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Medicare is the federal health care system that covers about 36 million people age 65 and older, plus 7 million disabled. It has four parts:
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Financed by Medicare and beneficiary premiums, which vary among plans.
The plans are private and financed by Medicare and beneficiary premiums, which vary among plans.
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Home > Medicare Monitor > Archives > 2008 > June > 12 > Entry
Medicare bill falls short
Facing a June 30 deadline before scheduled Medicare pay cuts to doctors take effect, the Senate backed away Thursday from a bill that would have increased physicians pay but slashed payments to private managed care plans.
The 54-39 procedural vote, with nine Republicans joining all the Democrats present, fell six votes short of the 60 needed to proceed. Among those not voting were presidential candidates Barack Obama, D-Ill., and John McCain, R-Ariz. Florida Sens. Bill Nelson, a Democrat, voted to proceed; Mel Martinez, a Republican, voted against continuing with the bill.
The votes means the two sides are likely to continue negotiations which have been on-going since last year. The 10.6 percent pay cut — the result of a Medicare formula set up several years ago to limit payments to physicians — originally had been scheduled to take effect at the beginning of this year, but Congress agreed in December to temporarily delay it until July 1 while lawmakers searched for ways to pay for eliminating the cut.
Doctors have repeatedly warned that if the cuts take place, many of them will refuse to accept new Medicare patients.
Congress could agree to simply extend the delay on the pay cuts, but that would mean Medicare’s 44 million beneficiaries would pay higher premiums next year to help finance the higher-than-scheduled payments to doctors this year.
Both parties have offered plans to avert the pay cut, but differ over how to pay for the increase and what impact the increase will have on premiums.
The bill that failed to pass the procedural hurdle was sponsored by Senate Finance Committee Chairman Max Baucus with support from most Democrats and a handful of Republicans. It would avert the pay cut and, instead, increase doctors’ pay rates by 0.5 percent for the remainder of this year and another 1.1 percent in 2009.
But Baucus’ bill would slash payments to private Medicare Advantage managed care plans, which a congressional advisory panel says are paid roughly 13 percent more than for traditional fee-for-service coverage.
The Baucus bill also would include a “hold harmless” provision that would keep the increase in physicians’ payments from being included in calculating next year’s Medicare Part B premiums.
An alternative bill by Sen. Charles Grassley of Iowa, the Finance Committee’s ranking Republican, would also avert the pay cut and raise payments by 0.5 percent this year and 1.1 percent next year.
But Grassley’s bill would not cut Medicare Advantage plans as deeply as Baucus’ and would not prevent Part B premiums from increasing to help pay for the doctors’ pay raise.
Grassley’s bill would also delay for 18 months Medicare’s plan to begin restricting the suppliers of durable medical equipment — such as medical oxygen and power wheelchairs. Baucus promised that he would offer a similar provision if his bill passed the procedural hurdle.
Both the American Medical Association and AARP, the nation’s largest organization for those 50 and older, endorsed Baucus’ bill. But Grassley and other Republicans warned that Baucus’ bill would result in at least a temporary pay cut to doctors because President Bush has threatened to veto any bill that included substantial cuts in Medicare Advantage payments. In that case, Grassley said, a Medicare bill might not be adopted until the fall.
Grassley urged the Senate to defeat the procedural motion to force both sides to continue negotiations. But Senate Majority Leader Harry Reid urged senators to support the motion and attempt to amend the bill on the floor next week.
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