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.

CLICK HERE TO WATCH SENS. PAUL, GRAHAM, LEE AND DEMINT AT TODAY'S PRESS CONFERENCE

"As a doctor, I have had firsthand experience with the vast problems facing health care in the United States. Medicare, as we know it, is broken and in desperate need of reform. The CHCSA fixes the Medicare system, and gives Seniors access to the best health care plans enjoyed currently by Members of Congress and does so without breaking the bank; in fact this plan will save taxpayers $1 trillion over 10 years" Sen. Paul said. "Seniors deserve to have a world-class health care system, and Americans deserve to have their tax payer dollars put to better use, in a system that will not eventually bankrupt this country."

"Allowing Medicare recipients to enroll in the FEHBP is a win for both seniors and the taxpayer. The FEHBP fosters competition among its hundreds of individual plans, provides better benefits for enrollees, and offers much wider choice and flexibility to participants. Most importantly, switching to the FEHBP will save the American people more than $1 trillion over the next decade. Frankly, it's hard to argue against this common sense reform because the FEHBP covers every Member of Congress and all federal employees. Our seniors on Medicare should have the opportunity to enroll as well" Sen. Lee said.

"Our goal is to save Medicare from bankruptcy and ensure seniors have affordable, high-quality health care - a crisis President Obama has only made worse during his time in office. Allowing seniors access to the Federal Employee Health Benefit (FEHB) program, which Members of Congress and federal employees use, will give them more choices and lower their out-of-pocket costs. It's also good for the taxpayers because it will save the federal government $1 trillion over the next decade and reduce the unfunded liability of Medicare by $16 trillion. To get our nation's fiscal house in order we must address future entitlement spending. Our bill gets a handle on Medicare costs, which continue to escalate, and ensures the program is sustainable for future generations" Sen. Graham said. 

"This is a common-sense solution that gives seniors more control over their own health care, access to more doctors and better quality care," Sen. DeMint said. "Doing nothing is not an option because we cannot allow Medicare to go bankrupt and for doctors to close their doors to seniors. For the first time, seniors will also have the freedom to keep private plans they like instead of being forced into a one-size-fits-all government plan. This bill improves health care for seniors, saves taxpayers trillions of dollars, and will help save our economy from unsustainable generational debt."

Click HERE to view the budget overview in its entirety. Click HERE to view the bill, S.2196.

BACKGROUND:

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.

The below table provides a breakdown of the cost savings associated with this plan, compared to the Medicare/FEHBP baseline, if the plan were implemented beginning in 2012.

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.

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