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tv   Key Capitol Hill Hearings  CSPAN  December 5, 2013 2:00am-4:01am EST

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massachusetts? when you pull the public on ,hings like education, jobs people want good jobs, people want the american jury. ant the american dream. if you look at the recent blog post, i think it was not an politico -- in sorry. i think it is totally right. one of the great unifying factors in this country was if setwork hard and play by a rules, you should do
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ok. and our guidepost for our kids, 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 2013, chris christie won in new jersey, that is true, but so did minimum wage expansion. terry mcauliffe won in virginia, walsh in boston, palacios in new york. blasio in new york. toledo, the person who was protested education --
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>> 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 the middle class. you may call that populism, but frankly when you hear pope francis start talking about that, too, i think we have had a lot, a lot of 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.
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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 prosperity, 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. 100 places where fast food workers are going to be staging strikes. and who are the fast food workers now? it 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
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-- 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, our union foundations talking about how to 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
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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, which has been part of the deal for decades, and whether that is being unraveled? >> i think you are seeing ebbs 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 i have seen around the country is some places like california actually start righting its economy. they passed a budget amendment
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two years ago, and you're seeing a huge change in terms of the california economy right now. they actually -- jerry brown 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. 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?
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as i said, new york made a very different decision 30 years ago, in terms of a city as a public 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 that if you work hard and play by the rules, 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 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
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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. the number of people in labor has actually gone up this year. my union is actually growing. >> 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
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great recession. so i'm not giving you as succinct an 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 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
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in terms of education laws, either major ones or smaller things? >> the first thing i would actually like to see in congress is comprehensive immigration 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 making sure that we take people out of the shadows, we grow our economy, and we make sure our borders are secure. and so first and foremost, the house of representatives needs to focus on that. and i was part of the fast for families yesterday. i have been arrested on the whole process of trying to get to immigration reform and whatnot. in terms of education, this is an issue.
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pre-k is an issue about showing whether the results actually really matter and what the research actually really matters, or whether the congress lives in an evidence-free zone. we have seen pre-k actually works to help level the playing field. the president has put a bill out 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. that pre-k bill should sail 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. and what is sad about this, states like oklahoma, you know,
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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, 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. the peak tech school that ibm in
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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. it's a school where ibm has back-mapped from what the entry position, the skills required for the entry position 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
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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 competitive grants. you cannot keep doing winners and losers in the nation when all communities really should have high-quality career tech ed. >> 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 bizarre that produce incredible incidents and publicity, kids
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being held up and suspended for childish things that are completely out of the norm, the lack of parental involvement in the inner cities producing what we have today, because there are not any parent sometimes. they may be grandparents, but that is about it. 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. >> so one of the -- look, i 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 i answer any of these questions. because you know, the policy
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from 30,000 feet is really different from the reality in a 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 public education is. we are the first responders of 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 teacher, they never get even in the good times the trading and the support that they pretty much need to deal with all of the situations that we confront. but in the times of austerity and privatization and hyper- testing, that is why they are so demoralized.
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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. because our job, whether a child has parents or one parent or has 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. and it has to 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.
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so that is why we talk of lot about wraparound services, not just health care services 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 public education, half of our kids come to school poor, they are poor, in the south and the west, it is more than half. i'm a big believer in we have to 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. we 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. make sure we have art and music and the tools teachers need to
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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. and whether that is breakfast, 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 wrapping services around all of these schools in the 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] >> several live events tomorrow
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morning. jack lew will be at the theitable trust to discuss state of financial reform on c- span 2 at 8:45 eastern. also at 9:30 a.m., members of the house energy and commerce committee on energy and power will hear from federal energy regulatory commissioners. later, on c-span 3, we cover a democratic steering committee hearing on unemployment benefits set to expire at the end of the month. >> in a survey of major main, the kansas city star was rated more in favor of reform than all the other major metropolitan newspapers in the united states combined. as nelson himself told an in 1910, i don't want the stars editorial to be a lot of literary essays. i want to get things done.
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up on pastowed performance with an editorial in the star that rejected the notion that roosevelt was a man on horseback who would seize power and become a dictator. he is a builder recalled to his work, said the paper, rather than a man on horseback. after roosevelt's arrival from africa amid talk of his candidacy, there were clubs formed like napoleon in the of 1910. >> the impact of newspaper publisher william rockhill nelson on the american movement sunday at span 3.stern on c- >> representative greg walden, chairman of the house energy subcommittee on communications technology on his plan to update the communications act covering television and other media. speaking at the hudson
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institute, the oregon republican says the update would help programmers that are trying to better serve their customers. this is 15 minutes. [applause] >> thank you very much, commissioner. i can still call you commissioner, i hope. i appreciate 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
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certainly the intersection between technology and global policy, nobody has done it better, nobody was a better witness. with 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 plays. 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 by rob to 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
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come to the table and help us modernize the law. that is where you can go right now, in terms of accessing and providing us information. if you think about it, the telik munitions act of 1996 is old enough to get a drivers license, the cable act is old enough to drink alcohol legally, and the communications 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. for members of congress, it age is seniority and experience, but with a statute it can portend irrelevancy. in the on-demand world of the internet, 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.
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what does that mean for retransmission consent in the 21st century, which was the 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 create it, 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, calmly, without incident. the same goes for the millions of other commercial contracts the compromise the way "glee"
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and "the big bang theory" were the shows get from the studio to tv. over the decades, this market has functioned smoothly. 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 wire to the 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
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few players in the industry. a meaningful update to the communications act will require 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 industry." i wholeheartedly agree and deeply appreciate his support and willingness to work with us on this effort. let's go back to the millions of inspired informed customers for
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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, 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 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 +++2xunlicensej
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cable to their xbox to their setup. they just wanted and this is occurring at as an accelerated 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. very few 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 distribution and we are looking at the next chapter. 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 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.
