Senators spar over Medicare cuts

Senate Finance Committee Republicans pushed hard on their accusations that a Democratic healthcare bill would slash benefits for seniors.

Republicans have hammered away for months about the effect of healthcare reform on Medicare, a strategy that has successfully fostered worry among senior citizens, polls consistently show.

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The Finance Committee’s markup of a bill authored by Chairman Max Baucus (D-Mont.) provided them with another platform to repeat that message — and provided Democrats with more discomfort.

And while committee members argued over Medicare and healthcare reform, Vice President Joe Biden and Health and Human Services Secretary Kathleen Sebelius visited a seniors center in suburban Maryland to promote President Barack Obama’s agenda.

Baucus’s measure reduces Medicare spending by $300 billion to $400 billion, mostly to redirect those dollars for expanded coverage of the uninsured. The single largest cut would affect private health insurance plans participating in Medicare Advantage.

Baucus and committee Democrats argued that the bill does not call for any reduction in benefits under traditional Medicare and that the cuts target inefficiency and overpayments. “There’s not one red cent cut in this bill” for Medicare benefits, Baucus said.

Moreover, Democrats note it costs more to cover someone in Medicare Advantage than in traditional Medicare. The Baucus bill would subject Medicare Advantage plans to a competitive bidding process that is designed to lower spending on the program.

“It’s a wasteful, inefficient program and it always has been,” said Sen. Jay Rockefeller (D-W.Va.). Baucus worked with Republicans to draft the 2003 bill that boosted Medicare Advantage funding, but on Wednesday called it a “mistake.”

According to government auditors, the subsidies for Medicare Advantage make it an average of 14 percent more costly per beneficiary. In addition, because of the way premiums are calculated, people in traditional Medicare pay an additional $3.60 a month because of high Medicare Advantage costs, Baucus said.

But Republicans contended that the Medicare Advantage plans offer the extra benefits, such as vision care, not available under traditional Medicare — and that cutting the extra funding would take those away, thus violating Obama’s pledge that no one would lose his or her current coverage under healthcare reform.

The second day of the committee’s markup of the bill proceeded even more sluggishly than the all-day session that kicked off the markup Tuesday. After spending nearly two hours debating committee procedure, senators moved on to some of the more than 500 amendments pending.

The first substantive amendments on the docket came from Republican Sens. Jon Kyl (Ariz.), Pat Roberts (Kan.) and Orrin Hatch (Utah), who tried in various ways to eliminate the Medicare spending cuts in the program and to protect Medicare Advantage plans. Sen. Olympia Snowe voted with Democrats on the Hatch amendment.

“It’s a wonderful way to make Medicare solvent by basically slashing all [provider] reimbursements so they don’t treat Medicare beneficiaries,” Roberts said.

“There is a strong possibility that Medicare Advantage beneficiaries will lose benefits under competitive bidding,” Hatch said.

Republicans are not the only committee members concerned about preserving the extra benefits provided to Medicare Advantage plan members. Sen. Bill Nelson (D-Fla.) has an amendment of his own to that effect, but it would only “grandfather” existing enrollees.

“You’re supporting the wrong amendment,” Nelson said to Hatch.

Sen. Ron Wyden (D) said his home state of Oregon had the highest percentage of Medicare beneficiaries signed up for Medicare Advantage. “The chairman is clearly moving in the right direction,” he said.

On Wednesday, the Obama administration sought to counter these arguments and quell anxiety among senior citizens. During their appearance at the Maryland seniors center, Biden and Sebelius denied that healthcare reform would be accomplished on the backs of Medicare beneficiaries.

“We will protect seniors — not burden them with out-of-pocket costs,” Biden said. “The bottom line is, seniors will be better off under what we are proposing, and not a dollar from the Medicare trust fund will be used to pay for health insurance reform.”

Obama himself proposed a competitive bidding model for Medicare Advantage that would have cut even more from the program than Baucus’s proposal, so Biden’s pledge does not appear to apply to the extra benefits available under that program.

The administration also stresses that its proposals, reflected in the bills working their way through Congress, would reduce Medicare beneficiaries’ prescription drug costs and expand preventive benefits.