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tv   Key Capitol Hill Hearings  CSPAN  December 4, 2013 9:00pm-12:01am EST

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teachers. when you talk to the teachers, the teachers stay. they do not have the 50%, 80% attrition rate, and they talk about how important it is to actually teach, and you see the collaboration. we have about 15 minutes left. we will go to melanie, and several others. the administration is having labor-management art or ships, and i am wondering what you think the biggest obstacles are to achieving this, particularly when it comes to organizing and reaching collective-bargaining contracts, and what needs to be done over this? well, i think austerity, austerity, austerity, austerity, austerity has really poisoned a
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because --ronments thank you -- but that is a whole other topic. but i also think that we don't in america -- we are more into john wayne than john dewey. john wayne gets the headlines, not john dewey. you take a school district in southern l.a. county, even through austerity, it has done extraordinarily well. actually, that is how i got to this. .hey solve problems and what they have done is they have done this through the transitions of a retiring superintendent and a retiring union president. so this has really become baked into their culture. talked about this story
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to you guys a lot, and nobody wants to write about it except in orange county. the same in terms of cincinnati, new haven. places, montgomery county, there are actually places where through thick and real when people have respectful relationships with each other and they start thinking about how they solve problems rather than arguments, you see real collaboration and working through a bunch of issues because teaching children is complicated. duncan, i give him a lot of credit. he wanted to do this management collaborative, but you actually have to change the culture to make this the norm, not the exception. and that is what i think we need. now, this one we are focusing on the common core.
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every interested party has an interest in focusing on that. but it has to be about not what , but reallyorm is how we help students success. >> i have a double-barreled political question. you mentioned it is too soon to talk about 2016. what is your focus for 2014, governors, congress, whatever? and you mention the war and plan. do you think this liberal populist direction for the democratic party can win elections outside of massachusetts, and is this an active debate for the democratic coalition now? you poll then public, on things like education, jobs, people want good jobs. people want the american dream.
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if you look at the muscles in the -- if you look at doug post,ck's recent blog which i think was not in "atlantic" but it "politico"? sorry. thatnk it is totally right one of the great unifying factors in this country was if by a sethard, and play of fairness rules, you should do ok. kids,r guidepost for our the next generation, are they doing better than they are. that has changed. and people are really anxious about that. they want to work hard and they want to do ok. so i think there is -- when i looked at the elections, in
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new, chris christie won in jersey, that is true, but so did minimum wage expansion. virginia,liffe won in walsh in boston, palacios in new york. the person who was protested education -- >> could you speak up? >> the person who was pro- education won. so there is something going on in the country that is about, yes, working hard. nobody wants a handout. but let's level the playing field so we have great public education and we have ways for people to enter or reenter or re-envision themselves. you may call that populism, but frankly when you hear pope francis start talking about that, too, i think we have had a
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years of trickle- down economics and austerity- based economics, and it has not turned the country around. so this level of populism, progressivism, i think, is something that people are yearning for. so we will see, but i don't see the republican party, at least in terms of the congress, i don't see that it is getting lots of hugs and kisses from people around the country. i see there is a lot of anger and a lot of anxiety that our lives are fundamentally different than what we thought they would be. so this notion of shared investment in education, investments in infrastructure, and trying to figure out an economy that works for all i think is important. take tomorrow, fast food workers.
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100 places where fast food workers are going to be staging strikes. and who are the fast food workers now? is no longer 18-, 19-, 20- year-old kid trying to get into college, or in college and doing this is a job. when you go to mcdonald's, when you go to walmart, you are seeing people in their 60s and 70s. this is wrong. and so i think there is a sense -- we will see. so, but, in terms of my belly wake, public education, on december 9 there will be over 60 events, 60 cities, counties, towns, and more coming every day, of parents, community groups, clergy, are union how toions talking about
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do bottom up reform, solution reform, community-based reform that actually helps kids be more successful than schools. so we are seeing this community work and this bottom-up organizing in public education, as well as in economic issues. job issues. >> mr. sellwood. >> you mentioned that we should not have a race to the bottom in this country. with what we saw in detroit, is does that raise the specter because other cities could resort to bankruptcy court to get out of pension promises they have made to workers? and secondly, how do you put this in a broader perhaps context of the fights that labor has fall in recent years with collective bargaining and pensions and perhaps the erosion of the social contract that other employees have enjoyed,
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which has been part of the deal for decades, and whether that is being unraveled? >> i think you are seeing ads and flows of this. in 2010, if you asked me that question, i would have quite a different answer than i have now. so, i mean, what have seen -- what i have seen around the country is some places like california actually start rig hting its economy. amendmentd a budget two years ago, and you're seeing a huge change in terms of the california economy right now. brownctually -- jerry took the opposite direction and said let's have a pro-growth, pro-worker, pro-public education strategy for moving our economy along. you are seeing the same thing in some ways in massachusetts.
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you are seeing it in maryland. so you're seeing some states make different choices. i think what has happened in detroit is a disaster. and i think it is a disaster because when you have a city go into bankruptcy, what does that say to the rest of the country? what is that saying to the people who live in that city right now? as i said, new york made a very different decision 30 years ago, as a publica city good, not a private entity. the private assets. it is a public good. so but the other question that you raise, which is the most important question i think, is that it is an american value
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that if you work hard and play the promises that have been made to you will be kept. and the unraveling of that social contract is an unraveling of the democracy, the lockean democracy in america. and that i think is very, very, very troublesome. and particularly right now, when you see this huge disparity of income, where rall hovers around 16,000, -- where wall street hovers around 16,000, the highest it has ever been, yet you have the greatest income disparity that you have had well before the great depression. so not a surprise, but the labor movement, people are taking another look at it. they are saying we actually need a collective voice. labormber of people in has actually gone up this year. my union is actually growing.
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>> would it be growing without the nurses? >> well, we are the second largest nurse union, and have been organizing nurses for about 20 years. >> i mean is the teacher portion growing as well? >> even with what happened in wisconsin and what happened in indiana, the teacher piece has stayed with us. and that is after 300,000 teachers were laid off since the great recession. not giving you as a sink an answer as i would like, -- i am not giving you as cis ink and answer as i would like, but people realize they need a collective voice. what we are doing in my union and with the afl-cio made the center of their convention is that union needs density. we cannot be islands. we have to be about making sure
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there is economic opportunity, there is educational opportunity for all the people that we serve , that there are good public services, that there is good public education, that there is affordable higher education, and that there is quality health care. and that is our mission. you look at our mission statement, that is our mission. that is what we focus on every day. and when you do that, you are uplifting the goals. >> we will do the two last questions with carolyn and dan. >> what do you see in congress in terms of education laws, either major ones were smaller things? i wouldirst thing actually like to see in congress immigrationsive reform. i mean, if you look at what the senate did, there is a path there that a lot of people compromised on to create the path to citizenship plus ways of
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making sure that we take people out of the shadows, we grow our economy, and we make sure our borders are secure. foremost, thend house of representatives needs to focus on that. and i was part of the fast for families yesterday. having been arrested on the whole process of trying to get to immigration reform and whatnot. this is of education, an issue. showing an issue about whether the results actually really matter and what the research actually really matters, or whether the congress lives in an evidence-free zone. pre-k actually works to help level the playing field. the president has put a bill out
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there. the house of representatives actually have a bipartisan bill, that lies in the house of representatives and the senate, the miller-harkin bill that has two republicans from new york state. i give them huge props for being part of it, hannah and grim. sailpre-k bill should through. if people want to make a smart investment, that should sail through but for the ideology of what the federal government should be spending. this,at is sad about states like oklahoma, you know, have shown us that pre-k really works. so we are fighting for it. i don't really know what its prospects are. i don't feel as hopeful as i wish -- you know, as the evidence should dictate. but we are fighting, fighting,
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fighting for that pre-k bill. number two, i think we could see a bill about career tech ed. i think we could see a perkins reauthorization. i think this is one of those examples when you actually see business, higher education, k- 12, and labor coming together like you did around peak tech. in peak tech school that ibm new york city, the colleges in new york city, the new york city department of education, and our union actually put together. it got a lot of attention because the president mentioned it in the state of the union, than the president went to see it, but this is a fantastic school. ibm haschool where back-mapped from what the entry
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position, the skills required for the interposition in ibm is, and we have put a six-year program together that also is aligned with the common core critical thinking, and every body, you go to the school, everybody loves it. so it is actually helping re- envision what career tech ed should look like in this new economy, and frankly, there is a lot of really great career tech ed schools throughout the country. toledo has one that is a terrific school, that has been aligned with gm. aviation high school in new york city, aligned with the aviation industry. transit tech in new york city. so i think there is some steam and a headwind that could actually push perkins through the gate, but it has to be formulaic. meaning we have to have a formula for this, no more
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competitive grants. you cannot keep doing winners whenosers in the nation all communities really should have high-quality career tech ed. >> must question -- last question, mr. thomason. >> it seems to me, at least, that like politics, education is pretty local. and today's teachers you think are trained well enough to handle situations like zero- tolerance policies that are so incrediblet produce incidents and publicity, kids being held up and suspended for childish things that are out of the norm, the lack of parental involvement in whatnner cities producing we have today, because there are not any parent sometimes. they may be grandparents, but that is about it.
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how do you deal with those kinds of things on a local basis? it is all well and good to talk about national policy, but they don't really deal with what this is about. -- look, if the often close my eyes and think about what it was like to be a student, what it was like to be a high school teacher in crown heights brooklyn, what it was like to be a local president before answer any of these questions. because you are so -- you know, the policy from 30,000 feet is really different from the schoolhouse, and a schoolyard, in the school hall. and so those experiences are the hard connections to make. but in your question, you actually answered the complexity of what to look education is. the first responders of
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poverty. we are the first responders to all of the social issues in america, and we don't actually -- our educators, whether they are the bus driver, the school secretary, guidance counselor or even in they never get the good times the trading and the support that they pretty ofh need to deal with all the situations that we confront. but in the times of austerity and privatization and hyper- testing, that is why they are so demoralized. but this is the amazing thing about school teachers. people go into teaching because they want to make a difference in the lives of children. and if we actually honored that heart connection, if we honored it and used it as the value it is, it is invaluable. then we could turn a lot of these things around. a childour job, whether has parents or one parent or has
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their grandparents, our job is to help all children succeed to their god-given potential. that's our job. that is part of the reason why he cannot just be our job. be a team unity responsibility. and that is why we actually focused on this whole notion of reclaiming the promise and this notion of focusing on not just teachers, as important as they are, and also the wraparound services, engaging curriculum about critical thinking, but also having things like music. that is why we talk of lot wraparound services, not just health care services but reckless, lunch, and dinner. -- but breakfast, lunch, and dinner. one of the worst things the congress is doing right now is cutting the snap program. so when half of your kids in
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public education, half of our kids come to school poor, they are poor, in the south and the west, it is more than half. in we have toever be the best we can be as school teachers. you heard what i said before. that if somebody cannot teach, they should not be there. he have to prepare teachers like finland prepares teachers. we have to value them like singapore and china and canada value them. we have to actually have the common core, but he was right. delete testing, at least for a while, but also make sure we have art and music and the tools teachers need to help. we have have parents involved and engaged in welcoming, safe, collaborative environments, and we have to have the wraparound services because we are the first responders to poverty. breakfast, that is lunch, and dinner, like i saw at the school in cincinnati, or whether it is what we're doing at mcdowell in terms of really
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wrapping services around all of these schools in the eighth course -- eighth worst county in america, when you do those things, schools succeed. and more important, the nation succeeds. thank you. >> thank you very much. appreciate it. [captions copyright national cable satellite corp. 2013] [captioning performed by national captioning institute]
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>> in a few moments, representative greg walden, chairman on the communications on his plan to update the communications act. in 15 minutes, a hearing on how the health care law will affect medicare advantage plans. after that, president obama on jobs, the economy, and income inequality. several live events tomorrow morning. treasury secretary jack lew will be discussing the state of financial reform on c-span two at 8:45 eastern. a.m., marissa of the
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house energy and committee subcommittee on energy and power will hear from federal energy regulatory commissioners. eastern later at 10:30 on c-span three, a democratic hearing onmmittee unemployment benefits that are set to expire at the end of the month. as you walk in, there are tables in front with lots of pamphlets. prior to entering the gun show. the pamphlets are how the government is trying to take away your rights to own guns and obama is doing this and obamacare is terrible. those were the guys i wanted to talk to because they were the guys with the leaflets, the ideas. i said to them, is this your stuff? they said, who are you? pedantic -- i am an academic researcher doing research on these organizations and ideas, trying to understand these, and i study men who believe this stuff. and they looked at me suspiciously and said, sort of
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asked me questions. i just said, look, here is what i am. i don't get it. here is my job, i went to understand how you guys see the world. i want to understand your worldview. look, you will not convince me, and i will not convince you. that is off the table. what is on the table is i want to understand why you think the way you do. downward mobility, racial and gender equality, michael kimmel on the fear, anxiety, and rage of angry white men, part of book tv, this weekend on c-span two. >> now representative greg walden, chairman of the house energy subcommittee on communications and technology on his plan to update to medications act covering television and other media. speaking at the hudson institute, dorgan republican says the update would help programmers that are serve their customers. this is 15 minutes.
