Sen. Edward Kennedy (D-Mass.) introduced legislation that would eliminate $12 billion set aside in last year's Medicare reform law to boost payments to private health plans. Kennedy's bill, which he calls the Defense of Medicare Act, also would repeal a demonstration project set to begin in 2010 in which Medicare would compete directly with private health plans for beneficiaries. Excessive payments to Medicare HMOs and PPOs "not only weaken Medicare but raise premiums for senior citizens and add to the deficit," Kennedy said in a summary of the bill provided by his office. The $12 billion for increased health-plan payments was intended to help prepare the plans for taking on a large number of Medicare beneficiaries in 2006, when beneficiaries will have the choice of leaving the traditional program. Kennedy cited a recent Medicare trustees' report that predicted the Medicare trust fund would go broke seven years earlier than expected as one reason for his legislation. -- by Jeff Tieman
Kennedy wants to repeal Medicare plans' $12 billion
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