Pelosi Sides with George Soros over Low-Income Seniors

The Hill reported that, at her press conference earlier this week, House Democrat Leader Pelosi rejected many of the pay-fors in the House-passed payroll tax measure: “We’re not going to give to the middle class with one hand and take from them with another by saying, ‘You’re going to get the tax cut, but seniors are going to have to pay more for Medicare, or whatever.’”

Where to begin with this statement?  For one, the House-passed Medicare proposals have NOTHING to do with making the middle class “pay more for Medicare.”  The ONLY increase in beneficiary cost-sharing in the House-passed bill makes wealthy seniors like George Soros and Warren Buffett pay more for their Medicare benefits.  And it’s such a “radical” proposal that it comes straight from the mind of…Barack Obama, who included it in his September deficit submission to Congress.

Meanwhile, the Hill continued that the former Speaker “Pelosi offered several alternatives for offsetting the tax package, including a provision to… allow Medicare to negotiate prescription drug prices on behalf of millions of seniors in the program…”  However, the Congressional Budget Office has consistently indicated that the only way to achieve savings through drug “negotiation” is by restricting access to therapies for seniors.  To use but one example, in April 2007 CBO concluded that drug “negotiation is likely to be effective only if it is accompanied by some source of pressure on drug manufacturers to secure price concessions.  The authority to establish a formulary, set prices administratively, or take other regulatory actions against firms failing to offer price reductions could give the Secretary the ability to obtain significant discounts in negotiations with drug manufacturers.”

To sum up:  Nancy Pelosi would rather cut access to seniors’ prescription drugs through new government-imposed restrictions than to force George Soros to pay more for his taxpayer-subsidized health care.  And Democrats say they stand with the middle-class how…?

House Democrats’ Absurd Double Standards on Benefits for Billionaires

On Friday evening, Democrats on the House Energy and Commerce Committee sent out an analysis of the health provisions of the House Republican payroll tax proposal.  Of particular note is the following sentence: “Increases and other changes made to the premium structure of Medicare raise fundamental and difficult issues for the program and certainly should never be considered in the context of addressing short term issues.”  This sentence obliquely refers to the proposals for additional means-testing included in the House Republican payroll tax bill – which come directly from the deficit reduction proposal the President submitted to the Joint Committee earlier this fall.
There’s a good reason why House Democrats might want to be circumspect about criticizing the means-testing proposal – because their position results in what can most charitably be described as feats of tautological jujitsu:
  • Congress SHOULD raise taxes on “the rich” to pay for a short-term payroll tax extension – but SHOULD NOT take away taxpayer subsidies for wealthy Medicare beneficiaries to pay for a short-term “doc fix” extension;
  • Congress SHOULD pass the tax increases the President proposed in his September submission to the Joint Committee right away – but SHOULD “CERTAINLY” NOT pass proposals to reduce wealthy beneficiaries’ Medicare subsidies included by the President in the same September proposal without months or years more study;
  • Choosing not to subsidize the health benefits of billionaires like George Soros is a “difficult” decision, but raising taxes by trillions of dollars is easy; and
  • Taking away wealthy Medicare beneficiaries’ subsidies “raise[s] fundamental…issues for the program,” but raising taxes on job creators in the middle of a sluggish economy raises no concerns, fundamental or otherwise, about the impact on stubbornly high unemployment.
It’s clear that Medicare is in the midst of a fiscal crisis – the program is projected to suffer a record deficit of nearly $40 billion this fiscal year, a greater deficit than that faced by Greece.  Even President Obama has admitted that “if you look at the numbers, then Medicare in particular will run out of money and we will not be able to sustain that program no matter how much taxes go up. I mean, it’s not an option for us to just sit by and do nothing.”  Yet House Democrats have articulated a philosophical position on which they are apparently willing to fight:  The holy right of people like Warren Buffett and Bill Gates to have their health benefits subsidized by federal taxpayers. 
So much for fighting for the middle class…

Weekly Newsletter: February 23, 2009

Orszag, Liberal Groups Support Health Care Rationing

Today President Obama will host a “fiscal responsibility summit” at the White House, followed later this week by a submission to Congress of his outline for the federal budget in Fiscal Year 2010 and beyond.  Press reports indicate that health issues will predominate both events, as entitlement spending in Medicare and Medicaid will serve as a focus of the fiscal summit, and health initiatives will be given a prominent place in the President’s budget proposals.

