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FOR IMMEDIATE RELEASE: January 26, 2004

SCHUMER: LONG ISLAND SENIORS WILL SEE $75-$100 CUTS IN MONTH MEDICARE HMO COSTS IN 2004

Schumer-championed provision in Medicare bill now bearing fruit for Long lslanders – 2004 base reimbursements will be 25% higher in Nassau, 19% higher in Suffolk

Nassau and Suffolk scheduled for only 2% increases before Schumer provision took effect

Over 85,000 seniors have lost coverage as a result of HMOs abandoning Nassau and Suffolk Counties – but brand new higher payments are what HMOs say they need to start coming back

Standing with Long Island Seniors at the Spangle Drive Senior Center in Babylon, US Senator Chuck Schumer today released new government figures showing that his effort to expand medical coverage on Long Island by fixing Medicare+Choice has resulted in large increases in HMO reimbursements for 2004 – and as much as $75 to $100 savings every month for Nassau and Suffolk seniors. Over 85,000 seniors in Nassau and Suffolk have lost health care coverage as HMOs abandoned Long Island over the last few years – a trend that Schumer hopes will now stop with these historic new increases in government reimbursement rates – 25% in Nassau and 19% in Suffolk. Each county had previously only been scheduled for a 2% increase in 2004.

"The HMOs have said that they need higher reimbursements to come back to Long Island because they just can't afford to do business here. Well, we listened and got it done," Schumer said. "When it comes to Medicare HMO money, the government has put up, so the HMOs have one less excuse for not showing up."

"If there is any silver lining in the dark Medicare bill that passed, it is that it contained our amendment to fix Medicare HMO reimbursement rates on Long Island to bring premium relief to seniors on Long Island," US Representative Steve Israel said. "The legislation we wrote and passed is the first step in fixing the disparities Long Island seniors face. Now the HMOs must deliver on their promises and use the increased reimbursements to reduce premiums and extend services. Our amendment mandates a study on whether HMOs are passing the savings to seniors and we will closely follow that study and hold their feet to the fire and make sure this increase is used to help seniors and not to line the pockets of the HMOs."

Representative Steve Israel led this effort in the US House of Representatives but was not able to join Schumer today.

Nearly a dozen HMOs have left Long Island in recent years because of Medicare's low reimbursement rates. Only two HMOs offer senior coverage plans in Suffolk County, down from 12 in the year 2000. In Nassau, just two out of 10 plans remain. When HMOs suspend their plans, seniors on Medicare are often stranded without prescription drug coverage and other essential benefits.

Unlike traditional medicare programs which pay medical practitioners on a fee-for-service basis, the Medicare + Choice plan – which will soon be known as Medicare Advantage – links HMOs and Medicare to extend coverage for services that the Medicare program does not usually cover. These changes would benefit thousands of people who live on Long Island, where many HMOs have suspended their plans, leaving over 85,000 seniors without coverage.

The final version of the comprehensive Medicare Bill passed in November contained provisions Schumer championed that provide higher Medicare+Choice payments for HMOs serving suburbs like Long Island. In late September, 17 Senators - Democrats and Republicans from across the country - joined Schumer to urge that the final version of the Medicare Bill should include these provisions, which are based on legislation he wrote with Republican Senator Rick Santorum of Pennsylvania, the third-ranking Republican in the Senate.

Schumer today announced the new reimbursement rates for Nassau and Suffolk Counties under Medicare + Choice / Medicare Advantage. HMOs will see base rate reimbursements increased in Nassau County from $667 in 2003 to $831 in 2004, a 25% increase. Suffolk payments will increase from $635 in 2003 to $755 in 2004, a 19% increase.

Without the increases from the Schumer provision, HMOs in Nassau and Suffolk would only have received a base rate increase of 2% in 2004. HMOs in Nassau were previously scheduled for a base rate reimbursement increase to only $682 in 2004, HMOs serving Suffolk would only have received an increase to $649 in 2004.

Schumer noted that today's numbers reflect the base rate reimbursements, and the final increases for reimbursements will be adjusted by factors including risk, age, gender, and Medicaid status.

While numbers are not yet available from the individual plans operating on Long Island, Schumer estimates that after adjustments, HMOs in Nassau County will receive an average reimbursement increase of about $100 per person per month, and HMOs in Suffolk will see an increase of approximately $75. The new Medicare law specifies different ways these increases may be used to reduce the financial burden on beneficiaries or increase their benefits. Schumer today urged the plans to put as much of today's increase as possible into premium reductions for beneficiaries on Long Island.

"This isn't just nickels and dimes, this is a quantum leap in the amount of money HMOs will get for serving Long Island seniors," Schumer said. "This wasn't easy to do, but after working together – Democrats and Republicans from across the country – we are finally seeing the results. No one should have less medical coverage because they live in Medford rather than Memphis - and now we hope that they won't."

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