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35–957 PDF 2007

S. HRG. 110–82

PRESERVING SENIORCARE: AFFORDABLE DRUG

COVERAGE THAT WORKS FOR WISCONSIN

HEARING

BEFORE THE

SPECIAL COMMITTEE ON AGING 

UNITED STATES SENATE

ONE HUNDRED TENTH CONGRESS

FIRST SESSION

WASHINGTON, DC

MARCH 28, 2007

Serial No. 110–4

Printed for the use of the Special Committee on Aging

(

Available via the World Wide Web: http://www.gpoaccess.gov/congress/index.html 

SPECIAL COMMITTEE ON AGING 

HERB KOHL, Wisconsin, Chairman 

RON WYDEN, Oregon 

BLANCHE L. LINCOLN, Arkansas 

EVAN BAYH, Indiana 

THOMAS R. CARPER, Delaware 

BILL NELSON, Florida 

HILLARY RODHAM CLINTON, New York 

KEN SALAZAR, Colorado 

ROBERT P. CASEY, Jr., Pennsylvania 

CLAIRE McCASKILL, Missouri 

SHELDON WHITEHOUSE, Rhode Island 

GORDON SMITH, Oregon 

RICHARD SHELBY, Alabama 

SUSAN COLLINS, Maine 

MEL MARTINEZ, Florida 

LARRY E. CRAIG, Idaho 

ELIZABETH DOLE, North Carolina 

NORM COLEMAN, Minnesota 

DAVID VITTER, Louisiana 

BOB CORKER, Tennessee 

ARLEN SPECTER, Pennsylvania 

JULIE COHEN, Staff Director 

CATHERINE FINLEY, Ranking Member Staff Director 

(II) 

C O N T E N T S 

Page 

Opening Statement of Senator Herb Kohl ............................................................. 1

PANEL I 

Leslie Norwalk, Acting Administrator, Centers for Medicaid and Medicare 

Services, U.S. Department of Health and Human Services, Washington, 

DC .......................................................................................................................... 2

PANEL II 

Jim Doyle, Governor of Wisconsin .......................................................................... 16

PANEL III 

Bette Linton, seniorcare beneficiary, Madison, WI ............................................... 26

Tom Frazier, executive director, Coalition of Wisconsin Aging Groups, Madison, WI .................................................................................................................. 30

Patricia Finder-Stone, state president, AARP Wisconsin, Madison, WI ............. 40

APPENDIX 

Prepared Statement of Represenative Thomas E. Petri ....................................... 53

Prepared Statement of Representative Steve Wieckert ....................................... 53

Prepared Statement of State Representative Thomas Nelson ............................. 54

(III) 

(1)

PRESERVING SENIORCARE: AFFORDABLE 

DRUG COVERAGE THAT WORKS FOR WISCONSIN 

WEDNESDAY, MARCH 28, 2007 

U.S. SENATE, 

SPECIAL COMMITTEE ON AGING, 

Washington, DC. 

The committee met, pursuant to notice, at 10:15 a.m., in room 

562, Dirksen Senate Office Building, Hon. Herb Kohl (chairman of 

the committee) presiding. 

Present: Senator Kohl. 

OPENING STATEMENT OF SENATOR HERB KOHL 

The CHAIRMAN. Hello to everybody. We will commence our hearing right now. 

This hearing focuses on a program that is very important to me, 

to most of the witnesses who are here today and, most importantly, 

to more than 100,000 low-income seniors in the State of Wisconsin. 

Since September 1, 2002, more than 103,000 seniors have participated in Wisconsin’s SeniorCare prescription drug program. The 

Federal Medicaid waiver that allows SeniorCare to operate is set 

to expire on June 30 of this year. 

The Bush Administration holds the key to survival of 

SeniorCare, and we believe that they must act now to renew the 

waiver. Without it, this popular and very successful program will 

end, forcing Wisconsin seniors to join Medicare Part D with a higher cost to both seniors and to taxpayers. 

SeniorCare is a model for a simple, affordable drug plan, and the 

Administration, I believe, should embrace it. It has a one-page application, a $30 annual fee, and a copayment of $5 for generic 

drugs and $15 for brand-name drugs. 

It does not have an asset test, a key difference from Medicare 

Part D, that makes it easier for low-income seniors to get the extra 

help that they need. In fact, many SeniorCare enrollees would not 

be eligible for Medicare’s low-income subsidy because of its difficult 

asset test. 

SeniorCare has strong bipartisan support in the State of Wisconsin, and among the entire Congressional delegation. To us, it is 

a no-brainer. It costs less, it covers more, and seniors are happier. 

As an AARP study points out, 94 percent of SeniorCare participants are better off than they would be under Medicare Part D. 

That is why so many seniors have chosen SeniorCare over Medicare Part D. In fact, enrollment in SeniorCare actually increased 

2

after January 2006, demonstrating that aggressive Part D outreach 

actually resulted in more seniors finding out about SeniorCare and 

signing up for it instead of Medicare Part D. 

Additionally, SeniorCare saves the Federal Government nearly $500 on each beneficiary when compared to Medicare Part D. The 

SeniorCare waiver has also saved an estimated $669 million in 

Medicaid funding, because seniors with SeniorCare have stayed 

healthier longer, avoiding costlier hospital and nursing home care. 

Today we will hear from Leslie Norwalk, acting Administrator 

for the Centers for Medicare and Medicaid Services, CMS, who will 

give the Administration’s perspective on SeniorCare. CMS ultimately has the authority to grant the waiver that would allow 

SeniorCare to operate through June 30, 2010. We appreciate Ms. 

Norwalk’s willingness to participate in this hearing and to hear the 

Wisconsin witnesses make their—our—case for SeniorCare. 

Next, we will hear from four Wisconsin witnesses who will make 

a compelling case for the continuation of SeniorCare. We will be 

pleased to hear from Wisconsin’s Governor, Jim Doyle, who has 

been an outspoken champion of SeniorCare. We will also hear from 

Bette Linton, who is currently on SeniorCare and is an example of 

one of the many Wisconsin seniors who would be worse off under 

Medicare Part D. 

Then we will hear from Tom Frazier, the distinguished executive 

director of the Coalition of Wisconsin Aging Groups, and also Patricia Finder-Stone, the state president at AARP, who will describe 

the hardships that Wisconsin seniors will face if SeniorCare is 

forced to end, as well as to the economic consequences to our State 

and to the Federal Government. 

Now, we hope the Administration will listen carefully to what 

they hear today. We believe it would be a huge mistake for the 

Administration to pull the plug on SeniorCare. It is a program that 

works for seniors and taxpayers, and we are committed to fighting 

to save it, so that Wisconsin seniors get the best and the most affordable drug coverage. 

The Ranking Member, Gordon Smith, will not be able to join us 

this morning because of a conflict with the Finance Committee 

hearing, and so we will now turn to our first panel and our first 

witness, the distinguished Leslie Norwalk. 

Thank you for being here. 

STATEMENT OF LESLIE NORWALK, ACTING ADMINISTRATOR, 

CENTERS FOR MEDICARE AND MEDICAID SERVICES (CMS), 

U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES, 

WASHINGTON, DC 

Ms. NORWALK. Thank you. 

Good morning, Chairman Kohl and distinguished members of the 

Committee. I appreciate the opportunity to appear before you today 

to discuss SeniorCare, a program that provides prescription drug 

coverage to eligible seniors in Wisconsin. 

Prescription drugs are integral to the delivery of safe, modern 

medical care. Accordingly, adding a comprehensive drug benefit to 

Medicare has been a priority at CMS for more than a decade, culminating in the 2003 enactment, and January 2006 implementation, of Medicare Part D. 

3

More than 90 percent of Medicare beneficiaries have prescription 

drug coverage through Part D or another creditable source, at a 

cost significantly lower to both taxpayers and seniors than originally estimated. 

