A proposal to eliminate a fund for regional preferred provider organizations participating in the Medicare Advantage program has touched off a conflict between the Senate and the White House, which said that any budget reconciliation bill it receives that would cut the fund will face a veto.
Legislation in the Senate, S. 1932, proposes a total of $39.1 billion in budget cuts over the next five years and was drafted as part of an effort to pay for Hurricane Katrina aid without further increasing the federal budget deficit. The bill is a combination of budget packages that were approved by eight different Senate committees and was scheduled for a vote on the Senate floor after press time.
Although the administration said it “strongly supports” Senate passage of the bill, as well as the goal of “budget discipline,” it also stressed its opposition to the provision that would cancel the establishment of the so-called Medicare Advantage Regional Plan Stabilization Fund. The goal of the fund, the White House said, was to ensure that regional PPOs participate in the program, helping it to grow and providing an incentive for them to offer more choices to Medicare beneficiaries, particularly in rural areas.
“If a final bill is presented to the President that limits the choices of seniors, takes away their prescription drug coverage or cuts the stabilization fund to increase Medicare spending,” the White House stressed, “the President’s senior advisors will recommend that he veto the bill.”
The maximum funding for budget reconciliation legislation was established during the spring, long before devastation wrought by Hurricane Katrina, and had already established a decrease in Congress’s overall spending authority of $12 billion.
Health insurers also have opposed the cut to the Medicare program, which they said would run counter to changes made only two years ago that were designed to bring stability to the program.
“Just days away from the period when beneficiaries begin making their choices for 2006, it is critically important that Congress not make changes to the Medicare legislation it passed less than two years ago,” said Karen Ignagni, president and CEO of America’s Health Insurance Plans, in a letter sent to all senators at the outset of deliberations on S. 1932 last week.