However, some Members may take a skeptical view of comments by Office of Management and Budget Director Peter Orszag and others that health care can be reformed—and the entitlement crisis resolved—primarily through government rationing of health care goods and services.  While head of the Congressional Budget Office, Orszag prepared a report on comparative effectiveness research that advocated rationing’s beneficial effects—while alluding to its potential downsides for patients.  The December 2007 report asserted that such research “could …yield lower health care spending without having adverse effects on health.”  However, the report also admits that “patients who might benefit from more-expensive treatments might be made worse off” as a result of changes in reimbursement patterns.

Orszag’s view of health reform is shared by the left-leaning Commonwealth Fund, which last week released its own report outlining ways to generate savings within the health sector.  The largest chunk of proposed savings—$634 billion over ten years—would come from comparative effectiveness research and subsequent rationing of care.  The report asserts that “merely making information available” about the relative merits of treatments “is unlikely to produce” outcomes yielding sufficient savings—and therefore recommends that the new comparative effectiveness center help “to create financial incentives for patients and physicians to avoid high-cost treatments.”  The Fund proposes that the comparative effectiveness center—similar to the Council established in economic “stimulus” legislation signed into law last week—“make benefit and pricing recommendations to public insurance plans, including Medicare.”

While supporting the need to slow the growth of health spending, and entitlement spending in particular, some Members may be concerned by the implications of these recommendations, which would place government bureaucrats between doctors and patients, leading to denials of critical care.  Some Members may instead support alternatives that would slow the growth of health care costs through additional competition (both inside and outside Medicare), while preserving and enhancing a culture where patients and doctors—not insurance companies or government bureaucrats—determine the appropriate course of medical care.  Some Members may also support means testing for the Medicare Part D benefit—requiring Warren Buffett and George Soros to pay more for their prescription drugs—as an additional way to bring our entitlement obligations in line with projected future revenues.

The Outlook Ahead

The President’s address to Congress Tuesday night, coupled with his submission of a budget outline on Thursday, will commence a six-week period leading up to Congress’ Easter recess where health issues will remain prominent.  As indicated above, the budget may include additional provisions regarding comparative effectiveness research and rationing of health care, as well as proposed cuts to Medicare Advantage plans that have proved popular with seniors—particularly those with low incomes—in recent years.  At this time it remains unclear whether the President will use the budget submission to fulfill his statutory obligation to present Congress with Medicare funding reform legislation, as required by the “trigger” provisions inserted into the Medicare Modernization Act at the behest of House Republicans.

Hearings and other legislative activity are also likely to continue regarding comprehensive health reform; Sen. Ron Wyden (D-OR) introduced his comprehensive bill on February 5, and Senate Finance Chairman Baucus—who pledged to introduce legislation early in the 111th Congress—may follow suit in short order.  The House may also consider legislation related to food and drug safety, as well as a bill (H.R. 1108 in the 110th Congress) giving the Food and Drug Administration (FDA) the authority to regulate tobacco products, funded by “user fees” on tobacco companies.  Particularly as many Democrats have harshly criticized the FDA for lax enforcement related to food safety matters, some Members may believe now is precisely the wrong time to distract the FDA from its current mission in order to have the agency regulate the tobacco industry—and the wrong time to burden working families with the second tobacco tax increase this year, on the heels of the 62 cent tax increase used to fund the State Children’s Health Insurance Program (SCHIP) expansion.