Before Part D, many States played a vital role in offering direct 

pharmaceutical assistance to their residents. Eligible low-income 

seniors often received drug coverage through Medicaid. For others, 

States commonly extended drug coverage through State pharmaceutical assistance programs, or SPAPs. On the eve of Part D implementation, 21 States had SPAPs that provided low-income enrollees with subsidies for prescription drugs. 

Additionally, prior to Part D, CMS recognized the need to work 

with States to extend pharmacy coverage to low-income elderly and 

disabled individuals not otherwise eligible for Medicaid. 

In January 2002, HHS and CMS announced a model demonstration called Pharmacy Plus, which allowed States to expand Medicaid coverage for prescription drugs to seniors and other individuals with family incomes up to 200 percent of the Federal poverty 

level. These Medicaid Section 1115 demonstrations were intended 

to test how providing a pharmacy benefit to a non-Medicaid-covered population would affect Medicaid costs, utilization and future 

eligibility trends. 

CMS approval for Pharmacy Plus waivers required States to establish budget neutrality, meaning that the services provided 

under the demonstration could not exceed the costs that Medicaid 

would otherwise have incurred in the demonstration’s absence. 

The overarching theory for Pharmacy Plus was that prescription 

drug programs for seniors would keep them healthier, target scarce 

resources more effectively, and generate offsetting savings in Medicaid, and that is known as diversion. 

In addition to Wisconsin’s SeniorCare program, CMS approved 

Pharmacy Plus demonstrations in Florida, Illinois and South Carolina, but denied waivers in Delaware and Hawaii because they did 

not meet the budget-neutrality requirements. 

Medicare Part D has significantly altered the landscape in which 

States provide prescription drug coverage to residents age 65 and 

over, as well as those who are disabled. 

Before January 2006, SeniorCare was one of few affordable drug 

coverage options for most low-income seniors in Wisconsin not 

qualified for full Medicaid benefits. Today, they and their counterparts across the country have access to comprehensive prescription 

drug coverage through Medicare. 

Individuals duly eligible for Medicare and Medicaid now receive 

their coverage through the Medicare program. At last count, more 

than 571,000 Wisconsin seniors are receiving drug coverage 

through Part D or other creditable sources. 

The low-income subsidy, or LIS, in Part D provides eligible Medicare beneficiaries with substantial help in paying premiums. Most 

LIS-qualified individuals received 100 percent subsidy, and therefore pay no premium for Part D coverage, and small copayments 

of around $1 to $5.35. 

Part D has had a significant impact on the ability of Pharmacy 

Plus demonstrations to divert seniors from Medicaid and save the 

requisite dollars to show budget neutrality. 

4

Now the Medicare drug benefit, and not the Medicaid demonstration, is chiefly responsible for diverting individuals from full Medicaid eligibility. 

Given the difficulties of establishing and maintaining Medicaid 

budget neutrality in this new Part D environment, all States, except Wisconsin, have discontinued their Pharmacy Plus programs. 

With CMS’s assistance, Illinois and South Carolina have successfully transitioned their demonstrations into Part D wraparound 

programs. 

CMS has reached out to Wisconsin, and is eager to work with the 

State to accomplish the same. Several States have worked with 

CMS to reconfigure or transfer their SPAP coverage or Pharmacy 

Plus waivers to wrap around the new Medicare drug benefit. 

With Part D at its core, States are able to provide beneficiaries 

the same or better coverage than before at a lower per-beneficiary 

cost. Currently, 24 States and the U.S. Virgin Islands operate 

qualified SPAPs to supplement Part D. These SPAPs pay premiums, copayments and deductibles, or fill in the gap for seniors, 

or some combination thereof. 

Wisconsin SeniorCare, the sole remaining Pharmacy Plus waiver, 

is set to expire at the end of June. The program has helped many 

individuals. However, it has failed to meet the State’s own expectations as a demonstration project. 

Enrollment is roughly half of what the State originally projected, 

and $109 million in State expenditures for 2007 is similarly overstated. In the current fiscal year, Wisconsin will spend only about 

$35 million on SeniorCare. 

Finally, the State’s rationale for how SeniorCare would, in fact, 

accomplish Medicaid diversion appears to have been flawed. More 

individuals aged 65 and older have enrolled in Medicaid than the 

State assumed for every year of the demonstration, in spite of the 

demonstration’s generous assumptions of Medicaid enrollment 

growth for seniors as a comparison point for budget-neutrality calculations. 

I greatly appreciate the leadership Wisconsin has demonstrated 

in providing prescription drug coverage to its most vulnerable citizens at a time when there were no other options. 

CMS wants to avoid any interruptions in SeniorCare enrollees’ 

drug coverage, and is committed to partnering with the State to establish an outreach and transition plan in which we can all take 

confidence, much like we have done in 24 other States. 

That being said, we believe the transition to Medicare Part D 

must be made as quickly as possible. CMS looks forward to working with Wisconsin to transition SeniorCare into a program that 

wraps around Part D so that Wisconsin seniors experience as little 

disruption as possible. 

I promise to listen, and am happy to answer any questions that 

you might have. 

The CHAIRMAN. Thank you. 

Well, as you know, SeniorCare—as I have discussed here this 

morning—the waiver expires on June 30 of this year. As you know, 

SeniorCare is a highly, if not wildly, popular program in the State 

of Wisconsin. Yet, as you have made clear, apparently the intention 

5

on the part of yourself and the Administration is that the waiver 

will not be renewed. 

So we want to know why you would take a program that is so 

popular, so successful, and clearly not a program that is by any 

stretch more expensive than Medicare Part D, why would you take 

a program like this and scuttle it? 

Ms. NORWALK. The main reason that we need to change the way 

that the program is structured is how it is funded. 

These individuals, we don’t know enough about their assets in 

terms of whether or not they would qualify for Medicaid or, in fact, 

whether or not they would qualify for the low-income subsidy 

under the Medicare program. The State hasn’t done any particular 

analysis around their assets that is specific to the population that 

has been enrolled. 

So, because of that, and because of the increases in the number 

of individuals or number of seniors who have qualified for Medicaid 

above what the State assumed, they simply don’t meet their budget-neutrality requirements that they had promised to meet in 2002. 

In fact, the number of seniors that enrolled in Medicaid far exceeds, by several thousand, the number that they had estimated 

would be diverted from the program. 

Moreover, while I totally appreciate that Pharmacy Plus has 

been successful in Wisconsin, and I am glad that a program that 

HHS and CMS began started, the assumptions under which it was 

made, the GAO has since questioned as being faulty assumptions. 

So, one of the things that the GAO said was that, ‘‘Neither data 

from State experience nor other research supports the saving assumptions necessary for budget-neutrality in the Pharmacy Plus 

demonstrations.’’

They go on to state that, ‘‘Based on conversations with Wisconsin 

health care financing officials, and a review of documents, we found 

that the State’s demonstration savings estimates were a residual of 

the budget-negotiating process, derived from determining how 

much was needed in savings to demonstrate budget-neutrality, 

rather than from research or data about what was realistic.’’ 

As an example of that, the number of people who are eligible for 

the Medicaid program that are seniors actually declined over the 

past 4 years. I don’t have the number for 2007. Yet, the assumptions that we have put in for meeting budget neutrality show an 

increase, so we would say that 2 percent more every year would be 

eligible for Medicaid, and that is how we assumed their budgetneutrality calculations. 

But what, in fact, has happened was the opposite. Fewer people 

were eligible, and yet an increasing number of people actually went 

on the Medicaid rolls that were seniors. 

So the diversion aspect that the State had to meet in order to 

qualify for this Medicaid demonstration, they failed to meet over 

the 5 years. That is really the key point. 

It is not so much that we don’t want to help Medicare beneficiaries in Wisconsin. Of course we do, just like we have done in 

24 other States. 

But the financing of that help needs to change. The financing of 

that help needs to come through the Medicare program, and 

through the State, rather than through Medicaid. These individVerDate 0ct 09 2002 12:29 Jul 11, 2007 Jkt 000000 PO 00000 Frm 00009 Fmt 6633 Sfmt 6633 H:\DOCS\35957.TXT SAGING1 PsN: JOYCE
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uals are not likely to qualify for Medicaid if they can’t spend down 

to meet the LIS asset test any more than they would meet the 

Medicaid asset test. 

