WASHINGTON, D.C. – Today in the U.S. Capitol, Sen. Rand Paul introduced his Medicare Reform Plan, the Congressional Health Care for Seniors Act (CHCSA) – S. 2196 – with co-sponsors Sens. Lindsey Graham (R-S.C.), Mike Lee (R-Utah) and Jim DeMint (R-S.C.). CHCSA will not only fix the Medicare system in its entirety, it also saves taxpayers $1 trillion in the first 10 years. This plan will provide better health care benefits, choice, quality, and outcomes by enrolling all senior citizens into the same health care plan as Members of Congress and other federal employees.
Below are top-line points on the Congressional Health Care for Seniors Act, S.2196:
The Congressional Health Care for Seniors Act (CHCSA) would simply enroll all seniors into the same health care plan as their Member of Congress and other federal employees – the Federal Employees Health Benefits Plan.
In 2010, federal employees could choose from among the 250 plans participating in FEHBP, including 20 nationwide plans. That means this plan will provide Medicare beneficiaries with richer benefits, higher quality health care, better access to doctors and providers, and a wider choice of health care plans that best suits their needs. Perhaps most importantly, because Members of Congress will be enrolled in the same plans, seniors can expect the program to continue as the best health insurance in the country.
This plan is expected to save taxpayers $1 trillion over the first 10 years and reduce Medicare’s unfunded liabilities by almost $16 trillion. Furthermore, individual seniors will save thousands of dollars from their personal health care budget each year while receiving more generous health benefits.
Like Medicare, FEHBP is a regulated marketplace where plans must accept any enrollee and cannot deny coverage to an individual for any reason. All individuals within a plan pay the same premium regardless of their health status or pre-existing conditions.
The CHCSA ensures that OPM will continue to ensure these protections for seniors, but also prevents the agency from placing onerous new mandates on health insurance plans. Further, the CHCSA makes it easier for new insurance plans to enter the market to compete for seniors’ business – including allowing employers to continue covering seniors through retirement.
In order to ensure low premiums and prevent plans from cherry-picking patients, the CHCSA creates a new “high-risk pool” for the highest cost patients within the FEHBP. The federal government will directly reimburse health care plans for enrolling the costliest 5 percent of patients, which keeps premiums low while allowing high-risk patients to get the same high-quality health care as every other enrollee – federal employees and seniors alike.
The CHCSA ensures affordability of high-quality health care. In addition to subsidizing three-quarters of the cost of the average plan, seniors who cannot afford to pay the remaining premium will receive additional premium assistance and cost-sharing through the Medicaid program.
The Congressional Health Care for Seniors Act provides Medicare patients with the best health care in America and will forever protect seniors’ interests by aligning them with self-interested politicians. These reforms dramatically improve the lives of tens of millions of senior citizens and save Medicare from bankruptcy.
Key Provisions
· Beginning in 2014, all Medicare-eligible patients can enroll in FEHBP as if they were federal employees.
· New plans with equivalent or superior benefits to an existing plan can enter the market freely without new requirements or mandates.
· Willing employers can give eligible patients the option of staying on their current plan and still receive the government’s contribution.
· Insurers will be rewarded for enrolling high-cost patients (referred to as a “high-risk pool”). The program assumes 90 percent of the total costs for the top 5 percent most expensive patients.
· Medicaid will continue to provide assistance to help low-income seniors afford their care.
· The initial eligibility age for seniors is gradually increased from age 65 to age 70 over the period of 20 years three months per year).
· Wealthy seniors will be asked to pay a greater percentage of their health costs than low-income seniors, using the same income tax brackets as the Medicare Part B and Medicare Part D programs.
· The existing Medicare program will sunset with transition rules to ensure continuity.
