Roth Statement at Hearing on Competition in the Medicare Program
WASHINGTON -- The Senate Finance Committee met today to hear testimony on health plan competition and choice in the Medicare program. Senate Finance Committee Chairman William V. Roth, Jr. (R-DE) delivered the following opening statement:
"Welcome to the second in our series of hearings on approaches to strengthen and modernize the Medicare program. This hearing will focus on how competition between health plans would be structured under the President's reform proposal and under S. 1895, offered by Senators Breaux and Frist.
"Both the Breaux-Frist premium support proposal and the Administration's competitive defined benefit proposal could significantly enhance the competitive aspects of the Medicare program. Both proposals seek to create a more efficient health insurance model for Medicare beneficiaries, that over time, could lead to improved health plan choices, affordability and benefits.
"Key to the ultimate success of these proposals is their ability to create the information and incentives necessary to enable beneficiaries to be well-informed and prudent purchasers of their own Medicare coverage. It is this prudent consumer behavior that over time would allow for slower growth in both beneficiary and taxpayer costs. Equally as important, it could also ease the introduction of needed and potentially expensive benefit improvements, such as we are discussing currently with respect to prescription drug coverage.
"Today, we will examine two somewhat different strategies to achieve a more competitive Medicare program. The Breaux-Frist proposal links the government contribution to health plans to the average premium charged by health plans. The Administration's proposal links the government contribution to health plans to the premium charged by the traditional fee-for-service plan managed by the Health Care Financing Administration.
"These two approaches reflect different views on how best to strike a balance between efficiency and equity. They differ in their particular blend of encouraging plan competition, incentives for prudent purchasing by beneficiaries, and their protection of the premium paid by those remaining in the traditional plan."
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