The CHAIRMAN. The average annual Federal subsidy for a SeniorCare participant is $617, which is about half of what the 

Federal Government spends to subsidize a Part D participant. 

You have talked about some very technical budget-neutrality 

rules, but isn’t it true, Ms. Norwalk, that, at the end of the day, 

SeniorCare costs the Federal Government less in its current form 

than it would cost to transfer everyone to Medicare Part D? 

Ms. NORWALK. I actually think that analysis is based, if I understand correctly, on an AARP study from May 2005. I would like to 

point out there are some significant differences that have happened 

in the past 2 years since the AARP did that study. To begin with, the Federal budget has saved over $189 billion 

from its initial estimates of the cost of the program. Moreover, that 

study is based on a $35 average premium. Well, the average premium now across the country is $22, and in Wisconsin there is a 

premium for $14.80. So there alone, the costs are overstated for the 

beneficiary by $240 purely in premiums. Moreover, the number of plans in Wisconsin that have a $0 deductible are the majority of them. There is even a plan in Wisconsin that doesn’t have a coverage gap for a premium under $50. 

So I think that there are lots of options that are available for 

beneficiaries, with or without the SeniorCare program, that the 

AARP report doesn’t take into account when determining savings. 

Finally, I think they overstate the amount that it costs the Federal Government, because of the differences in cost that we have 

seen over the past 2 years. The cost to the Federal Government for 

a non-LIS beneficiary is actually significantly less than the AARP 

report recognizes. It is about $892 a year, rather than the—I don’t 

remember the number you just quoted. What is it, like $1,200? 

In any event, I appreciate that at the time when the analysis 

was done, that was the best information that they had. But a significant amount has actually happened under the Medicare Part D 

program, including satisfaction rates I suspect are very similar to 

what you are seeing with the SeniorCare program. Every study 

that we have seen done, every poll, including J.D. Power and Associates, has a satisfaction rating for Medicare of 75 to 80 percent of 

those who are enrolled. 

So we totally appreciate that both programs are critically important to Medicare beneficiaries, and want very much to continue the 

concept of SeniorCare. 

What we have done in States like, say, Pennsylvania, where they 

have over 200,000 people on their PACE program, which is a similar program to that in Wisconsin, where they can wrap around the 

Part D program, and people who had PACE before Part D and 

after Part D see a very similar product. 

So, for example, in Wisconsin, you would have a $15 copayment 

for the brand-name drugs and $5 for generic or perhaps less, depending on the plan that the State worked with. 

What I would like to do is move, rather from a discussion about 

‘‘Gee, SeniorCare has to exist in its current form,’’ is figure out how 

it is that we can make SeniorCare work with no more cost to the 

7

State by wrapping around the programs that currently exist in 

Wisconsin to provide seniors with something that looks very similar and is as easy as possible for them, appreciating that a transition can make many people nervous. 

But, we have had so much success in the 24 other States we 

have worked with, we feel that our past experience and that success will bode well for transitioning the Wisconsin program from 

one that is Medicaid-based to one that is Medicare-based, with 

some help from the State and the same funds that the State has 

set aside for this program. 

The CHAIRMAN. As you know, Ms. Norwalk, SeniorCare does not 

have an asset test. If SeniorCare ends, many beneficiaries who 

move to Medicare Part D will not qualify for the low-income subsidy because of the complicated asset test. They will have higher 

out-of-pocket costs and could face the dreaded ‘‘donut hole,’’ where 

many seniors will not be able to afford their drugs. 

How can you argue that all of Wisconsin’s seniors will be better 

off under Medicare Part D? 

Ms. NORWALK. I actually think that what we have seen in other 

States that have had wraparound programs is that they have seen 

very similar costs. 

Now, every individual is different, and that is one of the reasons 

that the Part D program has been so successful, is that Medicare 

beneficiaries have been able to choose a plan that makes the most 

sense for them: plans that have no deductibles, plans that fill in 

the coverage gap with both brand and generics, or plans that have 

very low premiums, like $14.80. Every beneficiary needs something 

different. 

But one of the things that we have found for other States, for the 

concern about, ‘‘How do I choose the right plan?’’—even though the 

Medicare program has provided significant numbers of tools for 

beneficiaries, including 1–800–MEDICARE, which is available 24–

7, and significant help from CMS and our partners across the country—one of the things that many States have done is that the State 

decided that they would be the authorized representative of the 

beneficiary. 

They said, we will work with these X number of plans that have 

low premiums or no deductibles, and we will automatically enroll 

beneficiaries in those plans and work with those particular plans 

to wrap around their benefits, so that they see the exact same 

thing that they do now. 

They get a card that has ‘‘SeniorCare’’ on it, it has a $15 copayment for brand-name drugs, it has a $5 copayment for generics, or 

whatever it happens to be, perhaps less depending on the particular plan that the State works with. But we have had such success there that we think the out-of-pocket costs actually may be no 

more. 

Of course, as you know, the SeniorCare program, in many instances, has a deductible that far exceeds the deductible under 

Medicare. For certain populations, it is $500. For other populations—the higher the income level, of course—it is $850. 

Now, most of the plans in Part D in Wisconsin have no deductible. Consequently, there are lots of instances when beneficiaries 

8

have lower drug costs, maybe up to $850, where they would be better off. 

Now, I appreciate that the AARP analysis didn’t have the benefit 

of knowing what was going to be offered in 2007. But I think if 

they took another look at this, they may come out with very different results, as we have done with many other States in working 

with them to wrap around the Medicare Part D program. 

The CHAIRMAN. Well, we are very much appreciative of your willingness to come here and testify and, as I understand, to hang 

around a little bit to hear some of the subsequent testimony, particularly from the Governor and the panel. It shouldn’t take too 

long, and we hope it will be instructive and that you will find it 

useful. 

Ms. NORWALK. I am sure. Thank you for having me this morning. 

The CHAIRMAN. Thank you for being here. 

[The prepared statement of Ms. Norwalk follows:]

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The CHAIRMAN. We now move to our second panel, which will be 

the Governor of Wisconsin, Jim Doyle. Jim Doyle is the former Wisconsin attorney general, and he is now in his second term as our 

Governor. 

Governor Doyle has worked diligently to save and expand the 

SeniorCare program. He is a very strong proponent of it. His efforts 

prove how strongly he feels about its very important role in our 

State’s health care system. We certainly do thank him for following 

that conviction to make this journey here to Washington to testify 

before this Committee today. 

With that, we would like to hear from you, Governor Doyle. 

STATEMENT OF JIM DOYLE, GOVERNOR OF WISCONSIN 

Governor DOYLE. Good morning, Senator. Let me express my 

deep thanks to you for this hearing and for the work that you have 

done for seniors in Wisconsin, and particularly for SeniorCare. 

I want to also acknowledge and thank Ms. Norwalk. 

We continue to hope that we are going to be able to convince 

CMS that extending the waiver for SeniorCare for 3 more years is 

the best thing, not only for seniors in Wisconsin, but also the fact 

that we can do this in a manner that saves the Federal Government money and saves the State of Wisconsin money. 

I am currently here with a cane because I am currently in rehab 

for a little hip procedure that I had. Yesterday, I was in the pool 

at the rehab center. I had one of these instances that I know you, 

Senator, have frequently, where I was there and there was a class 

of seniors in the warm-water pool who were going through their exercises. They noticed that I was over in the other pool doing my 

rehab work, and you could tell people were talking with each other. 

As they came out of their pool at the end of their class, I would 

say about three-quarters of the group—I would think it was about 

20—about 15 of them came over to me and said, ‘‘Please save 

SeniorCare. Please save SeniorCare.’’ It was only one more instance of what happens to me frequently and, I know, to you as 

well, Senator, as you go though Wisconsin. 

All of us in Government appreciate the fact that there are often 

programs that work that people are very concerned about, and 

aren’t tremendously favorable toward the Governmental program. 

