"Medicare provides an important health care safety net for over 44 million seniors and certain persons with disabilities. Nineteen percent of the Medicare population receive their benefits through private health plans paid by Medicare, generally known as Medicare Advantage plans (MA).

Medicare is operating under increasing financial and administrative strain. However, the government's payments to the Medicare Advantage private plans are expected to grow by nearly 21 percent next year, while payments to physicians are expected to decline by more than 4 percent and hospitals will remain stagnant. In 2007, Medicare Advantage private plans received 113 percent of what it would cost to serve the same beneficiary in the traditional Medicare program. This year in Connecticut alone, the federal government will have overpaid its subsidy to the private plans by $21 million.

I am deeply concerned that these overpayments are draining the Medicare Trust Fund's resources for all future beneficiaries. Both the independent Medicare Payment Advisory Commission (MEdPAC) and the Health and Human Services Inspector General have recommended reducing the overpayments to the private Medicare Advantage plans. These savings could be used to improve the traditional Medicare plan, build up the Medicare Trust Fund and reduce premiums.

This program also raises questions about the how equitably benefits are being distributed among the Medicare population. Right now, 92 percent of Connecticut's Medicare population are experiencing higher Medicare Part B payments and reduced benefits in order to subsidize increased benefits for only 8 percent of the population.

Congress must continue to improve and protect Medicare. This will require controlling spending and setting fair payments to Medicare and Medicare Advantage plans while making sure that beneficiaries receive the health care services they require. The Committee on Ways & Means has recently held two hearings, and I anticipate many more to take place as Congress examines Medicare Advantage."