January 24,2006

Grassley on So-called “Giveaway” to Insurance Companies

M E M O R A N D U M

To: Reporters and Editors
Re: “Giveaway” to insurance companies
Da: Tuesday, Jan. 24, 2006

Sen. Chuck Grassley, chairman of the Committee on Finance, today made the following
comment in response to an announcement by two Democratic members – a senator and a House
member – that they will try to rescind a “giveaway” to insurance companies in the budget
reconciliation spending bill if the bill moves forward.

“I appreciate the interest in fixing a ‘giveaway’ to insurance companies. The conference
report cuts Medicare payments to insurance companies by $6.5 billion over five years. Even more
important, it rescinds the policy leading to those extra Medicare payments. The change is supposed
to make sure that a part of the payment formula to plans, called risk adjustment, is fully
implemented. It’s a change that makes sense. Beyond that, I’m happy to work with my colleagues
on legislation to cut other overpayments made by Medicare and Medicaid.”