Impeding changes to our Health Care system

[TheMercenary]

More great news for your guys plan from the NYTimes....

September 23, 2009, 4:10 pm Medicare Advantage: Suddenly a Battle With Three Fronts
By David M. Herszenhorn
Three related issues consumed lawmakers on the Senate Finance Committee as they debated major health care legislation on Wednesday afternoon, but connecting the dots from one controversy to the next isn’t easy.

Here’s the back story:

The health care bill proposed by Senator Max Baucus, Democrat of Montana and the committee chairman, seeks to cut $123 billion in payments to private insurance plans that administer health benefits for roughly 10 million Medicare beneficiaries.

The private insurance plans, known as Medicare Advantage, were originally intended to save money, and the government initially paid them 95 percent of the projected cost of enrollees in traditional Medicare.

But in recent years, spending on Medicare Advantage has soared, in part because the federal government offered incentives to the private insurers to offer coverage in underserved regions, including many rural areas.

Studies show that the private plans now cost about 14 percent more than traditional Medicare, and many Democrats say insurance companies are profiting excessively from them.

To attract customers, Medicare Advantage plans typically offer enhanced benefits compared to traditional Medicare, including vision and dental benefits and, in some cases, gym memberships. The added perks make Medicare Advantage popular among beneficiaries, and the proposal by Mr. Baucus to reduce payments to them has stirred opposition, particularly in Florida, where about 1 million people are covered by the plans.

As a result, Senator Bill Nelson, Democrat of Florida, has proposed an amendment to the health care legislation that would protect Medicare Advantage plans in areas where they are more cost-efficient than traditional Medicare, like Florida. (Big surprise.)

Now that proposal has set off at least three related controversies on the Finance Committee.
First, lawmakers in rural states are furious at the idea of protecting Medicare Advantage plans only where they are cheaper than traditional Medicare, because that’s typically true only in higher-cost regions like Mr. Nelson’s home state.

Second, to cover the cost of protecting some existing Medicare Advantage plans, Mr. Nelson has proposed extracting at least $86 billion more in savings over 10 years from drug manufacturers, potentially upending a deal between the pharmaceutical industry and the Obama administration.

And third, Republicans are furious that the federal Centers for Medicare and Medicaid Services, a division of the Department of Health and Human Services, has warned private insurers not to lobby customers over the health care legislation.

That last fight stems from a letter sent by Humana, one of the largest providers of Medicare Advantage coverage, to Medicare beneficiaries warning of potential cuts in benefits.

The Senate Republican leader, Mitch McConnell of Kentucky, has accused Democrats and the Obama administration of trying to muzzle critics of the legislation.

So as the Finance Committee debate shifted into high gear, Senator Orrin G. Hatch, Republican of Utah, proposed an amendment seeking to shield all Medicare Advantage plans from reduced payments. Mr. Hatch’s amendment was rejected by a vote of 14 to 9, with Senator Olympia J. Snowe, Republican of Maine, joining all of the Democrats on the committee to defeat it.

Senator Jon Kyl, Republican of Arizona, has offered an amendment seeking to protect the First Amendment rights of private insurers who might want to criticize the proposed health care legislation.

Mr. Baucus fired back at Mr. Kyl, saying Humana had overstepped its bounds and had frightened American seniors by warning them that their benefits would be cut. “There is no First Amendment right to lie,” Mr. Baucus said. “There is no First Amendment right to mislead.”

Some Republicans said Mr. Kyl’s amendment was valid even if Humana had made misstatements. “You have a right to be wrong,” said Senator Pat Roberts, Republican of Kansas. Mr. Kyl’s amendment was defeated 13 to 10, with all Democrats opposed and all Republicans in favor.

In an appearance in Maryland on Wednesday, Vice President Joseph R. Biden Jr. sought to refute the Republican assertions about cuts to Medicare Advantage. “Here’s the truth — you’ll continue to be able to get Medicare Advantage if that’s what you choose,” Mr. Biden said.

Mr. Biden said that less than a quarter of those eligible choose Medicare Advantage, “but those of you who have it, you’ll be able to get it.”

“All we’re doing,” the vice president said, “is just cutting the padding out of the subsidies that insurance companies are already getting.”

But some health insurance industry experts say that the proposed cuts in payments to Medicare Advantage plans will mean that insurers either have to reduce benefits or cancel their plans altogether.

Senators on the Finance Committee will be debating that point in the hours ahead.

http://prescriptions.blogs.nytimes.c...-three-fronts/