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[Congressional Record Volume 141, Number 82 (Wednesday, May 17, 1995)]
[Senate]
[Pages S6794-S6797]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

               EXTENDED USE OF MEDICARE SELECTED POLICIES

  Mr. CHAFEE. Mr. President, I ask unanimous consent that the Senate 
now turn to the consideration of Calendar Order No. 92, H.R. 483, 
regarding Medicare Select, and it be considered under the following 
time agreement: 10 minutes on the bill, to be equally divided between 
the chairman and ranking minority member of the Finance Committee; that 
one amendment be in order to be offered by Senators Packwood, Chafee, 
Rockefeller, and Kennedy, on which there will be 10 minutes for debate 
equally divided in the usual form; and that following the conclusion of 
time, that the amendment--namely, the Packwood-Chafee-Rockefeller-
Kennedy amendment--be agreed to; and that the bill be read a third time 
and passed and that the motions to reconsider be laid upon the table 
all without any intervening action or debate.
  The PRESIDING OFFICER. Is there objection? Without objection, it is 
so ordered.

                           Order of Procedure

  Mr. CHAFEE. Mr. President, since this has been agreed to, I am 
authorized to say there will be no further rollcall votes today.
  The PRESIDING OFFICER. The clerk will report the bill.
  The legislative clerk read as follows:

       A bill (H.R. 483) to amend title XVIII of the Social 
     Security Act to permit Medicare Select policies to be offered 
     in all States, and for other purposes.

  [[Page S6795]] The Senate proceeded to consider the bill.
  Mr. CHAFEE. Mr. President, I ask unanimous consent that Senator Dole 
be added as a cosponsor of the amendment.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The PRESIDING OFFICER. Who yields time?
  Mr. CHAFEE. Mr. President, the Committee on Finance is hereby giving 
a commitment to the distinguished Senator from West Virginia, Senator 
Rockefeller, that there will be a hearing on Medicare Select once the 
Department of Health and Human Services submits its report on this 
program.
  What we are doing is extending Medicare Select to all 50 States for 
18 months. This will continue unless the Secretary of Health and Human 
Services determines one of the following: That beneficiaries do not 
save dollars compared to other MediGap policies or that there are 
additional expenditures under Medicare or that access to quality care 
is diminished.
  Mr. President, there will be a GAO study on whether or not 
beneficiaries have a problem getting coverage under another MediGap 
policy if they wish to change policies and recommendations if there are 
problems.
  Mr. President, that is the arrangement here.
  Mr. ROCKEFELLER addressed the Chair.
  The PRESIDING OFFICER. The Senator from West Virginia.
  Mr. ROCKEFELLER. Is the Senator from Rhode Island finished?
  Mr. CHAFEE. I am.
  Mr. ROCKEFELLER. Mr. President, I want to thank the Senator from 
Rhode Island and to say that I agree with what he said and concur in 
the amendment and do gladly accept it, as it were, and consider it 
good.
  What this will do, I think, is what was wanted on both sides of the 
aisle, which is ideally what we strive for around here and rarely 
achieve. I had been reluctant to see the 14 States expanded to 50; the 
other side of the aisle wanted to see the 50. I did not have strong 
feelings about the 50 until I understood more about what the study, 
which is going on now, will show. I also wanted to make sure that if 
people leave Medicare Select and want to go to another MediGap Program, 
that they are not precluded from being able to join another program 
because of preexisting conditions, which, of course, most older people 
have.
  It seems to me this is a good compromise. This would allow all 50 
States to go into this, if they chose to do so. There would be a period 
of about a year and a half that that would take place. Some people will 
say the insurance industry does not want to do that because a year and 
a half is not enough time. There are 450,000 people in this program 
now, so it must be sufficiently interesting to the insurance companies.
  I am pleased that there will be hearings on this. That was a part of 
my original understanding with Senator Dole. Senator Dole, who is 
chairman of the Medicare Subcommittee that I am ranking member on, so 
to speak, he and I have agreed we will work out, along with others who 
want to be involved--modifications to Medicare Select if the study and 
the experience show that that should take place. I think that is 
entirely proper and fair.
  The GAO study itself, I think, is important because it would analyze 
the problems that seniors are having in switching MediGap policies. 
When we talk about MediGap policies, not everybody necessarily tunes in 
on that, but that is incredibly important. Most seniors have MediGap 
policies to make up for deficiencies in Medicare. These policies are 
very important to seniors, and that is why all of this be done 
properly.
  So, from my point of view, the compromise is a good one. It was 
carried out in honorable and good fashion between the Senator from 
Rhode Island, Senator Chafee, Senator Packwood, and, obviously, the 
majority leader and myself, and Senator Kennedy. I think it is a good 
compromise. I yield back the remainder of my time.
  Mr. CHAFEE. I know the distinguished Senator from Texas wants to 
speak briefly on this, and if she needs a few minutes of extra time, I 
presume the Senator from West Virginia will be agreeable to that.

