Font Size

This is a Debate to Watch

Two key House Committees are debating important "CHAMP" legislation which reauthorizes and improves the State Children’s Health Insurance program while also making desperately needed reforms to the Medicare Modernization Act of 2003, including the elimination of Medicare Advantage subsidies to private insurers.

This is very important legislation for seniors and children alike. You can watch the House Energy and Commerce Committtee hearing mark-up of this bill live at 11:30am and the House Ways & Means Committee at 1:00pm.

The House Ways & Means Committee has also created two wonderful "Truth Squad" reports which provide the facts about this legislation which you won't hear from tobacco companies afraid a tax might limit their sales and insurers worried about losing billions in subsidies. Here's the Tobacco Tax Truth Report and the Rural Care Truth Report on what this legislation really means for rural beneficiaries currently being targeted by an industry scare campaign which is threatening a loss of healthcare in rural America.

This is a critical debate for the future of healthcare of young and old alike. If Congress can't manage to do the right thing for seniors and can't help but wonder how urgent system-wide reform will be possible.

Intergenerational Approach?

Tomorrow the House Energy and Commerce Committee will consider legislation that would reauthorize and expand SCHIP and make revisions to Medicare. The House Ways and Means Committee is expected to take up the legislation on Thursday.

While the Senate SCHIP bill does not include Medicare provisions, Congress Daily reports that the House bill would increase SCHIP funding by $50 billion over five years while also tackling many of the Medicare reforms sought by healthcare and seniors’ advocates, including the National Committee. Congress daily reports:

“The bill would also: reverse a scheduled cut in Medicare payments to physicians and provide a modest increase in fees for each of the next two years,abolish a provision of the 2003 Medicare law that mandates the president propose changes in Medicare to limit the program's reliance on general revenue, give state insurance commissioners more power to regulate the marketing of private MA plans by agents and brokers, reduce payments to private MA plans, which are estimated to be 12% higher than payments to the traditional program for equivalent benefits, increase reimbursement rates for rural health providers in 2008 and provide larger subsidies to lower-income beneficiaries.”

Kaiser Daily Health Report provides a good roundup of the latest SCHIP/Medicare coverage today.

The Senate and House leadership say they want to pass SCHIP legislation before the August recess.

Clearing the Fog

Thanks to the Center for Budget and Policy Priorities for "Informing the Debate About Curbing Medicare Advantage Overpayments".

That's the name of a wonderfully simple primer on Medicare Advantage which answers all of the basic questions about these private Medicare plans and the multi-billion dollar price tag they bring.
If you're wondering what's really going on with these private Medicare plans this is a great place to start.

Insurer Profits Up (again) While Seniors & Taxpayers Pay the Price

Not only are insurers receiving billions in government subsidies to operate private Medicare plans but new profit numbers out this week show business is very good if you’re an insurance company with a piece of the Medicare privatization pie.

“UnitedHealth Group Inc., the largest U.S. health insurer, said profit rose 22 percent on gains from government-sponsored medical programs.”… United Health Profit Rises on Government Medical Plans , Bloomberg 7/19/07

“Health insurer Humana Inc. on Wednesday reported higher-than-expected second-quarter profit, mainly because of improving cost trends, and its shares rose as much as 10.4 percent to a record high. The company,one of the largest providers of Medicare health plans for the elderly, also rasied its full-year earnings forecast, which easily topped Wall Street's forecasts.” … Humana Profit Beats Outlook, Reuters, 07/18/07

Remember that while private insurers collect these record high profits the government is also paying them $1,000 on average more per beneficiary to provide health care coverage already provided by traditional Medicare. And, a married couple on Medicare is now paying $48 more in annual premiums to help cover billions in overpayments to insurers. These overpayments have cut two years from Medicare’s solvency according to the independent Medicare Payment Advisory Commission (MedPAC). MedPAC also estimates that in the case of Private Fee-for-Service plans only half of the excess payments to insurers are being used for extra benefits to seniors. It’s easy to see where the rest may be going…

“Humana has now raised its full-year forecast twice in the past two
months. However, the company's bullish outlook may not play well with U.S.lawmakers as they weigh whether Medicare Advantage reimbursements are too rich,CIBC's McDonald said. ‘If Congress is arguing already that they overpay you, and then you come out and you beat numbers and raise guidance on better Medicare margins, you wonder if that just gives Congress more ammunition to cut rates,’ McDonald said.”…Reuters

We can only hope.

