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House SCHIP Bill Could Cut Medicare Plan Payments

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Rep. John Dingell, D-Mich., has proposed phasing out Medicare Advantage “overpayments” over 4 years to help pay for expanding the State Children’s Health Insurance Program.

Dingell, chairman of the House Energy and Commerce Committee, today included that provision in a draft of H.R. 3162, a bill that would create the Children’s Health and Medicare Protection Act.

The House Energy and Commerce Committee plans to start going over H.R. 3162 Wednesday, and the House Ways and Means Committee plans to review another, similar SCHIP bill Thursday and Friday.

The full Senate could vote on a third SCHIP bill later this week.

The current SCHIP authorization bill is set to expire Sept. 30th.

The Bush administration has proposed increasing SCHIP funding to an average of $6 billion per year over the next 5 years, from $5 billion today and cutting, or phasing out, past state efforts to use SCHIP funding to pay for health coverage for childless adults and relatively high-income children.

The Senate has proposed increasing tobacco taxes to increase funding to an average of $12 billion per year.

H.R. 3162 would increase SCHIP funding to $15 billion per year.

H.R. 3162 reflects Democrats’ concerns about a Congressional Budget Office analysis that found the Medicare Advantage program costs the government 12% more than the traditional fee-for-service under Medicare program.

The Medicare program now is supposed to cut the reimbursement rate for doctors who treat Medicare patients 10% Jan. 1st, 2008.

H.R. 3162 would eliminate the proposed reimbursement cut and replace it with a 0.5% increase in reimbursement rates in each of the next 2 years.

H.R. 3162 would cover part of the cost of increasing SCHIP funding and the Medicare physician reimbursement rate by imposing a 45-cent increase in the federal excise tax on a pack of cigarettes.

The bill would use a combination of current county Medicare cost benchmarks and projected costs to guide the Medicare Advantage overpayment phase-out.

The bill also would:

- Prohibit a plan that fails to offer a price lower than the county benchmark rate from enrolling new members.

- Eliminate the Medicare Advantage regional preferred provider organization stabilization fund.

- Start a federal-state system that would regulate marketing of private Medicare plans.

- Prohibit private Medicare plans from making patients pay more of pocket than Medicare fee-for-service plans charge.

- Require plans to spend a minimum percentage of plan revenue on paying claims.

- Require all private plans to report quality data to the Centers for Medicare and Medicaid Service.

The Bush administration says President Bush would veto the major SCHIP bills now under consideration in the House and Senate if they cross his desk.

Rep. Jim McCrery, R-La., the most senior Republican on the House Ways and Means Committee, has put out a statement citing projections that H.R. 3162 Medicare Advantage cuts could lead to 3 million Medicare beneficiaries losing their current Medicare coverage.

“The Democrats’ plan to pay for a massive SCHIP expansion by increasing taxes and cutting Medicare is the wrong choice for America,” McCrery says.


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