May 11, 1995 CONGRESSIONAL RECORD — Extensions of Remarks E 1005

The Medigap Consumer Protection Act

would direct the National Association of Insurance Commissioners [NAIC] to develop guidelines to eliminate attained age rating which

would then be implemented in all States. The

NAIC, founded in 1871, is the Nation’s oldest

association of State public officials. It is composed of the chief insurance regulators of all

50 States, the District of Columbia and the 4

U.S. territories. In the past, Congress has requested similar action from the NAIC, which

has successfully completed these requests.

For instance, the Omnibus Budget Reconciliation Act of 1990 instructed NAIC to develop model standardized benefit packages for

the Medigap market. After holding public hearings, and consulting with interested parties,

the NAIC completed the standards, which

were approved by the Secretary of Health and

Human Services and became law.

I would like to include in the RECORD the following excerpt from a Consumer Reports article of August 1994 which describes the attained-age pricing problem in the Medigap

market:

Many companies have changed the way

they price policies so they can bait consumers with low premiums at the outset and trap

them with very high increases later on.

In 1989, most carriers used either ‘‘community rates’’ or ‘‘issue-age rates’’ to price

their policies. With community rates, all

policyholders, young or old, pay the same

premium. With issue-age rates, premiums

will vary depending on the age of the buyer.

But in either case, the annual premium will

go up only to reflect inflation in the cost of

benefits; it will not rise because you get

older. Both community and issue-age rates

protect policyholders from steep annual increases.

Now, however, more and more insurance

companies are restoring to a less benign

strategy as ‘‘attained-age’’ pricing. It allows

companies to gain a competitive advantage

by selling cheap policies to 65-year-olds when

they enter the Medicare-supplement market.

With attained-age pricing, the initial premiums, especially for those between 65 and

69, are usually lower than for issue-age or

community-rated policies. But there’s a

catch: Premiums will rise steeply as the policyholder gets older.

In 1990, 31 percent of all Blue Cross-Blue

Shield affiliates sold policies with attainedage rates. In 1993, 55 percent did. At the same

time, the proportion of Blue Cross-Blue

Shield plans offering community rates has

dropped from 51 percent to 21 percent. AARP/

Prudential still offers community rates but

finds its initial premiums have become less

competitive for policyholders age 65 to 69.

Attained-age policies are hazardous to policyholders. By age 75, 80, or 85, a policyholder may find that coverage has become

unaffordable—just when the onset of poor

health could make it impossible to buy a

new, less expensive policy. Take, for example, an attained-age Plan F offered by New

York Life and an issue-age Plan F offered by

United American. For someone age 65, the

New York Life policy is about $114 a year

cheaper. But by age 80, the New York Life

policyholder would have spent a total of

$5000 more than the buyer of the United

American policy.

Buyers are rarely warned of these consequences. Neither insurers nor agents are

required to tell consumers how expensive attained-age policies will become over time. A

sales brochure from California Blue Cross,

which boasts one of the state’s hottest-selling Medicare supplements, says nothing

about rate increases; it doesn’t even mention

that rates are calculated on an attained-age

basis. Of the 17 agents our reporter heard,

only one discussed the way his company’s

rates were set—and he thoroughly confused

the three methods. ‘‘The vast majority of

agents don’t understand attained-age pricing, so they can’t possibly explain it to their

customers,’’ says Mark McAndrew, president

of United American.

Only 10 states—Arkansas, Connecticut,

Florida, Georgia, Idaho, Maine, Massachusetts, Minnesota, New York, and Washington—either require that insurers use community rates or specifically ban attained-age

policies. In most other states, insurers are

shifting to attained-age policies. United

American, a large seller of Medicare-supplement policies, has just notified state insurance regulators that it plans to switch from

issue-age to attained-age rates. ‘‘We think

attained-age rates are a bad thing, but our

agents had to eat,’’ explains Joyce Lane, a

United American Vice president.

Mr. Speaker, Bonnie Burns, a private contractor for California’s Health Insurance Counseling and Advocacy Program delivered the

following testimony before the House Health

and Environment Subcommittee earlier this

year:

The danger [with attained age rating] is

that just when people begin to need more

and more medical care, they will also be hit

with much higher premiums. Alternative

methods of calculating premiums mean that

older beneficiaries will almost always pay

less than with attained age rates. The impact of sharply increased premiums is minimized.

