Senate Democrats Oppose Competition Pilot Program in Medicare Law

Senate Democrats on Wednesday plan to begin to introduce a "flurry of bills" to exempt their states from a pilot program to test competition between private health plans and traditional, fee-for-service Medicare, Roll Call reports (Pierce, Roll Call, 2/25). Under the program, part of the new Medicare law (HR 1), fee-for-service Medicare in 2010 would begin to compete with private health plans in six metropolitan areas. Beneficiaries would have to pay more to remain in fee-for-service Medicare, provided that fee-for-service would cost more, but Medicare would cap premium increases at 5% per year with safeguards to exempt the oldest and lowest-income beneficiaries (California Healthline, 11/25/03). At a press conference on Wednesday, at least seven Senate Democrats, led by Sen. Debbie Stabenow (D-Mich.), plan to introduce bills to exclude their states from the program. In addition, at least 12 other Senate Democrats plan to introduce similar bills in the next few days, according to one Senate Democratic aide. Senate Minority Leader Tom Daschle (D-S.D.) said that the bills would help "stop privatization of Medicare." According to Stabenow, under the pilot program, healthier Medicare beneficiaries likely would enroll in private health plans, and sicker beneficiaries likely would remain in fee-for-service Medicare. As a result, premiums for beneficiaries who remain in fee-for-service Medicare could increase by 25% or more, according to the Congressional Budget Office, Roll Call reports.

Sen. Hillary Rodham Clinton (D-N.Y.) said, "If they want these pilot programs, they should only go to those states where the Senators voted for this bill." Jim Manley, a spokesperson for Sen. Edward Kennedy (D-Mass.), said that the program "breaks the fundamental promise of Medicare, replaces a guarantee of quality health care with increased premiums, and leaves seniors and people with disabilities to fend for themselves in the market." However, Senate Republicans "scoffed at the Democratic strategy as a publicity stunt and as meaningless because the pilot program will not even begin for another six years," according to Roll Call. One unnamed Senate Republican aide said, "This is just another in a long effort of failed strategic ideas from the minority ... There's a difference between voting on message amendments and something actually becoming law" (Roll Call, 2/25).

Families USA has hired Walter Cronkite, former anchor of "CBS Evening News," to narrate and appear in an 11-minute video that highlights the "shortcomings" of the Medicare law, the AP/Las Vegas Sun reports. In the video, part of a larger campaign against the law, Cronkite presents a "generally critical view" of the legislation, the AP/Sun reports. He states that Medicare beneficiaries "will not benefit from the Medicare program's bargaining power" because the law "explicitly prohibits the government from negotiating with drug companies for lower prices" on prescription drugs. Cronkite praises the new prescription drug benefit included in the law but adds that "there are also some disappointing features, such as the failure to contain skyrocketing drug costs and the big gap in coverage, especially the 'doughnut hole.'" Families USA will spend $500,000 on the campaign, which also will include events in 24 cities, Ron Pollack, executive director of the group, said. Families USA plans to send the video to 10,000 senior centers and retirement communities nationwide (Sherman, AP/Las Vegas Sun, 2/24).