                           Amendment No. 1108

 (Purpose: To extend the period for offering Medicare Select policies 
                              for 2 years)

  Mr. CHAFEE. Mr. President, I send now to the desk an amendment in the 
nature of a substitute, which is sponsored by Senators Packwood, 
Chafee, Dole--does Senator Hutchison wish to be listed likewise?
  Mrs. HUTCHISON. Thank you.
  Mr. CHAFEE. Senator Hutchison, Senator Rockefeller, and Senator 
Kennedy, and ask for its immediate consideration.
  The PRESIDING OFFICER. The clerk will report.
  The legislative clerk read as follows:

       The Senator from Rhode Island [Mr. Chafee], for Mr. 
     Packwood, for himself, Mr. Chafee, Mr. Dole, Mrs. Hutchison, 
     Mr. Rockefeller, Mr. Kennedy, and Mr. Gorton, proposes an 
     amendment numbered 1108.

  Mr. CHAFEE. Mr. President, I ask unanimous consent that the reading 
of the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

       Strike all after the enacting clause and insert the 
     following:

     SECTION 1. PERMITTING MEDICARE SELECT POLICIES TO BE OFFERED 
                   IN ALL STATES FOR AN EXTENDED PERIOD.

       Section 4358(c) of the Omnibus Budget Reconciliation Act of 
     1990, as amended by section 172(a) of the Social Security Act 
     Amendments of 1994, is amended to read as follows:
       ``(c) Effective Date.--(1) The amendments made by this 
     section shall only apply--
       (A) in 15 States (as determined by the Secretary of Health 
     and Human Services) and such other States as elect such 
     amendments to apply to them, and
       ``(B) subject to paragraph (2), during the 5 year period 
     beginning with 1992.
       ``(2)(A) The Secretary of Health and Human Services shall 
     conduct a study that compares the health care costs, quality 
     of care, and access to services under medicare select 
     policies with that under other medicare supplemental 
     policies. The study shall be based on surveys of appropriate 
     age-adjusted sample populations. The study shall be completed 
     by June 30, 1996.
       ``(B) The Secretary shall determine during 1996 whether the 
     amendments made by this section shall remain in effect beyond 
     the 5 year period described in paragraph (1)(B). Such 
     amendments shall remain in effect beyond such period unless 
     the Secretary determines (based on the results of the study 
     under subparagraph (A)) that--
       ``(i) such amendments have not resulted in savings of 
     premiums costs to those enrolled in medicare select policies 
     (in comparison to their enrollment in medicare supplemental 
     policies that are not medicare select policies and that 
     provide comparable coverage),
       ``(ii) there have been significant additional expenditures 
     under the medicare program as a result of such amendments, or
       ``(iii) access to and quality of care has been 
     significantly diminished as a result of such amendments.
       (3) GAO study:
       The GAO shall study and report to Congress, no later than 
     June 10, 1996, on options for modifying the MediGap market to 
     make sure that continuously insured beneficiaries are able to 
     switch plans without medical underwriting or new pre-existing 
     condition exclusions. In preparing such options, the GAO 
     shall determine if there are problems under the current 
     system and the impact of each option on the cost and 
     availability of insurance, with particular reference to the 
     special problems that may arise for enrollees in Medicare 
     Select plans.''.