Questions for House Democrats on the Medicare Trigger

  • Ways and Means Health Subcommittee Chairman Pete Stark has publicly stated that “Medicare is not in crisis.” Yet the Medicare program faces unfunded liabilities of nearly $86 trillion—more than 70 times the total anticipated losses from subprime mortgages worldwide. Why do House Democrats believe that $1.2 trillion in mortgage losses requires the creation of massive new government programs to help borrowers, while $86 trillion in debt from an existing government program warrants no action at all?
  • Democrats have complained that the trigger is an “arbitrary” calculation of the health of the Medicare program. Since they find Medicare’s $86 trillion in unfunded obligations an “arbitrary” figure too low to prompt any concern, how high will Medicare’s expected losses have to rise before Democrats will take action? $100 trillion? $200 trillion?
  • “Fixing” the Medicare trigger this year requires finding less than $2 billion in savings during Fiscal Year 2013—this for a program projected to grow over the next five years from $455 billion to $636 billion in spending. Do Democrats really believe that nothing can be done to slow Medicare’s growth in spending from $181 billion to a mere $179 billion over the next five years?
  • When debating a resolution turning off the Medicare trigger last July, Rep. Alcee Hastings (D-FL) said that “The perceived problem with Medicare funding has already been addressed.” How is an $86 trillion shortfall a “perceived” problem—and if it has already been addressed, why do Democrats need to take further action turning off the Medicare trigger?
  • At a House Appropriations Committee markup last year, an amendment creating a bipartisan commission to examine entitlement spending and make recommendations to Congress was defeated on a largely party-line vote. Why do most House Democrats oppose even creating a commission to study the nation’s impending fiscal crisis due to unsustainable entitlement spending?
  • Why do House Democrats believe that wealthy seniors—including billionaires like Warren Buffett and George Soros—should not be asked to pay $2 per day more in premiums for their prescription drug coverage to help improve the solvency of the Medicare program?
  • Why would House Democrats embark on a new health care entitlement expansions—paid for by tax increases—without first ensuring the solvency of the existing Medicare benefit?
  • When gas prices topped $4 per gallon, a House Democratic aide said that the party’s advice to frustrated families struggling to fuel their cars consisted of “Drive small cars and wait for the wind.” What will Democrats tell seniors and those individuals looking to retire when the Medicare Hospital Trust Fund goes broke in 2019—exactly one decade from now?

Weekly Newsletter: November 17, 2008

  • Baucus’ Plan Exposes Democrat Hypocrisy…

    Last Wednesday, Senate Finance Committee Chairman Max Baucus (D-MT) issued a 98-page report outlining his proposals for reforming the health care system. Although his introduction stated that the platform “is not intended to be a legislative proposal,” Baucus did state his hope that the ideas raised would become a starting point for discussions on comprehensive health care reform during the 111th Congress.

    In reviewing the report’s contents, some conservatives may note several glaring contradictions present within its pages:

  • The Baucus plan proposes tens of billions in unfunded mandates on states—requiring Medicaid programs to cover 7.1 million new low-income individuals, and further requiring 33 states to expand their State Children’s Health Insurance Program (SCHIP) eligibility levels—at a time when Baucus and other Congressional Democrats allege that states’ “fiscal crises” require Congress to bail them out of their current obligations.
  • While expressing his support for cutting payments to private Medicare Advantage (MA), Baucus proposes to repeal a planned premium support project within Medicare, because he wants to bring payments to private insurers in line with traditional Medicare costs while opposing a link between Part B premiums and “how much [private] insurers’ costs differ from traditional Medicare.”
  • Senator Baucus, who at a health reform conference in June questioned Congress’ role in overseeing Medicare payments—“How in the world am I supposed to know what the proper reimbursement should be for a particular procedure?”—proposes numerous attempts to tie reimbursement to various actions by physicians (IT adoption, etc.) in the hope that these will achieve purportedly desirable health outcomes.

    …While Proposing More New Spending, Little Cost Control

    Many conservatives may also be concerned by the substance of the Baucus plan’s broader proposals. Similar in many respects to the less-detailed plan offered by President-elect Obama, the platform would expand the role of government in health care in significant, and historic, ways:

  • Expansion of Medicaid and SCHIP to millions of new individuals, as referenced above;
  • Health insurance subsidies for a family of four making $85,000 per year;
  • Repeal of the current five-year waiting period for legal aliens to become eligible for government benefits, increasing government spending on non-citizens;
  • Two new “temporary” entitlement programs, including a buy-in to the Medicare program for those aged 55-64, that many conservatives may be concerned will be anything but “temporary;”
  • A new publicly-run insurance option available to all citizens, whose low reimbursement rates would likely encourage providers to raise rates for private insurers, potentially leading to a “death spiral” of privately-provided coverage options;
  • A health insurance exchange representing another layer of regulation on the health insurance industry;
  • An individual mandate to purchase insurance, requiring the government to pass judgment on the adequacy of individuals’ coverage; and
  • Tax increases on businesses through a “pay-or-play” mandate that could in future years become an easy way for the government to pass off the cost of rising health care on the private sector.

    Just as worrisome to many conservatives are the lack of true cost-containment measures present in the Baucus proposal. Two of the plan’s prime savings targets—an expansion of the Medicaid drug rebate and one-sided cuts to Medicare Advantage plans—constitute little more than government-imposed price controls, which some conservatives may believe both ineffective and detrimental to new innovation.

