Senate Dems: Health bill cuts Medicare waste, not care

Democrats on the Senate Finance Committee are trying to make the case that the healthcare bill will strengthen Medicare and Medicaid by finding major savings through a crack down on fraud, waste and abuse.

In addition to the $940 billion bill's provisions to expand health coverage to 32 million uninsured Americans, the Senate Finance Committee staff is highlighting the legislation's efforts to end excessive Medicare payments to private insurers and to provide stricter oversight and enforcement of the government-funded health programs.


The bill will require private insurers who provide health benefits to seniors as part of the Medicare Advantage program to spend at least 85 percent of revenue from premiums on healthcare instead of banking them as profits or using them to offset overhead costs, the Finance Committee staff said in a memo. The payment rate for Medicare Advantage insurers will also be linked to local Medicare spending to try to reduce the $132 billion in overpayments they get, the staff said.

To crack down on waste that costs more than $60 billion a year, the bill will increase funding for fraud and abuse programs by $350 million this decade, raise penalties for fraud and abuse and use new technologies to identify wrongdoing.

The Democrats' memo comes as Republicans point out that seniors are uneasy with the Medicare changes in the bill. The National Republican Congressional Committee, the campaign arm for House Republicans, used a recent Associated Press-GFK poll showing most seniors against the bill in an attack Thursday against House Democrats facing tough races this fall.

Senate Finance Committee Democrats said the changes in Medicare will make it more efficient without reducing the level of care seniors receive.

"The truth is, health care reform will strengthen Medicare benefits, extend the life of the program and rein in overpayments to ensure a fair payment system that rewards quality for America’s seniors," the memo said.