Getting the Word Out on Medicare 'Disadvantage' Plans

We've been talking and writing and writing and talking about the privatization of Medicare. While a lot of our outreach has been with our National Committee members, seniors nationwide and grassroots work, today we went straight to Congressional staff. Today's briefing focused on those policy influencers who need to understand what Medicare Advantage overpayments are all about and their effect on the Medicare program. Three of the nation’s leading healthcare advocacy organizations were joined by Health Subcommittee Chairman Rep. Frank Pallone (D-NJ) who stated:

“The over-payments made to Medicare Advantage are a gaping hole that is draining the Medicare trust fund and imposing unfair costs on millions of beneficiaries across the nation. The time has come for Congress to put an end to end these subsidies to ensure that Medicare remains a reliable source of health care for the elderly and disabled for many years to come."

Thousands of letters from National Committee members calling on Congress to pass legislation, which would repeal billions in insurance industry overpayments, are being sorted for delivery to Capitol Hill later this month. The President of the National Committee and former Congresswoman, Barbara Kennelly told the audience:

“At a time when our nation is struggling with how to create affordable health care coverage for all Americans, it is simply incomprehensible to me why we would destroy the one affordable, universal health care system that already exists in Medicare. The vast majority of Medicare beneficiaries remain in the traditional program. But their voices are not as loud as the insurance industry’s”.

According to the Congressional Budget Office, private insurers offering Medicare Advantage plans will collect $75 billion dollars this year alone and $1.31 trillion over the next decade. That’s funding which could have gone to Medicare but is now going to the insurance industry instead. Judith Stein, Executive Director, Center for Medicare Advocacy, Inc. says:

“Medicare wasn't broken. But because of the ever-increasing private Medicare options, it is. The solution for the Medicare crisis is not to increase the eligibility age or decrease benefits, but to stop privatizing the program at the expense of older people and taxpayers."

Rev. Sandra Butler-Truesdale, President of the Campbell Heights Resident’s Association, described how D.C. seniors became victims of a private insurer’s marketing pitch that puts sales ahead of seniors’ care. Campbell Heights seniors were promised the private plan wouldn’t replace Medicare, there were no co-pays and they could stay with their own doctors. None of that is true.

“We are now in limbo, waiting 45 days to be placed back in Medicare.What do we do if we need care within those 45 days? Most hospitals are in trouble financially and don’t want to admit patients without medical insurance. What do we do?”

Richard Deem, Senior Vice President of Advocacy with the American Medical Association says

“Congress can stop Medicare cuts to doctors and preserve seniors’ access to care by eliminating overpayments to private health insurers providing Medicare Advantage plans. These subsidies are making Medicare less sustainable as the baby-boom generation reaches Medicare eligibility”

If Medicare continues to fund large subsidies to private plans, the program will face even more pressure to cut benefits and increase out-of-pocket costs for beneficiaries. Traditional Medicare will be eroded while private plans continue to collect billions in subsidies and beneficiaries pay more of the high costs of healthcare.

It’s time to stop disadvantaging Medicare. End these costly subsidies to insurance companies and put that money to work for all of the 43 million Americans enrolled in Medicare not just the few enrolled in private plans.



Have a Social Security or Medicare question?


Media Contacts

Pamela Causey
Communications Director
(202) 216-8378
(202) 236-2123 cell

Walter Gottlieb
Assistant Communications Director
(202) 216-8414

Entitled to Know



Copyright © 2017 by NCPSSM
Login  |