Hospital, physician lobbyists fought Medicare buy-in plan

By Amy Goldstein
Washington Post Staff Writer
Wednesday, December 16, 2009

Four days before the Senate jettisoned the idea of expanding Medicare to younger Americans, a dozen Senate Democrats, including some of the chamber's most liberal members, dispatched a stern letter warning that the proposal would make it harder for elderly patients in parts of the country to find care.

The letter, sent to Senate Majority Leader Harry M. Reid (D-Nev.), attests to the effectiveness of a ferocious campaign by influential hospital and physician lobbyists to defeat the idea. And it underscores the difficulty of forging policy and political deals in the warp-speed, supercharged environment in which Congress is trying to reshape the nation's health-care system.

The proposal to allow people ages 55 to 64 to buy insurance through Medicare -- one of the most significant ideas to emerge from the Senate's side of the debate -- appeared and vanished in a mere six days.

Sources on and off Capitol Hill say the quick life and death of the Medicare buy-in reflects the complex politics and a brutal reality at this stage of the Senate's deliberations, in which there is little time to refine proposals that do not immediately attract the 60 votes needed for health-care legislation to pass.

The broad contours of the proposal emerged early last week from 10 liberal and moderate senators whom Reid had assigned to negotiate a bill. The group reached for the Medicare buy-in as a compromise between members who favored a new government-sponsored insurance alternative for Americans of all ages, and those who were wary of more public coverage. The buy-in, they reasoned, would create access to public insurance for people in late middle age -- a group for whom medical problems become more common and insurance is particularly expensive.

But in the following days, the proposal met resistance among Senate moderates as well as some liberals. Meanwhile, Reid made a strategic decision, ordering the negotiators to keep the details of their proposal secret until congressional budget analysts examined the impact it might have on consumers and the federal budget. That strategy, however, meant that the proposal did not attract much support from outside constituencies that have, in the past, favored letting younger people buy into Medicare.

"We were immobilized due to lack of information," said John Rother, executive vice president for policy and strategy at AARP, a lobbying group for people age 50 and older, which has endorsed buy-in proposals in the past. "We couldn't support something that we didn't know what it was."

In the midst of this intricate dynamic, lobbyists for hospitals and doctors launched a broadside to try to kill the idea, focusing on two groups of Senate Democrats they viewed as most susceptible to their message.

The American Hospital Association and the Federation of American Hospitals targeted the first group, moderates who already had hinted at reservations about the idea of a broader public insurance alternative for people of all ages. They included Democratic Sens. Mary Landrieu (La.) and Bill Nelson (Neb.), and independent Sen. Joseph I. Lieberman (Conn.), who over the weekend spoke out most forcefully, saying he would oppose the health-care bill if it contained the buy-in.

Some of the most aggressive advocacy by hospitals and the American Medical Association, however, was aimed at the second group of senators, some of them liberals, who believe in public insurance but who had a history of concern about the rates that the traditional Medicare program pays doctors and hospitals in their states. The American Hospital Association sent two e-mail alerts to its members last week, equipping them with statistics and talking points.

One of the members was Karl Ulrich, president of Marshfield Clinic in Wisconsin and a founding member of a lobbying coalition of hospitals in the Upper Midwest, Mountain West and Northwest that includes the Mayo Clinic. Ulrich and other coalition participants swung into action, calling lawmakers they had been pressing for months to secure higher Medicare payments for their states. "I began talking initially to Senator Feingold on the 10th indicating we had concerns," he said, referring to Russell Feingold (D-Wis.).

Meanwhile, Brent Miller, the clinic's Washington lobbyist, was trying to persuade other House and Senate members. On Friday, Mayo Clinic officials called Marshfield and suggested a news conference to blast the provision. That same day, the letter was signed. "The senators came through," Ulrich said.

The letter to Reid said the senators "fear that provider shortages in states with low reimbursement rates such as ours will make such a program ineffective, or even worsen the problems these states are experiencing." One of its authors, Sen. Ron Wyden (D-Ore.), who early in his career founded a Gray Panther chapter that fought for better health insurance for older Americans, said in an interview that he has long been concerned about coverage for people ages 55 to 64. But the proposal, he said, would have worsened a climate in Oregon in which some doctors restrict the number of Medicare patients they will treat.

Sen. Charles E. Schumer (D-N.Y.), one of the 10 negotiators, said in a statement: "All of the potential pitfalls that have been raised were accounted for by the group during the deliberations." One person familiar with the negotiations said the proposal, for instance, would have included extra payments in parts of the country where Medicare reimbursement rates are especially low.

In addition, the source said, the proposal would have restricted eligibility to people ages 55 to 64 who were uninsured in the previous six months and given most of them help right away with paying for the coverage; four out of five of those people, the senators believed, would have been able to take advantage of a provision in the bill that would assist Americans who qualify for "high-risk pools" because they have existing medical problems.

The proposal collapsed before such details became public.

© 2009 The Washington Post Company