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-- the oregon republican says the update would help programmers that are trying to better serve their customers. >> thank you very much. commissioner. i can still call you commissioner, i hope. your warm and thorough introduction. i am an amateur radio operator. there are a lot of members of congress who actually pretend to be hams. i am actually the real thing. i will put that up, if you don't mind. i hope i'm not covering up too much of the hudson institute, but i am going to talk about the hashtag as part of my remarks. i'm delighted to be here this morning, honor to be with you. it is always fun to see where good government servants wind up after their service. the hudson institute i think made a really shrewd decision and choice in bringing rob mcdowell on board. your insight, knowledge, and certainly the intersection between technology and global policy, nobody has done it
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better, nobody was a better witness. of all due respect to those of you have testified before the committee. especially the work he did leading up to dubai a year ago, stands as a real testament i think to the increasingly critical role technology in all aspects of modern society place. so i am pleased and honored to be with you today to discuss the challenges and innovation of the video marketplace of today. yesterday, as rob mentioned, chairman upton and i were joined announced the update of the key medications act. we did so at a google hangout. when i was a kid, hangout was a bad thing to be at. no longer is that the case. we think it is time to take a hard look at the increasing gap between the outdated law and the incredible innovation and investment that the internet has brought to every silo of communications. we are rolling up our sleeves and asking all stakeholders to come to the table and help us modernize the law.
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that is where you can go right now, in terms of accessing and providing us information. telik think about it, the munitions act of 1996 is old enough to get a drivers license, the cable act is old enough to drink alcohol legally, and taking medications act of 1934, well, maybe i should have begun the speech with threescore and 19 years ago. it has long been eligible for social security. agemembers of congress, it is seniority and experience, but with a statute it can portend irrelevancy. in the on-demand world of the internet availability, the statutes that govern the video marketplace are blissfully ignorant of the changes that have taken place around them. these laws don't reflect a truly dynamic marketplace we have today. what does that mean for retransmission consent in the 21st century, which was the
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topic i was asked to speak at least partially on today? what we are really asking is how do you ensure viewers are able to access the broadcast programming they want, but at the same time respecting the rights of stations that transmit them over the air, ensuring certainty for the advertisers that support it and networks that created, and the cable, satellite, and broadband companies that deliver it. that is a mouthful of a question. it reflects the competent value chain created and maintained by a large number of stakeholders. we found, for the most part, this chain does not break. the vast majority of retransmission consent agreements are resolved quietly, call mike, without incident. the same goes for the millions of other commercial contracts "glee"promise the way quote the big bang theory" were the shows get from the studio to tv. over the decades, this market has functioned smoothly.
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think of the affiliate agreements, the carriage edition clauses, talent contracts come production deals, rate cards, audience measurements and licenses, although which are required to run video programming over the studio, over the air, or through a wired consumer. these agreement capture a complex interdependent industry that generates legions of value, employs millions of people, and ultimately entertains, educates, and inspires countless millions more. the policy makers be sensitive to the ripple effect of even the smallest changes in the law. some have seen the reauthorization of stella is the only vehicle for addressing changes in the video marketplace. i frankly believe it is the wrong place to make changes in this legal regime. the real update to the law should not be hastily slapped together for the benefit of a few players in the industry. a meaningful update to the communications act will require
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careful examination of the intertwined value chain and a clearer understanding of the ramifications of any changes for the businesses involved in their consumers. this is where former chairman dingell and i agree. in response to our announcement yesterday, mr. dingell stated, and i quote, "changes should not be made simply for changes sake rather based on clear and documented need. this will affect a rapidly changing industry with many jobs and billions of dollars investment at stake. we should approach this in a balanced fashion in order to preserve and promote american leadership in the telecommunications in history." agree andrtedly deeply appreciate his support and willingness to work with us on this effort. muska back to the millions of inspired informed customers for a moment. apparently there is a little- known clause in the constitution that guarantees americans the right to consume whatever they want, wherever they want,
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wherever they wanted, on whatever device they have. we certainly learned that as part of the dtv transition and often with satellite reauthorization, and something the industry is learning as well, especially during these times when new technologies have given the consumer the ability to take greater control over his or her for ewing experience -- her his or her viewing experience. the consumer is the reason this is rapidly evolving to the next level. as my friend rob mcdowell pointed out, during the announcement yesterday, he mentioned his children are perfect examples of how consumers just don't care about whether their video is delivered over unlicensed actor into a tablet, over copper ore: the coaxial cable to their xbox to their setup. they just wanted and this is an accelerated
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pace. in 1994, my wife and i attended a conference in california. one of the speakers when a distinguished panel much like this asked those of us in the room if we had ever heard of the internet. if you hands went up. then he asked, have any of you been on the internet, and very few hands went up. then the speaker went on to tell us that change was on its way. the antenna in our backyards may not be that important in the future because everything was about to change, content would be available via multiple methods of ditch bashan -- through distribution and we are looking at a enchanter. i cannot figure out time changing, how does walter cronkite give out the news more than once at my discretion? 20 years later, it is easy to see how right they were. not everybody got it right. in 1995, newsweek said, "visionary see a future of
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telecommuting workers, interactive libraries, and multimedia classrooms. they speak of electronic town meetings in virtual communities, commerce and business will shift from offices and malls to networks, and the freedom of digital networks will make government more democratic." baloney! the truth is that no online database will replace your daily newspaper. no cd rom can take the place of a competent teacher. and no computer network will change the way government works." poor old club. the inevitable is here. hopefully he is not here. watching major initiatives, customers are cutting the cord with streaming offers from netflix and google and amazon and digital antennas with haida purchase -- with high definition signals.
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it will not be very long before we have same-day service from amazon via rome. people laugh at the idea, but we will be sending remote copters to drop off cardboard boxes of yet more electronics. but then they laughed at the idea of the internet changing at all, too. american businesses cannot afford this kind of attitude. companies have to rethink traditional business models, reshaping them to fit the new ways their products and services are being consumed. timeshifting is impacting the business, increasing the complexity of how a network calculates the value of a program to its consumers and advertisers. the advent of new devices like the iphone and higher broadband speed's have dramatically expanded the ability and demand for content. as a result of all this change, traditional media companies are scrambling to respond to new entrants, new content, new distribution methods, and they are responding in different ways. offering consumers even more
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variety, choice, and often at lower cost. during this transition of the video programming industry, what role should policymakers play? congress, believe it or not, cannot predict the future. the people in the video programming and distribution industries are far more capable than congress to make the tough calls needed in this business. i am sure the events of the past few months have clearly demonstrated that you don't want government building technology solutions for anything. too often, washington attempts to correct a perceived distortion in the market, creating arbitrage opportunities, ultimately allowing the mark to work as the most efficient way to deal with transformations in the industry. where we need to regulate, the law needs to be flexible and nimble to allow innovators to satisfy the demands of consumers. that is the first principle of our update to the communications act.
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get outdated government rules off the books so innovators and market disruptors can do what they do best and serve their customers. policymakers should ensure that legacy regulations are not holding companies act from innovating and investing. policymakers should ensure that outdated laws do not tilt the playing field in favor of one party over another. at the end of the day, we'll work for consumers to foster a vibrant, competitive marketplace that works for them. to that and, part of a copper hints of update to the laws, we hope to work with our colleagues on the judiciary committee to review the compulsory copper consent copyright regime. we have to consider the effect of the compulsory licensing system as well stop video programming is valuable and creators of video content should be compensate a fairly for their work. in this diverse and evolving market place, this remains true.
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you should be compensated for your content. the network investment or intellectual property. if you lay fiber, you should receive fair compensation in the marketplace for your investment. if you create content, movies, tv shows, apps, you should receive fair compensation in the marketplace. if you create smartphones or tablets, software, you should receive fair compensation in the market place. this is another keeper the ball for update to the communications act. allow creators and investors to get value from their efforts. have precisely because we a vibrant, competitive system of video production and distribution that our economy can support the development of first rate epic scale programs like "game of thrones" while at the same time supporting all news and weather. say what you will about the video market place in america and a certainly has its detractors, but americans enjoy quality and choice in video programming that is the envy of consumers the rest of the world. at the heart of this volume of
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video programming and choice lies retransmission consent. a recognition of the value of the program. whatever steps are taken to change the read transition -- retransmission consent regime, quality programming will continue to command a premium price. our efforts to modernize today's video law should only seek to improve the clarity of the signals in the market and allow participants more flexibility to innovate and invest. by adapting to the technology environment, testing the limits of creativity, and by responding to the customers every day to maintain the trust of the people they serve. we are committed to maintaining a market for the provision of video service over satellites in improving the quality and looks ability of our nation's communications laws. , these are mistake not the same thing. as we work to reauthorize stella and improve the provision of local television oversight ally,
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advocates would be wise to remember that the satellite loss are not the cable act, and vice versa. cable laws are in need of updating, too, but the satellite reauthorization is not the time or place for that debate. i look forward to working with industrygues, those in and the fcc, on updating those laws. as part of the initiative that fred and i announced yesterday. we expect to reauthorize the satellite law for less than five years with an eye towards rolling up those provisions under the more copper hints of update. chairman upton and i strongly encourage those concerned with these issues to participate actively in our process. and you can do it in real time at this hashtag. commissioner, i thank you in the hudson institute for having me here to outline our objectives in the communication update we plan to undertake. thank you for the critical thought that you all contribute to our nation's dialogue on domestic and international policy, and i will come your contributions to the upcoming
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debate in modernizing the communicators act. i thank you very much. [applause] house speaker john boehner criticize senate democrats and the president for failing to create jobs and grow the economy. here's what he said on the house floor. speaker, the merc and people work hard and they have a right to expect their elected representatives to do the same. the house of republicans, to date house has passed nearly 150 bills this congress the u.s. senate has failed to act on. many of them would help our economy and boost job creation. bills passed by this house yet to be acted on by the senate. like bills would do things
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increased the supply of american energy and build the keystone pipeline, rollback redtape and unnecessary regulations, provide more flexibility to working families, reform and improve job-training programs, protect americans from cyber attacks, help schools recruit and keep the best teachers. delay the individual mandate, allow the merkin people to keep their health care plans they like -- allow the american people to keep their health care plans they like. every single one of these bills has been blocked by washington democrats. the senate and the president continued to stand in the way of the people's priorities. now we are trying to come to an agreement on the budget and on the farm bill. amongst other issues that are in conference. chairman lucasnd have made serious, good faith efforts to senate democrats. when will they learn to say yes to common ground? when will they start listening to the american people? i yield back. >> on the next washington
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journal, the farm bill with texas republican senator -- texas republican representative randy neugebauer, and questions about the affordable care act and ongoing budget negotiations. and we will continue the discussion on budget talks with representative akeem jeffries, a new york democrat and member of the budget committee. >> friday on c-span, "washington journal" looks at the mission and role of the national institutes of health, starting live at 7:30 eastern with director francis collins on their medical research priorities, future projects, and the impact of sequestration. at 8:00, allergy and infectious diseases director anthony fauci, followed by air green. at 9:00, the national cancer
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institute director harold varmus, and at nine clock 30, a look at the national is a tune of mental health. all with your calls and comments, live on c-span. now a hearing on how the health care law will affect medicare advantage. most private insurance plans offered to seniors as an option to medicare. the affordable care act willed decreased rebates given to medicare dennis plans. as is two and half hours. -- this is two and a half hours. [captions copyright national cable satellite corp. 2013] [captioning performed by national captioning institute] >> if you will take your seats, the subcommittee will come to order. the chair will recognize himself toward opening statement.
