ADVISORY

FROM THE COMMITTEE ON WAYS AND MEANS

SUBCOMMITTEE ON HEALTH

Health Subcommittee Chairman Stark Announces a Hearing on Medicare Advantage

House Ways and Means Health Subcommittee Chairman Pete Stark (D-CA) announced today that the Subcommittee on Health will hold a hearing on the costs seniors and people with disabilities pay through the Medicare Advantage Program. The hearing will take place at 10:00 a.m. on Thursday, February 28, 2008, in the main committee hearing room, 1100 Longworth House Office Building. At the hearing, the Government Accountability Office (GAO) will release and discuss findings of a new report on cost-sharing changes under Medicare Advantage plans.

In view of the limited time available to hear witnesses, oral testimony at this hearing will be from invited witnesses only.  However, any individual or organization not scheduled for an oral appearance may submit a written statement for consideration by the Committee and for inclusion in the printed record of the hearing.

BACKGROUND

Of the 43 million Medicare beneficiaries, 8.8 million (20%) are enrolled in what are currently known as Medicare Advantage (MA) plans. These private health plans must provide benefits "actuarially equivalent" to those covered under traditional fee-for-service (FFS) Medicare (Parts A&B).   However, Medicare Advantage plans can and often do limit the network of providers that are available to beneficiaries, and often have higher cost-sharing requirements for selected services and different premiums than traditional FFS Medicare.  MA plans can provide additional benefits that are not covered by traditional Medicare, such as eyeglasses and yearly physical exams. However, some of these same plans charge higher cost-sharing for covered Medicare services.

The number of private plans available to Medicare beneficiaries and enrollment in such plans have grown steadily since 2003, as plan payments and options have increased. There are now eight different types of MA plans: Health Maintenance Organizations (HMOs); Provider Sponsored Organizations (PSOs); Preferred Provider Organizations (PPOs); Regional PPOs; Private Fee For Service Plans; Cost Contract Plans; Special Needs Plans (SNPs); and Medical Savings Account plans.

According to the Medicare Payment Advisory Commission (MedPAC), MA program payments were on average 113 percent of FFS expenditure levels in 2007. To create financial neutrality between private plan and FFS payment rates, MedPAC has recommended setting MA benchmarks equal to 100 percent of FFS.  For many years, plans were paid at 95 percent of FFS rates, reflecting industry claims that private plans were more efficient. Only in recent years have payments risen to be substantially higher than local FFS payments.   

“I am concerned that seniors enrolling into Medicare Advantage plans may be unaware that under certain circumstances, they may be charged more than traditional Medicare,” said Chairman Stark in announcing the hearing.  “I look forward to hearing from CMS, GAO and our other witnesses about the costs associated with Medicare Advantage plans, and the steps that the Administration is taking to ensure that these costs are accurately explained.  I also think we need to get a better sense of what services plans are actually providing with the extra dollars, instead of more rhetoric about what is offered. It's an important distinction that deserves a full discussion."

FOCUS OF THE HEARING:

The hearing will focus on the structure, costs and oversight of the Medicare Advantage program.

DETAILS FOR SUBMISSION OF WRITTEN COMMENTS:

Please Note:  Any person(s) and/or organization(s) wishing to submit for the hearing record must follow the appropriate link on the hearing page of the Committee website and complete the informational forms.  From the Committee homepage, http://waysandmeans.house.gov, select “110th Congress” from the menu entitled, “Committee Hearings” (http://waysandmeans.house.gov/Hearings.asp?congress=18).  Select the hearing for which you would like to submit, and click on the link entitled, “Click here to provide a submission for the record.”  Once you have followed the online instructions, completing all informational forms and clicking “submit” on the final page, an email will be sent to the address which you supply confirming your interest in providing a submission for the record.  You MUST REPLY to the email and ATTACH your submission as a Word or WordPerfect document, in compliance with the formatting requirements listed below, by close of business Thursday, March 13 , 2008.  Finally, please note that due to the change in House mail policy, the U.S. Capitol Police will refuse sealed-package deliveries to all House Office Buildings.  For questions, or if you encounter technical problems, please call (202) 225-1721.

FORMATTING REQUIREMENTS:

The Committee relies on electronic submissions for printing the official hearing record. As always, submissions will be included in the record according to the discretion of the Committee. The Committee will not alter the content of your submission, but we reserve the right to format it according to our guidelines. Any submission provided to the Committee by a witness, any supplementary materials submitted for the printed record, and any written comments in response to a request for written comments must conform to the guidelines listed below. Any submission or supplementary item not in compliance with these guidelines will not be printed, but will be maintained in the Committee files for review and use by the Committee.

1.   All submissions and supplementary materials must be provided in Word or WordPerfect format and MUST NOT exceed a total of 10 pages, including attachments.  Witnesses and submitters are advised that the Committee relies on electronic submissions for printing the official hearing record.

2.  Copies of whole documents submitted as exhibit material will not be accepted for printing.  Instead, exhibit material should be referenced and quoted or paraphrased.  All exhibit material not meeting these specifications will be maintained in the Committee files for review and use by the Committee.

3.  All submissions must include a list of all clients, persons, and/or organizations on whose behalf the witness appears.  A supplemental sheet must accompany each submission listing the name, company, address, telephone and fax numbers of each witness.

Note:  All Committee advisories and news releases are available on the World Wide Web at http://waysandmeans.house.gov.

The Committee seeks to make its facilities accessible to persons with disabilities. If you are in need of special accommodations, please call 202-225-1721 or 202-226-3411 TTD/TTY in advance of the event (four business days notice is requested). Questions with regard to special accommodation needs in general (including availability of Committee materials in alternative formats) may be directed to the Committee as noted above.

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