Opening Statement of the Hon.

Hearing on Status of the Medicare+Choice Program

December 4, 2001

Thank you, Madame Chair, for holding this hearing at the request of the Democrats. We appreciate your willingness to use the subcommittee's resources to investigate the questionable - if not illegal - benefit and cost-sharing changes being proposed by some Medicare+Choice plans for 2002.

As you know, the impetus for this hearing comes from concern regarding a proposed plan submitted by UnitedHealthCare for beneficiaries in Milwaukee, WI which is represented by the Honorable Jerry Kleczka on our committee. This plan contains excessive cost-sharing increases that may well violate the statute's requirement that M+C plans cover at least all Medicare-covered services. While United's plan is the most extreme example I have seen, I am also aware of other proposed benefit packages offered in my district and in other parts of the country that raise similar concerns.

Beneficiaries join Medicare+Choice plans because they hold out the opportunity to get all of Medicare's benefits in addition to lowered cost-sharing and, depending on where you live, additional benefits like prescription drugs, vision care, and hearing aids. At a minimum, the plans are required to provide all Medicare-covered services.

However, the gamesmanship being played with the benefit packages in many Medicare+Choice plans for next year calls into serious question whether these plans are fulfilling their obligation under the law.

If you join a Medicare+Choice plan, you are prohibited by law from also owning a Medigap policy. Yet, Medicare+Choice seniors in Milwaukee will next year face hospital charges that will far exceed the $812 hospital deductible in Medicare fee-for-service. Beneficiaries in my district will pay $50 for each dialysis visit. Medicare-covered drugs that are self-injected or used for chemotherapy will cost some members $250 a treatment. Under these plans beneficiaries will pay more in Medicare+Choice than they would in FFS Medicare. If you are a low-income senior citizen or a person with a disability, Medicare+Choice with this kind of cost-sharing is an even worse option than fee-for-service Medicare on its own.

These are Medicare-covered services that they are playing with and Medicare+Choice plans are upping the cost of these particular benefits for only one reason - to avoid covering people that need those benefits.

That's why Rep. Kleczka, myself, and a number of other colleagues in Congress joined together to introduce the Medicare+Choice Consumer Protection Act.

This bill does three simple things to help Medicare+Choice enrollees. For beneficiaries who have seen their benefits eroded, it provides them with Medigap protections to leave Medicare+Choice and join a Medigap plan without medical underwriting. It eliminates the upcoming "lock-in" which would prohibit beneficiaries from being able to leave a Medicare+Choice plan at their choosing. And, in general, it prohibits Medicare+Choice plans from charging higher cost-sharing for particular services than is charged in the Medicare fee-for-service program.

The HMO industry has won the battle to continually delay risk adjustment which means that we continue to overpay them for the relatively low-risk population they serve. Now, they are using benefit and cost-sharing techniques to further avoid risk and ensure minimal expenditures on this line of business.

We need to say no. Our bill would prohibit these practices and make the playing field a bit fairer for beneficiaries.

Unbelievably, at the same time that these plans are reducing coverage of Medicare-covered services, the HMOs are up on Capitol Hill trolling for increased payments. I hope everyone has an opportunity to review a new GAO report we've released today entitled, "Medicare+Choice: Recent Payment Increases Had Little Effect on Benefits or Plan Availability in 2001." As the title indicates, the report makes clear that the $1 billion in extra funds that went to Medicare HMOs this year did almost nothing to increase benefits or plan options for people. It is further evidence that what is needed in Medicare+Choice are additional consumer protections - not additional money.

I am pleased that CMS Administrator Scully and a representative from UnitedHealthCare are here today to answer questions about the agency process for approving Medicare+Choice plans and the United proposal in particular.  In addition, I'd like to welcome Stephanie Sue Stein and thank her in advance for representing the beneficiary perspective.