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program,are advantage an alternative to the original program, provides health care coverage to medicare that if a share easter private health plans offered through organizations under contract with the centers for medicare and medicaid services, cms. plans may offer additional benefits not provided under the care ffs, such as reduced cost- sharing for vision and dental coverage. they also generally have a ander rate of satisfaction, approximately 28% of medicare beneficiaries have chosen to participate in medicare dennis. the affordable care act has noted in july 20 4, 2012, congressional budget office cbo billion from16 medicare, including $308 million
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from medicare advantage alone. in april 2010, the medicare act projected these payment cuts would result in an enrollment e m.a.se in th program of as much as 50%. it also provides quality bonus achieve to plans that four percent, 4.5%, and five percent stars on the quality cms.g system developed by rather than implement the bonus structure that would have led to these cuts going into effect in 2012, cms announced in november 2010 that it will conduct a nationwide demonstration. m.a. quality payment demonstration from 2012 through 2014 to test an alternative method for khaki leading and awarding bonuses.
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the general accountability office, the gao, in response to a request by senator orrin hatch , noted the demonstration "itect design made unlikely the demonstration would produce meaningful results" and recommended that hhs canceled the demonstration. gao also stated, "we remain concerned about the agency's legal authority to undertake the demonstration." $8.35 price tag of billion over 10 years, the medicare actuary noted this demonstration would offset more than one third of the reduction of payments projected to occur under aca from 2012 through 2014 , effectively masking the first cuts until-mandated next year.
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a recent report by the kaiser family foundation warned more than half a million beneficiaries may have to switch plan arer m.a. returned to fee for service medicare in 2014 as a result of the aca. in addition to plant availability, questions are being raised about the possibility of rising cost and limited provider networks in the future as more aca-mandated cuts go into effect. like to thank our witnesses for being here today and i look forward to their testimony regarding how the aca will impact the medicare advantage program. thank you, and i yield the remainder of my time to representative burgess. >> i think the chairman for the recognition. i also want to thank him for calling the hearing this morning. we see the headlines and everything that is going wrong in health care. but sometimes we forget there are some things that actually are going ok.
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there are things this committee and previous congresses have worked on to fix. that is one of the things we will be discussing this morning. sometimes we are so busy discussing triage, we don't allow ourselves the luxury to look at things that are working as intended. i opinion is medicare advantage is working, and it is important to hold hearings like this to learn from those successes and see where we can build upon those successes and where the potential threats that are undermining the benefits and services that now over 25% of seniors are experiencing and how those may be threatened. they cared finish allows integrated care coordination that this committee has sought with fee-for-service. bringingering costs, greater disease management and care coordination to patients lives, encouraging wellness , and actually using physicians to their maximum ability of their license, rather
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than always referring to a specialist. there are some conditions that can be satisfactorily managed by general interns and the family practice decision and we ought to encourage that and not punish it. but as money is taken out of the system and plans have been restraining things, eliminating services. we have to keep a watchful eye. peopleall hearing about wanting to be up to keep their doctor. will the cuts in the affordable care act pose a real danger to seniors keeping the doctors and benefits they now have with medicare inventors. the harm of these cuts is compounded when the money is not reinvested in the medicare program. we have heard that before. you cannot doubly count the money you take out of medicare and counted again as a savings when you're not reinvesting the money in part a or part b. one small change that has been bipartisan, mr. gonzales, who used to be part of this committee, champion when he was on the committee allowing a bill
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that would offer seniors a duringto switch plans the first three months of the year come right after the open enrollment. that was a reasonable suggestion of his at the time, and one i think the committee could support. mr. chairman, i would also like to -- i had time to go through the archives. i encountered a very brilliant and insightful opinion piece that was printed in "the washington times" june 6 of 2012, and i would like to offer it for the record. >> without objection, so ordered. the gentleman yields back, and recognizes mr. pallone for an opening statement. >> panky, chairman, and thank you to our witnesses for being here to share your expertise. today i meet leads to have the opportunity to talk about medicare and the positive reforms introduced by the affordable care act to medicare
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advantage. while the majority of medicare's 52 million beneficiaries are the traditional federally administered program, the care advantage offers beneficiaries an alternative option to receive their medicare benefits through private health plans. 29% of all medicare beneficiaries are and rolled in m.a. plans as of september 2013, an increase of 30% since 2010. the aca include reforms to medicare advantage payment policies and added a number of benefits and protections for beneficiaries, both through ma and traditional medicare. the care must cover on this if it is it's, preventative service with no copayments, and the aca insurers and made plans beginning in 2014 spend at least $.85 of every dollar received in pain ends on actual -- received and payments on actual care.
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some discounts will grove and neck several years until the gap is closed. the aca aims to provide quality to improve the quality of m.a. plans by rewarding public sees with bonus payments. supervising quality patient care over quantity of services provided is key to improving health care outcomes and reducing waste and the rising cost of health care. aca will also bring payments more in line with traditional medicare payments. on average, medicare pays more parenterally to private plans than the cost of care for those on traditional medicare. by reducing payments over time, there will be greater parity between m.a. and traditional medicare payments, resulting in savings that will benefit a rowley's and help secure the solvency of the medicare trust fund for a longer amount of time. critics of these payment air force forms projected cost to enrollees would rise -- critics
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of these payment reforms projected cost to enrollees would rise. changes in provider participation, pricing, and coverage occur every year as an inherent part of insurers businesses she's making, included long before the passage of the aca. that is why we have provided tools to cms to ensure seniors are protected from potential changes that private plans may make. in addition, seniors continue to have the choice that best suits their individual health needs and every year continue to maintain the ability to pick a new plan. hearing mored to from our witnesses on recent trends in medicare advantage. i think we all agree that our work is a committee needs to continue beyond the improvements we made in the aca. need to know how to strengthen the program. we cannot return to the ways before the affordable care act. we must move our health care
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system to one of quality and efficiency in all of medicare. thank you again, mr. chairman, and i yield back. >> the chair thanks the gentleman. now recognize the chairman of the full committee, mr. upton, five minutes, for opening statement. >> thank you. everyday we are hearing from folks and families about how the president's health care bill has wreaked havoc on their own health-care coverage, with millions receiving cancellation notices, and millions more facing premium rate shock, and others left to wonder if their applications on healthcare.gov or even successful. this morning where going to focus on how the health care could be affected by the changes in the president's health care plan. the president's health care law cut over $700 billion from the already struggling medicare program to fund the flawed new entitlement. included in the cuts were over $300 billion in direct and indirect cuts to the medicare
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advantage program, and many of these cuts start in 2014. medicare's managed care program currently provides coverage for more than 14 million americans, over a quarter of all medicare beneficiaries. these patients choose medicare advantage plans over traditional medicare for a variety of reasons, including improved cost-sharing, enhance benefits, better care coordination, and higher quality of care. millions of americans, especially those with lower incomes, medicare advantage is a better option for delivering their care, and frankly their choice. while medicare advantage continues to grow, the costs made in the health care law threaten the future of the program, some would say maybe government, and put -- and could in theeats of coverage future. according to rape or -- according to a report, more than
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half of beneficiaries may lose their existing medicare beneficiary plan next year, which would then force those seniors and disabled americans to switch their current plan a return to traditional fee-for- service plans. more than 100,000 beneficiaries not bed in 2013 will able to enroll in the medicare advantage plan at all. in 2014. likewise, for thousands of americans, if you like to keep your doctor, that is sadly another broken promise. reports confirm any medicare advantage a rowley's will see a change in their provider networks next year as a result of the new law. empty promises may be of little concern for some, but they have real consequences for the americans who expect us to do no harm. to know whyserve their existing coverage is changing when they were promised otherwise, and this morning's hearing will be an important opportunity to get some answers
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from a number of good experts and we appreciate you being here, and i yield to dr. cassidy. mr. chairman. over 37,000 of my constituents in louisiana are enrolled in medicare spanish programs, and they offer higher quality care and additional benefits, more so than offered in traditional medicare. yet despite the popularity, it has challenges. the president's health care law cuts medicare advantage by over $200 billion. i'm a doctor. when i see people who are coming to see me have this many cuts in the programs that cover them, intuitively common sense tells you they will have increased problems finding a doctor, they will have higher premiums, higher co-pays, fewer benefits, and plan choices. even now, with only 20% of these cuts implemented, there are reports of these problems already. barrow with congressman
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and 16 other members of congress have signed a letter opposing other cuts to the program. i urge my colleagues on the committee to make the same commitment to their constituents who have come to reply -- rely upon medicare advantage. with that, i yield back. >> >> a yields. chairman fore yielding. medicare advantage has been around since the late 1980's. word just means exactly what it says. an advantage. it is interesting that the democrats who created this affordable care act are demanding that coverage that policies have minimum coverage requirements. that is by the cost of so many policies have gone up and people have been notified they are not
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going to be able to keep those policies. been demanded to include so many additional things. why would medicare advantage not cost more because there are more things in it? preventive care, physical examinations, a nurse checking , in time they follow-up. got that program, i'm looking forward with the witnesses have to say about it. it may no sense to cut $300 billion out of the program that 20% of medicare beneficiaries have chosen, and it is gone up over the years. >> the gentleman's time has expired. >> i commend you for the
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hearing. my questions will require a yes or no answer. >> we are not ready for questions yet. anyone else? have beeng statements made by the members. i will not introduce our panel of five witnesses. douglas holtz- eakin. , chairman oflis health care partners. of mathematicald and -- esearch,
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you recognize for opening statement. >> thank you for the privilege of appearing today. amid take this time to opportunity -- valuableadvantage is a and popular part of medicare. 30% of beneficiaries are voluntarily enrolled in it. servicesrovide extra and approaches to health care in medicare programs. it disproportionally serves andr income beneficiaries has been the program of choice for them. importantly, results -- unfortunately medicare advantage is under a fourfold funding
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reduction due to provisions in the affordable care act. reductions.ems from the second, the modifications of benchmarks relative to spending. healthlications of a insurance textile, on in 2014, which will affect many plans and further act as a pressure. the fourth, the requirement that they must provide changes in the coding intensity for medicare advantage plans. the results of these changes are inevitable. the first we fewer plans. there are ports of 10,000 cancellation notices and ohio. 60,000 in the state of new jersey. they represent further violations to the pledge that if you like your health insurance
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you can keep it under the affordable care act. there will be fewer enrollees. 5 million fewer enrollees by 2019. these reductions are disproportionally borne by lower income americans. 75% of the impacts hit those making less than 30 foreign thousand dollars -- $34,000. these are not voluntary decisions of insurers. these are the consequences of the law which limits their ability to provide options to beneficiaries. going forward, i would emphasize that it is important to preserve this steppingstone to coordinated care, and that it would be extremely undesirable for congress to repeat the practice of using medicare
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advantage as a funding source for further expansion is mother programming initiatives. this is a valuable program that has proven to provide high- quality care, innovative approaches to medicine, and is the choice of many beneficiaries . i thank you and i look forward to answering your questions. >> the chair recognizes mr. baker. >> thank you. thank you distinguished members of the subcommittee. medicare -- we thank you for this opportunity to testify on medicare advantage programs. we cancel thousands of people with medicare advantage about talk him -- about talk it -- about topics ranging.