    Some conservatives may believe that the true answer to reforming health care and slowing the growth of costs lies in harnessing innovation and competition. Implementing, rather than repealing, the Medicare premium support program would allow insurers to compete directly with Medicare to treat seniors in the most cost-effective manner. Additional means-testing for current entitlements would ensure that scarce government resources will go to those most in need of assistance—meaning that Warren Buffett and George Soros should not pay the same prescription drug premium as a senior making $20,000 per year. These efforts, coupled with initiatives to streamline costly state benefit mandates and other regulations, would expand coverage by slowing the growth of health costs, helping to ensure the future viability of our current entitlement programs.

Weekly Newsletter: July 28, 2008

Tobacco Bill Coming Soon

This week the House could consider legislation (H.R. 1108) granting the Food and Drug Administration (FDA) the authority to regulate tobacco, possibly under suspension of the rules. The bill would establish a new center within FDA to regulate tobacco products and assess tobacco companies more than $5 billion in “user fees” over the next ten years to pay for this regulation.

Some conservatives may be concerned by the regulatory regime the bill would establish, which would require an agency charged with promoting food and drug safety to regulate a product inherently unsafe and unhealthy. Some conservatives may also object to the multiple layers of regulation the bill would create, by leaving intact the Federal Trade Commission’s ability to regulate tobacco advertising and distribution and providing only limited pre-emption against additional state-based regulations and restrictions. Some conservatives may question whether the highly prescriptive restrictions in the bill— including advertising limitations on the use of color advertising and regulation of the font size of tobacco disclaimer warnings, all of which raise significant constitutional questions about their free-speech implications—constitute good public policy, particularly as the Congressional Budget Office estimates that H.R. 1108 will reduce smoking levels by only 2% over 10 years.

Lastly, some conservatives may object to provisions in the bill that could prompt an international trade dispute. Last week, HHS Secretary Leavitt wrote to Energy and Commerce Committee Ranking Member Barton about H.R. 1108, observing that, because the bill prohibits all tobacco flavorings except menthol, foreign countries which manufacture clove or other flavored cigarettes may take action against the United States for providing unfair and disparate treatment for a particular type of manufactured cigarette. As press reports indicate that H.R. 1108 may be considered under suspension of the rules, some conservatives may be concerned by the lack of procedural opportunities available to address this disparity, such that the United States can live up to its obligations under international free-trade agreements.

A Policy Brief on H.R. 1108 (as reported by the Energy and Commerce Committee) can be found here.

Democrats Ignore Medicare Funding Warning

Last week Democrats responded to the Medicare trustees’ finding that the Medicare program faces significant future funding shortfalls—by resolving to ignore the problem. The resolution concerned a provision inserted into the Medicare Modernization Act at the behest of the RSC, which provided for the President to submit, and Congress to consider under expedited procedures, legislation to remedy Medicare’s funding problems when the program is projected to consume more than 45% of its funding from general revenues (as opposed to the Medicare payroll tax and beneficiary premiums). The Democrat majority’s action turned off this funding “trigger” for the balance of the 110th Congress, preventing those who believe in entitlement reform from taking action to force a House floor vote on Medicare reform legislation.

Many conservatives may be disappointed by the actions of Congressional Democrats, which prevented the President’s reasonable and modest proposals for Medicare reform—means testing that would make wealthier individuals like Warren Buffett and George Soros pay $2 per day more in Part D prescription drug premiums and liability reform to reduce the costs associated with defensive medicine practices— from receiving a vote in Congress. Many conservatives may believe that solving Medicare’s $86 trillion in unfunded obligations—and a Hospital Trust Fund scheduled to be exhausted in little more than a decade—will not be helped by Democrats’ apparent eagerness to ignore the problem. However, when Democrats like Florida’s Alcee Hastings note that “the perceived problem with Medicare funding has already been addressed,” many conservatives may be concerned that this lack of awareness will only hasten the day when Medicare’s funding shortfalls jeopardize the viability of the program—and wonder what policy-makers will tell their senior constituents when it does.

