Entitled to Know

Not surprisingly, the insurance industry’s million dollar ad and lobbying campaign is paying off on Capitol Hill and it appears a Congressional compromise to re-authorize SCHIP won’t include needed reforms to Medicare.

Congress Daily summarizes the closed-door negotiations and Speaker Pelosi’s comments afterwards:

House Speaker Pelosi said “We are working on agreements between [the] House and Senate to take two proposals to our respective caucuses in order to see where we go from here." House leadership sources speculated she was referring to breaking the House measure into separate Medicare and SCHIP bills to avoid confronting the Senate with the House Medicare funding language, which Senate negotiators have called a poison pill.

Of course, the President promises a veto of anything other than his proposal anyway so that’s no small part of the political calculations here.

Both the Medicare overpayments to private plans and the doctor’s fix appear destined for “to be determined later” status. The Health Care Policy and Marketplace Review’s latest posts on this can be found here and here.

The differences between Senate and House members trying to negotiate a compromise in their legislation to reauthorize and improve access to healthcare for children, SCHIP, remain. That, in our opinion, is a good thing. Not because we like gridlock but because this legislation is too important to seniors and children alike to take the easy way...which is to ignore the difficult issues tackled in the House bill but absent in the Senate version.

The House bill, called CHAMP, includes desperately needed reforms to private Medicare Advantage plans and is by far the better piece of legislation. Money currently being used to overpay insurers would go to improve health insurance access to children. More than a fair trade. Thankfully, House leaders are sticking to their guns...so far. Congress Daily describes yesterday’s closed door meeting this way:

"Senate Majority Leader Reid, House Majority Leader Hoyer, Senate Finance Chairman Baucus, and House Energy and Commerce Chairman Dingell attended the meeting in House Speaker Pelosi's office to discuss how to approach a conference report that would merge the bills. They made no decisions. 'We've got to find out how close are we. We know how far apart we are just without talking,' Rangel said. 'They cannot make commitments on their side, and we damn sure can't on ours, to say that we're compromising when we don't even know where we are.' From Rangel's perspective, ripping apart the House package might threaten its majority support. 'We put the baby together, and we made the baby with [Energy and] Commerce Committee and the Ways and Means committee, our caucuses, liberals, Democrats, pro-tax, anti-tax, cigarette people. We put this child together. And to split the child in half is very, very difficult to sell it to the parents,' he said."

While every major seniors and health advocacy organization (including the AMA and AARP) supports cutting millions in outrageous overpayments to private MA insurance companies and using that savings to improve insurance access for children...you can see just how much influence the insurance lobby still has on Capitol Hill...

“Before the meeting, Baucus said it would be very difficult to get the needed 60 votes for a conference report in the Senate if any Medicare provisions are added. Several Republican supporters of the Senate bill say they will not tolerate cuts to private Medicare Advantage programs that are part of the House bill.” Congress Daily AM, Sept 7, 2007

So in short, some in the Senate just "won’t tolerate" cuts to private plans which pay private insurers about $1,000 more than Medicare receives for the same beneficiary. They "won’t tolerate" cutting industry subsidies which will cost taxpayers $149 billion dollars over the next decade and cuts two years from Medicare’s solvency. And let’s not forget the extra $24 a year every Medicare beneficiary is paying to cover these subsidies...whether they’re in a private plan or not.

Clearly, the insurance industry does not want to lose the MA gravy train and it's lobbying hard to protect the sweetheart deal it wrote and passed through Congress in the 2002 Medicare Privatization...oops, we mean Modernization...Act.

That’s why we say in this instance...differences are a good thing. And we urge Senate to find the same courage their colleagues showed in the House and support SCHIP legislation that considers what’s best for children and seniors alike.

There has been a lot of activity in the SCHIP/Medicare debate in the House last week and today in the full Senate. Kaiser Daily Health Report has a nice editorial roundup of the debate.

But we’ve also seen a number of blog discussions in which it’s clear even those who are paying attention to this debate are still confused about the players. So, here it is in a nutshell.

Virtually every major health and senior’s advocacy group (NCPSSM, AMA, Medicare Rights Center, AARP, Families USA, etc.) supports the House SCHIP/Medicare act called the Children’s Health and Medicare Protection Act or “CHAMP”.These organizations are supporting cuts in industry subsidies…not cuts to seniors. For advocates committed to senior and health issues this is a no-brainer. Here is the AMA/AARP ad.

The only "seniors group" fighting against CHAMP is an organization created by the insurance industry. Here’s their ad.

So, it’s easy to see how people are confused. But CHAMP does not take away seniors’ Medicare. It does require Medicare Advantage private insurers to be paid at the same rate as traditional Medicare, ending the industry gravy train, which has meant hefty profits to insurance companies collecting billions in taxpayer supported subsidies at the same time.

The New York Times’ Paul Krugman, sums up the debate this way:

“The House plan, which would cover more children, is more expensive, but it offsets Schip costs by reducing subsidies to Medicare Advantage -- a privatization scheme that pays insurance companies to provide coverage, and costs taxpayers 12 percent more per beneficiary than traditional Medicare. Strange to say, however, the administration, although determined to prevent any expansion of children's health care, is also dead set against any cut in Medicare Advantage payments. So what kind of philosophy says that it's O.K. to subsidize insurance companies, but not to provide health care to children?”