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many callers are satisfied with their plan and their inquiries are easily resolved. others find navigating a plan challenging. these colors may struggle to resolve billing issues, cope with coverage denials, and other issues. we observed people find choosing aong medicare advantage plans dizzying experience. we urge people every year to revisit plan coverage as annual changes to plan benefits, cost sharing, provider networks, and others are commonplace each year. research suggests that inertia is widespread. there are too many plans, too many variables to compare. the affordable care act offers a blueprint for a high-value health care system where insurance plans and other providers are paid accordingly to the care they provide. medicare is the incubator for these reforms.
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the aca includes a set of policies designed to make medicare advantage more efficient, and enhance plan equality. other health care providers, medicare advantage plans have been and should be playing an important role in the transformation. medicare advantage provisions included in the aca are intended to secure higher value care. better quality at a lower price. aca haveanges by the strengthened the program. in addition to improving overall financial outlooks, the aca enhanced medicare advantage through benefits, and shared line quality. it prohibits medicare advantage plans from charging higher cost- chemotherapy, and requires that they spent 85% of
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premiums on patient care. thee and other changes that aca has brought to medicare advantage should be preserved. it is important to note that aca savings picture for medicare advantage payment adjustment are producing positive returns. benefiting current and future beneficiaries. inefficient -- in 2014, the part b premium remains at its 2013 level. while many addictive that aca changes would lead to widespread disruption of the landscape, we have not seen that among our clients that we serve generally. the premiums benefit levels and availability of plans remain relatively stable. the medicare advantage market is
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now more robust for consumers, and in roma continues to be on the rise in this year. while there appears to be increased incidence of slimming of provider networks, we see this every year. changing provider networks are inherent risk of any managed care system. the same.emains people can switch to another medicare advantage plan or back to original medicare during the open enrollment, which is occurring now. we believe congress should do more to simplify lan selection and coverage rules for people with medicare advantage. streamlining standardizing plans, and adequately funding independent
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counseling resources like the ship program. we encourage congress to explain where those cases medicare advantage is not the best fit for beneficiaries, and allow people to go back and forth between medicare advantage plans. you for the opportunity to testify today. >> thank you. for opening statement. >> thank you esteemed committee members for the invitation to address you. ofome to address the merits medicare advantage. effective federal program moving seniors to .igher-quality care hats. wearing multiple
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my 40 years and health care and health care policy of taken me many directions. the california association of physician groups, which represents 90% of coordinated care patients in california. my border presentation and chairmanship at in cq a -- at n cqa. as you mentioned, my role of health care partners. as a doctor at a practice for 20 years, and in inner-city hospital in los angeles, serving seniors and other disadvantaged patients. i saw that without equivocation, that fee-for-service mentality of the original medicare, or as volume, to it, paid for
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is not good for seniors. seniors, who are vulnerable, and those who are poor, need an ideal system that helps with great information, and a physician advisor to help navigate through a difficult and complex health care system. and manage across time. every physician i know manages his or her patience with great desire to do the best outcome, but does not have the infrastructure and resources to follow that patient longitudinally through their health care needs. advantagee one major that court medicare population health, however you choose to name it, for those that are unfamiliar with the term, really
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is having patient select a doctor through a network, through a help line, and then having a physician organization take responsibility per member per month for the total care of that patient. it changes the incentives. incentives drive behaviors. of healthne promotion, defer, and delay, through intervention disease management. pharmacy management. making sure that patients get to their specialists, have homecare programs, let me explain a little bit about how that works within our organization. 20,000 medicare advantage patients through our 11,000 affiliated physicians. five different states. the way that works is through
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great information technology, which is a big investment, but important that allows us to segment patient population into areas of means and design program specifically to those areas of need. there are homecare programs for those most vulnerable to have trouble getting into the doctor's office, and avoids 911 calls, and trips to the emergency room. there are comprehensive care clinic for those that have complex diseases where there is individual care plans, monitored by a team. i have to say, without equivocation, health care best delivered is a team sport. it is great to have a physician in the center of the team, but having care managers, disease management, social workers, dietitians, homecare keep abilities is a key component of making an effective system.
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i ask you without equivocation, continue to support ma, help it grow, support special needs programs, moving into medicare advantage. vulnerabley population that could use congress'support to make that effective. with that, i will yield back to you. >> thank you. >> hello. thank you chairman pitts, and members of the subcommittee. fellow atr mathematica, i have been examining medicare advantage for a long time, analyzing trends and benefits, looking at market dynamics, stunning applications for beneficiaries working with
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the kaiser family foundation, and others. my testimony makes three points that i hope will inform the congressional debate on the medicare advantage program today. arendependent findings closely aligned with the positions and opinions expressed by medpac. we heard this and a few other places here today. the ma program is strong with rising enrollment and widespread plan availability that is expected to continue through 2014. despite the concerns that the cutbacks and payment would discourage plan anticipation or make plans less attractive. there is 50 million people in the program. 29% of all beneficiaries. although it varies across the country, it is important recognize that health care is local and circumstances are different. the kind of care mentioned
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happens in some places, and not others. despite concerns over determinations in 2014, there are as many new plans entering into thousand 14 as terminating. since the aca was enacted, average in premiums to enrollees have declined. they will be lower in 2014. exit and entry are essential characteristics of a competitive market. medicare beneficiaries have an average of 18 medicare advantage choices as well as the option to stay in the traditional medicare program, with or without a supplement. beneficiaries can keep their plan. it is called medicare whether you are in medicare advantage or traditional. it is difficult to see the rationale on a national basis for paying private plans more than medicare currently spends on the traditional program. particularly when there is so much concern with the deficit
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and debt. medicare is historically aimed to set a men's to ma plans equal to what medicare would expect to pay in a traditional program. bys changed in 2003, and 2009 came into a considerably higher that medicare would have paid for the same beneficiaries if they were in the same program. this cost every beneficiary more and added part b damien's, providing little incentives to become more efficient. . found wide variations that suggests there was room for a lot more efficiency in the program. were incy changes that the aca reflect recommendations that congress'own commission has
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advocated for years. raised the concerns offerings to my mind are not consistent with the evidence on her part the way competitive markets work. the already addressed protections and places in the program. only five percent of beneficiaries in 2014 will have to shift plans. most will be able to stay in the same type of land. 21%average premium was down for a beneficiary, and premiums stable in 2014. some beneficiaries will see premiums rise in 2000 14. they will still be paying less than 2010. if historical patterns hold, they will switch around so that they can get a better deal. clearly payment reduction and
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encourage plans for prices from participating in medicare advantage. medicare has a number of attractions for this, such as .dequacy and quality standards option to return to traditional medicare. in its 2013 march report to congress, the payment changes under the affordable care act have improved the efficiency of the program, and may have encourage plans to respond by enhancing quality, increasing ma enrollment through plans and benefit packages that beneficiaries find attractive. i believe my analysis and testimony is consistent. thank you for your time. kaplan.
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>> ranking member for long, and members of the subcommittee, thank you for the opportunity to testify today. my name is jon kaplan. backgroundalth care of over 25 years working closely with nonprofit and for-profit health care entities throughout the health care industry. year, i led a team that analyzes the differences in health care outcomes between those enrolled in traditional medicare and those enrolled in private medicare advantage health plans. we found that patients enrolled in the medicare advantage plans had better health outcomes than those participating in traditional medicare. there are three key findings from our research. receive higher levels of recommended or vented care. they had fewer disease specific complications. episodes requiring
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hospitalizations, patient spent more than 20% less time than those in traditional medicare. they have less readmissions into the hospital. the percentage of people who died in the year we studied was substantially higher in the traditional medicare sample than those in the medicare advantage sample. this is a striking finding. one that we hope to explore further in a longitudinal study. it did not address the causes of differences. in my spirits, that factor is ma itself. how the plans organized and manage. they provide financial incentives with clinical best practices. they recruit the most effective providers and include only those who practice high-quality medicine. they put a strong emphasis on active care management. they invest resources in prevention to keep patients
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healthy, stable, and out of the hospital. there are many indications in our study that these are mechanisms responsible for the better health outcomes of the ma patients. take the example of the diabetes. to clinical standards for diabetes care are frequent hba one c testing and regular screening for kidney disease. the ma sample has substantially higher numbers of both tests done when the traditional medicare samples. the stronger focus on prevention helps keep haitians healthy and avoid the need for highly disruptive and expensive acute- care intervention. we found that diabetic patients had less foot ulcers and a beautician than those in traditional medicare. explain lower utilization rates. take the example of emergency room visits. in our traditional medicare match sample, four out of 10
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patients visited the emergency room once per year. for many portions of medicare advantage, this figure drops to around two out of 10. our last finding, among the three types of ma plan that we studied, the best health outcomes were for those patients in the him a plan. the findings suggest that it is actually effective at providing investment, preventive medicine, and active care coordination. let me conclude by suggesting implications of our study for health policy. in my opinion, medicare and managed plans are an extremely successful public-private partnership. these plants are present integrated care delivery model that uses effective provider incentives, real-time clinical information, and care coordination get abilities to improve the quality and lower cost. it should be supported and not
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discouraged more medicare patients to enroll. their health outcomes and the u.s. health-care system are likely to be better as a result. thank you for inviting me to speak. i look forward to answering your questions. >> thank you. that concludes the summaries. before we go to questioning, i would like to submit for the record a letter from the 60 plus association. so order. i will begin the questioning. i recognize myself for five minutes. of the president's health care plan, millions of americans and their families have received insurance cancellation notices. do you think medicare advantage may be obama cares next victim? what might beneficiaries in pennsylvania expect over the coming years in terms of plan choices, cost, benefit
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offerings, and provider debt works -- networks. >> i am concerned about the future of medicare advantage. thework we have done on applications of aca cuts, for example, in pennsylvania, in 2014 there would be an average loss of benefits of about 22 hundred dollars. there is a 90% reduction in benefits. we will see a decline in the medicare advantage to about 113,000 in sylvania is. are of concern. i am more troubled by the trajectory of the succeeding five years and the full cuts under the affordable care act. as to whether medicare banish for maine a viable option, and deliver the comprehensive benefits. i want to echo the statements
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that we heard in the opening remarks. the medicare population is so different than when medicare was originating. it is not population has multiple chronic conditions. it requires a coordinated approach to care. that is the route to better health and financial futures for medicare as a whole. medicare advantage is an important stepping stone. >> thank you. this committee has been committed in a bipartisan form to address access concerns by improving the flawed formula for participating medicare doctors. i believe medicare advantage plays a key role in ensuring the patient-physician relationship for seniors, and the disabled. what impact will the herman and have on to the flawed the medicare advantage program? >> thank you.
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there is no question that the cuts that are proposed in coming , andon medicare advantage i would stress the rescaling of the risk adjustment factor, which was a key component in what i believe is making it a positive incentive to care for the sick and fragile patients, to be paid based on the acuity of the patient. of reducingl significantly the payments relative to the most expensive patient starts to flip back to that possibility that the people will not be able to gain care if y're really sick. i would like to say that medicare advantage should not be the pay for foreign sgr fix.
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as you per from these other witnesses, it is extremely important for seniors of our entryy, 10,000 more medicare every day, to be able to access good coordinated care, especially for that five percent of patients that are eating up 52% of all health care dollars. the sickest and most fragile patients, to be able to access the doctors of their choice. >> here is a question for the panel. medicare advantage has a proven record of success and is popular because it provides better services am a higher quality of care, and increased care coordination. i believe there are several existing reform proposals for medicare advantage that merit further discussion and feedback. addressing substantial variation in value across services, and providers.
