June 24, 2003

Diverse Group of Organizations Joins House Democratic Leader Pelosi to Denounce House Republican Proposal Undermining Medicare

Pelosi Highlights Public Citizen Report Exposing Unreliability of Private Insurance Plans Relied Upon in Republican Proposal

WASHINGTON, D.C. – Members and supporters of the Campaign to Preserve – Not Privatize – Medicare today joined Democratic Leader Nancy Pelosi (D-Calif.) in criticizing legislation that would dramatically transform the Medicare program and provide only limited prescription drug coverage for seniors.

Those joining Pelosi today included 28 consumer, religious, senior, labor and disability rights organizations. In addition, Public Citizen issued a report detailing the unreliability of existing private plans in Medicare.

The U.S. House of Representatives likely will vote on the Medicare proposal later this week. Under the measure, the traditional Medicare program, which now covers almost nine of 10 beneficiaries and guarantees them choice of almost any provider and standardized benefits, would be forced to compete with private insurance plan HMOs and PPOs.  In this competition, private plans can be expected to use fair as well as foul means to win, including refusing to offer coverage in some parts of the country, especially rural areas, and offering coverage in others one year only to withdraw later, forcing beneficiaries to scramble to find new sources of coverage.  

Also, private plans likely will selectively enroll the healthiest of those seniors in Medicare to keep costs down, leaving beneficiaries with chronic health conditions and disabilities behind in the traditional Medicare program. Traditional Medicare would become much more costly due to this adverse risk selection. Those unable to afford the cost of staying in traditional Medicare would be forced to enroll in a PPO or HMO, where their choice of doctors would be greatly reduced.

Public Citizen’s report, Private Insurance Plans & Medicare: The Disappointing History, shows that HMOs do not serve rural parts of the United States well. Only 19 percent of rural Medicare beneficiaries have the option of enrolling in a Medicare managed care plan this year.  This contrasts with 74 percent of beneficiaries living in urban areas who have that option.

When HMOs do serve an area, they often prove unreliable. Since 1998, on 2.4 million occasions, Medicare beneficiaries have been forced to look for new providers after their HMO ceased providing service to them as part of a contract with the Medicare program, according to Center for Medicare and Medicaid Services data. (Some of those included in this total were dropped more than once by their Medicare HMO.) This includes plans that have withdrawn from Medicare and those that have scaled back their service areas for 2003. In many states, more than 50 percent of those enrolled in plans were dropped in a single year. In some states, that rate was more than 90 percent.

The Campaign to Preserve – Not Privatize – Medicare objects to the legislation being considered in the House because it will undermine the Medicare program, said Frank Clemente, director of Public Citizen’s Congress Watch.

"Medicare has been a success because it provides coverage for rural and urban, rich and poor, frail and healthy, preserving one community of interests among all groups rather than pitting one group against another," he said. "This legislation would end that and may particularly disadvantage rural areas that depend on the traditional Medicare program. This proposal threatens to unravel Medicare as we know it."

Click here to access the Public Citizen report.

Members of the campaign endorsing this statement are: Advancing Independence: Modernizing Medicare and Medicaid, the American Medical Student Association, the Center for Medicare Advocacy, Inc., the Center on Disability and Health, Church Women United, the Communications Workers of America, Consumers Union, the General Board of Church and Society of the United Methodist Church, Gray Panthers, the National Senior Citizens Law Center, NETWORK: A National Catholic Social Justice Lobby, the United Church of Christ Justice and Witness Ministries, and the Union of American Hebrew Congregations.

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