Bush To Veto Legislations Including Medicare Advantage Plan Cuts

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HHS Secretary Mike Leavitt in a May 22 letterwrote that President Bush's senior advisers would recommend he veto anylegislation that "would result in the loss of access to additionalbenefits or choices in the Medicare Advantage program," the AP/San Francisco Chronicle reports (Freking, AP/SanFrancisco Chronicle, 5/29). The letter was sent to Senate Finance Committee ranking member Chuck Grassley (R-Iowa) after bipartisan discussions ona Medicare bill halted last week (Edney, CongressDaily, 5/29).

Finance Committee Chair Max Baucus (D-Mont.) last week said he will moveforward with a Medicare package developed by Democrats that likely will beopposed by Republicans and the Bush administration. Baucus said he isretreating from crafting a bipartisan Medicare package that would delay for 18months a 10.6% cut to physician fees. Although both parties want to halt the cut,which is scheduled to go into effect on July 1, they have been unable to agreeon offsets to pay for the bill, among other issues (Kaiser Daily Health Policy Report, 5/22).

According to the AP/Chronicle, lawmakers must find at least $9billion in offsets over the next five years from other Medicare programs. The AP/Chroniclereports that Democrats and some Republicans favor making cuts to payments forMA plans, which cover about 9.5 million beneficiaries. Baucus spokespersonCarol Guthrie said advisory commissions have said the government on averagepays MA plans 13% more than it would spend on comparable patients enrolled intraditional Medicare. Guthrie said, "Congress has a duty to Medicarebeneficiaries and to all taxpayers to modify payments when they are found to beout of line" (AP/San Francisco Chronicle, 5/29).

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According to CongressDaily, reducing MA plan payments is an"attractive fundraiser" to offset the delay in physician feereductions, especially with Democrats, "who are not as supportive ofprivate-sector participation in Medicare." Grassley and Senate MinorityLeader Mitch McConnell (R-Ky.) last week offered a Medicare package that wouldcut $8.7 billion in MA payments for indirect medical education (CongressDaily,5/29).

Administration 'StronglyOpposes' MA Cuts

The Bush administration hassaid reducing MA payments would result in reduced benefits for beneficiaries (AP/SanFrancisco Chronicle, 5/30). Leavitt wrote, "To protect the interestof these beneficiaries, the administration strongly opposes any policies thatwould reduce payments for MA plans or target a subset of those plans forfunding reductions, program restructuring, marketing restrictions or enhancedstate regulation" (CongressDaily, 5/29). Leavitt wrote thatoffsets should be found through cuts to traditional Medicare fee-for-serviceplans (AP/San Francisco Chronicle, 5/30). According to CongressDaily,although Leavitt's letter did not specifically mention MA IME cuts, the"sweeping" opposition to MA payment reductions combined withLeavitt's letter "conjures up doubt that any reductions in the IMEpayments would pass muster" (CongressDaily, 5/29).

Letter 'ComplicatesEfforts' To Find Offsets

According to the AP/Chronicle,Leavitt's letter "complicates efforts" by lawmakers to find offsetsto maintain or slightly raise current physician payment rates. Already it is"tough to find enough votes to cut payments to any health care provider inthe Medicare program, let alone find enough support to overcome a presidentialveto," the AP/Chronicle reports (AP/San FranciscoChronicle, 5/29).

Reprintedwith permission from kaisernetwork.org. You can view the entire Kaiser Daily Health Policy Report, search the archives, and sign upfor email delivery at kaisernetwork.org/email . The Kaiser Daily Health PolicyReport is published for kaisernetwork.org, a free service of The Henry J.Kaiser Family Foundation.

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