Medicare Changes Show Lobbyist Influence with GOP

The Congressional Budget Office is one of the few non-partisan bodies in Washington. So, when it says the GOP has changed its own legislation on Medicare to benefit insurers to the tune of $22 billion, one ought to consider the statement seriously. Behind closed doors and without a Democrat in the room, cuts to insurers of $26 billion turned into a reduction in payments of $4 billion. While it may be perfectly reasonable, any deals struck in the dead of night among members of a single party simply looks corrupt.

At the heart of the issue is the formula under which the government pays private insurers that participate in the federal Medicare program. Private insurers attract healthier members of the 65+ age group, so their payments exceed their cost of treatment (a profit in its simplest terms). In 2003, the government adjusted the formula to reflect that. However, the Bush administration (made up of millionaires whose fortunes came from the government teat) decided to make sure HMOs don’t flee the system by adding a “hold harmless” payment that magically balanced the reduction.

By 2010, this hold harmless money goes away, and the Senate wanted annual audits to make sure HMOs weren’t over-billing by a process called “coding creep” or “upcoding” (Federalese is the ugliest version of the English tongue). That process makes patients appear sicker than they are, thus requiring more treatment, and therefore, more money goes to the HMO. These audits will, now, only affect 2008, 2009 and 2010.

According to the Washington Post, “The original Senate measure was supposed to reduce payments to Medicare HMOs by $2.9 billion in 2010, $3.3 billion in 2012 and $4.5 billion in 2015. Now, CBO scorekeepers think savings will peak at $2.9 billion in 2010. By 2012, the government will be paying the HMOs $100 million more than now scheduled, and $900 million more by 2014.”

Now, the interesting thing is that the change was inserted during the conference committee stage of the bills progress on Capitol Hill. As the Post explained, “That change was made in mid-December during private negotiations involving House Ways and Means Chairman Bill Thomas (R-CA), Senate Finance Committee Chairman Charles E. Grassley (R-IA) and the staffs of those committees as well as the House Energy and Commerce Committee. House and Senate Democrats were excluded from the meeting. The Senate gave final approval to the budget-cutting measure on Dec. 21, but the House must give it final consideration early next month.” Reports that the industry fought for the changes tooth-and-nail are certainly credible. Which makes one wonder just whose elected officials sit in Congress, those of the people or those of the special interests?


© Copyright 2006 by The Kensington Review, Jeff Myhre, PhD, Editor. No part of this publication may be reproduced without written consent.
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