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bipartisan policies such as those interviews by representative keith ross of pennsylvania that will restore choices, and not limit options to traditional ffs, or existing plans. improvements to the special needs plans, improvements to risk adjustment framework. what, if any short-term reforms can we consider, that will ensure the viability of the program, corrugated care for medicare beneficiaries? you mr. chairman. the best way to answer that question is that there are successes that are already in place in medicare advantage. everyone tonight has said that medicare advantage is a program to look at with positive reactions. what i think happens fundamentally in the medicare
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advantage program is that it allows for more of a freedom of choice among the different competitors in the insurance companies, offering those programs, and allow for members who choose to going to those programs to navigate themselves around to different programs. to make a choice and find what best suits their needs. that freedom of choice has allowed for the program to prosper based on what they offer to members who sign up for their programs, as opposed to mandating things in different ways. the competitive model against the insurance companies offering different programs, that is allowing for the growth of the program to be so successful and effective at practicing the medical care that we all are talking about we want to do for the senior population. >> i will give you this question, submitted in writing so you can respond for the record. the chair recognizing the
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ranking member for questions. wax thank you. i'm going to ask my questions because you seem to be able to clear up the mess -- mess i'm hearing from the republican side. opponents of the aca say that medicare advantage program will be obsolete because of cuts in the affordable care act. the republicans think the affordable care act is the end of the world. do you feel that medicare advantage program is stronger now and more secure for beneficiaries? if you could just answer that. >> there are components to that. one is that equalization of payments between the medicare advantage program and the traditional original medicare program, there is equity there that has been established, as well is the fact that part b premiums have come down or
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stabilize for everyone in medicare programs. other pieces that consumers are better protected in medicare advantage. higher cost sharing is allowed in traditional medicare programs. sicker beneficiaries are discriminated against. the 85% medical loss ratio that is required in medicare advantage, making sure that 85% of premium dollars from consumers, as well as the government are going towards medical costs, but other administrative cost. the star rating. we have a rating program were things have 1-5 stars based on quality and performance. tos is an important tool choose between plans. also that quality information is getting out to consumers. what more can be done in that regard, it is very good. the other thing is the out-of-
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pocket maximum's. they are introduced over the last few years. they have provided important protections for consumers. medicare advantage protections not only make the program more equal between the traditional medicare programs, that make sure the consumers are protected with consumer rights. >> you feel that medicare advantage a stronger now and more secure because of the aca question the >> yes. the summers are better protected within the advantage program because of the aca. give think the changes beneficiaries more confidence? >> i think it does. i think the aca with the star ratings program, other initiatives that make consumers more confident, we find that those are looking at these star
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ratings, these quality metrics that are not available under the aca. -- are medicare event either hasn't worked for them, or won't in the future. >> can you tell me how her busty choices offer seniors in the ma program? how many choices ? >> i think this goal went through those metrics in her testimony. , thisd for the most part is true in the medicare advantage program, as well as the part d prescription drug program.
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have too many choices. they are too confused by the variety of plans. over the last few years, the there has been headway in the number of choices that are not meeting will -- meaningful. folks get confused by those tweaks that will have a substantive component to them. narrowing choices in that way has helped people actually make better choices. >> you do not feel that -- you do not buy the naysayers who say that the aca is going to narrow choices for seniors in the program. >> it does not. we see plenty of choices out there where we are seeing clients. isn't that they don't have a choice, they have
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too many choices of medicare advantage plans. >> thank you. among recognize -- >> thank you. thank you for being here. i want to come to you. you talked about the fragile and vulnerable populations. i want to go back to that. i've recently found out that those medicare advantage enrollees that have renal disease have access to a coordination that is not available to others. it is not an option for those that are in standard medicare. medicare advantage not been option for all medicare enrollees? >> thank you.
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i support that. i believe that coordination of fragileideal for second patients. are pilots now at cms to try to incorporate population health. i would encourage them to be strengthened. i think it is an artifact of the way the law was originally written that patients were not allowed to enroll in medicare advantage. that could and should be change. is that if aworks patient has chronic renal disease and enrolls the medicare advantage, and covers end-stage pacing, they can stay in medicare advantage. if they have diagnosed as end- stage renal disease, they are not allowed to enroll. >> it would be an element of fairness that would allow. >> i believe that would be an improvement. yes.
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beforent to come to you and minute. i love listening to your hearing today. i have to tell you, seniors love their medicare advantage. we have a program called silver sneakers. people come to town hall meetings and talk to me about silver sneakers, and how they are doing. i have looked at some of the work they have done. , better outcomes for physical and emotional health, more activity. it is a great program. if i've listen to you all today, talk to me about stabilizing medicare. giving seniors more choices. should medicare advantage not being the platform for medicare reform? and give seniors more choices, not less? >> thank you for the nice comments.
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i'm a huge fan of medicare advantage for the reasons you say. it aligns the incentives of the providers work together to try and figure out what is the best way to take care of their members of patients. one may and line the incentives they work on things. one of the most important things that can help them prevent having these diseases even began. these things are aligned. these things are the ideal of aligning incentives, coordinating care. it is for the benefit of the member. i do believe that medicare advantage is the wonderful pilot for us as a society. what it does is it shows that we can find a way to curb the growth of health care cost. it.an find a way to improve >> give greater access. and provide better outcomes.
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>> correct. >> do you want to weigh in? >> i just echo the fairness issue. i think it is important. we know that medicare is a whole is facing a very problematic financial future. if we can find ways to control the costs, we should. >> let me ask you this. when you look at the limitation of the aca and the cuts that are being made, who is most impacted by the ma cuts that are there? seniors, physicians, support systems? wherein your research the you see it? >> this is impact directly to the seniors, whose choices will be restricted, whose benefits will be reduced. the deeply concerned about implications. i understand the testimony about consumer protections.
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that is at odds with the fact that the cbo projects there'll be 5 million fewer enrollees in 2019. we have 10,000 more seniors every day. you expected to rise, not fall. that is testimony for the financial underpinnings not being strong enough. >> i yield back. >> the ranking member, mr. dingell. >> i thank you for your courtesy and your kindness. an important moment. the american people are counting on us. they're trying to scare people about the affordable care act and its impact on medicare advantage. the facts do not support those claims. the questions i have today will focus on how aca impacts medicare advantage as well as traditional medicare. i would point out that what we
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adopted, the idea of medicare advantage, we were told they were going to give us a lot more insurance, and less cost to senior citizens. i have heard constant whining ever since that we have not done that. event, we have probably -- that problem is costing senior significantly more than traditional medicare or providing only similar services. in baker, is it correct that 2009, before passage of aca, the cms pay medicare advantage plans $14 billion more than if the same care have been provided under traditional medicare? >> yes. abouts averages out to $1000 per beneficiary, yes or no question mark >> yes. in 2009, medpac
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reports found that medicare advantage payment benchmarks was 118% of what medicare would spend. is that correct? >> yes. >> mr. baker and ms. gold, is it fair to say that reforms made by aca were intended to align medicare advantage payments with traditional medicare payments? >> yes. >> yes. >> despite claims made by some of my colleagues, these reforms have not really to medicare advantage. the program has been strong and growing. dividends, bonuses, and all of those good things to the company us and their officers were participating. mr. baker, how many people are enrolled in medicare advantage today? i believe the number is 15 million. >> correct.
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it correct that medicare advantage and roman has increased 30% from 2010 to 2013? >> yes. >> it seems like they are doing pretty well. >> it does. >> is it correct that the average medicare beneficiary will have a choice between 18 plans available to them in 2014? >> yes. >> mr. baker and ms. gold, the affordable care act has not resulted in a drastic increase in the number of plans available to seniors who choose to participate in medicare advantage? or decrease the number of people participating in the program. yes or no? >> yes. >> yes. >> thank you. fact, i know that aca has provided many benefits to the population and will continue to do so. most importantly, the aca has theoved the solvency of
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entire medicare program. something which is not properly addressed by people who are critical of the aca. is it correct that medicare hospital insurance trust funds is now solvent through 2026? toyears longer than prior the passage of aca? >> yes. that thisnds to show was helpful to medicare. >> yes. >> in 2012, beneficiaries were able to access bended services such as mammograms and colonoscopies with limited cost- sharing. >> yes. haveme 7.9 million seniors saved over 8.9 million -- billion dollars since the passage of aca.
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that is thanks to the doughnut hole being close. >> yes. >> the donut is going to be closed completely by 2020? >> that is correct. >> thank you gentlemen and ladies. this committee has a great tradition of working together to solve the pressing issues of the day. hope we can resume this tradition with bigger and focus on the facts rather than continuing to try to scare people about the affordable care act. let's give it a chance and work together. let's see that it has a chance to provide benefits to the society and the practice of , ill, an and the sick ailing in this country that we want it to have. i thank you for your courtesy. >> the vice chair of the subcommittee for five minutes. >> thank you. you were left out of that last exchange. you have any thoughts on the $13 billion excess cost for medicare advantage? reimbursement should be
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aligned with quality. most important issues, the quality of care for seniors under medicare advantage as opposed to pay for service medicine. >> let me switch gears a little bit. the affordable care act, i was here through the entirety of its committee. it is becoming obvious today that there were some assumptions and promises that were made in the affordable care act that have now turned out not to be true. i would submit that those weren't just errors in projections, those were purposeful deceptions. if the administration had been honest with americans about the bill, it likely it never would have passed. the affordable care act does take some hundred $60 million of medicare programs. >> that is correct.
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>> the portion taken for medicare advantage is $150 billion. >> that is correct. >> that is taken away from our through medicare advantage plans. i can member speeches given during the immigrant convention in 2012 that these are merely over payments to doctors and hospitals. this is not a real cut. it is taking away money that should have been paid in the first place. he recalled those speeches? >> not specifically. i remember the claims. >> you agree with the it ministration, the american association of retired democrats, that they were really the plans of payments question mark >> they are part of a strategy that always backfire. limit access to seniors in the end. it doesn't take out excess cost. a continued reliance on the strategy is going to damage medicare i'm not save it.
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we need to change strategies. >> i agree with you. article, medicare forced to limit access to doctors because of the reductions in medicare advantage. there was an article in usa today that quotes a story, a patient, whose daughter had given her bad news. medicare advantage plan from united was terminating her contract. she cannot that she is losing her oncologist. she is 71 years old and i medicare. a kind of seems like this is a direct consequence of cutting medicare advantage plans. what i be correct in characterizing that as such? >> the insurers will be caught in the middle. they have obligations to limit cost-sharing. there will be less money coming to them. their only recourse will be to restrict whatever access they
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have an limit. >> this is a story we are likely to hear repeated? >> yes. this is the leading edge of will be a bigger problem. >> the american associations of retired persons has on its website myths about medicare advantage cuts. one of the myths is that medicare managed cuts would help -- hurt seniors ability to see their doctor. in light of this information, do you think that is an accurate statement? >> no, i don't. it will be increasingly inaccurate over time. to judge by 2014 is a mistake. it is the trajectory over the foreseeable future that concerns me. >> i just can't escape the notion that the entirety of the affordable care act was sold on deception. the consequences of that deception are now becoming more evident every day. i am particularly sensitive to
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the fact that patients are going to be excluded from their doctors. i wish the ministration have been more honest about this. i cannot help but feel it was a perfect -- a deception. advantage, medicare taken those cuts out of part a and part b, not reinvested, is that correct? >> those cuts will be used to pay for medicaid expansions and insurance subsidies in exchanges. those moneys will be gone the moment they are spent. it will not be there for medicare. >> i'm not an economist. how do you reconcile the fact that they are claiming that that is a savings increasing the solvency of part a and part b when the money was taken and then spent for some other activity? would testify, the is an accounting fiction.
