ADVISORY
FROM THE COMMITTEE ON WAYS AND MEANS

SUBCOMMITTEE ON HEALTH

Johnson Announces Hearing on Status of the Medicare+Choice Program

Congresswoman Nancy L. Johnson (R-CT), Chairman, Subcommittee on Health of the Committee on Ways and Means, today announced that the Subcommittee will hold a hearing on recent changes in the Medicare+Choice program that have adversely affected seniors and people with disabilities. The hearing will take place on Tuesday, December 4, 2001, in the main Committee hearing room, 1100 Longworth House Office Building, beginning at 10:00 a.m.

In view of the limited time available to hear witnesses, oral testimony at this hearing will be from invited witnesses only. Witnesses will include The Honorable Thomas Scully, Administrator of the Centers for Medicare and Medicaid Services, an independent program expert, a beneficiary representative and representatives of health plans. However, any individual or organization not scheduled for an oral appearance may submit a written statement for consideration by the Subcommittee and for inclusion in the printed record of the hearing.

BACKGROUND:

The Medicare+Choice program was created through the Balanced Budget Act of 1997 (BBA 97) (P.L. 105-33). Medicare+Choice gives beneficiaries the option of choosing to enroll in private, integrated health plans that often offer coordinated and additional benefits, such as prescription drugs. Today, 15 percent of Medicare beneficiaries are enrolled in Medicare+Choice.

Although Medicare+Choice is popular with many beneficiaries, the program faces significant challenges. Enrollment in Medicare managed care had been increasing steadily until the changes mandated by BBA 97. Since that time, enrollment has declined by about 800,000 beneficiaries or about 12 percent. Prescription drug coverage has been eliminated or cut back dramatically in recent years, while program participants' cost sharing and premiums have increased, in some areas significantly. In 2002, only half of the Medicare population will have access to at least one Medicare+Choice plan with drug coverage, down from 65 percent in 1999. In addition, only one-third of the Medicare population will have access to a zero premium plan in 2002, down from 61 percent in 1999. Cost sharing for Medicare-covered services will jump 78 percent in 2002, from $14.88 per enrollee, per month, to $26.60 per enrollee, per month.

Next year more than 500,000 Medicare beneficiaries in 28 states will be forced to change their health coverage or move back to Medicare fee-for-service largely because reimbursement has not kept pace with health care inflation. Ninety-two thousand beneficiaries will no longer have a coordinated care option, 38,000 of whom will have to return to the Medicare fee-for-service program. These enrollees may supplement their lost benefits by purchasing a Medigap policy. The Medicare statute requires guaranteed issue for plans A, B, C, or F with any company within 63 days if the plan terminates coverage in a beneficiary's service area, but not if benefits are reduced or cost sharing is increased.

The Subcommittee is investigating recent reports that certain plans will significantly reduce benefits and increase premiums and cost sharing next year as a result of inadequate payments.

"Clearly, we are at a crossroads for Medicare+Choice. Recent benefit changes and cost sharing increases point to a fundamental flaw in the underlying payment formula that does not accurately reflect the cost of providing health services. Some fundamental changes are necessary this year to rationalize the payment and regulatory structure so seniors and the disabled who choose a Medicare+Choice plan enjoy the full range of supplemental benefits like prescription drugs and disease management not available in traditional Medicare," stated Chairman Johnson.

FOCUS OF THE HEARING:

Tuesday's hearing will focus on announced reductions in benefits and increases in cost sharing and premiums beneficiaries face next year as a result of plan decisions. The Subcommittee is interested in whether plans are meeting their requirement to provide all Medicare covered services and what needs to be done to improve benefits for seniors.

.DETAILS FOR SUBMISSION OF WRITTEN COMMENTS:

Please note: Due to the change in House mail policy, any person or organization wishing to submit a written statement for the printed record of the hearing should send it electronically to "hearingclerks.waysandmeans@mail.house.gov," along with a fax copy to 202/225-2610, by the close of business, Tuesday, December 18, 2001. Those filing written statements who wish to have their statements distributed to the press and interested public at the hearing should deliver their 200 copies to the Subcommittee on Health in room 1136 Longworth House Office Building, in an open and searchable package 48 hours before the hearing. The U.S. Capitol Police will refuse messenger deliveries to all House Office Buildings.

FORMATTING REQUIREMENTS:

Each statement presented for printing to the Committee by a witness, any written statement or exhibit submitted for the printed record or any written comments in response to a request for written comments must conform to the guidelines listed below. Any statement or exhibit not in compliance with these guidelines will not be printed, but will be maintained in the Committee files for review and use by the Committee.

1. Due to the change in House mail policy, all statements and any accompanying exhibits for printing must be submitted electronically to "hearingclerks.waysandmeans@mail.house.gov," along with a fax copy to 202/225-2610, in WordPerfect of MS Word format and MUST NOT exceed a total of 10 pages including attachments. Witnesses are advised that the Committee will rely on electronic submissions for printing the official hearing record.

2. Copies of whole documents submitted as exhibit material will not be accepted for printing. Instead, exhibit material should be referenced and quoted or paraphrased. All exhibit material not meeting these specifications will be maintained in the Committee files for review and use by the Committee.

3. A witness appearing at a public hearing, or submitting a statement for the record of a public hearing, or submitting written comments in response to a published request for comments by the Committee, must include on his statement or submission a list of all clients, persons, or organizations on whose behalf the witness appears.

4. A supplemental sheet must accompany each statement listing the name, company, address, telephone and fax numbers where the witness or the designated representative may be reached. This supplemental sheet will not be included in the printed record.

The above restrictions and limitations apply only to material being submitted for printing. Statements and exhibits or supplementary material submitted solely for distribution to the Members, the press and the public during the course of a public hearing may be submitted in other forms.

Note: All Committee advisories and news releases are available on the World Wide Web at "http://waysandmeans.house.gov".

The Committee seeks to make its facilities accessible to persons with disabilities. If you are in need of special accommodations, please call 202-225-1721 or 202-226-3411 TTD/TTY in advance of the event (four business days notice is requested). Questions with regard to special accommodation needs in general (including availability of Committee materials in alternative formats) may be directed to the Committee as noted above.