In my experience as Governor, SeniorCare is the singularly most 

popular program, in which more people come up to me who are either enrolled in it themselves or who are sons and daughters of 

parents who are enrolled it it, who want to talk about what a positive experience SeniorCare has been. 

I don’t think I have, in my time—and you could draw on your 

own experience—I don’t think I have had a single negative comment made to me about SeniorCare, and yet hardly a day goes by 

that I don’t have people talking to me in a positive way. 

I say this because one of the purposes we often hear talked about 

in Washington is about how States should be laboratories and how 

we should be able to develop programs in our States that help lead 

the Federal Government toward good policy. 

While we recognize all of the work that has been done on Part 

D—and in Wisconsin, we have certainly lived up to our obligations, 

and we have had senior specialists, and you will hear from some, 

17

who have spent a lot of time working to make sure that people are 

participating in Part D and are enrolled in the right program. We 

have done a lot of that work in Wisconsin. 

But I also hope that we all recognize that maybe Part D isn’t exactly the way we might want it to be in the end. As we work toward furthering, improving nationally, how we provide prescription 

drug care for seniors, that it is good to have some programs like 

SeniorCare out there that serve as models and serve as places that 

policymakers can go and look and think about how they might 

want to improve Part D as we move forward, and have some options. 

In fact, there is really only one left, in SeniorCare. But I hope 

it is one that the Federal Government recognizes the importance 

of maintaining for purposes of having some other alternatives and 

some other places that they can look to for developing policy. 

You know, since 2002, Wisconsin has been a National model for 

providing affordable, comprehensive drug coverage to older citizens 

through our SeniorCare program, and it has proven to be popular, 

efficient and cost-effective. 

In fact, when the Federal Government started offering its own 

coverage through Medicare, SeniorCare’s enrollment didn’t go 

down, it went up. So today, more than 105,000 seniors trust and 

rely on this program for lifesaving medicine at prices they can afford. 

Again, I really want to acknowledge and thank Ms. Norwalk and 

people at CMS, who have worked with us. 

One of the things that we did as part of our agreement with CMS 

to continue SeniorCare was to develop a wraparound program. 

Compared to the other 24 States with wraparound programs, our 

wraparound programs was developed by working and looking at 

those States. 

But compared to SeniorCare, the wraparound program has such 

little popularity that we couldn’t even get bidders to come in to bid 

on the wraparound program in Wisconsin. 

So, I think that really tells you where the marketplace is on this 

in Wisconsin. People vastly, vastly prefer SeniorCare. As I say, 

since Part D came into place, our SeniorCare enrollment has gone 

up significantly. 

As you know, SeniorCare operates under a waiver from the Federal Government that is expiring soon. I want to thank and acknowledge that Secretary Leavitt and I were able to work out an 

agreement that allowed SeniorCare to continue past January 1, 

2006. I thank the Secretary for his consideration and for allowing 

that and for at least giving us a fighting chance to be in the position that we are right now to have SeniorCare continue. 

But without additional action from the Bush Administration, the 

waiver will end on June 30 and our 105,000 citizens who are on 

SeniorCare will face a new world. Most of them will be forced into 

the Medicare Part D program, and we believe that they will face 

higher payments, they will face more complicated bureaucracy, and 

some of them will face the donut hole. 

I don’t think you will find a voice in Wisconsin of either political 

party that doesn’t agree that SeniorCare is the preferable program. 

18

Throughout the past year, as our seniors had to choose between 

SeniorCare and Part D, they overwhelmingly chose SeniorCare. 

During that time, SeniorCare enrollment increased over 26 percent. We believe it is obvious why: An AARP study found that 94 

percent of SeniorCare participants are better-served under 

SeniorCare than they would be under Medicare Part D. 

As you do, Senator, and as I mentioned earlier, I talk to seniors 

all over the State. They love SeniorCare, and they are obviously 

very concerned about what will happen to them if it is taken away. 

I believe the argument for SeniorCare is compelling. While the 

Medicare drug plan tends to be complex and bureaucratic, 

SeniorCare is very simple to administer and easy for people to 

navigate. While the Medicare plan is expensive and comes with the 

donut hole, SeniorCare has no gaps in coverage and much lower 

out-of-pocket costs. 

While the Medicare plan makes it illegal for the Federal Government to negotiate lower drug prices, in Wisconsin, we use that very 

negotiating power to be able to get big discounts on the most commonly prescribed drugs. Because of our very low administrative 

costs and the discounts we negotiate, the program is not only affordable for seniors, but it saves taxpayers money. 

The fact is, at the heart of our request for an extended waiver 

is this fact of lower costs. Both seniors and the Federal Government will spend more by ending SeniorCare than by extending it. 

In the State fiscal year 2006 alone, SeniorCare reduced drug costs 

for Wisconsin seniors by almost $200 million. Of the $253 million 

in drug costs billed to the SeniorCare program in fiscal year 2006, 

the Federal Government paid only $46 million, or about 18 percent, 

of those total drug costs after the rebates are taken into account. 

In fact, the average annual Federal subsidy for the SeniorCare waiver participant is $617. The Federal Government pays almost 

twice as much as that under Medicare, or about $1,200 per senior. 

The SeniorCare waiver has consistently achieved budget neutrality, which is the requirement for these waivers. Our most recent analysis shows that the program saved about $669 million in 

Medicaid funding through the fourth year of the waiver. 

These savings are the direct result of reduced Medicaid costs for 

health care services, because seniors with SeniorCare prescription 

drug coverage have stayed healthy longer and have saved us Medicaid costs. 

We are projecting that the savings to Medicaid will continue to 

be significant under the proposed waiver extension for State fiscal 

years 2008 through 2010. As shown in our waiver application, 

there are projected savings of $697 million to the Medicaid program alone during the waiver extension period. These savings 

translate into $404 million in reduced Federal expenditures. 

Last June, I asked the Federal Government to consider continuing the waiver, and in October, we submitted our formal application for our 3-year extension. To date, formally what we have received is a brief letter from the Department acknowledging the receipt of our waiver extension application. 

So I thank you for today’s hearing, and I hope I can shed some 

light on this urgent issue, and I hope it can be part of our effort 

to persuade the Secretary and CMS to extend SeniorCare. With 

19

their approval, we will continue to receive Federal funding for the 

program. Without their approval, we will lose our Federal match, 

and this extremely successful and popular program will cease to 

exist. 

Again, I want to emphasize how important it is for the States to 

be laboratories, and for us, particularly with SeniorCare, where we 

have demonstrated that without asset qualifications, that we are 

able to reach seniors and provide them with a very simple, good 

and effective program. 

Of course, we are going to continue to work with you, and we will 

continue to work with CMS, and we will do whatever ultimately we 

are required to do. 

But I do hope that we continue SeniorCare in Wisconsin and continue it as an example for the Federal Government and for you, 

Senator, and other Members of Congress to be able to continue to 

look at as we look for ways to improve providing prescription drug 

coverage for seniors, not only in Wisconsin but across the United 

States. 

I want to thank you, Mr. Chairman, for your tireless support of 

SeniorCare and for giving our citizens a strong voice in Washington. I continue to look forward to working with you and other 

members of our delegation of both political parties to make sure 

that seniors in our State can continue to get affordable, comprehensive drug coverage. 

I know that these budget-neutrality issues can get very complex, 

but I would hate to see SeniorCare get lost in an argument between Medicaid and Medicare. For most people in Wisconsin, and 

certainly people on SeniorCare, the argument about whether this 

is Medicaid or Medicare, which—we all understand or deal with 

these budgets, but it kind of gets lost. They see it as Federal Government and State Government and a program in which the Federal Government has very successfully partnered with the State 

Government to provide really meaningful coverage for seniors in 

Wisconsin. 

SeniorCare, to me, is the example of the program we should be 

looking for, where the State of Wisconsin has stepped up. I want 

to emphasize that even in very, very difficult budget times—and 

when I first became Governor, our State faced the worst budget crisis in its history, and there was pressure. We really had to decide 

what our priorities were, because we had to make very, very deep 

cuts. 

