H.R. 4988 creates a separate "Medicare Benefits Administration" to oversee the Medicare+Choice program and the new Part D prescription drug benefit. This entirely duplicative entity would administer the pieces of the Medicare program that are run by private, risk-bearing insurance companies and managed care plans. The only conceivable purpose of creating such an Administrator would be to prepare for phase-out of the traditional Medicare fee-for-service program, administered by the Center for Medicare and Medicaid Services, and a transfer of the Medicare program to the private sector.

While the Medicare program has always relied on private sector providers, there is a difference between the current structure and the one envisioned under the Committee bill. Since Medicare was enacted, private sector entities have delivered benefits to seniors and processed the program’s claims. The Medicare program itself, however, has always assumed the ultimate responsibility -- and the ultimate financial risk -- of caring for our Nation’s seniors. The private sector entities overseen by the Medicare Benefits Administration would not only deliver and manage the program’s benefits and process the program’s claims, but would assume financial risk as well.

The Medicare program was originally created because the private sector did not offer affordable and reliable health insurance to the elderly and disabled. We see little evidence that the elderly and disabled have become more attractive populations to insure, and we have serious doubts about the wisdom of the approach established in H.R. 4988. We do not object to private insurance companies or managed care organizations participating in Medicare, but we fear that if these companies assume the financial risk of providing care, the health and well-being of seniors and the disabled will no longer be the first priority of the Medicare program.

John D. Dingell
Sherrod Brown
Henry A. Waxman
Rick Boucher
Edolphus Towns
Gene Green
Frank Pallone, Jr.
Mike Doyle
Karen McCarthy
Tom Barrett
Chris John
Bobby L. Rush
Ted Strickland
Anna G. Eshoo
Lois Capps
Peter Deutsch
Eliot L. Engel
Tom Sawyer
Diana DeGette
Bart Gordon

Prepared by the Democratic staff of the   Committee on Energy and Commerce
2322 Rayburn House Office Building, Washington, DC 20515
Select Feedback to let us know what you think.

Back to the Committee on Energy and Commerce Democrats Home Page