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we are watching major initiatives, customers are cutting the cord with streaming offers from netflix and google and amazon and digital antennas with high definition signals. it will not be very long before we have same-day service from amazon via drone. 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
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are responding in different ways. offering consumers even more 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 market 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
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consumers. that is the first principle of our update to the communications act. 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 end, part of a comprehensive update to the laws, we hope to work with our colleagues on the judiciary committee to review the copyright consent regime. we have to consider the effect of the compulsory licensing
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system as well. 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. 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 key principle for update to the communications act. allow creators and investors to get value from their efforts. it is precisely because we have 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 local news and weather. say what you will about the video market place in america and a certainly has its
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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 video programming and choice lies retransmission consent. a recognition of the value of the program. whatever steps are taken to change the 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. but make no mistake, these are not the same thing. as we work to reauthorize stella and improve the provision of
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local television pver satellite, 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 my colleagues, those in industry 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 comprehensive 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
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policy, and i welcome your contributions to the upcoming debate in modernizing the communicators act. i thank you very much. [applause] >> on the next washington journal, the farm bill with representativen randy neugebauer. questionske your about the affordable care act, and ongoing budget negotiations. the discussion on budget talks with representative hakeem democrat.a new york washington journal is live on c- span every day at 7:00 a.m. eastern. >> friday on c-span, washington journal looks at the mission and role of the national institutes starting live at 7:30 eastern with director francis
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collins on their medical priorities, future projects and the impact of sequestration. at 8:00, allergy and infectious diseases director anthony fauci green,d at 8:30 by eric director of the national human genome research institute, at 9:00 national cancer institute and at 9:30, a look at the national institute of mental health with director thomas himself all with your talk -- calls and comments. >> several live events to tell you about this morning. treasury secretary jack lew will be at the pew charitable trusts discuss the state of financial reform. that is on c-span 2 at 8:45 eastern. at 9:30, members of the house energy and commerce subcommittee power will hear from federal energy regulatory commissioners. weight are at 10:30 eastern on c-span 3, we cover a democratic
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meeting onmmittee unemployment benefits to expire at the end of the month. >> as you walk in, there are tables out in front with lots of pamphlets. prior to entering the gun show. the pamphlets are all how the government is trying to take guns.our the government is doing this and obama is doing that. those were the guys i wanted to talk to. they were the guys with the leaflets, the ideas. them, is this your stuff? academic.m in an a researcher doing research on these organizations and ideas. i study men who believe this stuff. they looked at me suspiciously -- asked some questions. i said, here is what i am. it but here is my
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job. i want to understand how you guys see the world. i want to understand your worldview. you will not convince me and i will not convince you. that is off the table. i want to understand why you think the way you do. >> downward mobility, racial and equality, michael campbell on the fears, anxieties and rage of angry white men. sunday night at 9:00 this weekend on c-span 2. >> private insurance plans offered to seniors as an option to medicare. the affordable care act will rebates the federal government pays to medicare advantage plans. is 2.5 hours.
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>> an alternative to the original medicare fee-for- service provides health care coverage to medicare beneficiaries through private health plans. offered by organizations under contract with senators from medicare and medicaid services. they offer additional benefits not provided under medicare such as reduced cost-sharing, revision and dental coverage. they generally have a high rate andatisfaction approximately 28% of medicare beneficiaries have chosen to participate in medicare advantage.
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the affordable care act as noted a july 2012 congressional 716 -- cutce $716 million from medicare. in april of 2010, the medicare projected that these payment cuts would result in an decrease of as much as 50%. required cms to paymentsuality bonus four and ahieved half and five stars and quality rating system developed by cms. implement the structure laid out in the law which would have led to these cuts going into effect in 2012, cms announced in november 2010
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that it will conduct a nationwide demonstration. the m.a. quality payment demonstration from 2012 through 2014 to test an alternative method for khaki leading and awarding bonuses. wording bonuses. the general accountability office, the gal, in response to a request by senator orrin hatch noted that the demonstration projects designed need, quite made it unlikely that the demonstrations would produce meaningful results, "-end-double-quote, and recommended that hhs canceled the demonstration. it also stated him a quote, we remain concerned about the agencies legal authority to undertake the demonstration. with a price tag of $8.35 billion over ten years. the medicare actuary noted that this demonstration would offset more than one third of the
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reduction in the payments projected to occur under aca from 2012 to 2014. effectively masking the first wave of aca mandated cuts until next year. a recent report by the kaiser family foundation warned that more than half a million beneficiaries may have to switch to another m.a. plan or return to the fee-for-service medicare in 2014 as a result of the aca. in addition to the plant availability, questions are being raised about the possibility of rising costs and limited provider networks in the future as more aca mandated cuts go into effect. i would like to thank the witnesses for being here today and i look forward to the testimony regarding how the aca will impact of the medicare advantage program. thank you and i will yield the remainder of my time to representative burgess.
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>> thank you for calling the hearing this morning. we see the headlines and everything going wrong in healthcare. but sometimes we forget that there are some things that actually are going okay. there are things this committee and previous congresses have worked on, and that's one of the things we are going to be discussing this morning. sometimes we are so busy triaged and that we don't allow ourselves the luxury of things working as intended. my opinion is medicare advantage is working, and it's 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 might be threatened. medicare advantage allows integrated care coordination to community font to bring in for medicare. athe plans are lower in cost.
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they are bringing management to the care coordination to patients lives and encouraging wellness activities and actually using physicians to the maximum ability of their license rather than always referring to a specialist. there are those conditions that can be managed by general interest to family practice physicians, and we ought to encourage that and not punish them. as money is taken into the system and plans are forced to eliminate services that meet them such a good deal for seniors, we have to keep a watchful eye. we are all hearing about people wanting to be able to keep their doctor. will people keep the benefits they now have a medicare advantage. the harm of the cut is compounded when the money isn't reinvested in the medicare program. we've heard that before. you can't count the money that
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you take out of medicare and counter that began as a savings when you are not investing the money in part a or b. one change that has been bipartisan mr. gonzález that used to be part of the committee was allowing a return -- offered a bill that would allow seniors to switch plans between and a plans in the first three months of the year right after the open enrollment for go. 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 some time to go through the archives and i encountered a very brilliant and insightful opinion piece that was printed in the wall street times of june, 2012 and i would like to offer for the record. >> without objection, so ordered. >> the gentleman yields back and now the chair recognizes the member of the health subcommittee for an opening
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statement. >> thank you, chairman and into the witnesses for being here to share your expertise. today i am pleased we have the opportunity to talk about medicare and the positive reform introduced by the affordable care act to medicare advantage. while the majority of the 52 million beneficiaries are in the traditionally federally administered federal program, medicare advantage or m.a. offers beneficiaries an alternative option to receive benefits through private health plans. 15 million people, or 29% of all medicare beneficiaries, or enrolled in m.a. plans as of september, 2013. an increase of 20% since 2010. the aca included reforms to medicare advantage payments policies and the number of benefits and protections for beneficiaries go through speech 11 and a traditional medicare. for example medicare must cover wellness visits and preventive services with no copayments were coinsurance.
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the aca insures the m.a. plans beginning in 2014 spend at least 85 cents of every dollar received on premiums on actual care. beneficiaries will also receive discounts on their medications when they reach the coverage gap or the doughnut hole in medicare part the. these counts will grow over the next several years until the gap is closed. in addition, the aca aims to provide the quality of m.a. plans to improve the quality of m.a. plans by rewording plans to deliver high-quality plans with bonus payments incentivizing quality patient care over quantity of services provided is the key to improving health care outcomes and reducing waste in the rising cliffs of healthcare. the aca will also bring m.a. payments more in line with traditional medicare payments. on average, medicare has been bringing more per and will lead to these private m.a. plans than the cost of care and traditional medicare. by reducing the payments over time, there will be greater.