There are RSC Policy Briefs related to the Medicare trigger: Legislative Background; Talking Points on Trigger; Questions for House Democrats; Size of Medicare Program; White House Trigger Bill; Medicare Trustees Report

Article of Note: Fuzzy Math

Last Wednesday the New York Times reported on the many financial discrepancies surrounding the health care plan of Sen. Barack Obama (D-IL). While Sen. Obama has been consistent in saying that his health plan would save every American family $2,500 per year, many observers have come to question the factual basis for a “best guess” assertion by his advisers early last year. Independent estimates, including those by the Congressional Budget Office, have questioned whether the savings from such initiatives as health information technology and chronic care management will materialize, particularly in the four-year timeline Sen. Obama has promised—such that even a statement by Obama’s own advisers backtracked from any assertions that the purported savings would materialize by a date certain.

Many conservatives may be skeptical of Sen. Obama’s claims, particularly as the liberal Commonwealth Fund released a report in December with a menu of options for savings that would by their estimates achieve a total reduction in spending of only 6% in 10 years. Some conservatives may also be concerned that, in an attempt to reduce health care costs—whether by 8%, 6%, or some lesser amount— Sen. Obama would rely first and foremost on imposing price controls on physicians, pharmaceutical manufacturers, and insurance companies, along with rationing care through a government-controlled comparative effectiveness institute. Many conservatives may believe that such bureaucratic restrictions would in the long run prove far more effective at growing the size of government than slowing the growth of health care costs.

Read the article here: New York Times: “Health Plan from Obama Sparks Debate

Information Alert: Turning Off the Medicare Trigger

Today the House will consider H. Res. 1368, which would unfortunately turn off the Medicare cost-containment “trigger” for the remainder of the 110th Congress.

  • The Medicare “trigger,” incorporated into the Medicare Modernization Act at the behest of Chairman Hensarling and the Republican Study Committee in 2003, requires the President to submit, and Congress to consider, legislation when the Medicare trustees issue a warning that the program is growing at an unsustainable rate.
  • Complying with the trigger would mean that Medicare would grow by a mere $179 billion, instead of $181 billion, over the next five years — but it would send an important message that the US government is firmly committed to the cause of entitlement reform.
  • Democrats have criticized the trigger as being an “arbitrary” measure of Medicare’s fiscal solvency, but the Medicare trustees note that the program faces nearly $86 trillion in unfunded obligations. Some conservatives may question how much larger this “arbitrary” figure must grow for the majority to take action reforming entitlement spending.
  • Today’s resolution would prevent consideration of legislation that would make billionaires like Warren Buffett and George Soros pay more for their Part D prescription drug coverage. At a time when Democrats want to raise taxes on wealthy Americans, conservatives may question why Democrats object to making Ross Perot pay $2 per day more for his prescriptions to help restore Medicare’s fiscal solvency.
  • Today’s resolution would also prevent the consideration of reasonable medical liability reform legislation that would reduce the growth in Medicare spending by cutting down on defensive medicine practices. Many conservatives may support taking steps to protect doctors from frivolous lawsuits, and question why Democrats are once again rushing to defend trial lawyers.
  • Less than 24 hours after approving legislation that many conservatives considered a massive bailout associated with the housing market, this Democrat resolution would do nothing to resolve an entitlement crisis that by some estimates could be 70 times larger than the worldwide losses from subprime loans. In fact, some conservatives may believe that turning off the trigger is worse than doing nothing, because it prevents Members who believe in the need for entitlement reform from taking action in the face of Democrat intransigence.
  • As this Democrat Congress has dedicated floor time to debate subjects such as monkey bites, bilge water discharge, and the sale of wild burros, many conservatives may believe Congress would be better off spending its time addressing Medicare’s $86 trillion in unfunded obligations.

Weekly Newsletter: July 21, 2008

Resolution Would Block SCHIP Funds from Being Targeted to Poor Children

Last week, a group of Senators introduced a Resolution of Disapproval (S. J. Res. 44) designed to nullify guidance put forward by the Administration regarding state efforts to expand government-funded health insurance coverage to higher-income children. The guidance, issued last August and revised this May, provides a list of steps states must take in order to expand coverage to children in families making over 250% of the federal poverty level (approximately $50,000 for a family of four), and to ensure that states do not encourage families to drop private insurance coverage in order to obtain coverage through a government program.

