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Medicare Advantage Divides Summit Participants

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Democrats and Republicans often seemed to be speaking different languages today when they tried to discuss the Medicare Advantage program.

The program came up during the second part of the health care summit, after participants returned from lunch.

President Obama said he convened the summit partly to see if Republicans and Democrats could get past their talking points and engage in a real exchange of ideas. But the summit participants ended up bringing up many of the same arguments they have been using on each other for the past year.

Medicare Advantage plans are Medicare managed care or fee-for-service plans run by private insurers. They fill the coverage gaps left by the traditional Medicare program and are usually cheaper for participants than paying for traditional Medicare coverage along with Medicare supplement insurance. Democrats have argued that the Medicare Advantage plans are cheaper partly because the government has been subsidizing them.

The Senate health bill, the House health bill and the new Obama health proposal call for cutting the Medicare Advantage subsidies and cutting Medicare provider reimbursement rates.

Rep Paul Ryan, R-Wis., said he believes the Obama proposal is similar to the Senate health bill.

The Senate bill “treats Medicare like a piggy bank,” Ryan said. “It raids a half a trillion dollars out of Medicare, not to shore up Medicare solvency, but to spend on this new government program….Millions of seniors who have chosen Medicare Advantage will lose the coverage that they now enjoy.”

Sen. Charles Grassley, R-Iowa, suggested that cutting Medicare provider reimbursement rates could cause many medical facilities to shut down. “You’ve got to have a health care system left to serve the people we’re promising health care to,” Grassley said.

Obama and other Democrats would not agree that cuts in Medicare Advantage funding are cuts in Medicare funding.

“We’re not talking about cutting benefits of — under the Medicare program as is required under law,” Obama said. “What we’re talking about is Medicare Advantage.”

Many Republicans agree with Democrats that using tax dollars to subsidize the current version of Medicare Advantage is not a great idea, Obama said.

“You can make an argument that whatever savings we get out of Medicare Advantage should not go to filling the [Medicare Part D prescription drug program] donut hole, for example, that’s a legitimate argument,” Obama said. “You can make an argument that it should go just to deficit reduction. Those are all legitimate arguments. But my point is that the savings that are obtained here are from a program in which insurance companies are making a lot of money, but seniors who are in these kinds of programs are not better off. And the 80% of the people who are not in these programs are paying an extra 90 bucks a year to subsidize the folks who are in them, and that just doesn’t seem like a good deal for them or for the taxpayer.”

Obama also responded to complaints about the length of the Democratic health bills. “We’d love to have a 5-page bill,” he said.

But making a serious effort to help large numbers of Americans takes a large, complicated bill, because health care is complicated, and each issue is connected with other issues, Obama said. To help people with preexisting conditions, for example, the government has to do something about health coverage, he said.

Obama recalled that, while he was running in the Democratic presidential primary, he opposed the idea of requiring individuals to buy health insurance. Later, he said, he decided that a mandate is necessary to keep people from paying for coverage only when they are sick, and make bans on medical underwriting economically viable.

Democrats are right to oppose calls to scrap the current health bills and draft a new version, Obama said.

“‘Starting over,’ they suspect, means, ‘not doing much,’” Obama said. “Politically speaking, there may not be a reason for Republicans to want to do anything.”

If Republicans are serious about health reform, they ought to come up with ways to improve the current bills, and come up with ideas for helping large numbers of uninsured Americans and people with preexisting conditions, Obama said.

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But “we can’t have another year-long debate about this,” Obama said.

If the Republicans and Democrats cannot come together, then the Democrats have to think about procedures for passing bills on their own, Obama said.

Obama also touched on his hope that Republicans will make more of an effort to support the proposals that they themselves have developed when Democrats adopt those proposals.

The idea of using a health insurance exchange to help consumers and small groups buy subsidized coverage from private carriers “is a market-based approach,” Obama said. “It’s a Republican idea. Somehow, suddenly, when I embraced it, it became less of a good idea.”

Similarly, Obama said, he believes he supports the ideas of Sen. Thomas Coburn, R-Okla., about controlling health care costs – and that many of those ideas are already somewhere in the House health bill or Senate health bill.

But Republicans have used one of the cost-cutting initiative provisions as the basis of accusing Democrats of attempting a “government takeover of health care,” Obama said.

Also at the summit:

- Obama expressed an interest in sitting down with Republicans such as Coburn to talk about efforts to reform the medical malpractice system, while leaving some flexibility in place to help the victims of extreme cases of malpractice.

Waxman warned that medical malpractice reform is unlikely to play a major role in controlling health care costs. The Republicans want to take many of the rules and procedures that are already in effect in California and apply them throughout the country. But, even Republicans see California as a model for malpractice reform, some health insurance policyholders in the state will see their premiums increase 39% this year, he said.

- Rep. Peter Roskam, R-Ill., compared Obama’s recently released health care proposal to earlier Democratic proposals “with Republican bread crumbs on top.”

Roskam also criticized Democrats for depending too heavily on Medicaid to expand access to coverage. He said Democrats to want to increase the percentage of Americans covered by Medicaid to more than 25%, from about 20% today.

“Medicaid is a house of cards,” Roskam said.

- Sen. Ron Wyden, D-Ore., rejected the idea of the Democrats adopting relatively small “incremental” changes in the health finance system. Incremental changes are often more expensive than comprehensive reform efforts, and the government has been implementing incremental reforms since 1994 without much success, Wyden said.

- Sen. Jay Rockefeller, D-W.Va., blasted the health insurers. “They’re terrible,” he said. “There in it for the money. They can do what they want, and they do. A nice lady that’s running WellPoint said, ‘We will not sacrifice profitability for membership.’ Money first.”

- Although the summit participants often made the same general points they have been making for months, and often had a difficult time focusing on specific health reform ideas, the general tone of the summit was warm and polite, and the Republican participants welcomed Obama’s invitation to the summit.

If Congress ever has a conference committee to iron out differences between the House and Senate health bills, “I want you to be the moderator,” Rep. Joe Martin, D-Texas, said.


For earlier coverage of the summit, please see Obama Seeks Health Policy Bridge; Republicans Skeptical