Most seniors are in the middle class or

below and are already spending about 23 percent of their income on health care expenses

according to the AARP, while those under 65

spend about 8 percent. As people age their income and resources go down over time, particularly for older widowed women, and out

of pocket costs for health care consume an

increasingly larger part of their income.

Their ability to absorb additional costs in

premiums, deductibles and coinsurance is

limited.

Mr. Speaker, affordable premiums and reliable health care coverage are crucial issues

for millions of elderly Americans on fixed incomes. At age 65, virtually all Americans recognize the importance of good health coverage. Seniors face rapidly increasing health

costs as they reach their seventies and

eighties. It is inappropriate to lure seniors into

attained age policies which they will not be

able to afford if they live for a decade or two.

That is why Consumers’ Union and the National Council of Senior Citizens have written

letters strongly supporting the Medigap

Consumer Protection Act.

I would like to close, Mr. Speaker, by describing a few of the things the Medigap

Consumer Protection Act will not do:

The Medigap Consumer Protection Act does

not place price controls on the insurance industry. Under this bill each insurance carrier

will continue to set its own rates and can

charge as much or as little as it feels is prudent as long as it continues to meet the loss

ratio requirements which are already in place

under current law.

The Medigap Consumer Protection Act does

not diminish valuable consumer choice. Attained age rating makes it more difficult and

confusing for consumers to make price comparisons and compare different policies. Attained age rating confuses prospective

policybuyers and insurance agents. Attained

age rating deceives the average Medigap purchaser into purchasing coverage which they

may not be able to afford later in life. This bill

only prohibits the sale of any more of those

policies that Consumer Reports correctly described as bait and trap policies.

The Medigap Consumer Protection Act will

not force insurance carriers out of business.

Under current law, insurance carriers must

meet loss ratio requirements of 65 percent for

the individual market and 75 percent for the

group market. Loss ratios represent how much

an insurance company must spend on benefits

for each dollar it collects in premiums. For instance, a carrier selling Medigap policies to individuals must offer an average of at least 65

cents in benefits for each dollar it collects in

premiums. This bill will still allow insurance

carriers to clear up to 35 cents on each dollar

in premiums they collect.

I hope that my colleagues on both sides of

the aisle will join me in cosponsoring the

Medigap Consumer Protection Act and in

working toward its enactment so we can help

seniors retain affordable, private Medigap coverage as they grow older. This legislation simply eliminates a type of policy that ropes seniors into policies with deceptively low initial

premiums followed by sharp increases when

those consumers may no longer have the option of switching to a competing policy.

PASSAIC HIGH SCHOOL INDIANS

fHON. WILLIAM J. MARTINI OF NEW JERSEY

IN THE HOUSE OF REPRESENTATIVES

Thursday, May 11, 1995

Mr. MARTINI. Mr. Speaker, I would like to

take this opportunity to commemorate one of

the greatest high school basketball teams of

all time, the 1919–25 Passaic High School Indians. Over that 6-year stretch, the Indians enjoyed the longest winning streak ever for a

high school, college, or professional team.

They won an incredible 159 games in a row.

From December 17, 1919, to February 6,

1925, Passaic High was unbeatable. In an era

of low-scoring basketball, they outscored their

opponents by an average of 39 points, topping

100 points a dozen times. They once crushed

an opponent 145 to 5.

While these teams were blessed with great

players, such dominance transcends individual

stars and usually begins with the coach. It was

Prof. Ernest Blood that led the charge for

these young men for so many years. Blood

began playing basketball just a year after it

was invented, and soon after he stopped playing he was coaching. In Potsdam, NY, his

high school team did not lose to another high

school team from 1906 to 1915.

A move to Passaic. NJ, in 1918 brought him

to the job that would make him famous. Although his first season was marred by a defeat in the State championship, the streak

began on the first day of the 1919 season.

Win after win turned into State championship

after State championship. As the streak progressed, the team became the center of attention for this industrial city: A factory whistle

would indicate the results of the game, two

loud blasts for a win, one long blast for a loss.

Blood’s foresight and desire kept the team

ahead of its time, and he eventually led them
E 1006 CONGRESSIONAL RECORD — Extensions of Remarks May 11, 1995

to five consecutive undefeated seasons, 147

games in all.

