[Congressional Record (Bound Edition), Volume 147 (2001), Part 4]
[Extensions of Remarks]
[Pages 4746-4747]
[From the U.S. Government Publishing Office, www.gpo.gov]



      INTRODUCTION OF THE MEDICARE EARLY ACCESS AND TAX CREDIT ACT

                                 ______
                                 

                        HON. FORTNEY PETE STARK

                             of california

                    in the house of representatives

                        Tuesday, March 27, 2001

  Mr. STARK. Mr. Speaker, I am pleased to join with Rep. Sherrod Brown 
and a number of additional colleagues to introduce the ``Medicare Early 
Access and Tax Credit Act.'' Companion legislation is being introduced 
by Sen. Rockefeller in the Senate as well.
  More than 43 million Americans have no health insurance today. There 
are many approaches to solutions for decreasing the number of 
uninsured. As most of my colleagues are aware, I support the creation 
of a universal health care system in which each and every American 
would have health insurance coverage. That is the most fair, 
affordable, and sustainable solution to our national health care needs.
  However, that won't be accomplished overnight. In the meantime, there 
are steps that Congress can and should be taking to develop immediate, 
if smaller, solutions to providing people affordable health insurance 
coverage options. One such step is to pass legislation that would 
provide certain groups of individuals the option of buying into 
Medicare.
  A recent Kaiser Family Foundation survey found that a majority of 
voters believe that the next population of the uninsured who should be 
helped is those aged 55-64. I agree.
  A Commonwealth Fund study from July 2000 found that more than half of 
uninsured adults in the 50-64 age range trusted Medicare the most as a 
source of health insurance and nearly two-thirds of them would be 
interested in enrolling in Medicare early if that option were 
available. So, expanding Medicare would likely be a very attractive 
option to people of this age.
  While the 55-64 segment of our population has a lower overall 
percentage of uninsured than other age segments, once these people lose 
insurance it is often difficult or impossible for them to obtain 
affordable coverage in the private insurance marketplace. And, with the 
aging of the baby boom generation, this is a quickly growing segment of 
our population. In 1999, there were 23.1 million
  Given all of these facts, I have joined with many colleagues to 
introduce the Medicare Early Access and Tax Credit Act of 2001, a bill 
to expand access to Medicare's purchasing power to certain individuals 
below age 65.
  The Medicare Early Access and Tax Credit Act would enable eligible 
individuals to harness Medicare's clout in the marketplace to get much 
more affordable health coverage than they are able to purchase in the 
private sector market that currently exists. And, to make this coverage 
more affordable, we have attached a 50 percent tax credit to it.
  The bill would provide a very vulnerable population (age 55-64) with 
three new options to obtain health insurance (All numbers referenced 
below are based on the 2000 version of the bill so they are subject to 
change in our new legislation)
  Individuals 62-65 years old with no access to health insurance could 
buy into Medicare by paying a base premium (about $326 a month) during 
those pre-Medicare eligibility years and a deferred premium during 
their post-65 Medicare enrollment (about $4 per month in 2005 for an 
individual who participated in the full three years of the new 
program). The deferred premium is designed to reimburse Medicare for 
the extra costs due to the fact that sicker than average people are 
likely to enroll in the program. The deferred premium would be payable 
out of the enrollee's Social Security check between the ages of 65-85.
  Individuals 55-62 years old who have been laid off and have no access 
to health insurance, as well as their spouses, could buy into Medicare 
by paying a monthly premium (about $460 a month). There would be no 
deferred premium. Certain eligibility requirements would apply.
  Retirees aged 55 or older whose employer-sponsored coverage is 
terminated could buy into their employer's health insurance for active 
workers at 125 percent of the group rate. This would be a COBRA 
expansion, with no relationship to Medicare.
  Again, our new bill, The Medicare Early Access and Tax Credit Act of 
2001 supplements our previous versions of this legislation by 
incorporating a new 50 percent tax credit that would be attached to 
each of the three programs. Thus, the actual cost to the enrollees 
would be substantially less than the cost under the proposals in last 
year's legislation.
  Affordability is a key component of expanding health insurance 
coverage. Adding a tax credit to the programs increases their 
affordability so that more people age 55 and older can take advantage 
of the program. Last year's analysis from the Congressional Budget 
Office and the Joint Committee on Taxation, indicated that more than 
500,000 currently uninsured people would gain health insurance coverage 
by enactment of the Medicare Early Access and Tax Credit
  The Medicare Early Access Act and Tax Credit Act isn't the total 
solution for people age 55-64 who lack access to health insurance 
coverage. However, if passed, it would make available health insurance 
options for these individuals at much less than the cost of what is 
available today. This is a meaningful step forward in expanding health 
insurance coverage to a segment of our population that is quickly 
losing coverage in the private sector. The Medicare Early Access and 
Tax Credit Act is legislation that we should be able to agree upon and 
to enact so that people age 55-64 have a new, viable option for health 
insurance coverage. I look forward to working with my colleagues on 
both sides of the aisle and in the House and Senate to enact the 
Medicare Early Access and Tax Credit Act.
  A more detailed summary of the legislation follows:

                Medicare Early Access and Tax Credit Act

       (Please note: all numbers below are based on CBO/Joint 
     Committee on Taxation analysis of the legislation in 2000. We 
     will have updated figures once the new version of the bill is 
     analyzed.)


