Bush’s Medicare Veto Undermines Coverage For Low Income Americans»

Today, President Bush “vetoed the Medicare bill that would stave off a 10.6 percent cut in reimbursements to doctors and replace it with a slight increase.” In his veto statement, Bush claimed that the legislation, which made cuts to the Medicare Advantage program, “would reduce benefits to millions of seniors, including lower-income seniors, who have chosen to join these plans“:

While the MMA increased the availability of private plan options across the country, it is important to remember that a significant number of beneficiaries who have chosen these options earn lower incomes. The latest data show that 49 percent of beneficiaries enrolled in MA plans report income of $20,000 or less. These beneficiaries have made a decision to maximize their Medicare and supplemental benefits through the MA program, in part because of their economic situation. Cuts to MA plan payments required by this legislation would reduce benefits to millions of seniors, including lower-income seniors, who have chosen to join these plans.

In fact, the bill Bush vetoed actually “helps low-income beneficiaries pay the costs of Medicare benefits” by increasing “the amount of assets that applicants are able possess and still qualify for the Medicare Savings Program.”

Bush’s argument that low income Americans benefit disproportionately from Medicare Advantage plans echoes the now discredited analysis of AHIP, the health insurance lobby. As the Center for Budget and Policy Priorities points out, this claim is “based on misleading use of data“:

- “The Administration notes that about 49 percent of Medicare Advantage enrollees have incomes below $20,000, but generally fails to point out that 51 percent of fee-for-service beneficiaries do.”

- Nearly half (48 percent) of all Medicare beneficiaries with incomes below $10,000 are enrolled in, and thus receive supplemental coverage through, Medicaid. This is nearly five times the proportion (10 percent) who are enrolled in Medicare Advantage plans.

- Among beneficiaries with incomes below $20,000… a larger share receive supplemental coverage through Medicaid than through a Medicare Advantage plan”

Thus, Bush’s veto undermines the health care coverage for “low-income seniors” in the name of saving it.

UPDATE: The House of Representatives voted 383 to 41 to override Bush’s veto.

McCain’s Opposition To Medicare Compromise Could Have Jeopardized Women’s Health»

Today, Sen. John McCain (R-AZ) will hold a women-only forum in Hudson, Wisconsin “to bolster his support among women.” But McCain’s repudiation of the Senate’s recent compromise to halt the cut in Medicare physician reimbursement rates undermines women’s access to affordable health care.

While the senator said he supported providing “proper reimbursements to Medicare physicians,” he opposed the compromise because it tried to eliminate the government’s overpayments to Medicare Advantage plans. Thus, when given the choice between protecting womens’ access to physicians and continuing to subsidize private insurance companies, McCain agreed with President Bush and chose the latter.

But low Medicare reimbursement rates have already led many OBGYNs to stop accepting Medicare patients. In 2002, for instance, The Los Angeles Times reported that some Medicare patients “had a hard time finding a gynecologist and an ophthalmologist”:

Three or four OB/GYN offices told her they were not accepting new Medicare patients. Finally, she persuaded a friend’s doctor to take her. But now the 75-year-old is afraid her new doctors will drop her. “You’ve got to be careful not to step on your doctor’s toes,” Bowers said. “They don’t want to mess” with Medicare because of the low payments.

Similarly, in 2003, OB-GYN News reported that “Ob.gyn. practices are being affected as physicians nationwide are rethinking treating Medicare patients” and have “begun limiting the number of Medicare patients they take on…or–in some cases–have stopped caring for Medicare patients entirely.”

McCain’s choice to side with the insurance companies would have further restricted women’s access to doctors who simply couldn’t afford the lower payments:

- “Steven Polansky, who’s been an obstetrician and gynecologist in Sacramento, Calif., since 1977, said he couldn’t afford a 10.6 percent pay cut from Congress…”We haven’t gotten a raise from anybody in centuries,” Polansky said in an interview. “And it is becoming more and more difficult to run a private practice.”

- “There’s a threshold out there beyond which people can’t keep their doors open,” added Jerry McLaughlin, a Hobbs obstetrician and gynecologist who is the former president of the New Mexico Medical Society.”

- “‘We can’t compete with other cities,’ said local OB/GYN Dr. Paul Kocay. Some doctors already are moving towards cash-only practices. These ’boutique medicine’ clinics are going to increase if these cuts are enacted. Local doctors are between the 10th and 20th percentile in national salary averages. This could become a crisis situation in Kerrville.”

As the Wonk Room has pointed out again and again, McCain is not what women want.

UPDATE: Steve Benen points out that “the key thing to remember here is that McCain’s record on reproductive rights and sexual health is utterly miserable. His rhetoric is awful, but his record is worse.”

In Controversy Over Medicare Pay Cuts, Conservatives Side With Insurance Industry»

Last week, the White House and its allies in the Senate, voted down a proposal that would have made “cuts to the private Medicare Advantage program” in order to finance the deferment of a 10.6% physician fee cut for doctors who treat Medicare patients.

Writing an editorial in the Wall Street Journal, Scott Gottlieb, a former policy adviser at the Centers for Medicare and Medicaid Services, laid out the conservative argument and baselessly suggested that the private insurance plans that participate in Medicare Advantage provide better care than traditional Medicare and should not be cut:

Private insurers employ thousands of doctors, nurses and pharmacists, many experts in new technologies….private plans spend roughly four times more than Medicare on “consumer services, provider support, and marketing,” which includes money spent answering the telephone to adjudicate individual issues. Smaller health plans use one clinician for every 10,000 beneficiaries. Medicare would need 4,500 clinicians to keep pace.”

But as Robert Laszewski of Health Care and Marketplace Review points out, while Medicare Advantage plans “are paid 13% more than traditional Medicare pays for similar seniors,” there is no evidence to suggest that they deliver “a better cost/quality result” than traditional Medicare programs.

As AARP CEO William D. Novelli explained, “overpayments to Medicare Advantage raise costs for beneficiaries in the traditional program.” This is because Medicare premiums increase with Medicare costs, and overpayments by Medicare “drive premiums higher than they otherwise would be.” As a result, the millions of seniors enrolled in traditional Medicare “are charged higher premiums each month to help subsidize the cost of these overpayments.”

Insurance companies pocket the extra dollars. In fact, according to a Government Accountability Report (GAO) released just last week, private plans participating in Medicare Advantage earned greater profits and spent less on benefits:

Because organizations spent less revenue on medical expenses than projected, they earned higher average profits than projected. On average, MA organizations’ self-reported actual profit margin was 5.1 percent of total revenue, which is approximately $1.14 billion more in profits in 2005 than MA organizations projected…Nearly two-thirds of beneficiaries were enrolled in health benefit plans offered by MA organizations for which the percentage of revenue dedicated to profits was greater than projected and the percentage of revenue dedicated to expenditures (medical and non-medical combined) was lower than projected.

Thus, rather than bringing Medicare Advantage payments back to parity with fee for service, and using the savings to prevent the scheduled physician fee cuts, conservatives sided with the insurance lobby.