At yesterday’s health care summit and again this morning on Good Morning America, Sen. John McCain (R-AZ) proved that he was yesterday’s man as he rehashed old grievances and complained that Obama’s health care bill was full of special interest deals and carve outs. McCain signaled out an amendment offered by Sen. Bill Nelson (D-FL) during the Senate Finance Committee’s mark-up process, characterizing the provision as “unsavory”:
MCCAIN: The American people don’t like these unsavory deals. The issue came up twice about Florida and the 800,000 people. Because where they live in Florida they will not be subject to Medicare Advantage cuts. Now, you know, Medicare Advantage is a very popular program with seniors. Now, you can argue — I don’t agree with the argument that it might have to be cut. Although, I don’t agree with that. But to say carve out 1 group of 800,000. And there’s 300,000, 30,000, in my state, who have Medicare Advantage that are going to be cut with this plan. That’s unsavory. That’s unsavory.
In effort to reduce waste and lower spending, the Senate and House health care bills eliminate the government’s overpayments to plans that participate in the Medicare Advantage program. The legislation establishes a competitive bidding program under which private insurers in each geographical area would bid to provide coverage to Medicare beneficiaries in a particular geographic area.
Nelson’s proposal (on pg. 129) rewards any plan that provide services at rates that are below “the average per capita fee-for-service expenditure” with a bonus on top of their competitive bid. These extra bonuses are meant to encourage insurers to stay in a particular geographic area and continue providing benefits. So while it’s certainly not a coincidence that Florida (and other high cost states like New York and California) benefits from Nelson’s amendment, the provision is not exclusive to Florida and one could argue that encouraging efficient insurers to stay in certain markets is good policy. (Although, judging from Obama’s response at the Summit, it’s not clear that the administration agrees).
McCain claims that he’s now against cutting overpayments, but during the presidential campaign, he endorsed competitive bidding for Medicare Advantage. “We see no reason why the Medicare Advantage plans should continue to get a $15-billion-a-year subsidy,” McCain campaign adviser Douglas Holtz-Eakin said, “we’ll put them on a level playing field and save some money there.”