But even in that very, very difficult time, Wisconsin put its 

money into the SeniorCare program. Even in that time when everything else was getting cut, our priority was the preservation of 

SeniorCare. 

I am very proud that we came through that very difficult time 

with SeniorCare not only intact, but a growing, strong program. It 

shows the commitment that the State of Wisconsin has made to 

this very, very important issue of providing comprehensive prescription drug coverage for our seniors. 

It also shows the commitment that the Federal Government—

and again, I want to emphasize, of both political parties—that the 

Federal Government has made to this program as well. Together, 

20

we have developed a very, very strong and a very, very popular 

program in Wisconsin. 

I hope that we are able to persuade CMS and the Secretary that 

this is a program fully worthy of being continued for 3 more years. 

Again, thank you very much, Senator Kohl. I appreciate that you 

have taken your very valuable time to really explore this issue and 

to come to an understanding of how important SeniorCare is, I 

believe not only to the people of Wisconsin, but SeniorCare stands 

as a model of something that can be very helpful to the entire 

United States. 

Thank you. 

The CHAIRMAN. That is a very good statement, Governor Doyle. 

The question I want to ask you surrounds the issue of, why is 

this being done? I mean, you have made a very, very powerful 

point, and it is clearly a fact, that SeniorCare is enormously successful, wildly popular and, according to every analysis, not expensive compared to Medicare Part D. 

So we have over 100,000 people who are enrolled. It is a growing 

enrollment program. Every one of those 100,000-plus are happy 

with the program, don’t want to see it eliminated. 

As you pointed out, States are laboratories, and this is certainly 

a successful kind of a health care experiment that does work. 

The people at CMS—Ms. Norwalk, who is here, and others, Secretary Leavitt—they are smart people. I think they have an awareness and an understanding of this program’s success in Wisconsin. 

So cutting through all the technicalities, trying to understand in 

real-life terms what we are talking about here, in your opinion, 

why are they moving, if not having decided, moving in the direction 

of scuttling this program? 

Governor DOYLE. In my opinion, I believe that there is tremendous pride in Part D and a tremendously strong desire to show 

that Part D has accomplished everything for everybody. So, I think 

we are really fighting against very strong momentum to show that 

Part D can be used in ways to cover all problems and to do it very 

well. 

Now, we all know what we have been through in Wisconsin with 

Medicare Part D, and you will hear from a panel later, and I don’t 

know to what extent they will touch on this, but this has been a 

very, very difficult time for seniors. 

We have been good partners—I want to really emphasize this—

with CMS and the Secretary. Because we didn’t just sit back and 

complain that Part D is a mess, which in many ways it was, but 

we really did—we increased our number of senior specialists dramatically in the State who were out there working with people. 

I know your office and our other Congressional delegation, we 

worked hard, because it is important. If Part D is the vehicle for 

getting this done, then we wanted to get as many people enrolled 

in the right program in Part D. 

But I think we all have to understand, there are some very big 

shortcomings to Part D. To try to sort of jam everybody into this 

system creates some real difficulties. 

So I think, again, I appreciate—and I want to express my thanks 

to Secretary Leavitt, who did go out of his way to allow SeniorCare 

to continue after January 1, and to allow it to at least give us a 

21

fighting chance to be here. I want to express my thanks to the Secretary for doing that. 

But I think what we are practically up against is a real desire 

by this Administration to show the world that Part D is a great 

thing, and yet we have a few—we actually only have one that is 

left out there, like SeniorCare, which says, ‘‘Hey, you know, maybe 

Part D is or is not a good thing, but there are some other ways to 

go about doing this.’’ At least in SeniorCare, it is actually an easier, 

more understandable and a better way to do it. 

So I think we are kind of up against the whole big Part D machine here, and that is kind of what we are trying to just say: 

‘‘Well, let us just be one little voice out there that says that whatever you think of Part D, one way or another, that there is a way 

that we have found to do this in Wisconsin that actually works better.’’ I hope that that voice prevails. 

The CHAIRMAN. That is very good. Well, we appreciate your being 

here today. 

Ms. Norwalk is seated behind you, and of course, she is a fine 

woman, and probably doesn’t agree with your conclusions. I would 

ask if she wishes to make a response now, because this is a chance 

to have an informal exchange. 

Do you want to say a word or two or three, whatever is on your 

mind? Then we will go to the next panel. But we thank you for 

your willingness to come forward once more and make a few remarks. 

Ms. NORWALK. Sure. Happy to be here. 

We certainly do appreciate all the help that we have had from 

the State of Wisconsin in terms of Part D. 

I appreciate that your perspective, Governor, that this is all 

about Part D. 

It is really about whether the Medicaid program should be paying for individuals that would highly unlikely be able to qualify for 

Medicaid, either from an asset reason—although I appreciate that 

you may not have the specifics there, not having surveyed them. 

But that aside, there is another program, and that other program 

would, I think, be the reason that people did not qualify for the 

Medicaid program. 

You did mention something about negotiating, and I do want to 

clarify the negotiation point for Part D, because it is widely misunderstood. 

The prescription drug plans negotiate on behalf of Medicare 

beneficiaries every day to the tune of billions of dollars in price 

concessions, including things like rebates. So the Part D program, 

one of the reasons it is much less expensive than originally estimated is because of the large price concessions they have been able 

to extract from prescription drug manufacturers. 

I am glad that the State also has had success in getting rebates 

for the seniors in Wisconsin for the SeniorCare program, but likewise, the Part D program has had great success in doing that. 

That is why you see premiums much lower than the AARP report 

estimated. That is why I think the AARP report and some of the 

numbers that we have been discussing today are very overstated 

both in terms of Federal costs, as well as in terms of beneficiary 

costs. 

22

I appreciate that whatever happens, it is not so much that we 

want SeniorCare to go away, we want SeniorCare to be transformed into a different sort of program than it is, still with the 

State’s help so that beneficiaries in Wisconsin are no worse off than 

they are today. 

I think that there are lots of examples of how we can do that in 

different forms, and look forward to working with the State to end 

up with just that result. 

Thank you. 

The CHAIRMAN. Last comment, Governor Doyle? 

Governor DOYLE. Well, I know Ms. Norwalk has this argument 

all the time about the negotiations, and she can debate Members 

of Congress. But I would say, could you imagine if the Federal Government actually, on behalf of all potential Medicare recipients, 

was the one out negotiating, what those discounts would be? But 

that is not our issue before us today. 

I do want to talk about the Medicaid-Medicare issue, if I could, 

for just a moment. 

Wisconsin made a decision not to asset-test. CMS has now been 

asking us to go back, as Ms. Norwalk just mentioned, and to do a 

survey of people to see how many, if the asset test was applied, 

would no longer be eligible for Medicaid prescription drug assistance. 

We have been very reluctant to do this. I think you can appreciate this, Senator, because even if we go out and start surveying 

people on this, it really cuts to the very core of what SeniorCare 

is designed to do. 

I also believe, and I believe we have demonstrated this to CMS, 

that by not having the asset test for SeniorCare and allowing people to get their prescription drugs easier, we keep many people out 

of Medicaid-funded nursing care and other cares for much longer 

periods of time. 

That is really where we save the Federal Government Medicaid 

money. Because these people would, if asset-tested, would eventually have to spend down those assets and go into Medicaid. 

This is how, in 2002—we are not changing the rules of the game 

here—this is how in 2002, a prior Administration, and a Republican Administration, in Wisconsin demonstrated budget neutrality 

in 2002. That is how we are demonstrating again, as we go for our 

renewal in 2007. 

So this is something that we have been trying to engage CMS in. 

Again, Ms. Norwalk and her team have worked with us in a lot of 

different ways, and we really want to express our appreciation for 

that. 

But I do think that the non-asset-tested SeniorCare demonstrates that over time, we do keep people who would then spend 

down those assets and become Medicaid-eligible, we keep them out 

of Medicaid for a longer period of time, save the State money and, 

obviously, save the Federal Government a lot of Medicaid money to 

do it. 

