Senators Fight Over Medicare Spending Cuts, What It Would Mean For Beneficiaries

Senators on the Senate Finance Committee spent much of Wednesday duking it out over proposed Medicare cuts that would fund part of a Democratic push at health care reform. The intensity of the debate highlights the political importance of the senior citizen demographic.

The Washington Post: "The intense sparring over Medicare reflected mathematical and political realities. Polls have consistently shown that retirees — who vote at higher rates than any other group — are deeply skeptical of comprehensive health-care reform. … The Baucus bill relies on more than $400 billion in reductions to the growth in federal health programs over the next decade to help cover the cost of covering nearly 30 million uninsured people. The bulk of the reductions would be achieved by lowering payments to hospitals, nursing homes and other providers by about $200 billion. Baucus also proposes slicing $113 billion from Medicare Advantage, a program that pays private insurance companies more than traditional Medicare to provide additional benefits" (Connolly and Montgomery, 9/24).

The Wall Street Journal: "The money saved would go to expand eligibility for Medicaid, the federal-state heath program for the poor, and create new tax subsidies to help low- and middle-income families purchase insurance. … The bill would force the insurers to bid competitively to run the (Medicare Advantage) plans, a change from current law. Most Democrats contend that the government overpays private insurers to administer the plans. On a 14-9 vote, the committee rejected an amendment by Sen. Orrin Hatch (R., Utah) that would have weakened the proposed changes to Medicare Advantage in the bill" (Hitt and Adamy, 9/24).

The Associated Press: "Republicans sought unsuccessfully to wipe out or reduce the estimated $500 billion in Medicare savings in the legislation on a day consumed largely with politically-charged sparring over the giant health care program for seniors" (Espo, 9/24).

CBS News: "Democrats — and one Republican — on a key Senate panel Wednesday shot down an attempt from Republicans to nix from pending health care legislation a plan to establish an independent panel of experts that would make decisions about Medicare spending. President Obama and Democrats in Congress hope to bring down out-of-control Medicare costs by creating an independent commission with the authority to make spending decisions, with the idea that it would not be beholden to special interests" (Condon, 9/23).

In the meantime, Sen. Bill Nelson, of Florida, is fixed in the position of trying to satisfy older Americans on Medicare Advantage and expanding insurance to the uninsured, and he's offered an amendment to preserve the private Medicare plans. The New York Times: "The cost of Mr. Nelson’s proposed fix — to preserve benefits for many people enrolled in the private Medicare plans — could total $40 billion over 10 years, and that could also be a problem for the White House. Mr. Obama has promised not to sign a health bill that increases the deficit, and so far Mr. Nelson has not said precisely how he would pay for his amendment. Approval of the amendment could invite other Democrats to ask for similar deals that might make the bill more palatable to their constituents, but more costly as well" (Pear, 9/23).

The Hill: "Democrats note it costs more to cover someone in Medicare Advantage than in traditional Medicare. The Baucus bill would subject Medicare Advantage plans to a competitive bidding process that is designed to lower spending on the program. According to government auditors, the subsidies for Medicare Advantage make it an average of 14 percent more costly per beneficiary. In addition, because of the way premiums are calculated, people in traditional Medicare pay an additional $3.60 a month because of high Medicare Advantage costs, Baucus said" (Young, 9/23).

The Boston Globe: "Though some industry groups complain the spending reductions are too severe, adjustments could be made if problems arose because they would be phased in gradually. Most are aimed at making the programs more efficient. 'We think the proposals actually will improve access and quality,' John Rother, a leading lobbyist for the AARP, the large lobbying organization for senior citizens, said in an e-mail" (Wangsness, 9/24).

This is part of Kaiser Health News' Daily Report - a summary of health policy coverage from major news organizations. The full summary of the day's news can be found here and you can sign up for e-mail subscriptions to the Daily Report here. In addition, our staff of reporters and correspondents file original stories each day, which you can find on our home page.