Statement of Congressman John D. Dingell, Ranking Member
Committee on Energy and Commerce

The Patients Before Profits Act of 2006

February 8, 2006

Mr. DINGELL. Mr. Speaker, today I am introducing legislation--the Patients Before Profits Act of 2006--that will right some of the many wrongs in the budget reconciliation bill passed by Congress last week and signed by the President today. This legislation, which is also being introduced today in the Senate by Senator Clinton, will realign our priorities to protect the healthcare coverage of working families rather than the profiteering of HMOs and private insurance companies.

The Patients Before Profits Act eliminates Government overpayments to Medicare HMOs through removal of a ``slush fund'' provision and ensuring these HMOs are only paid what is appropriate for the consumers they serve. This bill would then use these savings to restore protections against excessive out-of-pocket costs for necessary medical visits, prescription drugs, and emergency room care. It will also restore the benefit protections that provide medically necessary treatments under Medicaid and ensure families have adequate benefit coverage, not bare-bone packages.

The Patients Before Profits Act is needed because of the recently passed so-called Deficit Reduction Act, which the Republicans designed and the President is signing into law today. In the dark of the night, the Republicans removed provisions that transferred $32 billion in taxpayer overpayments to Medicare HMOs and insurance plans.

The Senate bill had cut $36 billion in overpayments to the HMOs in Medicare. That included $26 billion in savings by more accurately calculating their payments. But the negotiators rewrote the provision to save just $4 billion, providing a $22 billion windfall to the HMOs. The Senate bill also eliminated a $10 billion slush fund designed to entice HMOs to participate in the prescription drug program. The Republican conferees dropped this provision, providing another $10 billion gift to the HMOs for a total of $32 billion.

This bill takes back the money given to Republican-favored companies and restores to our most vulnerable citizens the needed healthcare that was cut. According to the non-partisan Congressional Budget Office, of the $28 billion in savings from Medicaid over 10 years, about 75 percent of that amount is due to provisions that reduce the number of people who can afford to participate. It will increase the number of uninsured and under-insured by raising the copayments that people will have to pay to see their doctors, increasing premiums, cutting medically necessary treatments, and tightening access to long-term care.

By 2015, 4.5 million children will be affected by higher cost-sharing charges for healthcare services such as doctor visits. A total of 13 million people will face higher charges to access their healthcare services. Twenty million people will face higher charges to obtain needed prescription drugs. One-third of those individuals affected by the drug cost-sharing (6.6 million) will be children and half (10 million) will have incomes below the Federal poverty level (monthly incomes of less than $1,380 for a family of three). All this because of a Republican unwillingness to take back overpayments to HMOs.

Congressional Budget Office analysis also concludes that the Republican legislation assumes that the number of uninsured will increase. Twenty percent of the savings from new premium charges under this law will derive from families who are no longer able to maintain their Medicaid coverage due to increased costs. Sixty percent of those who will lose coverage due to new premium charges will be children. Again, all of this because of a Republican unwillingness to take back overpayments to HMOs.

The Patients Before Profits Act of 2006 is a good start to right some of the wrongs that the Republican-led Congress and the President have inflicted on working families, individuals with disabilities, the elderly, pregnant women, and children. I urge my colleagues to join me in this fight.

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(Contact: Jodi Seth, 202-225-3641)