
for the basic Medicare drug benefit in 2008 is projected to average 
roughly $25. Seventeen organizations will offer stand-alone 
prescription drug plans nationwide in 2008.
  Beneficiaries had a wide range of plans from which to choose--some 
that have zero deductibles and some that offer other enhanced benefits, 
such as reduced deductibles and lower cost sharing. There also are 
options that cover generic drugs in the coverage gap for as low as 
$28.70 a month; nationwide, beneficiaries in any State can obtain such 
a plan for under $50 a month.
  Consumer satisfaction with the Part D benefit is very high: Wall St 
Journal/Harris Interactive, December 2007--87 percent satisfied; VCR 
Research/Medicare Rx Network, November 2007--83 percent satisfied; KRC/
Medicare Today, October 2007--89 percent satisfied; and 90 percent of 
dual eligible beneficiaries and 85 percent of beneficiaries with 
limited incomes are satisfied. Both the KRC and VCR survey show that 
satisfaction is increasing 10 to 12 percent over the past 2 years and 
that 65 percent to 77 percent say that their Medicare plan is saving 
them money.
  Our experience with the Medicare Advantage and Part D drug plan shows 
one thing--competition and choice works. Under Part D we have true 
competition--private plans bidding against one another and driving down 
the price of drug benefit packages to seniors. Seniors can go onto 
Medicare.gov and select the plan that best suits their needs for drugs, 
copays, pharmacy locations, and the overall premium. As I described 
earlier--premiums are more reasonable than we predicted and 
satisfaction is very high--competition and choice works.
  Under Medicare Advantage we have competition-lite. Plans compete for 
beneficiaries, but Medicare Advantage reimbursement is tied to Medicare 
fee-

[[Page S4781]]

for-services rates in an area. People love to talk about how Medicare 
Advantage plans are reimbursed too much, but unfortunately that rally 
cry is based off a study that did not compare apples to apples. If you 
compare the cost of delivering Part A and B services alone, Medicare 
Advantage plans are only paid 2.8 percent more than Medicare FFS. I am 
comfortable paying 2.8 percent more because seniors have more choices, 
they receive more comprehensive benefits, and their care is coordinated 
under Medicare Advantage plans. Medicare Advantage plans actually match 
treatments with diseases and maintenance care with chronic conditions.
  Senator Coburn and I want to move Medicare Advantage from 
competition-lite to full competition. We will be introducing a bill in 
the coming weeks that will force Medicare Advantage plans to truly 
compete against each other on price. Medicare Advantage plans already 
compete on service and quality under our bill they will have to taken 
lessons from Part D drug plans and compete on price.
  If you have been listening from the beginning, you hopefully 
understand how effective competition and choice have been in two parts 
of the Medicare program. And you understand why I want that same robust 
health care competition and choice for every American. Every American 
deserves access to quality, affordable health care of their choice and 
competition between health care plans will help achieve that goal.

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