AARP officials say they will remember budget bill in '06

With the Senate approaching a vote on the budget-reconciliation conference agreement yesterday, the powerful seniors lobby AARP fired a final salvo in opposition to the bill’s Medicare and Medicaid provisions and made clear its intent to mobilize its members against those who would vote for the bill.

With the Senate approaching a vote on the budget-reconciliation conference agreement yesterday, the powerful seniors lobby AARP fired a final salvo in opposition to the bill’s Medicare and Medicaid provisions and made clear its intent to mobilize its members against those who would vote for the bill.

In a letter to Senate Majority Leader Bill Frist (R-Tenn.), AARP CEO Bill Novelli threatened to unleash the group’s politically active grassroots network on members of Congress who support the bill.

“If the conference agreement becomes law, then over the course of the next few weeks and months we will make sure that our members across the country fully understand the impact of this conference agreement on them and on their families,” Novelli wrote.

The AARP plans to make an issue of votes for the budget bill during congressional races next year, the group’s lobbyists said during a conference call with reporters yesterday.

“We will emphasize it throughout the coming year and into the midterm election,” said John Rother, AARP’s director of policy and strategy. But the AARP does not campaign for or against candidates, explained David Sloane, senior managing director of government relations and advocacy. “We’re not going to target specific members,” he said.

“AARP strongly opposes the budget-reconciliation conference agreement scheduled to come before the Senate for a vote today,” the letter begins.

Over five years, the budget-reconciliation bill would reduce Medicare spending by $6.4 billion and Medicaid spending by $4.8 billion, according to a House Budget Committee summary issued yesterday.

Over the course of the budget debate all year, AARP made it clear that it ardently opposed any changes to Medicare and Medicaid that would increase its members’ spending on healthcare services. AARP lobbyists have consistently told lawmakers that they would aggressively oppose a final bill that included such provisions.

While it may prove too late to put a stop to the entitlement cuts, a strong, 11th-hour statement from AARP puts lawmakers on notice that it is not done fighting these changes to Medicare and Medicaid — even if it must divert the focus of its message from Washington to lawmakers’ home districts and states.

The letter’s tone and content is also likely to gratify congressional Democrats, many of whom felt estranged from AARP after it backed the Bush administration and GOP leaders on the Medicare prescription-drug  benefit in 2003.

As House and Senate authors of the Medicare and Medicaid provisions worked to bridge their considerable differences in the budget reconciliation bill in recent weeks, the AARP has continually stated its preference for the Senate-passed language, which would not have created new requirements for Medicaid beneficiaries to pay for a larger share of their healthcare services.

Senate Finance Committee Chairman Chuck Grassley (R-Iowa) sought to balance the impact on beneficiaries and healthcare industries because of resistance from moderate Republicans on his panel, such as Sen. Gordon Smith (Ore.), to deeper cuts to Medicaid or new cost-sharing requirements.

In addition to criticizing the new payment requirements for Medicaid recipients, AARP outlined several other objections to the conference agreement.

The bill would impose new limitations on people trying to qualify for Medicaid’s nursing-home benefit. Congressional backers of these provisions say the changes are necessary because some middle-class older Americans have found ways to rearrange their finances in order to meet Medicaid’s low-income threshold.

AARP also complains that the Medicare provisions in the bill would raise beneficiaries’ premiums. For example, the measure would speed up the phase-in of a law requiring higher-income older Americans to pay higher premiums. This policy — the first ever under Medicare linking income to benefits or costs — was established by the Medicare prescription-drug law, but the budget measure would accelerate the implementation from five years to three years, beginning in 2007.

Compromises made between House and Senate negotiators about the effect on healthcare business interests seem to have raised AARP’s ire. The final agreement softens the blows on doctors, drug makers and health insurers that the Senate bill would have made.

“The final conference agreement does not ask for shared sacrifice to achieve budgetary savings. Rather it protects the pharmaceutical industry, the managed-care industry and other providers at the expense of low-income Medicaid beneficiaries and Medicare beneficiaries who will foot the bill,” Novelli wrote in his letter to Frist.

A number of healthcare-business interests that were fearful of the provisions in the budget-reconciliation bill were able to breathe sighs of partial relief as the details emerged from the conference talks over the week. Although some components of the healthcare sector would suffer financial setbacks as a result of the bill, most industries failed to see their worst-case scenarios materialize.

Physicians will face flat Medicare payments next year instead of a 4.4 percent cut. They also will not be forced next year to participate in a program linking higher payments to improving the quality of the care they provide.

In addition, drug companies evaded a costly increase in the rebates they make to states for the medicines they buy under Medicaid.

Health insurance companies, with the support of the White House, avoided Senate-passed language that would have raided a special $10 billion “stabilization fund” that makes higher payments to certain types of health plans that serve Medicare beneficiaries.

Nursing homes will continue to be compensated for “bad debt” (unpaid bills to Medicaid patients) for beneficiaries receiving both Medicare and Medicaid benefits and partial payments for unpaid bills to people only on Medicare.

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