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>> thank you. i will yield back my time. good morning. welcome to the panel. i would like to thank the chairman and ranking member for holding this member -- holding this hearing. according to a study that was done a couple of months ago, in my area of florida where we have a large percentage of grandparents and parents who rely on medicare, a number of statistics jumped out on the improved benefits in medicare. one was what mr. dingell mention. the closing of the doughnut hole. the discounts offered for prescription drugs. -- over 77,000 my neighbors have major savings in their drug costs under a care part d. due to the drug discount.
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they have been worth over $100 million to the medicare beneficiaries in the greater tampa bay area. that is substantial. that is due to the affordable care act. greater tampathe bay area, over 100 million seniors now have medicare coverage that includes preventative services. they can go get the mammograms, colonoscopies, without co-pays or deductibles. ed is a very important improvement to medicare. i think you testified that these improvements apply in traditional medicare and medicare advantage. >> that is true. some medicare advantage plans did offered those benefits. others did not. with the aca did was make sure that those preventive benefits applied across the board in those traditional medicare
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advantage plans. >> but let's take a page out of mr. dingell's questions. year, republicans here in the house adopted a budget that proposed drastic changes to medicare. the budget that was adopted would in traditional medicare and medicaid advantage, and put in place a new system in 2024. if your pd five years old or younger, this would impact your future in medicare. rather than and roll in traditional medicare advantage under the republican budget, instead beneficiaries would receive a voucher. it would privatize medicare. you would get a coupon. most analysts raise concerns that this would in essence shift costs to our parents and grandparents the rely on medicare.
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it appears to break the promise that you'll be able to live your retirement years in dignity and be safe from a catastrophic diagnosis. i would like to know yes or no from each of you, do you support that kind of drastic change to medicare and medicaid -- and medicare managed question mark >> i do support that change. cbo reports that came out indicated it would save reports -- >> yes you support it. esther baker? >> no i do not support it. for the reasons that you indicated. it would not -- the value of the voucher would not keep up with health care costs. more would come out of pocket of seniors. they would lose the securities they currently have. >> i believe it is important for congress to ensure health security for seniors.
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my a answer, which is hard to do, is to say that this is about the patient and patient care. >> yes or no? [indiscernible] republicanreview the a cheaper bozo? >> no ma'am. >> we do not take positions on legislative decisions. there is a number of technical questions that have been raised about those plans about cost shifting that would happen to medicare beneficiaries that are important questions to answer before any change to a popular program were made. >> i believe that the idea of using a voucher system, which is akin to what is being done in the medicare advantage base already, is a good idea. >> that republican budget also
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included provisions to repeal the affordable care act, including important reforms to medicare. the closing of medicare part d, the doughnut hole. those annual wellness exams, an important medicare and fraud prevention. do you support the repeal of those provisions that have [indiscernible] yes or no? >> i can't give a host cell answer. yes or no? >> i believe that there are parts of aca that should be repealed. >> i think beneficiaries should be upset if they were appealed. >> i think protections for seniors are important.
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>> need to be in place. i would answered differently depending on the provision. >> the chair >> mr. chairman, a riveed late and didn't get to hear their testimony so i don't have questions. i appreciate the opportunity hough. >> i just wanted to make the point that i think the representative was getting at to remind my colleagues who are complaining about cuts, these were the same cuts that were included in the ryan budget but the republicans wanted to give tax breaks to millionaires. a couple of questions.
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the implication by my colleague, dr. burgess was changes that would eliminate and narrow networks are caused by the affordable care act. and i'm just wondering in your research, i know with part d it's important to check every year to make sure that the formulary is the same. with medicare advantage, aren't changes likely in the network or something prior to the affordable care act as well? >> yes, i think there is a lot of volitility in this private marketplace swems in the part d marketplace. so every year we are very clear with beneficiaries if they have a part d plan they need to check that coverage because the
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formularies change every year and provider networks change every year. and it not just the plan that drives changes, providers also decide to leave the network or to no longer be involved. >> but this is not new? >> no, this is an inherent part of the medicare plan that was around in the mid 190eu's and before. this is an ongoing issue, this instability is inherent and is a part of the risks of the medicare advantage plan that go along with some of the benefits we've talked about as well. >> also mrs. gold, something was said about the precarries future of medicare and funding problems. i wonder if you could talk about the effect on sol vensy that the affordable care act has had on medicare? do have you that? >> i can try.
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>> or maybe mr. baker. >> go ahead. >> i think we noted earlier that two effects have occurred. one as i was responding to a comment that there is a longer period of sol vens si of the fund and that has been looked at as a bellwether, we're in one of the best places we've ever been. and secondly a stable part b premium. medicare cost are at historically low growth rates right now. and so all of the people with medicare are seeing the benefits of that cost containment in the a.c.a. and other cost containment efforts that have occurred. >> i also wanted to talk about more low income seniors, medicare provides cost sharing protections for low income
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seniors through the medicare savings program. i'm wondering if we're concerned about protebs for low income beneficiaries, rather than paying more than medicare to the medicare advantage plans, wouldn't it be better to invest more resources providing outreach enrollment and coverage, etc.? >> yes. our biggest problem on our help line is folks that can't afford their coverage whether they are in the original medicare program or medicare advantage program. . ey are above medicaid levels 50% are struggling to afford coverage swems dental work and other things that aren't covered by medicare. is strenging those programs
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particularly if we're looking at the s.g.r. and doing that simetainsly. >> we're looking at the s.g.r. we'd like to personal nantly repeal it. but the qualified individual program which pays beneficiary part b premiums is set toe expire at the end of the year. so don't you think at the same time we deal with that, we ought to deal with that? >> i think it's imperative that program be continued and be alt with the s.g.r. and be reauthorized. >> now recognize the gentleman from illinois for five minutes of questions. >> thanks. sorry i had to excuse myself during your testimony. a couple of points. one is i like myself and a handful of staffers went down to make sure we were enrolled in our new health care plan because we couldn't get confirmation.
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fortunately we got confirmation but i'm finding out i have less coverage at higher cost. and the real concern is and exhibited by my constituents on medicare advantage we're going to see the same thing occur in medicare advantage. so i think this is really a timely hearing because it's just like everything else in this new movement of healthcare is everybody is going to get less overage and higher cost no matter who you are or where you are in this country because of these reforms. i was here in committee when secretary southeast bill yuss two years ago confirmed the fact they doubled the $500 billion. you can check the transcript. it took me five minutes to get it out of her. but in the end she said we double counted because we have
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this $500 billion of savings out of medicare is going to go to obama care and of course we're also strengthening medicare by $500 billion. sthrag as part of the record, how can we say medicare is strengthened? can we make this argument that medicare is now stronger than it ever has been? reveals t believe that anything. the payroll tax taxes going in and spending going out as a whole is $300 billion. that's a gaping cash flow deficit. we get 10,000 new beneficiaries every day. in the absence of reforms for people to get the care they need and deserve and do it at a slower cost growth this program
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will fall under its own financial weight. >> numbers really matter and for the secretary to affirm $500 billion, that is really not chump change in the big picture of healthcare cost. i'm getting comments from constituents in my district who medicare advantage folks benefits are being reduced, they are losing access to their preferred physicians under the current system right now. again, back to doug, my question is how much worse can this get for my seniors who on the for medicare advantage? >> again, if the strategy for controlling cost is this traditional one of just cutting provider reimbursements, it will backfire. we have seen again and again that reproach without reforms and without an approach that
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gives you the prevention and coordination and better care, congress has to put the money back in because you haven't solved the problem. and to not put the money back in is to deny seniors care. that's your choice. >> and my seniors through medicare advantage have access to dialysis and the like afpblet i know you have a special focus in that arena. as networks shrink especially in rural america, what could happen to our options? >> i think you've heard that the cuts are not advisable in the future. i must say with all due respect to the committee, i think that is parody adjustment to get medicare advantage back to fee for service which was enacted is not the issue that should be focused on. what should focus on in my view is that we are potentially
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reducing the payment for acutety of the sickest patients which will asent insurers to avoid managing sick patients. those are the one that is need coordination, that need population health and access to good care and that is the issue that i would hope the committee will take a serious look at. because without that, while we may or may not have shrinking networks and i think we will because even today we see news reports of united and others cancelling thousands of doctors from the m.a. program, the real issue in my view as a physician and someone that cares about seniors is that the sickest and most fragile patient that is eat up all of the cost dem healthcare are the one that is ought to be protected and they ought to be protected by having appropriate acutey adjusted payments to insurers or the
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groups managing them in a way that supports better out comes, transparency, all of the star measures are positive. let's support quality performance and out comes and pay accordingly based on managing our sickest seniors. >> i now recognize the gentleman from texas for five minutes of questions. >> thank you for having this hearing today and our witnesses for taking the time to testify. medicare is critical to the well being of our nation's seniors and people with disabilities and many with low to moderate incomes and complex health care need. my first question is the affordable care act did extend the life of medicare by putting more money into medicare. yes or no answer to that, did it actually extend the life of medicare? >> it didn't, no. >> i have no knowledge of the
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facts. >> i don't study the trust fund. >> same for me, i've not studied the trust fund. >> i think we may have two difference of opinion but i think that's acknowledged that it did extend the life of medicare with the affordable care act. mr. baker you discussed changes to the medicare advantage in the affordable care act. it is to make it more efficient and reduce over payments and bring it more in line with traditional medicare. can you elaborate on some of the improvements under the affordable care act. one of the improvements was making sure it covers presentive services as well as original medicare. nother is the 85% medical loss ratio so making sure every
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dollar to these plans is going toward medical cost. once again the star ratings program and the out of pocket maximum i think have provided important financial protection to folks within the medicare advantage program. the star rating made it easier for consumers to choose among plans. they have many choices in most markets and the problem we see is folks not being able to choose among plans so the star ratings have helped that. >> we have a great medicare advantage plan in my area that actually quit taking medicare general medicare because they wanted all their patients to go in. they are a great facility. what recommendations would you have to further improve medicare advantage? >> i think once again we are very supportive of some of the good things that have come out of medicare advantage. we want to make sure that there
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are meaningful choices amongst plans so standardizing plans to the extent that is appropriate and possible. we'd love to have more data on appeals within plans to see where there are problems with a particular plan. we'd like to make sure there are better notices so this issue of slimming down of some of the networks, we think there could be more pinpointed notices sent. many patients find out from their doctor. nice if they be found out from the plan so they could be ready for open enrollment. we think it should be a base program for folks and by that we could help by increasing the availability of med i did gap policies so people can switch back and forth between the
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programs as necessary. >> from your perspective we've heard that medicare advantage would lead to wide changes in a.c.a. and wide disruption of the medicare advantage market. from your perspective has this been the case? >> we do not see widespread disruption at this point. we have seen provider issues with providers leaving networks. most of the consumers we've counseled have chosen other plans that continue to have those providers in their network or reverted to the original medicare program where the providers are available to them. >> you've written about medicare and scientific studies meet certain established standards for the findings to be accepted including transparency of data methods to establish validity of findings. as a professional researcher i'm interesting in hearing your thoughts on mr. cap lan's studies that lacked standards.
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i think there are many questions we need answered before we can say his results have great meaning. would you agree these are some of the questions we need answered before accepting the results of the conclusions of the study? >> i think usually when you have a study they undergo peer review and the methods are laid out. i didn't have time to do a thorough review of the study and some of the details which would ordinarily be there are not there. i think the most major part of the study that wasn't talked about in the testimony was assort of finding that over one year so many people lived longer if they were in m.a. and i don't think anyone with a proor con m.a. expects that that's a plausible finding. so i think there are some real questions about the risk
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adjustment and the selection of fact that is are in that study. so i think there are some questions. >> i'm out of time. thank you mr. chairman. >> do you want to take a minute to also spovend? >> i appreciate the comments and thank you for the question. we did have our studies reviewed. we actually were surprised by the findings and that caused us to pause because we were so shocked by some of the data that it showed. we didn't have agenda. we did have it reviewed by a number of organizations leading academic medical septemberers because we wanted to challenge what we were seeing. i understand mrs. gold didn't have the time to review it to be thorough. but we went through substantial reviews. we said that one finding about mority created the greatest concern so we wanted to go forward.
