Rekindling Reform
About UsReports and StudiesHealth PolicyArchivesLinksContact Us

HOW OUR NATIONAL POLITICAL DISCOURSE HAS CHANGED OVER FOUR DECADES
Click here to read a NY Times OpEd by Theodore Marmor and Jerry Mashaw.

URGENT: EXPAND SOCIAL SECURITY, DON'T CUT IT
Click here to see how an editorial in The Nation argues this.

Please help support us


ARCHIVES BACK TO ARCHIVES | HOME
Medicare Reform Legislation, 2007

August, 2007

A bill passed August 1 by the House of Representatives is a giant step toward restoring Medicare as the dependable program that seniors and people with disabilities have counted on for four decades. The bill, if enacted, would undo the great majority of the corrosive provisions of the Medicare Modernization Act of 2003 (MMA), legislation that was calculated to undermine Medicare's fiscal integrity and transform it from social insurance to private insurance.

In coupling the Medicare reforms with major enhancements of child health coverage, the House bill offers a key strategic opportunity for coalition building. It unites the interests of children, families and seniors and has attracted strong support from the nation's governors as well as the medical profession.

Titled the CHAMP Act – Child Health and Medicare Protection Act – the House bill:
  • Bolsters Medicare's finances by phasing out, over four years, overpayments to (private) "Medicare Advantage" (MA) plans, which have been getting paid an average of 12 percent more per beneficiary than providers under traditional Medicare
  • Sets up measures to rein in fraud and abuse in marketing of MA plans
  • Limits patient cost sharing in MA plans to no more than occurs for the same services in traditional Medicare
  • Mandates the medical loss ratio of MA plans, starting in 2010, to be at least 85 percent
  • Renames the MA program as the "Medicare Part C" program
  • Repeals the MMA's 45 percent cap on the general revenue part of the Medicare program's overall cost
  • Repeals the comparative cost adjustment demonstration program that is currently slated to convert Medicare into a defined contribution (voucher) program in 2010 in six metropolitan areas.
The new bill combines these steps with measures to:
  • Expand dramatically the (State) Child Health Insurance Program (CHIP)
  • Improve Medicare benefits
  • Eliminate cost sharing for preventive services in Medicare, even excluding them from the deductible
  • Improve financial assistance for low income Medicare beneficiaries
  • Reform the rules for Medicare payments to doctors and avert cuts due in 2008 and 2009 that, if implemented, could cause many doctors to abandon Medicare
  • Establish a center for research on comparative effectiveness of health services.
The Senate for its part, passed a measure that also would expand CHIP, though not nearly as much as the House's CHAMP Act would. However, the Senate bill has no provisions either to protect or to strengthen Medicare. After their summer recess, the two chambers will need to reconcile their bills. The insurance and pharmaceutical industries are lobbying heavily against CHAMP's Medicare provisions, so great pressure on Congress will be needed to ensure that the resulting legislation preserves the CHAMP Act's Medicare reforms. Fortunately both AARP and AMA have been advertising in support of CHAMP.

Under other provisions of the CHAMP Act, as described in the July 26 and August 2 issues of the Medicare Rights Center's bulletin Asclepios:
  • The bill eliminates the "doughnut hole" in Part D drug coverage for millions of older adults and people with disabilities living on less than $1,276 per month.
  • The bill substantially raises the amount of financial assets a person can have and still qualify for Extra Help under the Part D drug benefit.
  • The bill ends discriminatory treatment of mental illness under Medicare by providing parity in coverage with physical ailments.
People with Medicaid and Medicare would not be randomly assigned to private drug plans with no consideration of whether those plans cover their medications. To ensure that they have access to the drugs they need, they would be enrolled in only those plans that cover 95 percent of the 100 brand-name drugs and 95 percent of the 100 generic drugs most prescribed for people with Medicare.

People who are eligible for Extra Help – which provides drug plan premium discounts – would not have to pay a late penalty when they sign up for coverage.

The legislation would also protect people who joined a plan because of the drugs covered in its formulary. Members of drug plans that make midyear changes in formularies (the list of covered drugs) would be able to change plans, unless the formulary change was required for safety reasons.

The bill would give Medicare the ability to stay current with medical practice in its coverage of preventive health benefits. The secretary of health and human services would have the discretion to add coverage of new services to prevent or detect illness or disability.

The Center for Medicare Advocacy has described the CHAMP Act as including the most comprehensive and extensive improvement in protections for persons with low incomes in almost 20 years.





Copyright 2013 Rekindling Reform. All rights reserved.