Statement of Healthcare Leadership Council

The Healthcare Leadership Council applauds Chairwoman Nancy Johnson for her courageous efforts to maintain the goal of Medicare reform and bring the program into the 21^st Century.

The past couple of years have seen Medicare's precarious bankruptcy date extended and the immediate pressure to reform the program lifted from Congress. Chairwoman Johnson is to be applauded for continuing the dialogue on the issue of Medicare reform and working toward a long-term solution, despite opportunities for a short-term reprieve.

Even more dire than Medicare's budgetary problems is Medicare's inability to keep up with private insurance coverage or with advances in health care technology. An explosion in research has made the control and prevention of disease more veritable than ever. Yet Medicare beneficiaries do not have access to prescription drugs, limits on catastrophic out-of-pocket spending, many preventive benefits, and a number of other health care products and services that are now enhancing and saving the lives of those with employer health insurance including those enrolled in the Federal Employees Health Benefits Program.

The HLC believes it is unrealistic to expect the federal government to finance a comprehensive program with prescription drugs and other benefits under Medicare's currently flawed structure. Recent estimates of spending on prescription drugs by the Congressional Budget Office (CBO) have sharply increased, with spending on drugs by Medicare beneficiaries in 2001 7 percent higher than estimated last year and 23 percent higher by 2010.

Adding a costly drug benefit to today's Medicare while it is facing insolvency, even before peak enrollment by the baby boom generation, would further cripple the program. Instead, Medicare must embrace the innovations in health care delivery, benefit design, and cost management techniques that have occurred in the private sector in order to expand its benefit package and best serve its beneficiaries.

The Healthcare Leadership Council urges Chairwoman Johnson to continue her efforts to work in a bipartisan manner and develop a plan for restructuring Medicare for the long term so that current and future beneficiaries can access the high quality care and benefits they deserve. A reformed Medicare program that includes a wide selection of private health plans competing for Medicare beneficiaries would offer the highest quality of care and services, including prescription drugs and preventive benefits, at the most affordable price.

For the immediate future, HLC encourages Congress to begin incorporating elements of reform into the current Medicare program including a new streamlined regulatory process that is neither burdensome nor complex, an accelerated coverage process to ensure beneficiaries the latest medical technologies, a new independent administering entity to encourage the success of the Medicare+Choice program and any new benefits, a new method of measuring Medicare solvency for all Medicare spending, and an improved Medicare+Choice payment methodology to increase the availability of this program for Medicare beneficiaries.

The members of the Healthcare Leadership Council stand ready to assist the Chairwoman and her subcommittee with their efforts to move Medicare toward assuring that, in the near future, its beneficiaries are able to take advantage of the full potential our health care system has to offer.