Medicare Cuts Prevented with Veto-proof Democratic Majority in Senate

Led by Senator Ted Kennedy (recently returned to the Senate floor), the Democrats were able this week to pass a Medicare bill by a veto-proof majority. (President Bush had promised to veto the bill, so the larger margin of majority was an essential to keep the bill alive — the final vote was 69 to 30 in favor.)

Passage of this piece of legislation will be a victory for the AMA and others who vehemently sought to prevent the 10.6% cut in Medicare payments to physicians that would have fallen into place otherwise. Still, the bill does little to fix some of the larger underlying problems with Medicare.

One of the reasons President Bush had promised a veto was because the bill seeks to limit, in some forms, the funds flowing to Medicare Advantage plans. Medicare Advantage, which allows private insurance companies to get a piece of Medicare business by creating Medicare HMOs and other managed care plans, has been under criticism for several reasons. First, the government has found (through GAO investigations and other means) that they actually end up paying more for each Medicare beneficiary who is on a Medicare Advantage program than they would have paid if a patient had stayed in regular “Part B” of Medicare and purchased supplementary Medigap insurance. Second, some states have chided companies selling Medicare Advantage plans because of unethical marketing and sales tactics that may take advantage of the elderly. Third, Medicare Advantage plans have come under criticism that they can leave patients with enormous bills and medical debt because they do not cover, for example, clinical trials for cancer patients.

Still, the Kennedy-led vote has managed to not rock the boat among physicians (for now) and to shoot at least one arrow into the heart of the Republicans’ support for Medicare Advantage plans and market-based health system reforms.