When we talk about Breaux-Frist, we hear that a combined benefit package would be easier to administer and that the private market no longer separates hospital and insurance policies, so why should the Medicare program.  More importantly, the argument is made that redefining solvency by measuring the combined status of trust funds will make Medicare's financial status more clear.    The President's budget has already endorsed this policy because it would help lawmakers reduce the amount of general revenues allocated to the Medicare program.

I oppose these arguments in favor of Breaux-Frist and I oppose merging the HI and SMI Trust Funds for several reasons.

At a time when millions of our seniors in Medicare are financially strapped due to the rising costs of prescription drugs, any rise in the cost of the Medicare program would be financially detrimental to seniors nationwide.  If both Parts A and B of Medicare are combined, it seems clear that seniors would face a higher deductible.  This is because only 15% of seniors utilize Part A services and an overwhelming 85% of seniors use Part B services in a given year.  Combining these two parts will surely present beneficiaries with a higher deductible - placing an additional unnecessary burden on seniors who are already paying on average about $3,000 out-of-pocket for health services.

This would only be exacerbated by the fact that most seniors would see a rise in premiums for their supplemental insurance policies.  Many of these policies pay for Part A and Part B coinsurance and deductibles ? and if these costs increase from merging the two parts, it is likely that employers and beneficiaries will both have to make up the difference in cost.

I just want to express my concerns over asking beneficiaries to pay more out of pocket than they already do.  We hear every day from our constituents about how they can?t pay for their prescription drugs, and we are working hard in this Congress to come up with a solution to this problem.  The last thing we need at this point is to merge the HI and SMI Trust Funds, thereby increasing the cost of Medicare before we even add a prescription drug benefit.  

There are so many more important questions we need to ask in this discussion of merging the two Trust Funds and how a combined program would be financed, but I feel that the cost to seniors and the solvency of the Medicare program should be top priorities.

Thank you, Mr. Chairman.