That is what we have been working to demonstrate to CMS. That 

is what was demonstrated back in 2002 with the original budget 

neutrality of this program for the waiver, and that is the same 

standard that we are working on now. 

23

The CHAIRMAN. OK, well, in my personal life I have always operated under the principle that it is smart to give a woman the last 

word. [Laughter.] 

Ms. NORWALK. Bless you. 

The CHAIRMAN. So this will be the last word. Go ahead. 

Ms. NORWALK. Thank you. 

Just to address that particular point that the Governor raised, 

now that we have 5 years of experience with the SeniorCare program, it is not so much that we were suggesting that SeniorCare 

should have had an asset test all along, but rather that, with that 

5 years of experience, if we knew more about who was enrolled in 

SeniorCare, we could do a number of things. 

One, figure out whether or not their assets were such that they 

would have actually spent down to Medicaid. We are not sure 

about that, because we don’t know. I don’t know if they have very 

expensive homes, or whatever it happens to be. If it is, that is fine 

from the SeniorCare program perspective. 

But when we are looking at a couple of things: both whether or 

not they would be able to spend down to the Medicaid program for 

purposes of comparing SeniorCare, with or without the waiver, 

whether SeniorCare existed or not, what would have happened 

with Medicaid and the numbers of people who enrolled who were 

seniors; and then second, for determining—both of you raised this 

point—in terms of who is better off under the Medicare program, 

and given that the limited-income subsidy help, you pay no premiums and you pay only very small copayments. 

In fact, the copayments you pay under the LIS program in Medicare are significantly less than the copayments that are paid under 

SeniorCare. Because we don’t know the asset information about 

that, we don’t know actually how many of those in SeniorCare 

might be better off under the Medicare program. 

So for both purposes, we thought that asset question was very 

important and critical for determining, after 5 years of experience, 

whether or not they were actually budget-neutral in terms of the 

number of people on Medicaid and who would be better off under 

the Medicare program, not so much that we expected SeniorCare 

to have an asset test. 

But it was an important piece of information for us to do the 

analysis to figure out, on a go-forward basis, whether or not they 

could continue to meet budget-neutrality, now that we aren’t starting from scratch in 2002 but have 5 years of experience. 

Given the GAO’s concern, thought that it would be important for 

us to find out that information, because the GAO thought that our 

assumptions were, in fact, significantly more generous than they 

would have preferred for the State. 

The CHAIRMAN. Thank you so much for being here. This testimony has been extremely important, and thanks a lot. 

Governor DOYLE. Thank you, Senator. 

Ms. NORWALK. Thank you. 

[The prepared statement of Governor Doyle follows:]

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The CHAIRMAN. So we will now move to our third panel. 

Our first witness will be Bette Linton, a SeniorCare beneficiary 

from Fitchburg, who we are fortunate to have in Washington today. 

Our second witness will be Tom Frazier, the distinguished executive director of the Coalition of Wisconsin Aging Groups, a Statewide nonprofit, nonpartisan federation of over 600 member organizations. The Coalition is involved in education, training, leadership 

development and advocacy for Wisconsin’s aging network. 

Our third witness will be Patricia Finder-Stone, the AARP Wisconsin State president. She is a registered nurse and a Green Bayarea resident for nearly 50 years. Ms. Finder-Stone is familiar with 

the concerns and challenges facing our aging community in Wisconsin. 

So we thank you all for being here. 

We will start, Bette, with your testimony. 

STATEMENT OF BETTE LINTON, SENIORCARE BENEFICIARY, 

MADISON, WI 

Ms. LINTON. Thank you, Senator Kohl, for inviting me to one of 

the most beautiful capitals in the world. It is a privilege to be here 

at this time, when the cherry blossoms are in bloom. I am happy 

to represent the SeniorCare plan. 

Sometimes, we think that good health is simply the absence of 

illness. If you were asked today, ‘‘Are you healthy?’’, most of us 

would respond, ‘‘I hope so,’’ or ‘‘I think so.’’ 

Being healthy, in my view, is a way of living that emphasizes 

taking steps to prevent illness and to prolong our lives. These steps 

enable us to achieve a state of well-being given our own individual 

set of circumstances. 

Each stage of life has its own challenges. With the development 

of new drugs, diagnostic and surgical techniques, as well as the advances in medicine, we are offered new ways to prevent illness and 

to prolong and enjoy our lives. But the downside of this is that the 

cost of health care is soaring. 

So here is my experience. 

Prior to a fall that I had last year, I had been taking two prescription drugs routinely, one for acid reflux and the other for an 

occasional urinary tract infection. The medication for reflux came 

to about $140 a month, $1,680 per year, which came out of my own 

pocket. On a monthly Social Security check of just $648, it was a 

significant expense. 

Exactly one year ago last Friday, I dropped an empty laundry 

basket while I was going upstairs. In trying to retrieve it, I stepped 

backward three steps and landed on a hard concrete floor. I broke 

my right femur in three places and lay for 11⁄2 hours before someone came home, called an ambulance and took me to a hospital. 

The pain was intense. Today, I have a long steel rod, four screws 

and a plate in my right leg. Before flying to Washington, I wondered what the security door through the airport was going to 

sound like. [Laughter.] 

While in the hospital and the nursing home for rehab, I was 

given pain medications as well as pills to help me sleep. Ambulation during the past year has taken me from a wheelchair to a 

27

walker and, finally, my cane. Once at home, the home health agency installed grab bars and benches to ensure my safety. 

That summer, last summer, a nurse introduced me to the 

SeniorCare plan. As I said before, for several years I have been 

paying significant costs for the medications I mentioned earlier. 

The SeniorCare plan offered me huge savings. 

Someone—because I am not very good at figures—compared the 

cost of my medication under Medicare Part D with the costs under 

SeniorCare. Under Medicare Part D, the cost of my medication and 

premiums would be $684 a year under the least expensive plan. 

With SeniorCare, the cost would be $180 per year, an impressive 

savings for me of $504. 

So who has helped me pay for these costly expenses? Medicare 

helped with hospitalization, rehab and some home health assistance. Living on a Social Security check of just $648, I might have 

had to live in a small rented room with limited options for quality 

living, but I am one of those very fortunate senior citizens: My son 

has given me a room in his home 4 days a week, and my daughter 

cares for me from Friday through Sunday noon. 

My daughter was the nurse who introduced me to the SeniorCare 

plan. But, you know, when I think of the elderly people who have 

to take many, many medications each day and who must decide 

whether they can afford medications or buy a preferred meal, I 

know that I am truly blessed. 

Earlier, I stated, ‘‘Being healthy is a way of living that emphasizes taking the right steps to prevent illness and to prolong life.’’ 

I believe that my SeniorCare plan has enabled me to achieve this 

goal—and I had my card right here, but I can’t find it now. Anyway, I value my SeniorCare plan very much. 

Thank you for having me this morning. 

[The prepared statement of Ms. Linton follows:]

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The CHAIRMAN. That is a great statement, Bette. Thank you so 

much for coming here to make it. 

Tom, let’s hear from you. 

STATEMENT OF TOM FRAZIER, EXECUTIVE DIRECTOR, 

COALITION OF WISCONSIN AGING GROUPS, MADISON, WI 

Mr. FRAZIER. Good morning, Senator. I am pleased to be here 

today. Thank you very much for inviting me. 

I want to make the point that thousands of older people in Wisconsin would suffer significant harm if Wisconsin’s SeniorCare 

waiver is not extended. 

In preparing for this testimony today, I asked for stories about 

people, and I would like to just give you three. I have many, but 

I would like to give you three stories. 

The first is a woman on SeniorCare, takes four generic drugs and 

four brand-name drugs, and her annual cost under SeniorCare is 

about $990. The cheapest Part D plan would cost over $5,000, a difference of over $4,000. She does not qualify for the extra help due 

to assets. 