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but i would not throw out all the findings here. we recognize mority it was one that was most concerning and no you would to publish live longer if you signed up for medicare. >> your detail wasn't there. i'm not saying there may not be questions but the detail wasn't until the report to know if it was in fact legitimate or not and it wouldn't have gotten through peer review. >> we had it reviewed by leading medical centers. we didn't submit it for peer review because we wanted to get it out in the market as soon as possible. >> mr. chairman thank you very much. i would have to say math mat capolicy rewere search might sound higher than boston
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consulting group but if you know anything about boston consulting group you know it's one of the most outstanding companies in this country and i do know a little bit about that. mrs. gold, in your testimony you suggested that the president fulfilled his promise to our senior when is he said if you like your healthcare plan you can keep it. if you like your doctor, you can keep her. d you said it's called medicare. and suggesting, implying if you got a notice from a medicare advantage plan that you had selected that you were no longer going to be able to remain on the plan, are they going to have to get out of the business because of the 14% cut per year over ten years, something like $300 billion. it was okay because you still had medicare. you just diverted back into medicare fee for service.
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i would suggest to to you that's pretty disingenious to say if you like your plan you can keep it because you get kicked out of medicare advantage you can go to medicare if you can find a doctor. it's clear it's under attack and these beneficiaries are feeling the effects of $300 billion cuts in obama care. and with plan cancellation notices sent to tens of thousands of our country's seniors, some of the most vulnerable citizens are faced with this uncertainty. individuals are losing coverage they are happy with and the doctors with which they are comfortable. and this is a tragedy. it's a tragedy of the law. a bill that was rushed through congress without any serious debate, strictly partisan vote is now directly impacting people's lives and their
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personal healthcare decisions. >> let me ask would you please explain to the committee the reality for those potentially millions of people, seniors who lose coverage over the next few years, especially when it comes to a reduction in financial security and benefits? >> i think this is a very real possibility and something i'm deeply concerned about as you know. it is one thing to mandate that a medicare advantage plan have benefits and offer that. it's another for it to be in existence so they can take advantage of it. money trumps mandates. they won't have those choices or care. those who made that choice will see their plans taken away from them in violation of the promise. not here but is he made that statement about the
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$14 billion that was saved out of the medicare advantage program but that $14 billion was not kement northeast medicare. and really he was only presenting one side of the balance sheet. yes $14 billion may have been spent on medicare advantage. whether that was a little too much is open to question. but the savings that occurred to medicare and we the taxpayer because of the medicare advantage program that has preventive care and all these features that traditional medicare fee for service does not have, certainly not care coordination. this benefit is used by seniors from all walks of life. it's especially prevalent for the seniors with lower incomes. these cuts to benefits and coverage will affect lower income seniors more directly than others, is that correct >> >> about 75% will be experienced
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by those making less than $32,000 ballpark. >> what will that mean? >> these are the most vulnerable of the seniors. this has been a program that has given them not just the services in tradithsal fee for service but additional services and done it in a fashion of coordinated care and high quality out comes. it's a loss from the sperspecttive of having a viable medicare program for the future. >> i appreciate your leadership on this issue. >> seniors are just now learning that the upheaval of our healthcare system is not limited to the individual insurance market. the purpose of this hearing today. they now know it will affect them as well and seniors may lose benefits. that eard testimony
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seniors may lose benefits and access to doctors and be forced to pay more for their coverage plain and simpm. i yield back. >> i recognize the gentle lady from the virgin islands. >> thank you mr. chairman and welcome to our panelist this is morning. from what i've read medicare beneficiaries should expect in response to the question we're answering today and already experiencing improvements from the affordable care act. understand part those improvements have been made possible from the savings that came from equal liesing the reimbursements of medicare advantage to those of medicare. and as a family physician and an old fee for service doctor, i especially think with the a.c.a. reforms that the out comes from both can be equally beneficial
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to the beneficiaries. butter toris, i represent a territory and sometimes we have unique circumstances and suffer unintended consequences. so i want to ask a question on behalf of my colleague from port toe rick coe. and the question is with the revised method doling under the a.c.a. for paying plans using benchmarks should c.m.s. coordinate the medicare processes for example in august of this year c.m.s. put out the fee for service patient rates, the change that medicare payments to hospitals. but this is after the medicare advantage process for 2014 as closed in june preventing the medicare advantage plans from recovering the substantially increased d.s.h. payments, they
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must now make to hospitals. shouldn't c.m.s. address this lack of coordination for 2014 and it's harm to the medicare advantage plans and their beneficiaries? >> thank you. clearly i'm not an expert on the rate setting but i would say that my understanding is that medicare advantage base rates are set base odden the fee for service equivalence si and it makes very logical sense to me that we should have all of the built in fee for service costs in the base rate when the medicare advantage rates are set. so i believe that would answer or direct an answer and i think it's well known that c.m.s. has for years not calculated the fact that s.g.r. would probably be pushed out farlingter so they have not given credit to the
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s.g.r. fix each year in setting the rates for medicare advantage. so there are a variety of administrative issues i think related to how medicare base rates are set. >> thank you. i hope that answers his question. mrs. gold, i want to ask a question. we've heard about the a.c.a. causing spikes in premiums. while some plans have increased cost, isn't it true over all premiums have declined since the affordable care act was enacted and could you elaborate more about the premium changes. what factors contribute to differences in premiums among plans? and let me add another part of this question because of time. isn't it true that more than 70% of beneficiaries in tra the digsal medicare are subsidizing lower premiums for the once in
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medicare advantage? >> taking your second question first yes it's true that all beneficiaries subsidize it plus the taxpayers because that covers it too. cost vary a lot across the country. in some of the country are more efficient and some providers are more efficient than others. premiums have divered because fee for service payments differ. in some areas providers are stronger and they are able to negotiate higher rates so there is less money available for extra benefits. in some areas of the country or some plans decide to give it back in less cost sharing at point of service rather than lower the premiums. so there are a lot of reasons things differ and this fight between doctors and health plans has a long history that goes back years. you are trying to get the most you can out of the system.
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and the best thing the policy makers can do in congress is to set good standards and say we want to buy quality and value and to reinforce that. i think the stars do start to do that. and getting those right and figuring out across both programs, both medicare advantage and fee for service how to make care better for beneficiaries. because i don't think that care is as good as it could be for beneficiaries no matter what you're in and there is a lot of variation across plans and what their doing which is not all their fault, a lot of it has to do with providers and how willing they are to get together and how frag meanted they are. and especially for beneficiaries with chronic illness. they need providers who talk to each other and that is hard to change. the plans are dealing with that and we're dealing with that because other wise the beneficiary gets caught with the
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bill and their cost go up. >> thank you. you sound like an advocate for m.a. plans because you say there should be greater coordination of care. i'm going to you dr. gold because i thought your testimony was most about what the patient experience was rather than the economist. when you say the premiums will be lower in 2014 lelltive to ten that is because they are offering lower cost premiums with higher deductibles or allowing people to make a choice and they are choosing lower cost. that's what it's a function of? >> no. partly we don't have good data but i don't believe there is evidence that is why that has
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happened. >> common sense suggest that because when people vote with their pocketbook they vote with a lower plan. > we have a controversy here that says they are not sure there is improved quality data with m.a. plans. your testimony is excellent. my gosh when you show that graph of m.a. plans versus fee for service and the readmission vate lower, number of hospital days etc., that is just proof of what you're decriping as an increased model of coordinated care, fair statement? >> thank you for that compliment sir. i think that there are within the written testimony things that are very evident. i'm a high promoter of high transparency and payment related to quality so i recognize the star program as a good step
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forward. i wish there was a similar program in fee for service medicare so we'd have some evidence of whether medicare and fee for service is creating. >> let me emphasize because i'm a liver doctor, i take care of special need patients. you mentioned end stage renal disease. that is where coordinated care is most important and yet you describe the cuts that go to the special needs program, correct? >> yes, i think i've said several times. i think the greatest threat at the moment if we cut through this risk adjustment rescaling the benefit of adjusting payment based on acutety we unfortunately start to incentivize cherry picking which is avoiding high cost patients. that is a disaster for seniors and as you can see in the written testimony if you really manage the high cost seniors with comprehensive care, with
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end of life care, with all those kinds of programs you can make a dramatic reduction in utilization. >> i'm going to cut you off a second because i made your point and i believe it. i've been struck that mrs. gold and mr. baker say they have not yet seen the problems we're predicting and yet this wonderful graph shows we're on the leading edge of these cuts and there are compounding tchauts go through 2019 where there are dramatic cuts ultimately to m.a. plans receive. do i characterize your graph correctly? >> yes, sir. that's why i've said -- >> i'm sorry i've only got a minute left. you've been describing the dire things that could happen to these programs based upon 2015. if we extrapolate that out and come back in 2019, at that point is it fair to say that more
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likely than not they will be able to say at this point we've been able to see a negative impact of these cuts upon patient decphear >> i believe that's an accurate statement. >> so do i. just as a doctor who is going home to talk to a woman who is losing her m.a. plan and is a diabetic and has had a service that's been able to help her tremendously. >> can you lay to rest this myth that the a.c.a. actually prolonged the life of the medicare trust fund? >> as i said, there are no real resources in that trust fund. there is no way to pay a medicare's doctor bill out of that trust fund. everything that flows in flows right out. the treasury has spent every dime of it and it is gone. >> so when they suggest we've prolonged the life through the aca and you flatly say no, with
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your credentials you totally dispute that? >> i've testified numerous times about the fiction of government trust funds actually being able to pay any bills and it is just a fiction. >> i field back. thank you. >> the chair recognizes the gentleman from maryland for five minutes. >> thank you mr. chairman. i appreciate the testimony of the panel. congressman gingrich said something earlier i wanted to respond to that was seniors are now learning that the a.c.a. is going to cause them harm. i don't think seniors are learning that. i think seniors are being told that by fear mongering members
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of the other party who don't like the a.c.a. and i think that if seniors look carefully at their experience over the last couple of years, a period in which the positive impact of the a.c.a. has begun to be felt, they will conclude that in fact the a.c.a. is benefiting them. you look at the closing of the donut hole. ou lookity the new coverage of certain kind of preventive care services, screening and other care services, annual wellness visits where co-payments have been eliminated. you lookity the incentive structures that have been nut place to help improve management of care and chronic conditions in a more sensible way.
