HHS Secretary Tells Insurers He's With Them In Funding Debate

Thursday, March 22nd 2007, 1:40 pm
By: News On 6

WASHINGTON (AP) _ The Bush administration reassured worried health insurance executives Thursday that it strongly opposes efforts to cut their payments and use the savings to expand a separate insurance program for children.

Health and Human Services Secretary Mike Leavitt said that cutting managed care payments to insurers serving the elderly is part of a broader effort by some lawmakers to get the federal government to run health care.

``There are those who want the government to do the market's job,'' Leavitt told members of America's Health Insurance Plans, a trade group. ``They want to steer Americans into a government run, one-size-fits-all plan.''

Democratic lawmakers have listed the expansion of the State Children's Health Insurance Program as their top health priority this year. Their goal: Increase enrollment in the program from about 6 million children to about 12 million. The cost would be about $75 billion over five years _ triple current funding.

Many Democrats say some of money necessary for an expansion should come from the managed care plans that enroll Medicare beneficiaries. Leavitt said the Democrats also wanted to expand the program to middle-income adults.

The federal government spent about $56 billion last year on the managed care plans, also called Medicare Advantage. Enrollment in the plans has been growing quickly in recent years, and they now serve about 20% of all beneficiaries.

While Leavitt framed the debate by pitting the competitive private sector against the government, Democratic lawmakers are framing it differently. They say it's about helping poor children versus overpaying insurance companies.

Rep. Pete Stark, D-Calif., said during a congressional hearing Wednesday that the government pays 12% more for managed care than it does when comparable seniors get care through traditional Medicare.

``When private plans formally asked to join Medicare in 1982, they said they could provide Medicare's benefits better and cheaper than the government,'' Stark said. ``Fast forward 25 years, and we are now losing money for every person who enrolls in a private plan.''

The hearing was the first on the Medicare Advantage program this year. But more are expected in the coming months because Democrats want to renew the children's health insurance program before Sept. 30.

``Let me be clear, we have no intention of eliminating the Medicare Advantage program,'' Stark said. ``However, neither should we allow any Medicare provider sector to wall itself off from both scrutiny and from consideration for payment changes.''

The administration and insurers stepped up their defense of the Medicare Advantage program this week, saying that lower payments would mean fewer benefits for seniors, particularly low-income seniors and minorities. Seniors would either have to pay more money to participate or give up services such as free cancer screenings, the insurers contend.

``This is better care. This is driving quality up and the costs down,'' Leavitt said.

Health insurers support expanding the children's health insurance program. They just don't want the expansion to come at their expense. They intend in coming weeks to impress upon lawmakers that cutting funding won't be popular with their elderly constituents.

``What member wants to reduce funding for their constituents and take benefits away from their constituents?'' asked Karen Ignagni, president and CEO of America's Health Insurance Plans.