Democarts Tread Slowly on Medicare Cuts

When Democrats won control of Congress last year, it seemed almost a foregone conclusion there would be cuts in the Medicare program because Democrats have a distaste for managed care health plans.

It is widely known that Democrats do not like health maintenance programs ( HMOs ), so most analysts felt it would only be a matter of time before Democrats began slashing away at the managed care portion of the Medicare program.

The Democrats are willing to cut managed care coverage from Medicare in order to give more funding for expanded health coverage for children who do not have health insurance.

However, when a warning was received from NAACP and the League of United Latin American Citizens about the possible adverse effects of cutting into Medicare would have on blacks and Hispanics; the Democrats decided to take a step back and rethink their plans on cutting any Medicare programs.

Iowa's GOP Sen. Charles Grassley summed up some of the politics behind the Democrats slow approach to slashing Medicare managed care programs by stating, ""There are a lot of blue states ... that have a lot of HMOs."

The Democrats had planned to slash as much as $50 billion over the next 5 years from the Medicare Advantage managed care program. Karen Ignagni, president of American Health Insurance Providers said once Democratic members of Congress starting reviewing these cuts; the less likely it became that Democrats would be willing to cut Medicare programs because of the impact it would have on the beneficiaries in their district.

Ignagni's group is lobbying for Congress to not make these cuts because of the huge impact it would have on seniors.

Rep. Fortney Stark, D-Calif., chairman of a House subcommittee on Medicare, feels health insurance companies that run the managed care program for Medicare are overpaid. Mr. Stark points to the fact that it cost $112 per member who is enrolled in an HMO or preferred provider organizations (PPOs) Medicare program as opposed to $100 per member in the traditional program.

Rep. Earl Pomeroy, D-N.D., adds that right now Democrats feel Medicare managed care programs are nothing but 'slush' funds for health insurance companies running these programs.

Even though a vote on Medicare funding is still some months away, the consensus is the $50 billion cut from Medicare is all but dead. The Democrats did point out they may be able to make small savings in Medicare by slashing some fee for service programs.

Hilary O. Shelton, speaking on behalf of the NAACP, said that even a small cut in funding Medicare managed care programs would have a negative impact on seniors and minorities because they may not have access coordinated care and disease management services. Ms. Shelton also pointed out that seniors and minorities often suffer from more chronic conditions such as diabetes, asthma, and some forms of cancer.

Rosa Rosales, national president of the League of Latin American Citizens, also came out to speak against cutting funding for Medicare managed care programs. Ms. Rosales said any cuts to these programs will threaten access to comprehensive benefits, result in higher out-of-pocket health care costs, and create financial barriers to care that will be particularly harmful for Hispanic seniors."

A memo circulated privately to all House Democrats stated that health insurance companies are more worried about turning a profit than finding less costly and more efficient ways to run managed care programs for Medicare. This private memo went on to say minorities usually do not enroll in managed care plans, and that minorities and low-income elderly are more apt to enroll in Medicaid. This memo also states that attempts to protect managed care payments from cuts would make it difficult to expand children's health coverage and increase benefits in the new Medicare prescription drug program.

Recent government statistics show more than 8 million beneficiaries are enrolled in managed care. This represents about 18 percent of the total Medicare population, and this number is growing. Congressional experts estimate that enrollment in Medicare managed care programs will reach 22 percent by next year.

Read more about the Democrats plan for Medicare at Yahoo News