April 03,2001

Grassley Works to Improve Health Options for Older Americans

WASHINGTON – Medicare’s managed care option requires significant reforms to providedesired access to more older Americans, Sen. Chuck Grassley, chairman of the Committee onFinance, said today.

“Congress introduced managed care to Medicare to give older Americans more health careoptions,” Grassley said. “It was meant to give people a choice, and those who have choices arehappy. But too many older Americans still have no options. We have to put the choice back inMedicare Plus Choice.”

Grassley’s comments came after a hearing exploring ways to improve Medicare’s managedcare option, called Medicare+Choice. Grassley said Medicare has a long-standing history of offeringolder Americans alternative options to traditional Medicare. In fact, Medicare began offeringmanaged care as early as the 1970s.

In 1997, Congress created the Medicare+Choice program, designed to expand health plansto markets where existing access was limited or non-existent and to offer new types of plans, inaddition to controlling costs.

Managed care has proved to be a very popular alternative to traditional fee-for-serviceMedicare for many patients, Grassley said. Medicare beneficiaries often enroll in managed careoptions because these plans frequently offer benefits traditional Medicare does not, such as enhancedpreventive services, prescription drugs, eye glasses and hearing aids. Unlike fee-for-serviceMedicare, managed care plans also provide an integrated benefit package and coordinate care so thatservices can be administered more efficiently, ideally to contain costs and improve the quality of carefor the patient.

From the start, achieving the goals of the Medicare+Choice program has not been easy,Grassley said. The program’s aim to control spending, combined with increased regulatory burdensand program mismanagement, have turned many managed care plans away from entering newmarkets or maintaining existing ones.

As a result, the majority of managed care plans participating in Medicare are concentratedin a handful of densely populated states. Less densely populated states, such as Iowa, have verylittle managed care participation in Medicare. Only one Medicare+Choice plan exists in Iowa’s 99counties. It serves 2,099 patients in Pottawattamie County and boosts its number of participants byserving patients across the river in Omaha.

In states with more Medicare managed care, older Americans face hardships when their planspull out of the program, Grassley said. The beneficiaries must choose a new plan and might give upenhanced benefits or pay higher premiums in another plan.

Grassley said Congress has listened to plans and patients and stepped in to improve theMedicare+Choice program twice since 1997, but problems remain. He said he is hopeful thatunearthing the problems and finding solutions to them is possible.

“I’m not ready to give up on Medicare+Choice,” Grassley said. “The idea of giving olderAmericans a health care choice is still a good idea. I hope we’ll agree that it’s time to re-build thisprogram. That means not by applying one-time fixes or financial givebacks, but by changing plandesign, payment structures and regulatory requirements. Doing so will preserve this program forfuture generations and ensure that older Americans have the same kind of health care options thatmillions of others already enjoy today.”