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he between m.a. and traditional payments resulting in savings that will benefit enrollees and help secure the solvency in the medicare trust fund for a longer appear co. of time. now critics of these payment reforms predicted that m.a. cost to enrollees would rise and the provider network of plan choices with the decrease in m.a. enrollment for the drop. changes in provider participation, pricing and coverage occur every year as an inherent part of decision-making including before the passage and that's why we provided the tools to end scheuer the seniors are protected from potential changes private plans might make. in addition they continue to have the choice that suits their individual choice needs and continues to maintain the ability of these code ability to pick a traditional medicare. i look forward to hearing from the witnesses on recent trends on medicare advantage and i think we can agree to work as a
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committee needs to continue beyond the improvements we've made in the aca. to continue to strengthen the program for seniors is critical. we can't return to the ways before the affordable care act. we must move our health care system to one of quality and efficiency in all of medicare. so thank you again, mr. chairman. and i yield back the balance of my time to. >> the chair thanks the gentleman and recognize the rece chair of the full committee mr. upton for five minutes to. >> every day we are hearing from folks and families across the country about how the president told care bill has wreck havoc on their own healthcare coverage with millions receiving cancellation notices, millions more are facing premium rate shock and others to wonder if
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well medicare advantage , the cost madeow in the health care law threatens
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the future of the government -- program.e of the some would say maybe government. riskuld put coverage at for thousands of beneficiaries in 2014 and anymore in the future. according to a report by the kaiser family foundation, more than half a million beneficiaries may lose their existing land next year which those seniorsce and disabled americans to switch return toent plan or a traditional fee-for-service plan. beneficiaries000 enrolled in 2013 will not be enroll in the medicare advantage plan at all and 2014. likewise, for thousands of america's most are honorable, if doctor you'll be able to keep your doctor is sadly another broken promise. that manynfirm enrollees will see a change in their provider networks next year as a result of the new law. empty promises maybe a little
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concern for some, but they have consequences for the americans who expect us to do no harm. americans deserve to know why their existing coverage is changing when they were promised otherwise this hearing will be an important opportunity to get some answers from a number of good experts. andppreciate you being here i yield to dr. cassidy. >> thank you. over 37,000 of my constituents are enrolled in medicare advantage programs. offer high-quality care and additional benefits more so than offered in traditional medicare. despite its popularity, it has challenges. the president's health care lockups medicare advantage by over $200 billion. when i see that the people who come to see me are having this much -- this many cuts in them, common cover sense tells you they will have
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increased problems finding a doctor, higher premier's, higher pays, fewer benefits and plan choices. with only 20% of these cuts implemented, there are reports of these problems already. i along with congressman barrow and other members of congress opposinged a letter .ther cuts to the ma program i urge my colleagues on the committee to make the same commitment to their constituents who have come to rely on medicare advantage. >> mr. upton. >> i yield my time back to the chairman. >> mr. chairman, did you yield to me? i think the chairman for yielding. medicare advantage has been around since the late 80's. it was medicare plus, then it was medicare advantage.
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the word advantage just means exactly what it says. it is an advantage. it is interesting that the democrats that created this act demandedre , the policies have been among coverage requirements. that is why the cost of so many of those policies have gone up. people have been notified that they won't be able to keep those policies january 1 of 2014 because they are demanded to include so many additional things. why would medicare advantage not cost more? are more things, annual clinical examinations, nurse sure that theke patient got medication sold, that the return further importance -- appointments. you got that program and that is about, i am all looking forward to what the witnesses have to say about it.
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it made no sense to cut $300 thaton out of a program 29% of medicare beneficiaries had chosen and it has gone up over the years. i yield back. >> the chair now recognizes the member five minutes for opening statements. >> thank you for your courtesy. require yes orll no answers. >> we are not the questions yet. >> oh i don't have an opening statement. thank you mr. chairman. >> the opening statements that ive been made by the members, will now introduce our panel. douglas, is mr. president of the american action for them. mr. joe baker, president of medicare rights center. dr. bob margolis, ceo of health
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care partners. , senior partner and managing director of the boston consulting group. your written testimony will be made part of the record. ui five minutes to summarize your testimony. mr. eakinrecognizes for a five minutes opening statement. >> thank you for the privilege of hearing today. let me upsize a few points that i made in my written statement. the first has been pointed out by the chairman and others. medicare advantage is a valuable and popular part of medicare. nearly 30% of beneficiaries voluntarily enrolled in it. it does provide extra services and innovative approaches to health care in the medicare program. it disproportionately serves lower income beneficiaries and minorities. it has been the program of
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choice for them. most importantly, medicare advantage is not fee-for-service medicine. it represents an important opportunity to move away from the practice of medicine that costly and that rewards volume over quality and american health care system. medicare advantage is under reform. due to provisions in the affordable care act and others more recently. the first thames from reductions. second is thehe modification of benchmarks relative to fee-for-service spending. the third, the implications of 1 tax that will affect many ma plans and further act as pressure on the ability to provide benefits. the fourth, the recent provideent that cms changes for medicare advantage plans. the result of the changes are inevitable.
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the first will be fewer plans. from 60 to 140 fewer plans and 2014. there are reports of 10,000 cancellation notices in ohio. 50,000 in new jersey. these all represent further the pledge that if you like your health insurance, you can keep it under the affordable care act. by 2019 when the cuts are fully implemented. and these reductions are disproportionately borne by low-income americans. estimates are 75% of the impact hit to those making less than $34,200. the next step for the plans that do survive is to pass along these reductions in the form of either higher cost sharing or benefits or more limited networks that provide benefits with fewer choices. these are not the voluntary decisions of insurers. they are the consequence of the law that limits their ability to provide options to beneficiari
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beneficiaries. going forward, i would emphasize that it's important to preserve this steppingstone to coordinated care and the better practice of medicine and medicare and that it would be undesirable for the congress to repeat the practice of using medicare advantage as a funding source for the further expansions of other program initiatives. this is a valuable program that has proven on the ground to provide high-quality care, innovative approaches to medicine and it's a popular choice of many of the beneficiaries for the further reductions in the undesirable policy step. thank you and i look forward to answering your questions. >> that gentle man mr. baker for five minutes for an opening statement. >> thank you, chairman and ranking member parliament and a distinguishedistinguished membee subcommittee. medicare is a national profit that works to provide access to
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affordable care for older adults and people with disabilities and we thank you for the opportunity to testify on the medicare advantage plan. each year we cancel the lead cocounsel people about topics ranging from enrolling in the plan to appealing the d- claim it. we find medicare advantage are good options for some but not all was medicare. the callers are satisfied with the plan and their inquiries are resolved. others buy the plan are challenging. the callers may struggle to resolve billing issues, cope with coverage denials, compare their details and other issues. in particular we observe the people choosing among the medicare advantage plans sometimes as a dizzy experience. we urge people to revisit the plan's coverage as annual changes to plan benefits, cost sharing, provider networks and other coverage are common place each year yet research suggests inertia is widespread. there are too many plans into
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variables and meaningful choices among the plans. it offers a blueprint for constructing the system with hospitals and other providers are paid accordingly according to the quality of care that they provide. medicare is that e.g. greater for these reforms. as such it includes a set of policies designed to make the medicare advantage system more efficient and to enhance the plan quality. alongside the physicians, hospital and other healthcare providers medicare advantage plans have been and should be playing an important role in the transformation. medicare advantage included in the aca are intended to secure the high-value care. in other words, better quality at a lower price. recent changes to m.a. by the aca have strengthened the program in addition to improving medicare's overall financial outlook the aca through added
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benefits they are a cost sharing and improved plan quality. for instance, the aca expand coverage for the preventive services and prohibits medicare advantage plans from charging the original medicare for renal dialysis, chemotherapy and skilled nursing facility stays and requires the plans spend 85% of the premiums and federal payments on the patient care. these and other changes that would be aca has brought should be preserved. it's important to note that the aca this occurred largely from the medicare advantage payments producing the positive for the medicare program. benefiting both current and future beneficiaries. improved cost efficiency and medicare translates into real progress for older adults and people with medicare and people with disabilities. for example, in 2014, the part b. premium remained at the level amounting to 194 per month.