Blood left after the 1923–24 season, but the

streak continued well into the next season, finally coming to an end in a 39 to 35 defeat

at the hands of Hackensack High on February

6, 1925. It had been 159 games since the Indians had experienced a defeat, and the magnitude of their accomplishments did not go unnoticed. Coach Blood was the third coach ever

elected to the Basketball Hall of Fame, and

one of the team’s greatest stars, Johnny

Roosma, was also accorded that honor.

And to this day, the wonder teams of Passaic High are enjoying much-deserved accolades. On May 18 of this year, they will be inducted into the Sports Hall of Fame of New

Jersey. Congratulations to the families and

friends of all of those connected with these

special athletes. Their accomplishments are

rightly being enshrined into the memory of our

great State, and memorialized for basketball

fans across the country.

STATEMENT HONORING RAY AND

BETTY WELLS

f

HON. MARGE ROUKEMA OF NEW JERSEY

IN THE HOUSE OF REPRESENTATIVES

Thursday, May 11, 1995

Mrs. ROUKEMA. Mr. Speaker, I rise to call

attention to the Girl Scout spring gala being

held by the Girl Scout Council of Bergen

County, May 12, in Teaneck, NJ. They will

honor Ray and Betty Wells, who will receive

the Girl Scouts Outstanding Achievement

Award for their many years of service to the

Girl Scouts and other community and civic organizations. Proceeds from this event will benefit nearly 10,000 girls and 2,500 Girl Scout

volunteers.

Ray and Betty Wells, whom I have known

for many years, are community leaders who

are an inspiration to us all. Each has a

re ́sume ́ of service, activities, and dedication

that is incomparable. Their energy and enthusiasm are endless. It is their brand of volunteerism and personal generosity that has

made our county an exceptional place to work

and raise a family. Bergen County has been

blessed to have good citizens like Betty and

Ray.

Betty Wells, a Girl Scout herself for 5 years

as a young girl, worked as a volunteer in Girl

Scouting for more than 25 years, highlighted

by 10 years as the leader of Troops 350 and

276 in Paramus. She was a charter member

of the Order of the Evergreen and is a recipient of the ‘‘Thanks’’ badge, the Girl Scouts’

highest honor for adults. She served as the

association chairwoman and service team

chairwoman in Paramus.

Ray Wells became involved in the Girl

Scouts through Betty’s involvement, serving

first for several years as the fund drive chairman in Paramus before ultimately taking on

the fundraising efforts for all of Bergen County. He also served on the board of directors.

An architect, he also wrote a Girl Scout manual on building.

The Wells’ Girl Scout activities centered, of

course, around their daughter, Holly, who enjoyed Girl Scouting from age 7 to 17 with her

mother as troop leader. Holly today continues

the tradition of shaping young people as

owner and operator of a preschool in Pennsylvania.

Holly, of course, is only one member of Ray

and Betty’s lovely family, to whom they are immensely dedicated. They have two other

daughters, Kerry, a secretary who lives in Fair

Lawn, and Julie, a nurse in Seoul, South

Korea. Their son, Tom, is an attorney, Peter is

director of the Paramus Building Department

and Jeff is the principal of Wells Associates,

the family architecture firm.

Betty and Ray, who both grew up in

Lyndhurst, moved in 1953 and began their involvement in community service almost immediately. Both served as Sunday School teachers at the Old Paramus Reformed Church,

where Ray was Sunday School superintendent

and Betty was a choir member, deacon, and

elder. Betty joined the Stony Lane Elementary

School Parent-Teacher Organization after their

children began school, eventually becoming its

president. She also was a member of or volunteered at the Paramus Junior Women’s

Club, the Paramus Garden Club, the Paramus

Women’s Club, the Juvenile Conference Committee, the Hermitage in Ho-Ho-Kus, the

Church Guild an Valley Hospital.

Ray was a member of or worked with the

Paramus Jaycees, the George Washington

Cemetery Board, the Aviation Hall of Fame,

the Bergen County Regional Blood Center, the

Oradell Planning Board, the Bergen Museum

of Arts and Science, the Boy Scouts, March of

Dimes, and United Way. He joined the

Paramus Rotary Club in 1964 and went on to

serve as a director, president, and district governor before becoming an international director of the service organization. He headed up

Rotary projects as diverse as Polio Plus—an

effort to eradicate polio—Preserve Planet

Earth and restoration of the gazebo at Bergen

Pines.

