Medicare Is Focus on Day 2 of Health-Care Negotiations

By Ceci Connolly and Lori Montgomery
Washington Post Staff Writers
Thursday, September 24, 2009

Slogging through a second day of work on legislation intended to overhaul the nation's health-care system, the Senate Finance Committee wrestled Wednesday with politically volatile proposals to squeeze money out of Medicare.

As they continued marking up the bill, a process expected to stretch into next week, Democrats fended off attempts by Republicans to restore proposed reductions to the program, which serves the elderly, and get rid of government restrictions on the ways insurance companies market to seniors.

Although the day-long session was marked by a slow pace and partisan sniping, Finance Committee Chairman Max Baucus (D-Mont.) could take comfort in several signs about the bill's prospects.

Early indications suggested that two key swing senators -- Blanche Lincoln (D-Ark.) and Olympia J. Snowe (R-Maine) -- were inclined to back the bill. Additionally, Baucus, who has not always enjoyed broad support in his caucus, held the Democratic bloc together in the face of an energetic assault from GOP senators.

Sen. Jon Kyl (R-Ariz.) warned that seniors "have reason to be worried that portions of this bill could affect their care," saying legislation that includes hundreds of billions of dollars in Medicare reductions over the next decade is bound to impact the quality of care.

"Nobody is trying to cut seniors," countered Sen. Debbie Stabenow (D-Mich.).

For Democrats, it was a day of rhetorical gymnastics. Even as they turned back Republican efforts to put billions back into Medicare, several Democrats said they hope to enact similar -- albeit smaller -- increases themselves.

"You're supporting the wrong amendment," Sen. Bill Nelson (D-Fla.) told Republicans as he urged them to wait for a proposal he planned to offer to restore some of the Medicare funds.

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 National Republican Congressional Committee has targeted the districts of House Democrats that have high retiree populations, blitzing them with ads saying the Medicare changes are "unconscionable."

Vice President Biden made a direct appeal to seniors in a visit to the Leisure World retirement community in Silver Spring on Wednesday. "You're going to be better off -- you, all of us who qualify for Medicare -- are going to be better off under the reforms we're proposing, not worse off," he said.

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.

The Medicare Advantage payments are "stuffing money into the pockets private insurers and [don't] provide any better benefits to anybody," said Sen. John D. Rockefeller IV (D-W.Va.).

AARP, the seniors' advocacy group, argues that the proposed changes would have little impact on Medicare beneficiaries because they represent such a small portion of total Medicare spending, and says insurance providers have agreed to accept the reductions as part of reforms that would deliver millions of new customers.

The cuts "are about a 3 percent reduction overall in what Medicare is expected to spend over the 10-year budget window. So the question is: Can we find 3 to 5 percent in efficiencies in the Medicare program?" said David Sloane, a senior vice president at AARP.

But other health analysts are less certain. They say cuts to Medicare Advantage, in particular, are likely to cause some insurance companies to pare benefits, raise premiums or pull out of some rural areas where it is more expensive to provide medical care. Democrats acknowledged as much Wednesday when Nelson advocated his amendment to ensure that Medicare Advantage recipients continue to receive their current level of care, said Joseph Antos, an expert on health policy at the American Enterprise Institute.

"He's looking at the numbers, and they tell him a big cut to Medicare Advantage is likely to upset the apple cart for an awful lot of people in Florida," Antos said. AARP has not endorsed the Nelson amendment.

The head of the nonpartisan Congressional Budget Office said that while it was possible that certain "extra" benefits would be reduced, existing law guarantees that every Medicare beneficiary receives the same basic services.

Democrats also held firm in the battle over regulations governing communications between insurance providers and their older customers. The federal government recently ordered insurers to stop sending mailings to Medicare beneficiaries warning that health-care reform may jeopardize their benefits. The trade group America's Health Insurance Plans calls the move a "gag order," and Republicans said the government could be violating First Amendment rights to free expression.

Baucus, who said his mother has received fraudulent phone calls from marketers, chastised the industry for preying on "vulnerable" people. The effort to lift the restrictions was defeated.

The panel, which continued its work into the evening, devoted much of the morning to squabbling over procedural matters. Republicans tried to postpone final action until the bill is written in arcane "legislative language" rather than "plain English," as Sen. Kent Conrad (D-N.D.) put it.

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