Medicare vote over HMO cuts to move in Senate

Reuters

July 10, 2008

By Kim Dixon

WASHINGTON (Reuters) - A key U.S. Democratic lawmaker charged on Wednesday that members of the military's civilian health plan will suffer if a stalemate over health insurance reimbursement is not remedied.

At issue is controversial legislation that cuts about $13 billion in federal pay to insurers such as UnitedHealth Group Inc and Aetna Inc. The companies contract with the government's Medicare health insurance plan for 44 million elderly and disabled people.

Backers say the funds are needed to reverse an automatic 11 percent pay cut to doctors who take Medicare patients. The American Medical Association and seniors group AARP are pushing hard for the bill.

"If the Senate fails seniors on Medicare, we'll fail our military members too," Senator Max Baucus of Montana, the Democrat who heads the Senate Finance Committee handling the bill said in a briefing with reporters.

Reimbursement to doctors who take patients in Tricare, the military's health care plan for its civilian members, is based on pay under Medicare. About 9 million uniformed service members and their families get care through Tricare.

"Tricare is already one of the lowest paid insurance plans that providers accepted because it is tied to Medicare," said Retired Sgt. Major Frank Yoakum of the Enlisted Association of the National Guard.

Senate Democrats plan to bring up the Medicare bill again later on Wednesday. Late last month, they failed by one vote in a mostly party-line vote to win the 60 needed in a procedural test to advance the legislation.

The House overwhelming passed a similar bill last month, surprisingly winning over many Republicans and giving Democrats fuel to push a fight over the bill. The legislation also includes politically popular payment changes for dialysis providers such as DaVita Inc and delays a competitive bidding program opposed by equipment makers such as Apria Healthcare Group Inc, Invacare Corp, Kinetic Concepts Inc, among others.

VETO THREAT

Still, the bill faces a veto threat from President George W. Bush, who contends the cuts to private plans will disrupt the care of seniors. Health insurers have made the same argument.

About 10 million seniors are enrolled in the private plans. Critics say the plans can afford the cuts, pointing to a government report finding they are paid between 13 percent and 17 percent more than the government pays to treat MedicareMedicare patientspatients not in a private plan.

The major players -- the insurance, doctors and seniors lobbies -- have been airing broadcast ads over the Fourth of July recess to influence key Senators, but none have formally changed their vote.

Baucus said it would be politically risky for the president to veto a bill backed by doctors and senior groups, especially in an election year.

"My view is if we pass this bill today with over 60 votes, the President will be hard pressed not to sign the bill," he said in a briefing with reporters.

(Editing by Andre Grenon)

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