If anybody was under the illusion that major Medicare reform would be a bipartisan initiative this year, those hopes were dashed as House Democrats began fighting President Bush's call for restructuring.
Without consensus in a nearly evenly divided Congress, it may mean little or no change in the near future to Medicare's model of covering beneficiaries and paying providers' bills, which are projected to amount to $238.1 billion this year.
"I think we're back to the same-old, same-old in terms of those who are against the private-sector reforms," said Edward Goodman, vice president of public policy at the VHA hospital alliance.
At two separate hearings in the two days after Bush's endorsement of a reform framework developed by a bipartisan commission two years ago, House Democrats launched a counteroffensive against the plan.
In his budget address to a joint session of Congress last week, Bush lauded the work of the National Bipartisan Commission on the Future of Medicare, which developed, but did not formally approve, a plan under which many more seniors would receive their Medicare coverage through private-sector health plans.
"Medicare's finances are strained and its coverage is outdated," Bush said. "Now is the time to act." He didn't specifically endorse any Medicare reform bill introduced so far in Congress.
But Democrats were prepared to pounce on the bipartisan commission's plan.
At a hearing of the House Ways and Means Committee's health subcommittee, Rep. Fortney "Pete" Stark (D-Calif.), the panel's senior Democrat, took on Sen. John Breaux (D-La.), co-chairman of the bipartisan commission and co-sponsor, with Sen. Bill Frist (R-Tenn.), of legislation that would enact the commission's plan.
Stark said the proposal relies too heavily on private managed-care plans to deliver healthcare to Medicare beneficiaries. Stark and fellow Democrats cited HMO withdrawals from many markets-affecting nearly 1 million beneficiaries last year alone-and higher Medicare expenditures per HMO enrollee than expenditures for beneficiaries receiving fee-for-service care among the reasons to oppose the Breaux-Frist proposal.
"There is no evidence that managed care has done anything to help Medicare," Stark said.
Rep. Jim McDermott (D-Wash.), a psychiatrist, added: "What we're seeing is a proposal that's designed to push seniors into managed care by dangling this benefit out there."
The Breaux-Frist plan aims to change Medicare from a giant bill-payer to a system that pays most, but not all, of seniors' premiums for joining private-sector health plans. A second bill, dubbed Breaux-Frist II, would create a new agency to oversee Medicare HMOs and private prescription-drug plans.
Breaux said the Congressional Budget Office estimated that Breaux-Frist II, offered as a moderate alternative to the first bill, would increase Medicare spending by $163 billion during the next 10 years. That is less than the estimates of Democratic-sponsored bills that would add prescription-drug benefits to Medicare.
But Breaux, testifying before the subcommittee, said his plan is the only way to offer prescription-drug coverage and choice of health plans to beneficiaries without breaking the federal bank because his proposal would do more to constrain the program's costs.
He also said it would speed new medical technologies and treatments to beneficiaries because private plans would have more freedom to cover new innovations than fee-for-service Medicare.
"(Medicare) is inadequate in what it does and noted for what it does not do," Breaux said. "This is going to combine the best of what the government can do with the best of what the private sector can do."
Despite the opposition from his own party to the first of his two plans, Breaux said he was hopeful that Breaux-Frist II would receive stronger support.
The House Energy and Commerce Committee's healthcare and oversight subcommittees also conducted a joint hearing aimed to build a case that HCFA's regulation of Medicare, Medicaid and other federal healthcare programs is too overbearing and should be streamlined. The hearing was the first in a series of fact-gathering sessions to support potential legislation or administrative actions to rein in HCFA regulation.
A similar case is made in the Breaux-Frist plan, which would take Medicare HMO regulation away from HCFA to reduce regulation of the health plans and make them more profitable.