The Medicare Informed Choice Act: A First Step in Protecting Medicare Beneficiaries

THE MEDICARE INFORMED CHOICE ACT: A FIRST STEP IN PROTECTING MEDICARE BENEFICIARIES -- (Extensions of Remarks - September 22, 2005)

* Ms. SCHAKOWSKY. Mr. Speaker, I am pleased to join my colleague, Representative Pete Stark, in introducing the Medicare Informed Choice Act, an immediate and essential first-step in protecting Medicare beneficiaries.

* I believe that fundamental changes are needed to make the new Medicare drug benefit more affordable and less complicated. Along with my colleagues Representative Marion Berry and BOB ANDREWS, I have introduced H.R. 752, the Medicare Prescription Drug Savings and Choice Act, which would establish a meaningful drug benefit in Medicare and require Medicare to negotiate for price discounts, as the VA and large employers do today. In the meantime, however, it is clear that Medicare's 42 million beneficiaries need immediate relief from the confusion and complexity of this fall's enrollment process. The Medicare Informed Choice Act would provide that relief by providing three simple changes in 2006: elimination of the late enrollment fee, a one-time opportunity for every beneficiary to switch plans, and protection against the loss of retiree health benefits.

* I recently received a letter from a constituent, Phyllis Arist from Evanston, Illinois. She wrote:

I urge you to suspend the late-enrollment penalty for Medicare Part D.

Enrollment in Part D will be a challenge for anybody and everybody, whether that person is health care savvy or not. There will be dozens of complex plans that consumers will have to confront. How would you choose among a slew of different drug plans, each covering different drugs, using their own cost-sharing scheme, working with different pharmacy networks, and no guarantee that the plan will be around next year?

If Medicare Part D were a straight-forward benefit like Medicare Part B, the penalty might be justified. But given the circumstances, it is unfair. People with Medicare need more time to understand the new Medicare drug benefit. More time, combined with reliable and comprehensive information, will ensure more people are making the right choices and not taking a leap of faith into the unknown.

* Senior citizens and persons with disabilities will face obstacles in getting access to independent information, but they will be inundated with materials from private plans seeking customers. Beginning next month, Medicare beneficiaries and their families will be subjected to multi-million advertising campaigns by insurers. As reported in The Wall Street Journal (``Insurers Bet Big on New Drug Benefit,'' September 7, 2005), ``The payoff could be big. The new drug benefit is expected to boost 2006 revenue at seven of the largest health insurers by at least $4.45 billion in 2006, and lift earnings by 2 percent to 4 percent according to CIBC World Markets analyst Carl McDonald.'' Some companies expect increased profit levels of 4 percent to 6 percent.

* The pressure to make a quick decision will be enormous, particularly when coupled with a sales pitch arguing that failure to choose will result in a permanent, financial penalty. Without adequate, independent and personalized counseling, many beneficiaries will make the wrong decision. Getting rid of the late enrollment fee is only part of the solution. Our bill will give all beneficiaries the opportunity to switch their plan and enroll in one that better meets their needs, whether they enrolled by mistake or because they succumbed to sales pressure.

* Finally, there is massive confusion about how the new Medicare drug benefit will mesh with current retiree benefits. Unfortunately, a beneficiary's misunderstanding and enrollment in a Medicare drug plan could result in the loss of retiree benefits. Again the Medicare Informed Choice Act gives a one-year grace period to sort out confusion and correct any errors.

* I urge my colleagues to support the Medicare Informed Choice Act so that we can protect our constituents from unfair penalties or the loss of retiree benefits.

http://thomas.loc.gov