By Wayne Allard

Currently 295,727 American seniors enjoy Medicare health plans called “cost contracts.”

Under legislation I introduced in the Senate, seniors will be able to continue utilizing these valued health plans.Medicare cost contracts are managed care plans that are reimbursed on a cost basis for providing health services. Under current law, cost contracts are one option for Medicare beneficiaries. Cost contract premiums cover Medicare deductibles and additional benefits not covered by basic Medicare.

Further, for the costs of a normal Medicare fee-for-service copayment, seniors with cost contracts can use any Medicare provider regardless of whether they participate in the health plan’s network.Cost contracts are vital to seniors who have them.

From New York to California, America’s seniors are enrolled in cost contract plans. In Colorado, the state I represent, seniors are enrolled in cost contract plans in 46 of Colorado’s 64 counties. Cost contracts are especially important in rural Colorado. Of the 18,050 Coloradans with cost contract plans, 89 percent live in rural Colorado, where few Medicare and Medicare+Choice providers operate.

Unfortunately, under current law cost contracts soon will terminate. In 1997, in an effort to expand and refine Medicare+Choice, Congress passed the Balanced Budget Act. Among other provisions, the Balanced Budget Act terminated the Medicare cost contract program effective December 31, 2002.

To prevent the termination of this valuable service, in 1999 I introduced legislation to extend cost contracts. That year Congress passed the Balanced Budget and Refinement Act, which extended cost contracts for two years through 2004.I believe Congress should work to extend Medicare cost contracts further. My bill, the Medicare Cost Contract Extension Act of 2001, S. 1224, would accomplish this by extending by ten years the cost contract sunset date of December 31, 2004 to December 31, 2014.