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while many predicted the changes to medicare advantage would lead to the widespread disruption, we have not seen that among our clients that we see generally. the premiums benefit levels and availability of the plans remain relatively stable. in fact the medicare advantage market is now better and more robust for consumers and enrollment continues to be on the rise. while there appears to be an increased incidence of medicare advantage provider network this year we must stress that we see this every year changing provider networks are an inherent risk of any managed care system. our advice to the medicare beneficiaries remain the same. people can switch to another medicare advantage plan or back to original medicare into traditional medicare during the open enrollment took out which is occurring right now in any situation where the current plan doesn't meet their needs. in closing, we believe congress
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should do more to simplify plans for the coverage rules for people with medicare advantage. we recommend the notice regarding annual plan changes regarding changes on the plan networks and further streamline and standardize plans improving the appeal system and adequately funding independent counseling resources like this ship program. we also urge congress to expand the range of supplemental options available to people with original medicare for those cases where medicare advantage plans are not the best fit for beneficiaries needs and also to allow people to go back and forth between the medicare advantage plan and the program with more facility. we thank you for the opportunity to testify today. >> we now recognize doctor margolis for a summary of the opening statement. >> thank you esteemed committee members for the invitation to address you today. i come to address the merits of medicare advantage having as
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many years of experience in the program and can tell you without any hesitation that it is the most effective federal program giving seniors to high quality care through coordination and measurement of quality and outcomes. i come wearing multiple hats as my 40 years in healthcare policy have taken me many directions, the california association of physician groups which i chaired in which represents over 90% of all coordinated to patients in california. my board representation in the chairmanship which has proven through extensive measurement and transparency that the quality and measurement that occurs in medicare advantage is superior to the fee-for-service original alternatives. as you mentioned, my role as healthcare partners, but recently as a doctor that practiced for over 20 years in
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the urban inner-city hospitals in los angeles serving primarily seniors and other disadvantaged patients. when i saw that without a quick vacation the fee-for-service mentality of the original medicare or as we like to refer to a t. for volume is not coordinating care for seniors. seniors that have multiple chronic diseases who are vulnerable and especially those that are poor and with less and fewer resources need an ideal system that helps with great information and a physician advisor to help them navigate through a very difficult and complex health-care system and manages them longitudinally across time. as a physician i can tell you every physician dino manages his or her patients with a great desire to do the best outcome that doesn't have the infrastructure to coordinate and
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the resources to follow that patient longitudinally through their healthcare needs. if that is the one advantage that coordinated care population health managed care, however you choose to name it, population health for those that perhaps are unfamiliar with the term really is having patients select a doctor through a network, through a health plan and then having that organization take the responsibility through a per member, per month for the total care of that patient is totally changes the incentives and the incentives drive behaviors. the behavior within a coordinated care program are one of false promotion, d. for her and delay chronic disease through much more intervention, disease management, pharmacy management, making sure the patients get their visits and
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households -- health care programs so that we explain how that works in our organization which is relatively large. we care for over 250,000 medicare advantage patients through that you have and those in the affiliate and employed physicians in five different states. and the way that works is through great information technology which is a big investment, but an important investment that allows us now to segment the population into areas of need and these fine programs specifically to those areas of need. so for instance there are home care programs for those most honorable but have trouble getting into the doctor's office and avoid buying one calls into trips to the emergency room. there are comprehensive care clinics for those that have very complex diseases where there is individual care plans monitored by the team, and i have to say that without a quick vacation,
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health care best delivered is a team sport and it's great to have a physician in the center of the team but having the care managers and disease management and the social workers, having dietitians and home care capabilities is a key component of making it an effective system, so i ask you without any equivocation please, continue to support m.a. strengthen it, help it grow to support special needs programs, supports moving the duel into medicare advantage and into a coworker needed away with the states. ..
