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Bill Would Limit Private Medicare Plan Out Of Pocket Costs

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Rep. Pete Stark, D-Calif., today introduced a measure that would prohibit Medicare Advantage plans from charging beneficiaries more than traditional Medicare fee-for-service plans charge for any service.

The bill, the Medicare Advantage Truth in Advertising Act, does not yet have a bill number.

Stark is chairman of the House Ways and Means Committee health subcommittee.

Stark’s bill would continue to permit Medicare Advantage plans to use flat co-payments, but the co-payment charges could never exceed traditional Medicare charges, Stark says.

Stark held a hearing last week on problems at the relatively new Medicare Advantage private fee-for-service plans, but the new bill would apply to all Medicare Advantage plans, including private health maintenance organization plans and private preferred provider organization plans that serve Medicare beneficiaries.

“Medicare Advantage plans don’t live up to their name,” Stark said. “Though seniors and people with disabilities wouldn’t know it from the never-ending stream of insurance propaganda, Medicare Advantage plans charge more than traditional Medicare for a large number of services – everything from home health care to hospital stays and chemotherapy drugs to durable medical equipment.”

In other Medicare Advantage news, Rep. John Spratt, chairman of the House Budget Committee, said today at a hearing on the plans that finances could lead to changes in program funding.

“We’re going back and looking at the terms of that program and whether it needs to be adjusted based on nothing other than federal resources,” Spratt said.

Many Democrats would like shift some Medicare Advantage program funding to the State Children’s Health Insurance Program.

Peter Orszag, director of the Congressional Budget Office, testified at the Budget Committee hearing that capping Medicare Advantage federal reimbursement levels at 50% more than the rate charged by traditional Medicare fee-for-service plans would save $4 billion over 10 years.

At an earlier hearing, Orszag said capping Medicare Advantage reimbursement levels at the reimbursement level for traditional Medicare coverage would save $150 billion over 10 years.