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within the traditional medicare fee for service context as well as obviously within the m.a. item t, there is just after item of improvements which are there because of the affordable care act which are making the medicare plan and medicare coverage more robust for our seniors. so it's just wrong to suggest that this is going to be harmful to the senior population. this earing in a sense, hearing is titled what beneficiaries should expect under the present healthcare plan medicare advantage. and i think they can expect good
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things. everybody here generally is saying good things about the medicare advantage program. that's not the dispute we have. it's whether the affordable care act is having a negative impact on what 29% of beneficiaries have access to or a positivism impact.- positive so when mr. baker and mrs. gold say good things about the program which they have, that is not a continue diction on the other testimony they are offering here. i think it's very consistent. it's just you believe in contrast to the other witnesses here that the affordable care act is actually strengthening and improving the medicare advantage act. my understanding mr. baker is the premium that was offered initially to medicare advantage
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plans which was i think 114% against what the fee for service rate is was done because the government wanted to incentivize the market and the private health insurance industry to come in and innovate and was successful in doing that. you have 29% of beneficiaries now in those plans show that's happened. but along the way because of good rigorous analysis, we discovered that that premium was no longer justified and in fact was going to some things that really ended up being a waste from the standpoint of medicare program. can you just speak -- i've used up most of my time here. but can you talk again about two or three of the things that you think the affordable care act has done to improve the medicare advantage program which i think all of us want to see remain
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strong? >> i think three main things. one is the medical loss ratio. making sure 85% goes to medical care. closure of the donut hole and preventive care services. i would add and i haven't talked about this before but the affordable care act does set up a program to enhance coordinated care in the fee for service as itional medicare program well as strengthen medicare advantage like program in many states that are partnering with the federal government with care. to coordinated that has some promise. needs to be monitored but looks like it has some promise. >> the chair recognize it is gentleman from virginia for five minutes of questions. >> thank you mr. chairman. i want to highlight a real life
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example. my 83-year-old mother reports that her rates have risen for her medicare advantage plan. in order to for her to keep the policy she's now paying higher rates. when the secretary was here she claimed rates were decreasing nationwide. so i did a survey in my district avend we found that mr. mr had their rates going oup, not a huge amount. as mr. baker testified the bigger group was those who stayed about the same. there were a couple of folks who reported their rates went down. i'm wondering is this the case from your perspective nationwide that the rates are going down as the secretary testified earlier this year? >> we can get back to with the data but i don't think those are the facts. there are big differences across counties, regions states in the united states. >> let me go to that point because i had some curiousty
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because one of the reasons i represent a very rural district where it takes hours sometimes to get to the nearest hospital depending on where you are located particularly as a result of obama care and the cuts to medicare we lost a hospital in one of my most rural counties a few months back. that was one of their top reasons for why they closed the hospital. do you find that is more of a problem in rural areas as opposed to urban areas. >> it's harder to narrow networks in a rural setting because you don't have many choices so they don't have the option to do that. >> in that county they had one choice and now they have to drive a fairly good distance to get to the next choice where they also only have one choice depending on what direction they go in. i appreciate that.
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i ask you a rural question too in that you were talking about the hemmingt care and dr. cassidy showed the chart and how the cuts are coming and you indicated earlier in your testimony that is going to limit access for some folks s. that going to be far more worse in the rural districts like mine? >> i think that it's predictable that cuts will affect rural areas where there are fewer choices than the urban areas where there is more competition but i can't say that i have evidence to support that. >> common sense would lead us to that conclusion, would it not? >> yes. >> do you want to disagree? >> yeah, because the a.c.a. has lowest payment counties actually benefiting. in some of the rural counties they are going to continue to have 115% of fee for service. so i don't think it's payment in rural areas. i agree there are a lot of
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problems in rural areas with managed care and getting it set up. but i don't think tilts payment changes that are causing the problems. >> souled disagree with the folk that is had to close the hospital and they were mistaken in looking at their numbers. >> no i would say they have a real problem but it's not the a.c.a.. >> two of the things they listed was the downgrading of the committee responsible to this administration but the other two things they listed were the a.c.a. and the cuts to medicare. so two out of the top three have hurt my people and i'm concerned about it. and now i think it's going to affect the elderly also disproportionately represented in the areas of my district. in that regard you indicated we shouldn't be looking at these medicare advantage rates based on 2013 but we should be looking to the future. can you explain that more fully?
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>> i'm concerned that the current experience has been a mast as the chair said at the out set but the demonstration program. i'll take this opportunity to say not all a.m.a. plans are wonderful. it's a good idea to have the stars program to rate them. it is not a good program. it does not reward good performance and needs to be reformed so it does. but to put $8 billion disguised for the near term. >> i appreciate that. and mr. chairman w that i yield back. >> the chair recognize it is gentleman from new york. >> thank you mr. chairman. thank you for having this hearing today. i've been listening. my republican colleagues are la meanting healthcare cost are going up. they claim the a.c.a. is causing
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this to happen although it's not trufmente yet when we identify savings in cost they say how terrible it is. you can't have it both ways n. 2009 prior to the passage of the a.c.a. the rates paid to medicare advantage plans exceeded that of traditional medicare by 18% and to better align them with the cost associated with traditional medicare. these changes were estimated to save over $135 billion over ten years. so you can't have it both ways. every time we identify a way to save money, my colleagues on the other side of the aisle say this is so terrible. this is being cut, that is being cut. and then they claim that the a.c. savement causing cost to rise. you can't have it both ways. according to the 2010 medicare
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payment advisory commission report to the congress, in 2009 medicare spent about $14 billion more than beneficiaries enrolled in the medicare advantage plans than if they had stayed in traditional medicare. so i want to go along the lines of the questions of how did we get to the point we were paying so much more for private insurers to provide medicare benefits and isn't it accurate reforms will help correct the overpayment problem with medicare advantage plans and extend medicare solvency for our beneficiaries? >> yes, i think it will have that effect. >> i think it's also worth noting that all of the cuts to medicare that were included in the a.c.a. were also included in each of the republican budgets proposals for the last three years. so under republican proposals these cuts to medicare advantage
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would continue too. on trust fund sol vens si. i want to -- solvency, we measure this by the trustees report. shows solvency is extended and that is important to state as well. mr. baker, i know in the past there have been concerns about medicare advantage plans cherry picking and seeking to enroll the healthiest seniors leaving the sickest to enroll in traditional medicare. have you seen evidence of this practice continuing or what steps did a.c.a. try to take to stop this practice? >> the provisions in the a.c.a. to have similar cost sharing for benefits typically used by sicker ben fish yires like renal dialysis and chemotherapy is one
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of the ways those plans have become more atricttoif those sicker beneficiaries avend something the plans can't use to cherry pick. i think what we see and it is born out by the research is that folks typically do join medicare advantage at a younger and healthier age. as they age and become more severely ill, they do disenroll, some do disenroll and enroll in traditional medicare with the thinking that certain treatments, certain providers are more available in the original medicare program. and so we do see that pattern emerge anecdotely in our work. >> let me ask you this question on a different question. in new york we have about 2100 physicians eliminated from united health medicare advantage
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provider network and expected to impact about 8,000 of new york seniors. this was a business decision made by a private company and c.m.s. is prohibited by law from interfering in the payment arrangements between private health insurance plans and healthcare providers. but i hope c.m.s. will use the authority it has to ensure adequate providers are in place to ensure beneficiaries have access to healthcare services. for seniors whose physicians are no longer part of a specific meds care advantage network, what suggestions would you offer them? more than 90% of physicians in america are willing to accept new patients under the traditional medicare program. so is moving to traditional medicare an option? >> moving to traditional medicare is an option or moving to a different medicare
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advantage plan is an option. it's our understanding those physicians are in other medicare advantage networks or are in as you said in the original medicare program. so this happens every year to some extent so our advice is the same this year, look for another plan that has your provider in it or return to the original medicare program and your provider is involved in that program. >> the chair recognize it is gentleman from florida for five minutes of questions. >> thank you for holding this very important hearing. i think the panel for their testimony as well. i was reviewing your report about how medicare advantage provides better out comes and reater saving than traditional medicare. why does it produce such dramatically better results? >> there are two or three things to take away that drive that.
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one is the alignment of incentives. we understand that the incentives are aligned between those who pay for the healthcare and those who provide the healthcare. with that alignment things tend to be for productive 234 how they perform. because of that alignment there is a huge investment in preventive care. so when they have the same goals ey are going to try to avoid acute interventions. they work with the patient to manage them threw it. and the third point i want to emphasize is the issue around many of these members are become very sick with time, age as well as where they are sose owe economically. the sickest portion that drive the 52% of the cost. that require greater intervention and greater coordination.
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so when these ideas of coordinating care and aligning insent rives important on all aspects of healthcare it's extremely important on the chronically sick individuals. > thank you very much. in the last congress about 40% of the seniors in my district had medicare vong plans. they love their plans. and it's very popular in my area. again, they like their plans. back in 2010 c.m.s. chief actuary did a report. he wrote we estimate that in when the m.a. provisions will be fully phased in enrollment and medicare advantage plans will be lowered by 50%, does this track with your own analysis of these cuts? >> absolutely.
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as you've heard today. medicare advantage is a high quality program and popular. the senior population is rising, 10,000 in beneficiaries every day. one would expect if nothing changed you'd see more enrollment. we're going to see less. what's change sd the financial foundation. it's going to be impossible for plans to survive and those that survive have to change their networks and cost that will be undesireable. >> next question for you some democrats have been pushing the a.c.o.'s as a model for better care coordination and cost savings. doesn't medicare advantage promote the same cost with a provep track record of better out comings and cost containment? >> m.a. has a track record and it's a high quality track
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record. as i said earlier not every plan is created equal. a.c.o.'s are concept at this poinlt and unproven. there is one big difference. seniors choose their m.a. plan. seniors are assigned to their a.c.o. and they have no choice. that's a significant difference in the two concepts. >> the chair recognize it is gentle lady from north carolina. >> thank you mr. chairman and thank you to our panel for being here on this issue. serving the second district of north carolina i've been hearing in the since the rollout of obama care that my constituents who are losing their medicare advantage are very very concerned about this issue as you can imagine. and it's showing in north carolina that the cost of benefits for seniors for medicare advantage are over
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$2,000 per beneficiary. now that we're seing this play out the things i'm hearing from my constituents are that they are losing their access to care to their physicians, the cost is going up, and again, as you can imagine they are very, very concerned about this issue. to mr. holt again, who again is going to be most affected by these medicare advantage cuts? which sector of population of our seniors? because i keep hearing over and over again thates helping our chronically ill patients who have this coverage and this is a better plan for them. is that not who we're harming? >> this is a better plan for those with multiple chronic diseases who need coordinated care. they are typically lower income. typically minority participants. that's the population that will
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be affected, no question abet. >> can you identify some of the tangible benefits? you talked about coordination of care. are there more specifics we can hear so we have a better understanding of what we're losing? >> i will concede to the greater wisdom. >> i have another question for you on that issue. you had identified quite correctly that we really need to be talking about taking care of those patient who is are at the end of life, the ones who we know those are where the dollars are really being spent. how do you feel about the independent payment advisory board? that's going to come into play don't you believe? >> yes, ma'am, i certainly do not think that organizations like that should make decisions about individual patient care on the one hand. and let me just say relative to
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that very sensive topic, almost nobody wants to die in a hospital if they have support at home. and with coordinated care, integrated programs, spiritual counseling, pain management and 24 access to care givers you can avoid almost everybody having that unfortunate event in their family. that's a big opportunity and let's support special needs programs, the dually eligible and move towards medicare advantage much more aggressively. >> i appreciate those comments. and that is exactly why i'm as concerned about this issue as you are. >> and mrs. gold. i just have to ask you yes or no, isn't that what you identified a few moments ago when you said you thought coordination of care could be better served another plan and under affordable care act that
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actually happens? >> i think there are a lot of problems with getting coordinated care? >> doesn't medicare advantage do that? >> no, only some plans do that. it has the potential. >> i did not say that every medicare advantage plan but i did say that medicare advantage plans offer these benefits, yes or no >> yes. >> thank you. and just to finish out we've got about a minute and this question is to mr. holtz again. we've heard the bipartisan concerns here and we want to make sure we take care of our seniors. we can see over and over the affordable care act is so negatively acting your seniors with their medicare advantage plans. just coming from a completely bipartisan perspective, what can we do now moving forward, what would you like to see in medicare advantage that we can move to, that we can actually
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make a difference because we are going to have to make changes in medicare, yes. and i would like to know from both of you what your thoughts are on what we need to do in >> it is important that we have a sustainable social safety net for our seniors. medicare needs to be a different program in the future both financially and because the care seniors need is different than when medicare was founded. it is not the and but it is a great stepping stone. it needs to be preserved and not wither on the vine. >> we need that financial backing. is a serious concern in terms of funding. >> very quickly if you could add to that. >> my simple answer is that this partnership, public-private partnership has been successful and therefore in my mind we should invest in

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