Many conservatives may be surprised and disappointed by this resolution, which if successful would effectively give states a disincentive to reach out and enroll poorer-income children if children from wealthier families can be more easily found and enrolled in government-funded coverage. Particularly as the Administration has issued clarifying guidance noting that no child need be dropped off the SCHIP rolls while states implement this new policy, some conservatives may question why Democrats would prefer to extend government-funded health insurance to families making $80,000 or more, while neglecting to ensure that poorer children receive first preference for SCHIP enrollment.

An RSC Policy Brief on the Administration’s SCHIP Guidance can be found here.

Medicaid Bailout for States Receives Committee Hearing

This week the House Energy and Commerce Committee will hold a Subcommittee hearing on legislation (H.R. 5268) designed to provide a temporary increase in the Medicaid matching rate provided to states. News reports suggest that the Democrat leadership may attempt to attach similar provisions to a second “stimulus” package being considered by the Congressional majority.

Some conservatives may be concerned that this legislation—which was proposed, and rejected, during negotiations over the first “stimulus” bill passed in January—would not provide any “stimulus” at all, instead substituting federal Medicaid spending for state dollars, at a significant cost to the federal budget deficit. Given an Urban Institute study suggesting that lost revenue—and not increases in Medicaid enrollment—generates a measurably larger impact on state budgets during economic downturns, some conservatives may view H.R. 5268 as providing a bailout to states, which did not engage in proper budgetary planning, that will only encourage “moral hazard” among states with flawed revenue projection models.

The legislation being considered also includes provisions designed to disregard “extraordinary pension contributions” for purposes of calculating each state’s Medicaid match rate. Because the Centers for Medicare and Medicaid Services has noted that Michigan—home to full Committee Chairman John Dingell—is the only state that would benefit from such a change, some conservatives may consider this provision an authorizing earmark and object to its inclusion.

An RSC Policy Brief on Medicaid matching formulae can be found here.

Documents of Note: Democrats Defend Entitlement Spending on the Wealthy

Last Wednesday, RSC Chairman Hensarling submitted an op-ed to the Washington Times discussing Medicare legislation recently enacted over the President’s veto. The article noted that the Democrat-constructed bill pits groups of low-income seniors against each other—by adding subsidies for some, while taking away access to Medicare Advantage for millions—all the while doing nothing to make billionaires like Warren Buffett and George Soros pay $2 per day more for prescription drug coverage.

Read the op-ed here.

And as Congress once again may consider SCHIP-related legislation, some conservatives may find the colloquy between Rep. Mike Burgess (R-TX) and House Energy and Commerce Chairman Dingell from last October enlightening. In it, Chairman Dingell admitted that states can choose to disregard tens of thousands of dollars of income from families applying for SCHIP—thus making families with six-figure incomes potentially subject to government-funded health insurance for “poor” children.

Rep. Hensarling Op-Ed: Democrat Medicare Bill Shortchanges Minorities

Over the last several weeks, I have heard from physicians rightly concerned that lawmakers had yet to pass legislation repealing a scheduled 10.6 percent reduction in their Medicare reimbursement rates. No doubt Congress should and will act soon, to preserve seniors’ access to physician care. This is critical for doctors, specifically primary care physicians, whom already face tremendously difficult challenges. But behind the scenes of the physician reimbursement debate lies an interesting paradox in the way Congressional Democrats protect wealthy seniors, while exposing large numbers of low-income beneficiaries whom the legislation purports to protect.

Nestled into the sprawling 278-page bill the House passed with limited debate are provisions that would expand eligibility for subsidy programs that aid low-income beneficiaries with Part B premium payments, deductibles, and co-insurance. Coupled with several proposals designed to increase outreach to low-income populations, the changes would cost hardworking Americans $7 billion over the next ten years.

Of course, budgetary rules require Congressional Democrats to pay for this expansion of the Medicare benefit. By listening to Senator Obama, you might assume that the likeliest culprit would be yet another tax on the wealthy. But that is far from it. The expanded subsidies for low-income individuals – as well as the physician reimbursement provisions and other related Medicare provisions – are paid for by cuts to Medicare Advantage plans that provide coverage to millions of seniors.

The paradox arrives in the discovery that Medicare Advantage plans disproportionately serve low-income and minority populations. Nearly half of all Medicare Advantage beneficiaries had incomes under $20,000; for Hispanic and African-American populations, that number rises to 70 percent. While policy-makers argue about “overpayments” to Medicare Advantage plans, many low-income seniors have come to appreciate – and rely on – the lower costs and increased benefits that these plans have provided. But as a result of the House-passed legislation, over 2 million seniors, including 1.8 million in private fee-for-service plans popular in rural areas with limited physician access, will lose their Medicare Advantage coverage.

