H.R. 1, the "Medicare Modernization and Prescription Drug Act of 2003"

June 26, 2003

To Members of the United States House of Representatives:

The U.S. Chamber of Commerce, the world's largest business federation representing more than three million employers of every size, sector and region, urges your support for H.R. 1, the "Medicare Modernization and Prescription Drug Act of 2003." This important legislation modernizes the Medicare program's structure and strengthens its delivery system by emphasizing quality care, establishing a much needed prescription drug benefit, and offering preventive health care services and disease management. The Chamber particularly notes the bill's provisions that give employers the flexibility and options necessary to provide retiree health coverage on a voluntary basis.

H.R. 1 takes important steps toward reforming Medicare for future generations of beneficiaries and taxpayers. The bill establishes more private health plan choices and independent oversight of those plans, which ultimately will spur more competition, stabilize program growth and reduce providers' subjugation to a centralized payment system with no room to consider particular circumstances for differences in reimbursement. Medicare's routine underpayment of its share of costs has caused providers to shift millions of dollars to private payers at a time of skyrocketing growth in health care spending.

The bill also introduces key reforms to the fee-for-service program to improve health care quality, such as exploring ways to introduce disease management protocols and evaluate outcomes data that will improve the health system as a whole. Additionally, indexing the Part B deductible to inflation is long overdue. Growth in this part of Medicare exploded at a rate of 12 percent in 2001 and another 11 percent last year. Even more alarming, in 2002 this part of Medicare consumed 7.8 percent of all federal tax expenditures, up from 6 percent only one year earlier. Containing costs in this part of the program is essential to ensuring the availability of funds for other federal priorities.

The Chamber urges members' support for H.R. 1 and, upon passage of companion Senate legislation, looks forward to working with members of the conference committee in finalizing details of this important, and long overdue, legislation.

Sincerely,

R. Bruce Josten
Executive Vice President
U.S. Chamber of Commerce