Opening Statement of the Hon. Gerald D. Kleczka, a Representative in Congress from the State of Wisconsin

Hearing on Status of the Medicare+Choice Program

December 4, 2001

I would like to thank Chairwoman Johnson for accepting my request for a hearing to investigate the reductions in benefits and dramatic increases in cost-sharing that beneficiaries face next year as a result of private decisions by Medicare+Choice plans.

I am particularly pleased that the Subcommittee has invited, at my request, Ms. Stephanie Sue Stein, Director of the Milwaukee County Department on Aging.  Ms. Stein is a tireless advocate for senior citizens in Milwaukee and throughout the State of Wisconsin.  I am confident that she will provide the Subcommittee a compelling, first-hand account of the devastating effects the benefit reductions are having on seniors and their families.

Last month, UnitedHealthcare of WI notified 16,000 seniors in the Milwaukee area that their “PrimeCare Gold” Medicare+Choice plan would be changing to a new “Medicare Complete” plan beginning January 1, 2002. Although UnitedHealthcare decided to lower beneficiaries’ premiums from $65 to $55 per month, the insurer significantly increased rates and reduced benefits for numerous health services.  For instance, last year, under the PrimeCare Gold plan, beneficiaries were not subject to a copayment for inpatient hospital services.  Under the new Medicare Complete plan, beneficiaries will have to pay a copayment of $295 per day.  Likewise, for the first time, beneficiaries in Medicare Complete will have to pay $150 per day for skilled nursing facility services, $30 per visit for outpatient rehabilitation, and 20 percent per outpatient visit for renal dialysis.  In addition, Medicare Complete has a $4,800 out-of-pocket limit on inpatient and outpatient services.  Unlike the new name, this coverage is by no means “complete.”

The Medicare+Choice program was intended to provide more health insurance options and benefits for seniors at less cost.  As so many Wisconsin seniors know, it has failed to deliver such promises.  Since UnitedHealthcare is the last remaining Medicare+Choice plan in the Milwaukee area, senior citizens will be forced to pay significantly higher rates or return to the traditional fee-for-service Medicare program.  But, if they do so, they are unable to purchase a Medigap supplemental policy without penalty.

To express my opposition to UnitedHealthcare's dramatic price increases, I wrote a letter to Mr. Tom Scully, Administrator of the Centers for Medicare and Medicaid Services (CMS), and requested his immediate intervention to reject these benefit changes and to ensure a viable Medicare+Choice option is available to Milwaukee residents.  I have included a copy of this correspondence for the record.  In addition, I have spoken personally with both Administrator Scully and U.S. Department of Health and Human Services Secretary Tommy Thompson to urge them to renegotiate this plan.

Both Mr. Scully and Secretary Thompson have been attentive to my plea on behalf of Wisconsin seniors enrolled in UnitedHealthcare’s plan.  Mr. Scully, in particular, has been responsive and has notified me during each step of the CMS approval process.  I appreciate his personal attention to and concern regarding this critical matter.

Although some progress was made to lower the hospital inpatient copayment, I still believe that $295 per day for hospital inpatient services is outrageous and unacceptably high.  A senior enrolled in Medicare Complete plan could be required to pay up to $4,800 for an inpatient hospital stay that would cost $812 under the traditional fee-for-service Medicare program.  This is ludicrous, and I question its legality.  Certainly, such a plan was not the intent of Congress.

Regrettably, CMS approved the plan, so I have taken other steps to help protect seniors who find themselves trapped in a plan in the future that no longer meets their financial or health needs.  I have cosponsored legislation, entitled the Medicare+Choice Consumer Protection Act of 2001 (H.R. 3267), that would extend much-needed protections to seniors who would like to exit their Medicare+Choice plan due to the high rates and return to the traditional Medicare program with a supplemental Medigap plan.

Under current law, seniors whose Medicare+Choice plan drops their coverage have the option to buy Medigap insurance to supplement traditional Medicare without penalty.  During this time, an insurance company that sells Medigap policies cannot: refuse to sell the policy to the beneficiary; impose a waiting period, exclude coverage for a pre-existing condition, or, charge a higher price for the policy because of health status.

Unfortunately, these protections are not provided to senior citizens who choose to disenroll in their Medicare HMO due to reduced benefits or increased cost-sharing.  This critical legislation would ensure that seniors who leave their Medicare HMO for those reasons would be able to purchase Medigap supplemental insurance without penalty.  H.R. 3267 would also prohibit Medicare+Choice plans from charging higher cost-sharing for a service than Medicare charges in the fee-for-service program, which has been of debate in UnitedHealthcare’s Medicare Complete plan.  It is imperative that the Subcommittee quickly considers this or other comparable legislation to ensure seniors have the time to carefully review their health care options and be assured the best possible care.

In the meantime, I am pleased that CMS seems to have heeded the concerns of senior citizens—at least for this year—by calling for a Special Enrollment Period (SEP), in which seniors can leave their Medicare HMO and have guarantee issue rights to purchase a Medigap policy.  I look forward to hearing more details about this SEP from Administrator Scully during today’s hearing.  In particular, I hope to learn how CMS intends to notify seniors of this new special right to disenroll without penalty.

Again, I thank Chairwoman Johnson and Ranking Member Stark for their willingness to put a spotlight on the current situation in Milwaukee, Wisconsin and investigate the drastic reductions of benefits and increases in cost-sharing for beneficiaries in Medicare HMOs next year.