A 75-year-old widow takes six medications for high cholesterol, 

osteoporosis and a heart condition. Her income is actually below 

the Federal poverty level, but she recently sold her home and 

moved into an apartment, so she does not qualify for the extra 

help, again, due to those assets. The least costly Part D plan would 

cost her over $4,000 a year in out-of-pocket expenses. Under 

SeniorCare, she would pay $960 a year, a difference of over $3,000. 

Another SeniorCare enrollee actually wanted to see if she would 

actually be better off in Part D. So she and her husband’s combined 

income would require an $850 deductible under the SeniorCare 

program before she would qualify for the assistance. Under 

SeniorCare, her costs are about $2,500 a year. Under Part D, her 

costs would be about $7,300 a year in premiums, copayments and 

deductibles. Needless to say, she chose to stay in the SeniorCare 

program. 

The worst thing is that the people who can least afford their prescriptions will be the ones hurt the most, and that is the major 

point I want to make today. 

Out of the 104,000 people on the SeniorCare program in Wisconsin, 48,000 of them, nearly half, fall into what we call Level 1, 

which is an income of $16,000 or less per year. Those people pay 

a $30 enrollment fee, and then they pay a $5 and a $15 copayment 

for a generic or a brand-name drug. If they don’t qualify for extra 

help under Part D, they will have a deductible, a copayment, a 

monthly premium, and no help if they are unfortunate enough to 

reach the donut hole. 

One of the factors in Wisconsin that is somewhat unique, we are 

the second-worst State in the country in getting our applications 

for extra help approved. Over two-thirds of our applications are denied, and that is one of the reasons. 

We think that is largely due to the asset test for Part D, which 

is so low—$7,600 for an individual and $12,000 for a couple. It is 

just extremely low, and for some reason, I guess, older people in 

Wisconsin have managed to save a little bit of money in their golden years. 

31

The other thing is, as you have already heard, and I don’t want 

to belabor this, but the SeniorCare application and process is simpler. This is the SeniorCare application: one page, back and front. 

This is the extra-help application for the Social Security Administration. We have a cover letter, we have a page of instructions, we 

have five pages of actual application. Then, of course, we do have 

the paperwork reduction notice at the end of it. [Laughter.] 

SeniorCare is popular because it costs less, both for individuals 

and the Government, it is simpler to use, it covers almost every 

drug that somebody needs to take, and, as you have heard, there 

is no donut hole. 

In summary, thousands of low-income older persons will face 

much higher out-of-pocket costs, and I think you heard the examples: $3,000, $2,000, almost $5,000. Those people will not be able 

to afford their prescription drugs, and I don’t think the Federal 

Government, the State Government, or anybody wants that to happen. 

I think there are two compelling reasons to continue SeniorCare. 

First, it costs less, so why should we change it? 

Second, CMS defends Part D on the basis of choice. ‘‘We need to 

give people choice. One plan does not fit everyone.’’ I have heard 

that time and time again. We have already got 54 Part D plans to 

choose from in Wisconsin. Why don’t we just consider SeniorCare 

as choice number 55 and let them have one more choice? 

A lady from northwestern Wisconsin may have said it best. 

‘‘Without SeniorCare, I couldn’t possibly make it. My monthly income is so low, I can barely get my bills paid.’’ If she is forced off 

SeniorCare, Senator, I can assure you she will not get her bills 

paid, and that would be a shame. It would be a shame that our 

Government has let her down. 

Thank you. 

[The prepared statement of Mr. Frazier follows:]

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The CHAIRMAN. Thank you, Tom. That is a great statement. 

Patricia, would you let us hear from you? 

STATEMENT OF PATRICIA FINDER-STONE, STATE PRESIDENT, 

AARP WISCONSIN, MADISON, WI 

Ms. FINDER-STONE. Chairman Kohl and distinguished Committee 

members, who are unable to be with us today, I am Patricia Finder-Stone. I am president of the AARP Wisconsin, and I am a registered nurse. Thank you for inviting AARP to testify on the importance of the Wisconsin SeniorCare prescription drug program. 

AARP played a critical role in enacting SeniorCare, and we 

strongly support renewal of the waiver that helped create it. 

SeniorCare was tailored to meet the needs of Wisconsin residents 

with limited incomes, and it provides greater assistance to some individuals than is available under Medicare Part D. AARP also 

strongly supports and played a critical role in enacting the Medicare Part D benefit. 

Part D is helping millions of beneficiaries, including thousands 

in Wisconsin not eligible for SeniorCare, to afford the drugs they 

need. However, SeniorCare is able to provide greater coverage for 

some people with low incomes in Wisconsin, because Wisconsin 

contributes State funds and it gets millions of dollars in discounts 

and rebates from drug companies. 

Without the waiver, Wisconsin would not be able to use the savings from drug companies. That is because Medicare only counts 

payments by State programs toward Part D’s coverage if the State 

program does not get savings from drug companies. Without those 

savings, the State would not be able to provide its current level of 

coverage if it were to reconfigure SeniorCare to wrap around the 

Part D benefit. The result would be higher costs for beneficiaries, 

for the State and for Medicare. 

In fact, SeniorCare currently costs the Federal Government less 

than half of what Part D costs for the average enrollee, $617 for 

SeniorCare versus $1,331 for Part D. 

Unlike Part D’s low-income subsidy program, SeniorCare has no 

asset test. A report that we commissioned in 2005 found that 80 

percent of SeniorCare enrollees who meet the Part D low-income 

subsidy income criteria do not meet its asset test. 

I have personally helped Medicare beneficiaries enroll in 

SeniorCare, and I was touched by how grateful people were and 

how easy the one-page application is. However, because of the asset 

test, people applying for the Part D low-income subsidy must fill 

out a daunting eight-page application form, to which Tom referred. 

The extra help Part D offers to those that are least able to afford 

their drug is one of the most important features and a key factor 

in our support of Part D. But the asset test is keeping millions of 

people who need the low-income subsidy from getting it. AARP believes that we should encourage people to save for retirement, not 

penalize those that do so with an asset test. 

We have been working with Senator Smith, along with Senator 

Bingaman, on legislation that takes a solid first step toward 

AARP’s goal on eliminating the asset test by raising the asset limits and streamlining the application process. We greatly appreciate 

41

their leadership on this issue, and we especially want to thank you, 

Senator Kohl, for being a cosponsor. 

However, SeniorCare has never had an asset test, and this onerous provision has never been imposed on beneficiaries in our State. 

That is a strong argument for renewing the waiver. 

The insurmountable cost of providing equivalent coverage is a 

strong argument for renewal, and the lower per-capita cost to the 

Federal Government compared to Part D is yet another powerful 

argument for renewing the waiver. 

We therefore urge CMS to re-authorize the SeniorCare waiver 

and to help us ensure that no one is worse off under Part D. 

Thank you again for inviting us today, and I would be happy to 

answer questions that you have. 

[The prepared statement of Ms. Finder-Stone follows:]

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The CHAIRMAN. Thank you. 

Tom, briefly, given your experience working with SeniorCare 

beneficiaries, is there any question in your mind that SeniorCare 

saves the Federal Government money compared to Medicare Part 

D? 

Mr. FRAZIER. No. There is not. 

The CHAIRMAN. Ms. Finder-Stone, in 2005, AARP commissioned 

a study on SeniorCare and looked at the feasibility of Wisconsin 

switching to a Medicare Part D wraparound at the same level of 

coverage that beneficiaries have today. 

What factors contribute to your findings that the transition to a 

wraparound would be more costly to Wisconsin and the Federal 

Government? 

Ms. FINDER-STONE. Well, we feel that Wisconsin is using tools 

that might not be appropriate for Part D to use in negotiating better drug prices, because we use tools like a preferred drug list. 

The waiver is a Medicaid-based program, and those tools are 

commonly used in Medicaid. However, Part D is a Medicare program, and individual Part D plans already have formularies. 

Many people have serious concerns about the Federal Government establishing a single National formulary, because they fear 

that it might create access problems that AARP would not want to 

see. 

The CHAIRMAN. Thank you. 

Well, we want to thank you for your testimony, all three of you. 