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my testimony today makes three points that i hope will inform the congressional debate on the medicare advantage program today. my indie band of findings i should say in general are closely aligned with the positions and opinions expressed by medpac. first and foremost, and we for this and a few other places here today, the m.a. program is strong with rising enrollment and widespread plant availability that's expected to continue through 2014, despite the concerns that the cutbacks in thing that would discourage plan participation or make plans
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less attractive. there's 50 million people in the program, 29% of all beneficiaries in all time high. although it varies a lot across the country and i think it's important to recognize that health is local and the circumstances are different, the kind of care dr. margolis mentioned happens in some places and not others. second, despite concerns over plan terminations in 2014 there are almost as many new plans injuring in 2014 as terminating come and since the aca was enacted, average in premium to enrollees has declined, and they will still be lower in 2014 than they were in 2010. exit and entry are essential characteristics of a competitive the market. medicare beneficiaries today have an average of 18 medicare advantage choices, as well as options as well as options to stay in the traditional medicare program and with or without a
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supplement. medicare beneficiaries can keep your plan. it's called medicare, whether you're in medicare advantage or medicare traditional. second of it's difficult to see the rationale on a national basis for paying private players for more than medicare currently spent on the traditional program. particularly when there's so much concerned with the deficit and debt. medicare is historically -- payments below or equal to what medicare would expect to be in the traditional program for beneficiaries who enroll in the plan. this changed in 2003, and by 2009, payments were considerably higher than medicare would've paid for the same beneficiaries if they were in the traditional program. this cause every beneficiary more in added part b premiums and provide a little incentives for m.a. plans to become more efficient. when i examined the 2009 plan data i found wide variation in m.a. plans cost relative to
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traditional medicare spending, even controlling for plan levels, plan types and payment levels. that suggest there was room for a lot more efficiency in the program, variable across plants. and the policy changes that were in the aca reflect recommendations that congress is on medicare payment advisory commission has advocated for years. third, many of the concerns raised about 2014 offerings either to my mind from what i've looked at are not consistent with evidence or inherent part of the way competitive markets work. and they are already addressed by protections in place in the program. only 5% of beneficiaries, of enrollees in 2013 will have to shift plants. most will be able to stay in the same type of plan. the average premium was down 21% between 2010-2013, for a beneficiary, and premiums stable
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in 2014. some beneficiaries will see their premiums rise in 2014, but they will still be paying less than 2010. and the historical patterns hold, some of the beneficiaries will switch around so that they can get a better deal. clearly, payment reductions can encourage plans from participating -- discourage plans to to spread in medicare advantage, but this doesn't yet appear to be an issue. medicare has a number of protections for this such as network adequacy and quality standards required notice of change in plans and other means. because in a choices voluntary there also is the option to return to traditional medicare. in its 2013 march report to congress, medpac concluded that the payment changes under the affordable care act have improved the efficiency of the program and may have encouraged plants to respond by enhancing quality. all the while continuincontinuin
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g to increase in may enrollment through plans and benefit packages that beneficiaries find attractive. i believe my analysis and testimony a consistent with medpac's conclusion. thank you for your time and i look forward to any questions. >> the chair thanks the generally. now recognize mr. kaplan, five minutes for a summary of his opening statement. >> chairman pitts, ranking member alone and members of the subcommittee, thank you for the opportunity to testify today. minus jon kaplan and i'm senior partner of the boston consulting group. i have a healthier background of over 25 years working closely with both nonprofit and for-profit health care entities throughout the entire health care industry. earlier this year i led a team that analyzed differences in health outcomes between patients enrolled in traditional medicare and those enrolled in private medicare advantage health plans. we found that patients enrolled in the medicare advantage plans have better health outcomes than
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those participating in traditional medicare. there are three key findings from our research. first, the m.a. patient under sample receipt higher levels of recommended preventive care, and have fewer disease specific complications. second, during acute episode required hospitalization, the patients in the m.a. plans spent almost 20% less time in the hospital than those in traditional medicare. in addition they have less reignition into the hospital. finally, 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 of sample. this is a striking finding, and one that we hope to explore further in a longitudinal multi-your study. our study did not directly address the causes of these differences. in my experience, however, the key factor is m.a. itself and how the plans are organized and
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managed. first, these plants alive financial incentives with clinical best practices. second, the recruit the most effective provider and include only those who practice high quality medicine. third, they put a strong emphasis on active care management and invest resources and prevention to keep patients healthy, stable and out of the hospital. there are many indications in our study that these three mechanisms are responsible for the better health outcomes of the m.a. patient. take the example of diabetes. to clinical standards for diabetes care our frequent hb h. one seed testing and rigorous cleaning for kidney disease. our data show that the m.a. sample had substantially higher number of both tests than the traditional medicare sample. this stronger focus on prevention helps keep patients healthy and avoid the need for a high destructive and expensive
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acute-care intervention. for example, we found that diabetic patients in m.a. have dramatically less foot ulcers and applications than those patients in traditional medicare. align incentives and active care management also help explain lower utilization rates, take the example of emergency room visits. in our traditional medicare match sample, but four out of 10 of the patients visit the emergency room at least once per year. for many portions of medicare advantage, this figure dropped to around two out of 10. our last -- one last find issue. among the three types of m.a. plans that we studied, the very best health outcomes were for those patients in the capitated m.a. plan. findings show that decapitation is actually effective at preventive medicine and active care coordination. let me conclude by suggesting some implications of our study for health policy. in my opinion medicare advantage plans are an extreme example of
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a successful public-private partnership. these plans represent an integrated care delivery model that use effective provider incentives, real-time clinical information and care coordination capabilities to improve quality and lower costs. in my opinion, federal policy should be supporting and not discouraging more medicare patients to enroll in m.a. their health outcomes and the entire 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. >> the chair thanks the gentleman. that concludes the summaries. before we go to questioning i would like to ask consent to submit for the record a letter from the 60 plus association. without objections ordered. i will now begin the questioning, recognize myself for five minutes for that purpose. mr. holtz-eakin, since passage of the president's health care
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plan, millions of americans and their families have received insurance cancellation notices. do you think medicare advantage maybe obama cares next victim? and if so, what might beneficiaries in pennsylvania expect over the coming years in terms of plan choices, costs, forgone benefit offerings and provider networks? >> thank you, mr. chairman. indeed, i am concerned about the future of medicare advantage. as i said in my opening statement. the work we've done on the implications of aca cuts, for example, in pennsylvania would suggest that in 2014 there would be an average loss of benefit, beneficiary of about $2200, that this is about a 19% reduction in those benefits. and that we would see a decline in -- about 113,000 pennsylvanians. those numbers for 2014 are of
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concern, but i am more troubled by the trajectory over the succeeding five years of the full cuts under the affordable care act as to whether medicare advantage will remain a viable option within the medicare program and deliver the comprehensive benefits. i just want to echo the statements that we heard in many of the opening remarks. the medicare population is so different than when medicare was originated. it is now a population that has multiple chronic conditions and comorbidities and it requires a coordinator approach to care. that's the route to both better health and a financial future for medicare as a whole. medicare advantage i think is an important steppingstone. >> thank you. dr. margolis, as you know this committee has been committed in a bipartisan form to address access concerns in part by improving the flawed position for the for participating medicare doctors.
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however, i believe medicare advantage plays a key role in ensuring the physician and patient relationship for seniors and the disabled. what impact, in your opinion, was the permanent solution to the flawed formula have on the viability of the medicaid -- medicare advantage program. >> thank you, mr. pitts. there's no question that the cuts that are proposed and coming up on medicare advantage, and i would specifically stress the rescaling of the risk adjustment factor which really was a key component in what i believe is making it a positive incentive to care for the sick and fragile patient was to be paid based on the acuity of the patient. and so the potential of reducing significantly payments relative to the most expensive patients starts to slip back into that
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possibility that the people will not be able to gain care if they are really sick. and that is a potential, serious problem. and i would also like to say that medicare advantage should not, in our opinion, be the pay for foreign sgr fix. i think as you for from all the other witnesses that it is extremely important for the seniors of our country, 10,000 more of which are inching medicare everyday to be able to access good coordinated care, and especially for that 5% 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 and get the care they need. >> here's a question for the panel. medicare advantage has a proven record of success and is popular with seniors because it provides better services, higher quality of care and increase a care
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coordination. to ensure the program's viability, i believe there are several existing reform proposals for medicare advantage that merit further discussion and feedback. concepts like overlaying a value-based insurance design over the existing medicare advantage program to address a substantial variation and value across health care services and providers. bipartisan policies such as those introduced by representative t. of pennsylvania that would restore choice of medicare advantage beneficiaries and not limit their options to traditional ffs or the existing plants. improvements to the program special needs plans, improvements to the programs risk adjustment framework that would improve accuracy and payments and account for chronic condition. what reforms could we consider that would ensure the viability of the program in promoting maximum value and high quality, coordinated care for medicare beneficiaries? we will start with you, mr. kaplan. >> first of all, thank you, mr.
