By DAVID ESPO, AP Special Correspondent
July 30, 2007
WASHINGTON - House Democrats are launching a drive this week
to roll back years of Republican changes to Medicare, aiming
to dramatically scale back federal subsidies to HMOs that cover
millions of seniors.
The same legislation contains several provisions to bolster
traditional Medicare, sweetening the payment system for doctors,
promising free colon cancer screening for all beneficiaries
and injecting new funding to defray costs for the low-income.
Rep. Fortney (Pete) Stark, D-Calif., the bill's principal
author, dismissed Republican claims that the measure would
destroy the private Medicare plans that insure eight million
seniors. "It eliminates the subsidy" that raises
the government's cost higher than it is under traditional Medicare,
he said. "If they (HMOs) can't make it at 100 percent
of fee-for-service, they obviously shouldn't be in business."
Ironically, in their first major Medicare measure since taking
power in January, Democratic House leaders call for relatively
few changes in a controversial, stand-alone prescription drug
program now in its second year.
Despite repeated complaints that pharmaceutical companies
are favored over patients, the legislation as drafted does
not narrow a gap in coverage known as a donut hole.
The Medicare provisions are largely overshadowed by other
elements in the measure that would expand a federal program
of health care coverage for lower-income children. A vote is
scheduled later in the week.
President Bush has threatened to veto a less sweeping children's
health bill in the Senate. And the two issues combined — coverage
for children and for seniors reflect the deep health care divide
between Democrats, who generally favor greater government involvement
in health care, and Republicans, who promote private alternatives.
In the case of Medicare, Republicans have long favored encouraging
insurance companies to offer coverage to seniors, often with
benefits unavailable in the traditional government-run program.
According to the government's most recent statistics, more
than 8 million beneficiaries are enrolled in these managed
care programs, or about 18 percent of the total Medicare population.
Congressional experts predict the total will reach 22 percent
by next year.
Largely as a result of legislation enacted while Republicans
controlled Congress, the government pays an estimated $112
per recipient in managed care for every $100 it pays for traditional
coverage.
The legislation would gradually eliminate the difference in
payments over the next decade, with the first impact coming
in the fall of 2008. According to early drafts of the legislation,
the government savings would total $50 billion over five years
and $157 billion over 10.
In addition, the legislation limits the cost for any individual
service under private Medicare, ensuring that no patient pays
more in out of pocket expenses than they would have paid under
traditional Medicare.
Republicans say the effect would be to decimate the private-market
alternative to government coverage.
"Medicare advantage would be destroyed," said Rep.
David Camp of Michigan, the senior Republican on the subcommittee
Stark chairs. "In some states there would be no Medicare
Advantage at all according to testimony before our committee."
In an interview, he said Democrats were cutting managed care
Medicare to pay for an expansion of coverage for low-income
children, a trade-off he called "their first step to universal,
government-run health care."
"I think beneficiaries are not going to be confused," said
Karen Ignagni, president of the American Health Insurance Providers,
an industry group. "This is a safety net issue for them."
And one prominent Democratic pollster, Mark Mellman, has cautioned
in a recent memo that seniors "overwhelmingly oppose cuts" to
either traditional or private-run Medicare.
"Seniors will punish members who vote for Medicare cuts
at the polls," he wrote.
If House Democrats are concerned about political repercussions,
they haven't shown it.
A seven-page packet recently distributed to first-term Democrats
stressed that the legislation would eliminate "the HMO
slush fund and overpayments, funded with taxpayer dollars," head
off a looming 10 percent cut in doctor payments and extend
the solvency of the Medicare trust fund by two years.
While Democrats sound confident they can succeed in passing
the legislation through the House, its fate in the Senate is
less clear. Sen. Max Baucus, D-Mont., chairman of the Senate
Finance Committee, chose to pay for expanded children's health
care solely by raising the tobacco tax, and contains none of
the Medicare changes in the House measure.
And while numerous Democrats said they expect some changes
to emerge eventually in a compromise bill, support for Medicare
advantage in the Senate is stronger than in the House.
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