On behalf of the entire Board of Trustees and our 1.3 million members nationwide, I thank Chairman Grassley, Ranking Minority Member Baucus, and the entire Finance Committee for the opportunity to present written testimony for the record on this country’s health care priorities.

TREA Senior Citizens League (TSCL) consists of active senior citizens concerned about the protection of their Social Security, Medicare, and veteran or military retiree benefits.  Approximately three-quarters of the membership are between the ages of 76 and 85. Nearly all are over the age of 60. Most either served in the Armed Forces during World War II or played a part in the war effort. 

Given our membership, I have no doubt that you will understand our ardent interest in the topics covered today.  First, I want to commend Secretary Thompson and the Bush Administration for moving the debate on Medicare and Medicaid reform forward.  I also want to thank the Members of the Finance Committee for bringing the debate to the next step in opening it for discussion in the Senate. 

Medicare:
TSCL conducts an annual survey of its members in order to fine-tune our legislative priorities.  The February 2002 survey reported that almost 28 percent of our membership has trouble paying for their prescription drugs each month; 27 percent reported having trouble paying their health insurance premiums, deductibles and co-payments.  And nearly 52 percent of our membership said that the creation of a Medicare outpatient prescription drug benefit would be the most beneficial action Congress could take to improve their health care management situation.  Thus, we are heartened by the Administration and Members of Congress’ promise to make a prescription drug benefit a top priority in the coming months.

While we understand that the details of the Administration’s Medicare reform proposal are not worked out, we have concerns about the possibility of a prescription drug benefit only being offered to individuals who leave the traditional Medicare fee-for-service program and sign with a private health care provider.  We want all seniors to have access to an affordable prescription drug plan, without their having to give up traditional Medicare and, perhaps, their doctor of many years.  

The Administration has stated that by “reforming” Medicare, it means strengthening the program and giving individuals more choices.  We applaud that.  We do want to make sure that those “choices” are truly that and are not, instead, forced by financial necessity.  For example, the price of prescription drugs is so high for many TSCL members that they may not truly feel they have a choice in switching to a private insurer if that’s the only way they will have access to a prescription drug benefit.

A second point we would like to comment on is the failure in the past of Medicare+Choice to provide everyone with an array of options.  While we understand that Medicare+Choice is not a central element of the President’s Medicare proposal, we want to add our voice to others who have said that the program has not worked out as it was intended.  We feel that any system implemented must provide for fairness, and quality options for all seniors - not just those in urban areas or certain states.

Access to affordable and reliable health care coverage is important to TSCL members.  TSCL  believes that, when private companies contract to offer services to seniors, it should not be for only a brief time.  In the past, many insurance companies have left certain regions, leaving seniors high and dry with respect to their health care options.  We want stability for our seniors, including assurances that they will be able to continue to have access to their family doctor, in whatever reform is enacted. 

TSCL members believe that a prescription drug benefit alone is not the entire solution to more affordable prescription drug costs.  A prime aspect of a Medicare prescription drug program that many TSCL members would like to see is the requirement that drug companies price prescriptions for Medicare beneficiaries at the same price as prescriptions available through state Medicaid or veterans’ drug programs are priced. 

Many bills to reform Medicare introduced in the 107th Congress had some provision for low-income individuals.  We applaud the inclusion of a reasonable and adequate stipend, tax credit or discount for low-income seniors for their prescription drugs, co-payments and other services.  Should certain seniors begin receiving their prescription drugs through the Medicare program rather than the Medicaid program due to changes in legislation, we  believe that full access and affordable prices for those seniors should be kept intact.

TSCL supports a competitive system for seniors to obtain prescription drugs.  Prescription drug discount cards do not replace a prescription drug benefit either within traditional fee-for-service Medicare or private managed care plans.  Still, TSCL does believe that prescription drug discount cards can offer some benefit to uninsured seniors.  But because no one card offers discounts on all drugs, TSCL is opposed to measures that would lock seniors  into one program for several months.  In addition, many good prescription drug discount cards currently are very low priced or free.  TSCL believes there is a potential for government-set enrollment fees to backfire. For example, companies could impose a fee where none existed before.

TSCL is not committed to a government system, private system, or some specific mix of responsibilities between the two - but more importantly, to a system that provides stable, affordable and appropriate health care choices for all of our seniors. 
 

Medicaid:
The basis of the Administration’s proposal, as we understand it, is the “forward-funding” of the federal government’s share of Medicaid costs to states for the first seven of the next ten years, with the final three years states receiving a lower level of funding.  Under the proposal, states would also have more leeway in the “optional” part of Medicaid services the state provides to its residents. 

Many states are suffering from monumental budgetary shortfalls, and they do need assistance and they need it now.  However, we do not want to see a temporary fix and a burden left for future generations of governors and state elected officials.

As to the optional services provided by the state, here, too, we are concerned that programs not be implemented in such a way as to lead to unfairness and discrimination against those individuals residing in rural areas.  We also want to ensure that certain federal regulations and standards remain in place for nursing homes and other care centers.  It is also important to maintain protections for spouses of nursing home patients.  The stay-at-home spouse should be allowed to remain in their homes, rather than being forced to sell their home to cover nursing home costs.

We do believe, as the Administration has outlined, that preventative care is important for all elements of society.  In addition to the fact that helping our citizens stay healthy is the right thing to do, there is a financial incentive for the government and private insurers to be promoting preventative care.  While supporting the Administration’s efforts in this area in theory, TSCL is concerned that government not become “Big Brother” with respect to the health care of seniors.

Should a Medicare prescription drug program be implemented, TSCL understands that the “dual-eligibles” who are covered both by Medicare and Medicaid would receive their prescription drugs under the Medicare program.  This would certainly assist in easing the financial burden of states.  TSCL urges that this be done in such a way that the services and costs currently received and paid for, respectively, by seniors are not negatively impacted by this.

The flexibility to adopt “best practices” and common-sense solutions offered as a principle by the Administration should be commended.  However, TSCL is concerned that this “flexibility” not lead to higher co-payments (or new co-payments) for those seniors who are already on Medicaid because they are impoverished.  And while flexibility for states to implement new programs that work is important, so too is availability to a full complement of services to seniors, without discriminating against individuals who are not well-off.

TSCL suggests that economic forecasts on the growth of Medicaid appear optimistically low.  Realistic budget forecasts could prevent more dire circumstances down the road.  The nine percent growth figure given for the next 10-year timeframe, given recent years of 13-14 percent growth, seems--perhaps--to be too low, especially as health care costs continue to increase about three times faster than senior cost-of-living adjustments.

An overall cap on state Medicaid expenses causes TSCL to pause as well.  We don’t want to see any one of our senior citizens forced to be without service because the state is over a pre-determined limit, especially if that limit is put into place using an unrealistic forecast for growth.

Cuts in Medicaid would negatively affect seniors who were born in the years 1917-1926 especially hard, as they receive lower Social Security benefits than other seniors who have similar work and earnings records. 

Finally, TSCL is concerned about the deficit and the effects it will have not only on Medicare and Medicaid, but also Social Security.  Now is the time to make tough choices that allow for fairness and dignity for our seniors--and an array of quality, affordable healthcare options.

We believe that the sooner both the Medicare and Medicaid issues are addressed, the better.  We appreciate the Finance Committee’s efforts in taking a step in that direction by furthering the debate on possible legislative solutions.

Thank you, again, for the opportunity to submit a written statement for the record.

March 2003