April 11,2000

Roth Asks Finance Committee Members for Input on Medicare Reform and a Prescription Drug Benefit

Seeks Consensus Reform and Drug Benefit Package Action Later this Spring

WASHINGTON -- In an effort to reach a consensus on overdue improvements to the Medicare program, Senate Finance Committee Chairman William V. Roth, Jr. (R-DE) today asked each member of the committee for his views on the major issues in Medicare reform, including the issue of a prescription drug benefit. Roth asked whether members believe that benefit expansions should be coupled with reforms as well as members' thoughts on the timing of reform.

In a letter sent today to Committee members, Roth said, "My purpose is to determine whether broad, bipartisan consensus can be developed with respect to legislative action this year in the major areas of Medicare reform, including views with respect to the inclusion of a prescription drug benefit."

A copy of the letter is attached. Responses to the Chairman's letter will not be released by the Committee.


April 11, 2000

Dear ---:

The Finance Committee has devoted exceptional time and resources in this Congress to examining the issues of Medicare reform. In that regard, there are certain steps I am undertaking to prepare for Members' meetings to be held later this Spring. My purpose is to determine whether broad, bipartisan consensus can be developed with respect to legislative action this year in the major areas of Medicare reform, including views with respect to the inclusion of a prescription drug benefit.

My goal is to seek major, overdue improvements to the Medicare program, including legislation addressing beneficiaries' prescription drug expense concerns. To that end, I would appreciate receiving from each of you an updated and detailed sense of your views and priorities with respect to needed reforms in the Medicare program.

Last summer, in response to a similar request, many Members responded with particular attention to urgent Medicare provider payment issues which we addressed through enactment of the Medicare, Medicaid and S-Chip Refinement Act of 1999. In contrast, in this request, I urge you to focus particularly on what you believe the Senate Finance Committee should do this year in the areas described below.

By way of context, the Committee has taken fifteen days of testimony, the preponderance of which suggested that any major benefit expansions in Medicare, such as coverage for outpatient prescription drugs, should occur not in isolation, but in the context of other reforms. The Administration has also testified in support of this point. Therefore, as you consider the following areas, please indicate whether you believe benefit expansions should be coupled with reforms. If your answer is yes, please indicate which specific reforms you believe are most important to act upon this year. By no means feel that your proposals would need to be limited to this year. With respect to timing and implementation, we could consider staging certain reforms over a multi-year period. Certain organizations appearing before the Committee, such as the American Association of Retired Persons, have urged that we proceed slowly to permit public understanding and acceptance of any major changes and to permit such changes to be successfully assimilated into the Medicare program. If you think that staging of major reforms is best to do, please share your views about where that would be most advisable.

1) Prescription Drugs - What action do you believe is most important to take this year with respect to addressing the concerns about outpatient prescription drug expenses? What are your preferences with respect to the design of any prescription drug program? What would you recommend with respect to crucial issues such as taking into account existing coverage secured from other sources such as employer retiree health benefits, Medigap policies and Medicaid? For this year, as was suggested by some of our witnesses at the prescription drug hearings, would you recommend beginning by offering prescription drug assistance first to lower-income beneficiaries?

2) Standard Benefit Package - Aside from prescription drugs, what other improvements would you recommend in Medicare's standard benefit package to make it more consistent with what is considered to be a state-of-the-art, comprehensive health insurance benefit package, including incentives for the appropriate use of health services? For instance, some of the areas we took testimony on raised changes such as adoption of a combined Part A and Part B deductible, elimination of the hospital spell-of-illness concept and adoption of 365 days of inpatient hospital coverage, premium and cost-sharing adjustments, annual or lifetime stop-loss protection on out-of-pocket expenses, and other similar proposals to bring benefits for elderly and disabled beneficiaries into line with what is typical of coverage for other Americans.

3) Medicare+Choice and Health Plan Competition - What improvements would you recommend in the Medicare+Choice program to stabilize and improve private health plan participation in Medicare and to extend the benefits of competition to beneficiaries through premium incentives and benefit improvements? Testimony indicated that there are elements of the President's proposed competition model that could pave the way for the longer-term premium reforms proposed in the Breaux-Frist bill under consideration in the Committee.

4) Fee-for-Service Program Modernization - What improvements would you recommend to modernize the current Medicare fee-for-service program, particularly to ensure that beneficiaries receive the best possible day-to-day service from Medicare in areas such as claims handling, beneficiary appeals and consumer information?

5) Medicare Governance - What improvements in Executive Branch governance and in particular, in the Health Care Financing Administration, are needed to ensure effective management of the Medicare program in a reform environment, considering both the necessity for public accountability, and for ensuring continuity at all times in the provision of services to beneficiaries?

6) Medicare Financing - What improvements do you believe are necessary to initiate this year in the underlying financing structures of Medicare to protect and sustain the program for the next generation? Do you support inclusion in a Medicare package of provider payment adjustments and other offsets, such as were offered by the President in his budget submission this year?

In closing, I look forward to working with you to bring changes to Medicare that are constructive, that meet the most pressing health care needs of the elderly and disabled, and that are fiscally responsible and sustainable. Please submit your views and priorities to Frank Polk, Staff Director, Committee on Finance, Dirksen 209, by close of business on Friday, April 28, 2000. All replies to this request will be held in strict confidence.


William V. Roth, Jr.