  Mr. CHAFEE. Mr. President, just in summary then, what we have done 
is, First, we have promised that in the Finance Committee we will have 
a hearing on Medicare Select once the HHS report comes in; second, this 
legislation extends Medicare Select to all 50 States, the 15 that have 
it now plus any others that want to come in over the next 18 months, 
and that it will continue indefinitely, beyond the 18 months unless the 
Secretary of HHS determines that the beneficiaries do not save money 
compared to other MediGap policies or there are additional expenditures 
by the Government under Medicare, or access to or quality of care is 
diminished. Finally, there will be a GAO study on whether or not the 
beneficiaries have a problem getting coverage under another MediGap 
policy, if they wish to change policies. Furthermore, the GAO would 
make recommendations if there are problems.
  So, Mr. President, I yield the floor.
  Mrs. HUTCHISON addressed the Chair.
  The PRESIDING OFFICER. Who yields time?
  Mr. CHAFEE. I yield whatever time I have.
  The PRESIDING OFFICER. The Senator from Texas is recognized.
  Mrs. HUTCHISON. Mr. President, I do want to be a cosponsor of this 
substitute because I think this is one of [[Page S6796]] the important 
positive things that we can do for health care reform. This was brought 
to my attention by Congresswoman Johnson last year when we were afraid 
that this option for our seniors in the 15 States using it might be 
lost in the shuffle, and I called Senator Chafee and we worked to try 
to make sure that this was extended. I am very pleased that Senators 
Rockefeller and Chafee have now come to an accommodation to not only 
extend it for the 50 States but to allow all people in all 50 States on 
Medicare to have the option of selecting Medicare Select.
  Medicare Select is health reform that works. Since I have been in the 
Senate, we have spent more time discussing the problems in our health 
care system than about the models of achievement in the industry. What 
about the reform that has accomplished savings in health care? Medicare 
Select is a program we should encourage and promote, not to let die.
  Medicare Select gives seniors an option to save money. In Texas, more 
than 8,000 seniors are enrolled in Medicare Select plans and save an 
average of 15 to 20 percent of the cost of Medicare supplemental plans. 
This is a significant savings for those on a fixed income. Nationwide, 
400,000 people participate in this program in 15 States. If we allowed 
this program to expire at the end of this year, seniors would be hit 
with higher premiums.
  Medicare Select policies are highly rated by Consumer Reports 
magazine. In its August 1994 issue, Consumer Reports included 8 
Medicare Select policies in the top 15 best value MediGap products 
nationwide. In fact, almost every health care reform bill introduced in 
this body last year contained a permanent extension of this program to 
50 States.
  The need to extend Medicare Select Program is critical. If this 
program were allowed to expire, premiums could substantially increase 
for the current Medicare Select enrollees and, more importantly, would 
limit options for new Medicare beneficiaries. With the recent report by 
the trustees of the Medicare trust fund telling us of the dire straits 
of the Medicare Program, it would be unthinkable to start eliminating 
cost-effective options for providing care to the Medicare 
beneficiaries.
  I appreciate Senator Chafee's and Senator Rockefeller's leadership on 
this. I think they are taking exactly the right approach. I am glad to 
be a cosponsor of this substitute. When we talk about improving health 
care, here is one of the key ways we can do it so that we can provide 
options for all 50 States for our seniors to have the ability to add to 
their standard Medicare plan options that they would want at an 
affordable price.
  I hope we will adopt this quickly. I hope that the other seniors in 
the States not now covered will look into this option, because this is 
the way we can do what this Congress has been trying to do for 2 years, 
and that is to provide more cost-effective health care availability for 
our senior citizens. Thank you, Senators Chafee and Rockefeller.
  I yield the floor.
  Mr. CHAFEE. Mr. President, I thank the distinguished Senator from 
Texas for her kind comments. She has been a loyal supporter and active 
worker in connection with this Medicare Select effort. I congratulate 
her for what she has done.
  Mrs. FEINSTEIN. Mr. President, I rise in support of Senate passage of 
the Medicare Select bill, H.R. 483, which as passed by the House would 
extend the current demonstration program beyond its June 30, 1995 
cutoff date and expand it from 15 States to the entire Nation.
  While it has thus far been just a small 3-year demonstration program, 
the Medicare Select Program has been a tremendous success in the 15 
States where it is offered, especially in California.
  Medicare Select provides supplementary insurance--for copayments, 
deductibles, and other out-of-pocket costs--for 100,000 California 
Medicare recipients (roughly 440,000 nationally).
  Seniors enroll in the low-cost Medicare Select Program in exchange 
for participation in a loose-knit managed care plan.
  This network of providers are used to cut premium costs by 10-37 
percent over fee for service medigap products, which translates into 
savings on medigap premiums of up to $25 per month, or $300 per year.
  In California, more than 2,200 new enrollees are being added per 
month, because the Medicare Select Program can provide low-cost, high-
quality health benefits, while still retaining a high degree of choice 
over their physician.
  There is no additional cost to the Federal Government.
  However, under current law, no new Medicare recipients will be able 
to enroll in the program after July 1, 1995, when the demonstration 
program that was authorized in 1990 and extended for 6 months last year 
will end.
  To make sure that select is continued in California, I joined Senator 
Chafee and others in introducing Medicare Select legislation earlier 
this year, and am pleased that the House was easily able to pass 
legislation that would extend the program for 5 years and expand it to 
all 50 States, with a bipartisan vote of 408 to 18.
  This Medicare Select legislation should not be confused or dragged 
down with other, more contentious health care insurance reform issues. 