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chairman. the best way i would answer that question is that there are a lot of successes that already in place in medicare advantage. i think everybody on the panel tonight and today has said that medicare advantage is a program to look at with some very positive reactions. what i think happens when a new in the medicare advantage program is that it allows for more of a freedom of choice among the different competitors in their being the insurance companies that are offering those programs, and allows for the members to choose to go into those programs to navigate themselves around to different programs to make a choice and to find what best meets their needs. that sort of freedom of choice has allowed for the program to prosper based on what they offer to the members who sign up for the programs as opposed to mandating things in different ways. so the competitive model amongst the different insurance companies are offering different programs in different states, i think that strong model has
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allowed for the growth of the program to be so successful and effective at practicing the medical care that we are all talking about and we want to do for these senior populations. >> i'll give you this question and submitted in writing to you if you could respond for the record. the chair now recognizes the ranking member for five minutes. >> thank you, mr. chairman. i'm going to ask my questions of mr. baker, because you seem be able to clear up a lot of the myth that i'm hearing from republican side. as you've heard opponents of the aca are going to say that medicare advantage program will be obsolete because of cuts in the affordable care act. i mean, the republicans basically think the affordable care act is the end of the world. i mean, you understand all that. mr. baker, do you feel that the medicare advantage program is stronger now and more secure for beneficiaries than before the
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affordable care act? if you could just answer that. >> sure. i think there are a couple of components to the. one is that the equalization payments between medicare advantage program and the traditional original medicare program i think once again is an equity that it has an established, as was the fact that part b premiums have come down or have stabilized for everyone in the medicare program. i think the other piece is that consumers are better protected in medicare advantage. some plants had increased cost sharing for services like chemotherapy. higher cost sharing than is allowed in the traditional medicare program. affordable care act has equalized once again cost-sharing so that sick or beneficiaries are not discriminate against. the 85% medical loss ratio that's required in medicare advantage now making sure that 85% of those premium dollars both from consumers at those from the government are going towards medical costs not of the administrative cost. the star rating and we now have a reading program where plans
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have one to five stars based upon their quality and plant performs. this has been an important tool, for consumers to choose between plans. and also that quality information has been getting out to consumers and i think more could be done in that regard but i think it's very good. the other thing is the out of pocket maximum spirit that were introduced over the course of the last few years, and have provided important protections for consumers. so that these medicare advantage protections not only make the program more equal, if you will, between their traditional medicare original medicare program but also ensure that consumers are better protected with consumer rights and protections once they are in a plant. >> so obviously you feel that medicare advantage is stronger and more secure because of the aca? >> yes, i do get i think consumers are better protected within the medicare advantage program because of the aca. >> do you think the changes
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pursuant to the aca give beneficiaries more confidence to the program, might even make the more comfortable in choosing the medicare advantage plan? >> i think it does. i think the aca with the star ratings program, with other quality initiatives in the medicare advantage plans may make consumers more confident. we find that folks are looking at these star ratings, looking at these other quality metrics that are not available, are now available under the aca. i think they also are, many of the consumers that we talk to appreciate that they have a choice between medicare advantage and original medicare. i think it's also important that the original medicare program, which is the base of all of this, be kept strong and they kept as a very viable option for folks that medicare advantage either hasn't worked for or it won't work for in the future. >> can you tell me how robust the choices are for seniors in the m.a. program? how many choices do they have? >> right. i think on average consumers
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continue to have about 18 plan choices, and i think gold went through some of those metrics in her testimony. we find for the most part, this is both good and the medicare advantage program as well as in the part d prescription drug program, the consumers are really, the biggest question we have from consumers is they have too many choices and they are too confused by the variety of plants. over the last years the center has made some headway in tamping down them of choices that are not meaningful. by that i mean there might be one little tweak to a plan to make a somewhat different than another plan that a company is offering. folks get confused by those tweets that don't have a real substantive component to them. so narrowing choices in that way and helping people make better choices. >> and you don't feel that that's what i mean again, you don't buy the naysayers who say
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that the aca is going to their choices for seniors in the m.a. program? >> it has not at this point, not subject of a. we see plenty of plan choices out there in the markets where we are seeing clients. once again, our problem in counseling most of our consumers, but all of our consume it isn't that they don't have a choice, is that they have too many choices of medicare advantage plans. before passage of the aca and after passage of the aca. >> thank you very much. >> the chair thanks agenda and i recognize the the vice chair of the full committee for questioning. >> thank you, mr. chairman. and thank you all for being here. dr. margolis, i want to come to you. you talked a bit about the fragile and vulnerable populations, and i want to go back to that. recently found out that those medicare advantage enrollees that have end-stage we will disease have access to a coordination that is not
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available to others. but it's not an option for those that are in standard. in medicare. so why should medicare advantage not be an option for all medicare enrollees? >> thank you, ms. blackburn. i support that. i believe that ordination of care is ideal for sick and fragile patients, especially the srd. i know there are pilots now at cms to try to incorporate population health for esrd. i would encourage them to be strengthened. i think it is an artifact of the way the law was originally written that esrd patients were not allowed to enroll in medicare advantage. that could and should be changed, in my view. the way that works is that if a patient has chronic renal
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disease and enrolled in medicare advantage and becomes an end-stage patients they can stay in medicare advantage, but if they've already diagnosed as end-stage renal disease, they are not loud to a role in medicare advantage. >> it would be an element of fairness into the system that would allow -- >> i believe that would be a key improvement, yes, ma'am. >> mr. chao become want to come to you for a minute. i love listening to your hearing today. i to tell you in my district seniors love their medicare advantage. we've had a program called silver sneakers, and artistic. and people, to a town hall meetings. they talk to me about silver sneakers and how they are doing. i've looked at some of the work that they've done and the surveys, ma better outcomes for physical and emotional health. more activity. it's just been a great program so as i've listened to you all to do, talk to me for a minute. we talk about stabilizing
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medicare, giving seniors more choices, giving them more options. should medicare advantage not be the platform for medicare reforms and give seniors more choices and options, not less? >> first of all, thank you. for the nice comments. i am a huge fan of medicare advantage for exactly the reasons you say. it aligns the incentives so that the providers and payers work together to figure out what's the best way to take care of the members and their patients. when they outlined the incentives, to start work on things and is one of most important things is to coordinate care, as dr. margolis, talk about witches let's coordinate the care, especially as complex members and so forth. let's find a second help them to prevent having these diseases either progress or even begin. all of these things are aligned. all these things are the idea of aligning incentives, coordinating care of. and it's all for the benefit of the member. okay, and so, therefore, i do
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believe as you said that medicare advantage is a wonderful pilot for us as a society, we as a society. because what it does is it shows that we can find a way to curb the growth of health care costs. we can find a way to improve -- >> so curb the cost, give greater access, and provide better outcomes? >> direct. >> mr. holtz-eakin, do you want to weigh in? >> i would just echo the fairness issue. we know that medicare as a whole is facing a very, very problematic financial future. if we can find ways to control those costs and provide medicare we should. spent let me ask you this. when you look at the limitation of the aca and accounts that are being made, who is most impacted by the m.a. katz that of there? is a seniors? is a physician's? isn't the support system for seniors?