The importance of your coming here is, I think, exemplified by the 

fact that both the Governor and Ms. Norwalk have stayed to listen 

to your testimony, which indicates how important your testimony 

is to this whole process. 

I think it has been a great hearing. I think the Governor has 

been very powerful in his statement. Ms. Norwalk has been very 

strong in her position, and I know she is an open-minded woman, 

and I have hope that she will be much impressed by what has transpired here this morning. 

With that, I declare the hearing closed. 

[Whereupon, at 11:21 a.m., the Committee was adjourned.] 

(53)

A P P E N D I X 

PREPARED STATEMENT OF REPRESENTATIVE THOMAS E. PETRI

Chairman Kohl and Ranking Member Smith: 

I would like to take this opportunity to thank you for holding this important hearing on SeniorCare and its impact in Wisconsin. I strongly believe that Secretary 

Leavitt should approve the pending waiver to extend the program through 2010. 

Today’s hearing will highlight the immense popularity and cost effectiveness of 

SeniorCare. Over 100,000 senior citizens participate in the program, and receive 

prescription drugs in a manner that is affordable and easy to understand. Not only 

are seniors in Wisconsin satisfied with the program, but taxpayers are saving 

money. The average federal subsidy for a SeniorCare waiver participant is $617, 

less than half the $1,174 the federal government spends to subsidize a Part D participant. 

If SeniorCare is not continued, some of our most vulnerable seniors will face potential breaks in prescription drug coverage, confusion, and needless expense. 

Wisconsin has created a program that works well for our seniors and taxpayers. 

I am encouraged that this Committee will be examining this issue closely, and I will 

continue to work with my Wisconsin congressional colleagues to support our seniors. 

This hearing will provide important information for the Department to consider as 

it evaluates Wisconsin’s waiver request, and I again commend Chairman Kohl for 

calling this hearing. 

PREPARED STATEMENT OF STATE REPRESENTATIVE STEVE WIECKERT

Thank you for holding a hearing on Wisconsin’s Senior Care program. I am especially concerned about Senior Care’s future, as are so many Wisconsin citizens. One 

reason in particular I am so fond of the Senior Care program is not only because 

I believe it is helping Wisconsin’s citizens, but because I was the author of the Senior Care program in the Wisconsin Assembly. 

I ask that the decision on whether to extend the Senior Care waiver be extended 

for another two years, which would mean the waiver would be extended until at 

least June 30 of 2009. 

While originally 4 states have been granted these waivers for their own prescription drug programs for seniors, only Wisconsin remains as the only state that still 

has the waiver in effect. The reason I believe that is important for the federal government to continue this waiver and allow Wisconsin’s program to remain helpful 

to our seniors is because of the cost saving nature of the way that the plan was 

designed. I know that ‘‘budget neutrality’’ is a major review criterion for extending 

our program. 

From the beginning, our early legislative drafts had the participation of private 

drug companies, which helped pay for our plan. For example, currently about $44 

million of Senior Care is paid for through drug rebates in Wisconsin each year. If 

Senior Care was required to be redesigned through a federal withdrawal of participation, program costs could skyrocket by more than $44 million a year. 

It would certainly benefit so many more U.S. Senior Citizens if the federal Medicare Part D plan was modeled after Wisconsin’s Senior Care. 

I ask the committee do all it can to work toward the extension of the Wisconsin 

Senior Care program. 

Thank you for this opportunity to submit written testimony to your committee.

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PREPARED STATEMENT OF STATE REPRESENTATIVE THOMAS NELSON

Thank you Mr. Chair and members of the Special Committee on Aging. I want 

to offer my thanks to Chairman Herb Kohl for conducting this hearing and for his 

leadership on SeniorCare. I apologize that I am not able to offer my remarks in person but appreciate the opportunity to enter my comments into the public record. 

The SeniorCare program has been tremendously successful in Wisconsin and is 

far superior to the alternative, federal program, Medicare Part D. Currently, over 

103,000 Wisconsin seniors are enrolled in SeniorCare. 

The popularity of Senior Care reflects the program’s simplicity and cost-efficiency. 

Where Medicare Part D has been widely criticized for its difficult application process. SeniorCare has a simple one-page enrollment form—and no doughnut hole. The 

savings to Seniors are clear when you compare SeniorCare’s $30 annual fee to the 

monthly premium and $265 annual deductible of Medicare Part D. Additionally, 

Seniors and taxpayers enjoy savings from overall lower costs negotiated with drug 

companies. Not surprisingly, among eligible Seniors, 94% would fare better under 

SeniorCare than Part D. 

For some time, the states have served as laboratories for constructive social policy 

change. Over the years, Wisconsin has led the way in welfare reform, campaign finance reform, and workers’ compensation—just to name a few issues. Often, these 

successful, new approaches to solving old problems are implemented at the federal 

level or replicated in other states. It is unfortunate that the Bush Administration 

has turned this process on its head. Rather than promoting the Wisconsin-born and 

widely successful SeniorCare program, the administration is seriously considering 

forcing Wisconsin Seniors into Medicare Part D, or what I call, SeniorCare Lite. 

U.S. Health and Human Services Secretary Mike Leavitt has stated that a major 

constraint in renewing the SeniorCare waiver is ensuring that the program is budget-neutral. SeniorCare costs the federal government half as much as Medicare Part 

D. Where Part D costs the government $1,174 per participant, SeniorCare costs 

$617 per enrollee and leverages private and state dollars. The fact that Secretary 

Leavitt seemingly ignores this fact makes me question his leadership and overall 

competence as HHS Secretary. 

The Secretary’s failure to appreciate SeniorCare cost-efficiency follows a long and 

disturbing pattern of poor performance by key Presidential cabinet members and administrative personnel—notably former U.S. Defense Secretary Donald Rumsfeld 

and most recently, current U.S. Attorney General Alberto Gonzalez. 

While the Bush Administration’s resistance to embrace and support SeniorCare 

might suggest SeniorCare is a partisan issue, to the contrary, Democrats and Republicans alike in Wisconsin are united, four-square behind SeniorCare. To my 

knowledge, not a single elected official has publicly opposed this program. A big reason why SeniorCare enjoys universal, political support in Wisconsin is because everyone recognizes its positive impact on so many Seniors and their families. At a 

time when Seniors face rising prescription drug costs, Seniors can turn to a program 

that offers much needed financial relief. By saving on average $1,629 per year, Seniors have considerably more disposable income to pay home heating costs, groceries, 

and other expenses. 

Last month, I launched a petition drive to save SeniorCare. Many other legislators and organizations across Wisconsin have signed on, generating thousands of emails, letters and phone calls in support of SeniorCare. To say the least, public support has been overwhelming. Consider two stories told by a pair of concerned families:

‘‘When reading that Senior care may be discontinued, I was alarmed. I have had 

my Mother on Senior care since it started and I know how much it has saved her. 

She is now almost 97 years old and her assets have been depleted a long time. As 

of now four of us, her children, who are retired are using our funds to pay for her 

care. Also she lived in a retirement assisted living residence and so many of those 

elderly people were so very confused regarding the Medicare D program. Many elderly do not have family who can help them fill out the paperwork. I personally told 

them who to contact for Senior care. I have also been at the pharmacy watching these 

wonderful Seniors struggle to get their prescriptions. Even the pharmacist tried to 

explain why some drugs are covered and some not. Senior Care was so simple and 

cost effective, so please do your best to have it continued.’’

‘‘I heard that there is word that Senior Care may be discontinued. I hope that you 

can do all you can to save it as it has helped many like myself who do not have 

money for medications. My brother died because he could not afford $500 a month 

for his medication for cancer. He was a Marine veteran, wounded on Iwo Jima about 

March 8, 1945 much before Senior Care began. Thank you.’’

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These are just two of the countless stories demonstrating SeniorCare’s importance 

and begs leadership from Washington, DC to do the right thing and renew the federal waiver. Please, Mr. Chair, on behalf of the 103,000 Seniors and their families, 

do whatever you can to save SeniorCare. 

Thank you for the opportunity to present testimony on this important issue.

Æ