Certainly, there are problems with the current medigap insurance 
program that must be addressed. However, this is a simple, 
straightforward bill that should not be used for those purposes.
  The Medicare Select Program is entirely voluntary, and should not be 
confused with programs and proposals that would require seniors to join 
HMO's to get their Medicare. No seniors are being forced or fooled into 
joining, Medicare Select seniors can still receive service outside 
their plans, and no insurers are being forced to sell this type of 
product.
  In fact, Consumer Reports has listed Medicare Select products as 
among its highest rated values, and extension of the Medicare Select 
Program has been endorsed by the California Commissioner of Insurance 
as well as the National Association of Insurance Commissioners.
  Certainly, managed Medicare programs like Medicare Select must be 
implemented carefully, in order to ensure that Medicare enrollees are 
appropriately informed of the benefits of this program, provided with 
high-quality services, and ensured access to highly trained physicians.
  However, the matter at hand is straightforward, and the most 
important thing is that Medicare Select be extended. Therefore, I urge 
my colleagues to support the Medicare Select legislation.
  Mr. KOHL. Mr. President, I rise in strong support of the Medicare 
Select Program. The bill we are considering extends Medicare Select for 
5 years and allows all States to participate. Fifteen States are 
currently allowed to take part in this program which provides older 
Americans with a managed care alternative to supplement their Medicare 
benefits.
  We have a strong managed care tradition in Wisconsin. Many seniors 
had managed care options during their employment and wish to maintain 
that choice of care as they retire. Medicare Select provides that 
opportunity and is very popular in my State.
  Mr. President, if we do not act on this legislation, Medicare Select 
will terminate on June 30. Over 26,000 Medicare recipients in Wisconsin 
will face increased premiums and limited choices. 450,000 older 
Americans in the 15 States will be hit with higher costs if the program 
is not extended.
  At a time when the majority party is pursuing a budget proposal that 
cuts Medicare by $256 billion--which would greatly increase out-of-
pocket costs for older American's and ration care--we should not kill a 
program that currently saves money for older Americans and expands 
their options.
  Detractors from this bill suggest that before we act, we should wait 
until a study being conducted for the Department of Health and Human 
Services is completed later this summer. Or will it be completed in 
December? No one seems to know when it will be ready. The fact is, Mr. 
President, the study was due this past January. What's the holdup?
  There is one date that I am certain of--June 30, 1995--the date when 
Medicare Select will terminate.
  I am eager to see the results of the study I just mentioned. I 
believe it will have important ramifications on the future of managed 
care and Medicare. [[Page S6797]] But we must not hold Medicare Select 
beneficiaries hostage until a date uncertain.
  During debate today, concerns have been raised about premium rating 
based on age and one-time open enrollment periods under medigap 
policies. I agree that these concerns should be addressed. However, 
these issues relate to all MediGap policies, not just Medicare Select. 
We should not single out those who benefit from Medicare Select in 
order to iron out differences in overall MediGap policy. We can and 
should review these issues under Medicare reform and broader health 
care reform legislation.
  Medicare Select works for older people in Wisconsin. It saves 
beneficiaries from 20 to 30 percent in premium costs than under 
traditional medigap policies.
  Medicare Select plans are subject to the same regulations as other 
medigap policies which are regulated by the States. Select plans must 
offer sufficient access, have an ongoing quality assurance program, and 
provide full disclosure of network requirements.
  The program saves money for Medicare recipients, does not cost the 
Federal Government, and perhaps most importantly, provides many 
beneficiaries and providers their first exposure to managed care.
  Mr. President, time is running out. I urge my colleagues to support 
and extend Medicare Select.
  Mr. CHAFEE. Mr. President, I thank Senator Rockefeller, the Senator 
from West Virginia, for all of his help. I am glad we were able to work 
this out. It looked a little sticky at first, but we have done it. I 
look forward to working with him on the Finance Committee as we have 
the hearings next fall or whenever the report comes in from HHS.
  Mr. ROCKEFELLER. I yielded the remainder of my time, so if the 
Senator will yield.
  Mr. CHAFEE. I yield. The Senator may take as much of my time as he 
wants.
  Mr. ROCKEFELLER. There are two points I want to make that I think are 
very important to those who might be listening and who might be 
confused at this point. One is that we went from a 5-year extension to 
a year-and-a-half extension. Then, as the Senator from Rhode Island 
pointed out, the year-and-a-half extension would then become automatic 
unless the Secretary of HHS had objections or found problems or 
whatever. That means that basically--I do not want this to be taken the 
wrong way--Donna Shalala who is watching this closely--I do not think 
destructively but constructively--18 months would pass and she would 
still be there. So that for some of the colleagues who might be worried 
that this is an automatic extension, it is not, except as the merit 
allows that. I think that is a matter of great comfort to me, and it is 
another reason why I appreciate the Senator from Rhode Island. I thank 
him.
  Mr. CHAFEE. Mr. President, I yield back the remainder of my time.
  The PRESIDING OFFICER. If there be no further amendment to be 
proposed, the question is on agreeing to the committee amendment in the 
nature of a substitute.
  The committee amendment was agreed to.
  The PRESIDING OFFICER. The question is on the engrossment of the 
committee amendment and third reading of the bill.
  The amendment was ordered to be engrossed, and the bill to be read a 
third time.
  The bill was read a third time.
  The PRESIDING OFFICER. The bill having been read the third time, the 
question is, Shall the bill pass?
  So the bill (H.R. 483), as amended, was passed.

