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For years, the Medicare reimbursement system penalized efficient providers in many states, including Wisconsin, by paying them less than other states. And it penalized Wisconsin seniors by delivering fewer benefits than seniors in other states enjoy. This is an indefensible system that uses fundamentally flawed and outdated reimbursement formulas.

Because Wisconsin has been successful in holding down health care costs, the payment rate is very low in comparison to high cost states, like Florida and California. Wisconsin Medicare beneficiaries receive on average $4,500 in Medicare benefits per year, according to data from the Centers for Medicare and Medicaid Services, below the national average of $5,490. Studies show this costs Wisconsin nearly a billion dollars each year in Medicare dollars lost. Ultimately, it is the businesses and employees in the private sector who must pay higher costs to make up for this Medicare shortfall.

To correct Medicare formulas that disadvantage Wisconsin and ensure that the State gets its fair share, I again cosponsored the Medicare Equity Act, which was introduced by Senators Russ Feingold and Susan Collins. This legislation would take a significant step forward in correcting the reimbursement formulas that penalize Wisconsin. I was pleased that the Medicare Prescription Drug, Improvement and Modernization Act of 2003, which Congress passed and the President signed into law, included several provisions of the Medicare Equity Act and other legislation that will help equalize payments. The new law will reform Medicare formulas for hospitals, physicians and other health care providers, and will result in millions of dollars of additional reimbursement for Wisconsin.

The new law is a major step forward and I will continue to work with my colleagues in Congress and the Administration to ensure that the Medicare system is fair to all of our seniors, no matter where they live.