                 TITLE I: HELP FOR PEOPLE AGED 62 TO 65

       62-65 year olds without health insurance may buy into 
     Medicare by paying monthly premiums and repaying any extra 
     costs to Medicare through deferred premiums between ages 65 
     to 85.
       Starting July, 2002, the full range of Medicare benefits 
     (Part A & B and Medicare+Choice plans) may be brought by an 
     individual between 62-65 who has earned enough quarters of 
     coverage to be eligible for Medicare at age 65 and who has no 
     health insurance under a public plan or a group plan. (The 
     individual does not need to have exhausted any employer COBRA 
     eligibility).
       A person may continue to buy-into Medicare even if they 
     subsequently become eligible for an employer group health 
     plan or public plan. Individuals move into regular Medicare 
     at age 65.
       Financing: Enrollees must pay premiums. Premiums are 
     divided into two parts:
       (1) Base Premiums of about $326 a month payable during 
     months of enrollment between 62 and 65, which will be 
     adjusted for inflation and will vary a little by differences 
     in the cost of health care in various geographic regions, and
       (2) Deferred Premiums which will be payable between age 65-
     85, and which are estimated to be about $4 per month in 2005 
     for someone that participated for the full three years. The 
     Deferred Premium will be paid like the current Part B 
     premium, i.e., out of one's Social Security check.
       Note, the Base Premium will be adjusted from year to year 
     to reflect changing costs (and individuals will be told that 
     number each year before they choose to enroll), but the 20 
     year Deferred Premium will not change from the dollar figure 
     that the beneficiary is told when they first enroll between 
     62-65--they will be able to count on a specific dollar 
     deferred payment figure.
       The Base Premium equals the premium that would be necessary 
     to cover all costs if all 62-65 year olds enrolled in the 
     program.

[[Page 4747]]

     The Deferred Premium repays Medicare for the fact that not 
     all will enroll, but that many sicker than average people are 
     likely to voluntarily enroll. The Deferred Premiums ensure 
     that the program is eventually full financed over roughly 20 
     years.


       title ii: help for 55- to 62-year-olds who lose their jobs

       55-62 year olds who are eligible for unemployment insurance 
     (and their uninsured spouses) may buy into Medicare through a 
     premium.
       The full range of Medicare benefits may be bought by an 
     individual between 55-62 who: (1) has earned enough quarters 
     of coverage to be eligible for Medicare at age 65; (2) is 
     eligible for unemployment insurance; (3) before lay-off had a 
     year-plus of employment-based health insurance; and (4) 
     because of the unemployment no longer has such coverage or 
     eligibility for COBRA coverage.
       A worker's spouse who meets the above conditions (except 
     for UI eligibility) and is younger than 62 may also buy-in 
     (even if younger than 55).
       The worker and spouse must terminate buy-in if they become 
     eligible for other types of insurance, but if the conditions 
     listed above reoccur, they are eligible to buy-in again. At 
     age 62 they must terminate and can covert to the Title I 
     program. Non-payment of premiums is also cause for 
     termination.
       There is a single monthly premium roughly equal to $460 
     that will be adjusted for inflation. It must be paid during 
     the time of buy-in; there is no Deferred Premium. This 
     premium is set to recover base costs plus some of the cost 
     created by the likely enrollment of sicker than average 
     people.


 title iii: help for workers 55+ whose retiree benefits are terminated

       Workers age 55+ whose retirement health insurance is 
     terminated by their employer may buy into their employer's 
     health insurance for active workers at 125% of the group rate 
     (this is an extension of COBRA health continuation coverage--
     not a Medicare program).
       This Title is an expansion of the COBRA health continuation 
     benefits program. If a worker and dependents have relied on a 
     company retiree health benefit plan, and that protection is 
     terminated or substantially slashed during his or her 
     retirement, but the company continues a health plan for its 
     active workers, then the retiree may buy-into the company's 
     group health plan at 125% of cost. They can remain in that 
     plan, paying 125% of the premium, until they are eligible for 
     Medicare at age 65.


                         title iv: tax credits

       Creates a new, federal tax credit equal to 50% of the 
     amount paid by an individual for any of the three new 
     programs described above. Thus the actual cost of 
     participation will be half of the dollar amounts described 
     above. This tax credit assures much greater participation 
     levels because it dramatically lowers the monthly premiums.

     

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