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where in your research the you see? >> this is, in fact, directed to the seniors whose choices were restricted, whose benefits will be reduced, and i'm deeply concerned about the long implications. i understand this one at mr. baker about consumer protections and confidence in the program, but that's at odds with the fact that the cbo for example, projects that there will be 5 million fewer enrollees in medicare advantage in 2019. if they felt more confident we would have 10,000 new seniors every day. you would see it rise, not fall. and i think that is stark testimony to the financial underpinnings being not strong enough and that will limit the benefits and the choices to seem just. >> yield back. >> now recognize the ranking member america's mr. dingell, five minutes for questions. [inaudible] >> thank you for your courtesy and kindness. this is an important moment in the american people are counting on us. i'm concerned that the committee
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might be holding another hearing to try to scare people about the affordable care act. and its impact on medicare advantage. when the facts do not support those claims. the questions i had today will focus on how aca impacts medicare advantage as well its traditional medicare. i would point out that when we adopted the idea of medicare advantage, we were told that they're going to give us a lot more, more insurance and a lot less cost to senior citizens. and i've heard constant whining ever since that we have not done that. in any event, we have a problem here because that program is costing taxpayers significantly more than traditional medicare, while providing only similar services. so, mr. baker, yes or no, is it correct that in 2009 before passage of aca the cms paid
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medicare advantage plans $14 billion more than at the center been provided under traditional medicare? yes or no? >> yes spent in the end of this averages out to about $1000 per beneficiary, yes or no? >> yes. >> now, additionally am a ms. gold, a 2009 medpac report found that medicare advantage payments benchmark was 118% of what medicare would spend, is that correct? >> yes. ..
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correct, yes. >> is it correct that medicare advantage enrollment has increased 30% from 2010 to 2013, yes or no? it seems like they are doing pretty well, doesn't it? now is that correct be average but a care beneficiary will have a choice between a team pla plag the favorable to them in 2014, yes or no? >> yes. >> 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 nor as it decreased the number of people
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participating in the program. is that correct, yes or no? i note that it's provided many benefits to this population and will continue to do so. most importantly, the aca has improved the solvency of the entire medicare program, something which is not popularly addressed by people who were critical of aca. is that correct hospital insurance trust fund is now solvent through 2026 fax that is ten years longer than prior to the passage of aca. yes or no? >> yes. >> that tends to show that it's quite helpful. in 2012, 34.1 million medicare beneficiaries were able to have
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access to preventive services such as mammograms and colonoscopies with limited cost sharing. is that correct, yes or no? >> yes. >> 7.9 million seniors have saved over $8.9 billion since the passage of aca and that is thanks to the doughnut hole being closed, is that right? >> yes. >> and it's good to be closed sometime by 2020, is that right? >> that's correct, yes. >> this committee has a great tradition working together to solve the issues of the day. i hope that we can resume this with a focus on the fact rather than continuing to try to scare people about the affordable care act. let's work together and see that ito seethat it has a chance to e the benefits to the society and the practice of medicine and the
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sick and ailing. thank you for the courtesy. >> i now recognize the vice chair of the subcommittee for questions. >> thank you mr. chairman and douglas holtz-eakin. do you have any thoughts on the 14 billion-dollar excess costs for medicare advantage the chairman reference to? >> the reimbursement should be aligned with quality and i think the most important issue is the quality of care under medicare advantage has posed for the fee-for-service medicine. >> i was here through the entirety of how i habit came thh the kennedy and through congress and it's becoming pretty obvious today that there were some assumptions of some promises that were made in the affordable care act but have now turned out to not be true and i would submit that those were not just errors, those were actually purposeful deceptions.
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if the administration had been honest with americans about this bill, it's very likely would have never passed. so the affordable care act does take $716 billion out of the medicare program; is that correct? and the portion for medicare advantage is about 150 billion; is that correct? so that's taken away from the seniors and the medicare advantage plans and i can't remember speeches given during the democratic convention in 2012 that these were over payments to doctors and hospitals. it's not a cut if it's just taking away money that should have been paid in the first place. do you recall those speeches? >> not specifically but i remember the claims. >> do you agree with the association, congressional democrats that these cuts were ridding the plans of an efficient payments?
