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What Is the Senate’s Medicare Plan?
September 20, 2007 • Volume 7, Issue 37
Leaders in the House and Senate have decided to send President Bush a bill that deals exclusively with children’s health insurance, daring him to veto a measure that reduces the number of uninsured children by four million.
As a result, the important Medicare reforms in the House bill are on hold until both chambers get around to Medicare legislation, likely toward the end of this year. We know what the House wants to do for Medicare:
- level the playing field between Original Medicare and Medicare private health plans and protect consumers against abusive marketing;
- expand programs that help people with low incomes afford their Medicare out-of-pocket costs’
- improve Medicare’s coverage of preventive care, mental health services and prescription drugs.
But what does the Senate have in mind for Medicare?
Some clues can be found in some of the bills members of the Senate Finance Committee, which has jurisdiction over Medicare, have introduced this year:
- Senator Jeff Bingaman, Democrat of New Mexico, and Senator Gordon Smith, Republican of Oregon, have sponsored legislation that would increase the amount of allowable financial assets under the Extra Help program (the federal assistance program that helps people with low incomes pay for their Medicare drug coverage). This would allow individuals with a modest amount of savings to receive coverage through the “doughnut hole,” the coverage gap built into Part D. Senators John Kerry, Democrat of Massachusetts; Blanche Lincoln, Democrat of Arkansas; Olympia Snowe, Republican of Maine; and Herb Kohl, Democrat of Wisconsin and chairman of the Select Committee on Aging, are also original cosponsors.
- Senator Smith, along with Senator Kerry, has a bill that would ensure all Part D plans provide full coverage of medicines for cancer, HIV/AIDS, depression, schizophrenia, seizures and for organ transplant patients.
- Senator Snowe, along with Senators Smith and Kerry, has sponsored a bill that ends Medicare’s discriminatory treatment of mental illness, bringing parity between how the program covers treatments for mental illness and physical ailments. (Currently Medicare only covers 50 percent of the cost of outpatient mental health treatment, but it pays 80 percent for other outpatient medical care.)
- Senator Ron Wyden, Democrat of Oregon, along with Senators Smith and Kohl, is a cosponsor of a bill that targets fraudulent and deceptive marketing of Medicare private plans, allowing states to police and penalize plans that engage in such abusive practices.
- Senator Lincoln, with Senator Kerry as a cosponsor, has a bill that moves Original Medicare toward providing, and paying for, improved care coordination for people with chronic conditions.
These initiatives are all crucial to improving the Medicare program, but they are not free. To pay for them, the first place the senators should look is the overpayments to Medicare private health plans—the misnamed Medicare Advantage plans. Putting payments to private plans on par with costs under Original Medicare is a financially responsible way to pay for improvements to Medicare, and it is good policy in its own right. Private plans were introduced into the Medicare program with the promise that they would cut costs. We should hold them to this promise instead of using overpayments to subsidize insurance companies’ profit margins.
Medical Record
“The legislation [the Children’s Health and Medicare Protection Act] also makes significant improvements in the Medicare program, beginning with more equitable payments for Medicare Advantage (MA) plans . . . These cuts will benefit the vast majority of beneficiaries who are enrolled in traditional Medicare and subsidizing the plans with higher premiums” (American Federation of Labor and Congress of Industrial Organizations, “People Are Talking . . . about the CHAMP Act,” House Ways and Means Committee web site, July 27, 2007).
“Medicare Part D is helping seniors, but the recent data indicates that most seniors that are eligible for the low-income subsidies are not receiving this vital assistance. There are steps we can take to strengthen Part D and improve the benefits it offers—particularly to low-income seniors. These bills, which Senator Smith and I are working to advance, will help many more seniors get access to the life-saving prescription drugs to which they are entitled” (Senator Jeff Bingaman, “Bingaman & Smith Push Measures That Provide Assistance to Low-Income Seniors Receiving Medicare Prescription Drugs Benefit,” Senator Jeff Bingaman’s web site, April 12, 2007).
“Mental disorders are the single most frequent cause of disability for Medicare benefits, affecting more than one out of four beneficiaries. Yet, Medicare pays far less for the critical mental health services needed by these beneficiaries than it does for medical treatment for their physical disabilities. It is time to end the unfair distinction between physical and mental disorders under Medicare” (Senator Olympia Snowe, “Snowe, Kerry Introduce Medicare Mental Health Copayment Equity Act of 2007,” Senator Olympia Snowe’s web site, July 2, 2007).
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