The Rotary motto best describes Ray and

Betty: ‘‘Service Above Self.’’ Their good work

and service to their neighbors and fellow men

are limitless. Four decades of community service is a record that few can even come close

to matching. I give my heartfelt congratulations

to the Wells and wish them the best for the future. We are all blessed to have you pass our

way. God bless and Godspeed.

CHANGE OF COMMAND OF

ADMIRAL SKIP DIRREN

f

HON. TILLIE K. FOWLER OF FLORIDA

IN THE HOUSE OF REPRESENTATIVES

Thursday, May 11, 1995

Mrs. FOWLER. Mr. Speaker, I would like to

take this opportunity to pay tribute to Rear

Adm. Frank M. ‘‘Skip’’ Dirren, Jr., who has

been the commander of Naval Base Jacksonville since July of 1992, and who will be leaving us tomorrow to accept a new command in

Norfolk, VA. Admiral Dirren is a man of character, courage and compassion and an outstanding naval officer. I am proud to call him

my friend.

If it is true that ‘‘nothing is really work unless

you would rather be doing something else,’’ as

J.M. Barrie once said, then Skip Dirren has

not done a lick of work since he joined the

Navy in 1964. He loves his job and is the

quintessential Navy man—patriotic, loyal, and

devoted to duty. A decorated veteran helicopter pilot, he has made the Navy his life,

and he exemplifies the virtues that I associate

with the service at its best.

Skip is also a fine leader and good man to

have in your corner, as he has consistently

demonstrated during his tenure in Jacksonville. His turn at the helm of our Navy complex

has helped to steer our facilities and personnel through some very rough waters, and he

has strengthened the already good relationship between the community and its Naval facilities in many ways.

His community activism has particularly endeared him to our citizens, and his warmth

and eloquence have made him a much

sought-after speaker. In short, he has become

a respected and beloved member of the community, and his generosity, his kindness, and

his many talents will be greatly missed.

Mr. Speaker, although the business of the

House prevents me from attending Admiral

Dirren’s change of command ceremony tomorrow, my thoughts will be with him and his

lovely wife, Susan, as they celebrate a job

well done and prepare to enter a new chapter

in their life together. I hope they know that

they take with them the gratitude and affection

of our entire city. I wish them both fair winds

and following seas.

TRIBUTE TO MORTON GOULD:

COMPOSER, CONDUCTOR, AND

fFRIEND

HON. BART GORDON OF TENNESSEE

IN THE HOUSE OF REPRESENTATIVES

Thursday, May 11, 1995

Mr. GORDON. Mr. Speaker, I rise today to

highlight merely a few of the countless accomplishments in my dear friend Morton Gould’s

distinguished career, recently capped off by

his receipt of the Pulitzer Prize for music composition.

A New York native, Gould began this career

at the early age of six, when his first composition was published. His tutelage in piano and

composition continued, and by age 21, he was

conducting and arranging weekly orchestra

radio programs for the WOR Mutual Network.

Perhaps Gould’s most performed instrumental piece is his ‘‘Pavanne,’’ from his ‘‘Second

Symphonette.’’ Other works familiar to all of us

include ‘‘Latin-American Symphonette,’’ ‘‘Spirituals for Orchestra,’’ ‘‘Tap Dance Concerto,’’

‘‘Jekyll and Hyde Variations,’’ and ‘‘American

Salute.’’

The Library of Congress has commissioned

his work, as well as the Chamber Music Society of Lincoln Center, The New York City Ballet, and the American Ballet Theater. He has

composed scores for Broadway musicals,

films, and both television movies and series.

Conductors worldwide have had the pleasure of directing performances of his compositions, and, as conductor, Gould has appeared

with major orchestras in the United States,

Japan, Australia, and Israel.

Some of Gould’s other awards include a

Grammy Award, several Grammy nominations,

the 1983 Gold Baton Award, the 1985 Medal

of Honor for Music from the National Arts

Club, and the Kennedy Center Honors in

1994. He received the Pulitzer Prize this year

for ‘‘Stringmusic,’’ which was composed at the