To sum up: Congressional Democrats are cutting benefits for some low-income seniors – in order to extend benefits to other low-income seniors. All the while, proposals to increase Part D premiums for the wealthiest Medicare beneficiaries -think George Soros and Warren Buffett – languish in legislative purgatory.

There is a Machiavellian logic to Democrats’ apparent lack of appetite for Medicare means testing. If wealthier individuals become less dependent on the welfare state for their health benefits in retirement, political support for the popular program may wane. But when President Bush proposed to extend current means-testing of Part B premiums to the prescription drug plan as one way to alleviate Medicare’s funding woes, the New York Times considered this element of the President’s plan a “reasonable” proposal. If President Bush and the editorial board of the New York Times can both see the merits of this concept, there is little reason why Congress, in its infinite wisdom, should not see fit to include it in the Medicare bill.

Instead, the legislative product being considered constitutes, at best, an attempt at behavioral modification – forcing low-income beneficiaries away from plans run by “greedy” insurance companies – and at worst a perverse experiment in social Darwinism, pitting one group of vulnerable seniors against another in a competition for Medicare dollars. All this so Warren Buffett can avoid having his estimated $60 billion fortune decimated by paying an extra $2 per day for prescription drug coverage.

In March, the Medicare trustees issued their annual report, which noted that Medicare faces $86 trillion – yes, trillion – in unfunded obligations. The two best ways to stem this looming tide of debt are increased competition among private Medicare Advantage plans and proposals utilizing means-testing to dedicate scarce health care resources to the seniors who need them most. Yet the House bill undermines the former, while ignoring the latter.

While introducing Medicare legislation very similar to the bill the House passed, Senate Finance Committee Chairman Max Baucus decried efforts to “protect private insurance plans” that would “leave low-income beneficiaries behind,” arguing that his “balanced legislation” will prevent the latter while discouraging the former. I agree with Senator Baucus that his legislation is indeed balanced – it would ensure that a senior with $20,000 in income will continue to pay as much for prescription drugs as Ross Perot (or Senator Baucus himself). But in their ideological quest to undermine private insurance plans, Congressional Democrats are indeed leaving millions of beneficiaries on Medicare Advantage plans, many of them low-income, behind. Speaker Nancy Pelosi and House Democrats – Cutting coverage for beneficiaries while protecting billionaires.

This post was originally published at The Washington Times.

Questions for House Democrats on the Medicare Trigger

  • Ways and Means Health Subcommittee Chairman Pete Stark has publicly stated that “Medicare is not in crisis.” Yet the Medicare program faces unfunded liabilities of $86 trillion—more than 70 times the total anticipated losses from subprime mortgages worldwide.  Why do House Democrats believe that a $1.2 trillion “crisis” requires the creation of massive new government programs to help borrowers, while $86 trillion in debt from an existing government program warrants no action at all?
  • Democrats have complained that the trigger is an “arbitrary” calculation of the health of the Medicare program. Since they find Medicare’s $86 trillion in unfunded obligations an “arbitrary” figure too low to prompt any concern, how high will Medicare’s expected losses have to rise before Democrats will take action?  $100 trillion?  $200 trillion?
  • “Fixing” the Medicare trigger this year requires finding less than $2 billion in savings during Fiscal Year 2013—this for a program projected to grow over the next five years from $454 billion to $636 billion in spending. Do Democrats really believe that nothing can be done to reduce Medicare’s growth in spending from $182 billion to a mere $180 billion over the next five years?
  • At a recent House Appropriations Committee markup, attempts to attach language creating a bipartisan commission to examine entitlement spending and make recommendations to Congress was defeated on a largely party-line vote. Why do most House Democrats oppose even creating a commission to study the nation’s impending fiscal crisis due to unsustainable entitlement spending?
  • Why do House Democrats believe that wealthy seniors—including billionaires like Warren Buffett and George Soros—should not be asked to pay $2 per day more in premiums for their prescription drug coverage to help improve the solvency of the Medicare program?
  • A House Democratic aide recently said that the party’s advice to frustrated families dealing with high gas prices consisted of “Drive small cars and wait for the wind.” What will Democrats tell seniors and those individuals looking to retire when the Medicare Hospital Trust Fund goes broke just over a decade from now?