Finance Committee Agonizes Over Medicare Cuts

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Politico reports: "The top Senate Republican says Democratic cuts to Medicare will cost them in the 2010 elections, warning that the hundreds of billions in reductions to the senior citizen health program is 'Orwellian.' Sen. Mitch McConnell (R-Ky.), the Senate minority leader, criticized Democrats for insisting that a half-trillion dollars in cuts to Medicare as part of the health care overhaul, well, aren't exactly cuts to Medicare. 'They're taking a half trillion dollars out of Medicare not to make it more sustainable, but to start a new federal program for a whole new set of citizens. This is a huge issue,' McConnell said. Then came McConnell's warning. 'They ought not to do it, but if they do do it, it'll be the biggest issue in the 2010 elections,' he said" (Sherman, 9/24).

Lincoln Journal Star reports on a Nebraska senator's thoughts on Medicare and reform: "The Senate Finance Committee's health care reform bill would threaten Medicare benefits and raise taxes, Sen. Mike Johanns said Thursday. 'It's a false promise (that) you can fund new entitlements and cut Medicare and not affect benefits,' Johanns said during a telephone conference call from Washington. To suggest otherwise is 'preposterous,' the Nebraska Republican said. ... About 35,000 Nebraskans are enrolled in Medicare Advantage, Johanns said" (Walton, 9/24).

MSNBC explains one of the central issues related to Medicare spending -- the political difficulties of cutting the funding for Medicare Advantage plans. "Chances are that many taxpayers have never heard of Medicare Advantage. Yet that program - in which private-sector firms insure about 10 million people age 65 and older - is at the heart of this week's Senate debate over health insurance. About 23 percent of Medicare beneficiaries now have Medicare Advantage coverage, which provides more benefits than traditional Medicare. Senate Finance Committee Chairman Max Baucus is proposing to cut more than $100 billion over 10 years from Medicare Advantage plans. ... The senators on the Finance Committee ... are trying to walk a fine line: how to cut spending on Medicare Advantage, while not alienating the seniors in their own states who are happy with the plans." Meanwhile, these proposals take on great importance because of the voting record of the senior population. "In the last off-year election in 2006, nearly two-thirds of people over 65 voted. By contrast, only one-third of people aged 25 to 34 voted in 2006."

"If Congress cuts more than $100 billion from Medicare Advantage, some people's benefits will be cut. ... Most Democrats are critical of Medicare Advantage, agreeing with Sen. Jay Rockefeller, D- W.V., who said at Wednesday's hearing, 'It's a wasteful, inefficient program and always has been.' ... But other Democrats defend Medicare Advantage plans - especially the plans in their own states. Finance Committee Democrat Sen. Bill Nelson of Florida said it would be 'intolerable' to ask seniors on Medicare Advantage to 'have something taken away from them that they have come to expect.' He offered an amendment to 'grandfather in' some Medicare Advantage plans and shield those beneficiaries from benefit cuts. And, then, he promised, 'On a going-forward basis, we're going to squeeze the inefficiencies out of that extra 14 percent that has gone into Medicare Advantage.' Finance Committee member Sen. Charles Schumer, D-N.Y., said that in his state, too, there are laudable Medicare Advantage plans" (Curry, 9/24).

This information was reprinted from kaiserhealthnews.org with kind permission from the Henry J. Kaiser Family Foundation. You can view the entire Kaiser Daily Health Policy Report, search the archives and sign up for email delivery at kaiserhealthnews.org.

© Henry J. Kaiser Family Foundation. All rights reserved.

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