Several Democratic Lawmakers Oppose Medicare Competition Pilot Program

Several Democratic legislators are attempting to exempt their states from a pilot program to test competition between private health plans and traditional, fee-for-service Medicare, the Washington Times reports (Fagan, Washington Times, 6/8). Under the program, part of the new Medicare law, fee-for-service Medicare in 2010 would begin to compete with private health plans in six metropolitan areas. If costs are higher under traditional Medicare, beneficiaries remaining in that program would have to pay more. Medicare would cap premium increases at 5% per year with safeguards to exempt the oldest and lowest-income beneficiaries (California Healthline, 2/25). At least 15 Democratic senators, including Minority Leader Tom Daschle (S.D.) and Hillary Rodham Clinton (N.Y.), have introduced bills that would block the competition pilot program from entering their states. At least nine House Democrats also have introduced bills that would prevent the pilot program from coming to California, Connecticut, Michigan, New Jersey, New Mexico, New York, Pennsylvania, Texas and Washington, D.C. Aides for both parties said it is not likely that the bills will be passed this year because the House is controlled by Republicans. However, Sarah Feinberg, a spokesperson for Daschle, said that Democrats will continue to push their bills this year, and if there is no action, will re-introduce the issue next year. Some Republicans, including Sens. Gordon Smith (Ore.) and Lincoln Chaffee (R.I.), have expressed concern about the program, according to the Times.

The program's opponents say that it favors private plans because the government will provide them with larger payments than traditional Medicare receives. Feinberg said, "This program basically amounts to a Medicare privatization experiment." One Democratic aide also said that Democrats who introduced the bills were reacting to a rumor that the Bush administration had agreed to keep the pilot program out of some Republican lawmakers' states. According to the aide, Democrats do not want Republicans to be exempted from the pilot project. HHS spokesperson Bill Pierce said that he is not aware of plans by the Bush administration to exempt any Republican states from the program, adding that the Democrats' bills are part of an effort to "wage a political war" against the new law. Supporters of the pilot program say that it was introduced to settle the debate over whether private plans or traditional Medicare is more efficient at providing health coverage. Robert Moffit, health care specialist at the Heritage Foundation, which supports the program, said that it is modeled after the Federal Employees Health Benefits Program, which offers a variety of health plans with different premiums and out-of-pocket costs to federal employees. He added that it is "profound hypocrisy" for lawmakers to oppose a pilot project that offers health coverage similar to their own (Washington Times, 6/8).