Help for Medicare
CONGRESS is immersed in what has become an annual scramble to avert scheduled but unrealistic cuts in doctors' fees for treating Medicare beneficiaries. What's concentrating the legislative mind this time around is a 10.6 percent reduction, set to take effect July 1. These moments of urgency offer opportunities for legislative mischief but also leverage for legislative achievements. The current measure, passed by the House Tuesday by an astonishing 359 to 59 vote, offers some of both. The Senate, racing to get out for the Fourth of July recess, should embrace the House measure, and the president should retract his veto threat.
The achievement comes in the form of restrictions on the fastest-growing segment of Medicare, the private insurance plans known as Medicare Advantage, which now enroll more than 20 percent of Medicare beneficiaries. These plans are paid on average 13 percent more than what it costs Medicare to reimburse private providers; they also cover more services. The most wasteful -- or lucrative, depending on whether you're footing the bill or reaping the profits -- of these arrangements are so-called private fee-for-service plans, which are paid on average 17 percent more than regular Medicare. These plans are freed from some of the cost-saving and quality requirements imposed on other Medicare Advantage plans, such as HMOs and preferred-provider networks. The House-passed measure would level the Medicare Advantage playing field, ever so slightly, by imposing new restrictions on the private fee-for-service plans and eliminating some double payments to Medicare Advantage plans generally, saving an estimated $13.6 billion over five years. This is a small but significant step, strenuously resisted by the insurance industry and the Bush administration.
The mischief involves suspending a competitive bidding program for medical equipment supplies such as oxygen tanks, wheelchairs and hospital beds, also set to take effect next week. There is overwhelming evidence that the government is overpaying for such supplies. The first round of the pilot program, involving 10 cities, would have saved an average 23 percent over current costs; the 18-month moratorium in the measure also postpones expanding the competitive bidding to 70 additional cities. Still, the measure would save the same amount by cutting payments to medical equipment suppliers by 9.5 percent across the board. In addition to maintaining physician payments this year and slightly increasing them next year, the measure would expand preventive care, reduce co-payments for mental health services and make it easier for low-income beneficiaries to qualify for extra help. This is not a time when Medicare should be dramatically expanding benefits, but these targeted improvements are justifiable and paid for. We would rather see the money going to Medicare beneficiaries than to the insurance companies and equipment suppliers now profiting so handsomely from the program.