                                H.R. 483

       Resolved, That the bill from the House of Representatives 
     (H.R. 483) entitled ``An Act to amend title XVIII of the 
     Social Security Act to permit medicare select policies to be 
     offered in all States, and for other purposes'', do pass with 
     the following amendment:
       Strike out all after the enacting clause and insert:
     SECTION 1. PERMITTING MEDICARE SELECT POLICIES TO BE OFFERED 
                   IN ALL STATES FOR AN EXTENDED PERIOD.

       Section 4358(c) of the Omnibus Budget Reconciliation Act of 
     1990, as amended by section 172(a) of the Social Security Act 
     Amendments of 1994, is amended to read as follows:
       ``(c) Effective Date.--(1) The amendments made by this 
     section shall only apply--
       ``(A) in 15 States (as determined by the Secretary of 
     Health and Human Services) and such other States as elect 
     such amendments to apply to them, and
       ``(B) subject to paragraph (2), during the 5 year period 
     beginning with 1992.
       ``(2)(A) The Secretary of Health and Human Services shall 
     conduct a study that compares the health care costs, quality 
     of care, and access to services under medicare select 
     policies with that under other medicare supplemental 
     policies. The study shall be based on surveys of appropriate 
     age adjusted sample populations. The study shall be completed 
     by June 30, 1996.
       ``(B) The Secretary shall determine during 1996 whether the 
     amendments made by this section shall remain in effect beyond 
     the 5 year period described in paragraph (1)(B). Such 
     amendments shall remain in effect beyond such period unless 
     the Secretary determines (based on the results of the study 
     under subparagraph (A)) that--
       ``(i) such amendments have not resulted in savings of 
     premiums costs to those enrolled in medicare select policies 
     (in comparison to their enrollment in medicare supplemental 
     policies that are not medicare select policies and that 
     provide comparable coverage),
       ``(ii) there have been significant additional expenditures 
     under the medicare program as a result of such amendments, or
       ``(iii) access to and quality of care has been 
     significantly diminished as a result of such amendments.
       ``(3) The GAO shall study and report to Congress, no later 
     than June 10, 1996, on options for modifying the Medigap 
     market to make sure that continuously insured beneficiaries 
     are able to switch plans without medical underwriting or new 
     pre-existing conditions exclusions. In preparing such 
     options, the GAO shall determine if there are problems under 
     the current system and the impact of each option on the cost 
     and availability of insurance, with particular reference to 
     the special problems that may arise for enrollees in Medicare 
     Select plans.''.

  Mr. CHAFEE. Mr. President, I move to reconsider the vote.
  Mr. ROCKEFELLER. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.

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