POSTPONING INEVITABLE? A strong bipartisan vote overrode President Bush's veto of a Medicare bill that would have cut payments to physicians. Now that the bill is law, seniors covered by Medicare need to understand how the other aspects of the bill may affect them.

Physicians and pharmacists welcomed the congressional override—not just because it stops a cut in their reimbursement rate. The new law also modifies several other aspects of Medicare that work to the benefit of health care providers. Critics maintain that the changes will hurt many Medicare patients in the long run, and only postpones having to deal with the Medicare program deficit.

A Step Away from Privatization?

Physician pay cuts that briefly went into effect July 1 would have reduced overall spending of the Medicare program. Now that the cuts are blocked, how will the bill pay for the difference? By cutting funding to Medicare Advantage, a corporate insurance program administered by the government.

Approximately 9.5 million Americans use Medicare Advantage plans instead of standard Medicare. Advantage plans:

• are paid a fixed amount directly by Medicare
• are more like private HMOs, requiring patients to use specific doctors or medical networks
• can be more expensive than regular Medicare, but provide expanded medical services
• can even cost less than regular Medicare in certain situations, by providing rebates to patients
• provide patients with some choices about what kind of coverage they need, and how much they want to spend

Although the program was created to foster competition and creativity in providing health coverage, critics say the program costs more than standard Medicare. Rep. Lloyd Doggett (R-Texas) said, "We take some of that unnecessary waste and we use it to pay physicians who are working hard and ought not to have a cut in their reimbursement rates." (Associated Press, 7/17/08)

Republicans Join Democrats to Override Bush Veto

Bush referred specifically to the Medicare Advantage program when he announced his veto. "I support the primary objective of this legislation, to forestall reductions in physician payments," he said. "Yet taking choices away from seniors to pay physicians is wrong." (American Medical News, 7/18/08

Many insurance companies and privatized health care advocates supported the president's veto.

However, both the Senate and House of Representatives easily voted to reject the veto.

All Democrats voted to override the bill, and many Republicans joined them.

Changes Included in Medicare Bill

Here are a few of the many provisions in the bill:

• Block pay cuts to physicians.
  • blocks 10.6% reduction this year
  • blocks a further 5.4% reduction planned in 2009
  • provides for a 1% increase in 2009
  • prevents a likely sudden decrease in the number of doctors who will accept Medicare insurance*
• Lower copayments for mental health visits from 50% to 20% of office visit cost.
• Provides incentives for doctors to use electronic prescription technologies (see sidebar).
• Expand Medicare Part D drug coverage to require more drugs be covered by Medicare.
• Postpone competitive bidding program for suppliers of durable medical equipment.
• Continue low-income coverage and expand drug benefits to low-income patients.

*In some areas, Medicare beneficiaries have trouble locating a doctor who will accept them as a patient. Because of the bureaucracy involved with accepting Medicare insurance, some doctors have stopped accepting new patients or refuse to accept Medicare at all.

Postponing the Inevitable?

The president and other critics of the bill point out that the pay cuts to physicians were originally intended to improve the large Medicare funding problem. Medicare and Social Security are currently under-funded, which means these entitlement programs run a huge deficit every year. Congress set up the pay cuts in 1987 in order to start dealing with the problem.

The short-term concerns that there are enough doctors to treat Medicare beneficiaries won the day. Sen. Dianne Feinstein (D-Calif.) said, "The California Medical Association tells me that if those mandated cuts [in physician fees] took place, we could lose 60 percent of doctors who currently take Medicare patients." (Christian Science Monitor, 7/15/08)

Copyright © 2010 Informify

Question for Readers:

Do you think Congress is sticking its head in the sand regarding Medicare funding, and putting off having to deal with the program's deficit?