Thank you, Mr. Chairman. It was a pleasure to accommodate you today in the scheduling of this important hearing.

Today we are considering two bills, H.R. 3142 and the President's proposed demonstration legislation. Each of which would set up a demonstration project to test an idea that may benefit the military retirees of this country. It seems appropriate that my good friend, the Ranking Member of the Veterans' Affairs Committee, Sonny Montgomery, has co-authored another important piece of bipartisan legislation which creates a similar demonstration which would benefit veterans, H.R. 4068. Congressman Montgomery, like no other, has always looked out for the health and well-being of this country's veterans. As most everyone knows, Sonny is retiring at the end of this session, after 30 years of dedicated service. It is a fine example of his strength of character, that even in the waning days of his last Congress, he is still working to pass a measure to assist the Nation's veterans.

Sonny has always been there for America's veterans, and he has always been there for me when veterans in my district needed help. He was instrumental in my fight to build a new VA hospital in Detroit, and the many proud veterans of southeastern Michigan and I will always thank him for it.

This institution has seen many great individuals, but rarely someone that combines so effortlessly the dedication and high moral fortitude of Sonny Montgomery. Sonny will be missed, and I wish him the best of luck in the future.

Both bills before us today would set up a demonstration project to test the idea of letting the Department of Defense receive payments from Medicare for treating military retirees covered by Medicare. Currently the DoD cannot receive payments from Medicare for treating military retirees who also happen to be Medicare beneficiaries. Some military retirees today cannot continue to receive health care at military facilities because of limitations on health care funding by the Defense Department.

H.R. 3142 would establish a 2-year demonstration, under which the Medicare program would reimburse the Department of Defense for health care of these retirees who are also eligible for Medicare. Such a program may well be one way to address a concern we all share--that our veterans and military retirees and their families continue to receive appropriate health care. Our job at this hearing is to find out how such a program would work, and about the impact of such a program on the Medicare Trust Fund.

We will also hear testimony today on a similar proposal of the President's. The President's proposal would establish a three-year trial program to investigate the cost of allowing the DoD to be directly reimbursed by Medicare.

The Department of Health and Human Services is advocating the implementation of this bill to study the effects of providing the DoD with reimbursement from the Medicare program, testing whether this subvention concept would save money and allow military retirees to continue seeing their own doctors. Just as importantly, multiple veterans organizations and military retiree organizations have pledged their support for this bill in the hope that it will prove whether Medicare subvention will work for both veterans and military retirees.

The President's plan addresses concerns about the Medicare Trust Fund in two ways. First, Medicare would reimburse DOD only after the Defense Department has spent more than it now spends to provide health care to these military retirees. Second, the proposal places an annual cap of $65 million on Medicare payments. By contrast, CBO estimates that H.R. 3142 would increase Medicare costs by about $200 million a year. I want to follow whatever course maximizes good health care for our veterans and minimizes any jeopardy to the Medicare trust fund.

I thank my friend Sonny Montgomery once again for bringing to the forefront a piece of legislation to benefit our country's veterans. Sonny, on the eve of your retirement, you have my gratitude and the entire country's for your many years of fine service.

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