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spinnaker i don't agree with that. they are part of a strategy of cuts that have backfired. it limits access to seniors in the end and it doesn't take out excess cost and the continued reliance on the strategy is going to damage medicare and not save its financial future. we need to change strategies. >> i agree with you. it was an article in usa today that talks about a story about a patient in dorothy her doctor had bad news after her last checkup but it wasn't about her diagnosis, her medicare advantage plan from united was terminating her doctors contract after february 1 and she also found out she was losing her oncologist at the group. so what kind of seems like this is a direct consequence of
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cutting the plan by $150 billion. would i be correct in characterizing that as such? >> they will be increasingly caught in the middle. they have obligations for cost sharing and benefits and there will be less money coming to them created the only recourse would be to restrict whatever excess benefits they had. >> so this is a story that we are likely to hear repeated over time? >> i think that what we have heard is the leading edge of what will be a bigger problem. >> said the association has on its website the myths about medicare advantage cuts and one of them is that medicare advantage cuts would hurt seniors abilities to hurt her -- see their doctors. if the current plan allows you to see a plan to veto physician nothing will change. in light of this information, do you think that is an accurate statement? >> no i don't and it will be increasingly inaccurate over time. to judge it by 2014 is a mistake
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because of the foreseeable future that concerns me the most. >> i candice gave the notion that the entirety of the affordable care act was sold to the american people on deception. the consequences of that deception are now coming more evident every day. i'm particularly sensitive to the fact patients will be excluded from their doctors. i wish the administration had been more honest and again i can't help but feel it was an active and purposeful deception. let me ask a question following up on some of the stuff chairman dingell was asking. the cuts of medicare advantage of the cuts were taken out of part a and b. but not reinvested; is that correct? >> those cuts will be used to pay for medicaid expansion and insurance subsidies and exchanges. the money will be gone the moment they are spent a velocity there for medicare to be. >> i'm just a simple country doctor that you are an economist so how do you reconcile the fact
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that they are claiming that is a savings that is increasing the solvency when the money was taken and spent for some other activity? >> asked us to fight, that is an accounting fiction. there are no real resources to pay the bills from providers for real patients. >> i will yield back my time. >> the gentle lady from florida for five minutes for questions. >> good morning and welcome to the panel. i would like to thank the chairman and ranking member for holding this hearing on how the affordable care act is improving and strengthening medicare and medicare advantage. according to a study that was done a couple of months ago, in my area of florida where we have a large percentage of our grandparents and parents who rely on medicare, a number of statistics jumped out on the improved benefits and medicare. one is what mr. dingell
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mentioned the closing of the doughnut hole for the prescription drugs. in the greater tampa bay area, over 77,000 of my neighbors now have major savings in the drug cost under medicare part d. due to the drug discounts. they have been worth over $100 million to the medicare beneficiaries in the greater tampa bay area. that is very substantial and that is due to the affordable care act but also due to the affordable care act just in the greater tampa bay area over 100 million seniors now have medicare coverage that includes preventative services. they can go get the mammograms, the colonoscopies without copayments or deductibles. that is a very important improvement. mr. baker i think you testified that these improvements apply in
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traditional medicare and the medicare advantage; is that correct? to make some plans that offer those preventive benefits and others did not. and of course traditional medicare to ask so wha not so wa and it is made sure they were in the traditional medicare and all medicare advantage plans as well. >> i would like to take a page out of how mr. dingell asks the question sometimes and i would like to get a yes or no answer. earlier this year to public and the house adopted a budget that proposed drastic changes to medicare. the budget that was adopted by the end of traditional medicare and medicare advantage and put in place a new system in 2024 so if you are 55 or younger this would really impact your future and medicare. rather than an role in the traditional medicare advantage under the republican budget
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instead beneficiaries would receive a voucher that would privatize medicare and you would get a coupon and most analysts raised concerns that this would in essence shift their significant cost to our parents and grandparents that rely on medicare. it appears to break the promise that he will be able to live from the -- a catastrophic diagnosis. i would like to know from each of you do you support that kind of change to medicare and medicare advantage, yes or no? >> i do support of change. the report that came out this summer would save the cost for beneficiaries and the government indicating it had broken the increasing cost. >> all right. and mr. baker asked. >> i do not support that and our organization does not support the proposal for the reasons
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that you indicated that it would not. the cost would not keep up with healthcare cost and more would come out with seniors and they would lose the healthcare they currently have. >> ibb that is important for congress to assure the security for seniors. my apolitical answer which is hard to do in washington i'm sure is to say this is about patient care. >> yes or no. >> be integrated and coordinated care system development whether through that program. >> would you review the proposal? >> we don't generally take positions on legislation. we let you do that but there is there's anumber of technical qus and issues that have been raised about the cost shifting that what happened to the medicare
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beneficiaries that are important to answer before any change to a very popular program were made. >> i believe that the idea of using a voucher type system which is very a ten to what is being done in the medicare base already is a good idea. >> that republican paul ryan budget included provisions to repeal the affordable care act including the important reforms to medicare, the closing of the coverage gap known as the doughnut hole and preventive services that are such a great benefit to many of the neighbors and a wellness exams and important medicare fraud prevention provisions. do you support the repeal yes or no because my time has run out. >> just yes or no real quick because my time is up. >> yes or no. [laughter]
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>> of the reforms in medicare to include it in. >> there are parts that should be repealed. >> beneficiaries would be pretty upset if they were repealed. >> i think protections are important. they need to be continued and be in place. >> i would answer differently depending on the provision. >> the chair recognizes the gentleman and the chair emeritus for fiv five-minute. >> i arrived late and i didn't get to hear the testimony. >> the gentle lady from illinois for five minutes for a question. >> i just wanted to make the point is tha that i think that representative castor was getting at to remind my colleagues who are now
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complaining about cuts to medicare in the affordable care act these were the same cuts that were included in the budget but instead of strengthening medicare, the republicans wanted to give tax breaks to millionaires. a couple of questions. the implication by my colleague was changes that will eliminate the networks are caused by the affordable care act and i'm just wondering in your research i know with part d. is important and make sure the formulary is the same. with medicare advantage, or that change is likely in the network or something prior to the affordable care act as well? >> i think there is a lot of
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volatility in this marketplace as well as in the part d. marketplace. so every year we are very clear with the beneficiaries that if they are in the medicare advantage plan they need to check that coverage because the formularies which is a list that changes every year and provider networks, the providers also decide to leave the network or to no longer be involved. >> but this isn't new -- >> this is an inherent part of the plan that has been around since the mid-80s and even before. so this is an ongoing issue. this kind of instability if you will is in hair and and it's part of the risk of the plan that goes along with the benefits that we've talked about as well. >> they said something about the precarious future of medicare
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and funding problems. i wonder if you can talk about the effect on solvency that the affordable care act has had on medicare. >> i think we noted earlier as i was responding to mr. dingell blank commented that there is a longer period and to the extent that has been looked at through the years as a bellwether for the health of the medicare program were one of the best places we have ever been in the second, something to the benefit of all people is a stable part b. premium. the medicare costs are at historically low growth rates. >> and that is what you have to say. >> all of the people with
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medicare are seeing the benefits of the cost containment in the aca that have occurred in private plans into the government-run medicare program. >> i also wanted to talk about the low income seniors. medicare provides cost-sharing protections for low-income seniors through the medicare savings program. i'm wondering if we are truly concerned about protections for love income beneficiaries rather than paying more than medicare to the medicare advantage plans wouldn't it be better to invest additional resources in the medicare savings program improving outreach and enrollment and coverage? >> the short answer to that is yes. we are very concerned. the biggest problem is folks that can't afford their coverage whether they are in the original program or the medicare advantage program and the medicare savings program help lover and come. above medicaid income levels but
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lower income folks. 50% have incomes over $22,500 a year and many of them are struggling to afford coverage as well as dental work. is strengthening the medicare savings programs were subsidy programs particularly if we are looking at the sgr into doing that simultaneously? >> that's what i wanted to ask about. we would like to permanently repeal it. the program that pays the part d. premiums is set to expire at the end of the year. so don't you think of the s. time we deal with sgr we ought to do with that? >> it's imperative the program continue to be dealt with with the sgr and continue to reauthorize. >> i yield back. >> i recognize the gentleman from illinois for five-minute.

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