Ostensibly, the vote was against pay cuts for doctors. But it was really about “creeping privatization of Medicare,” writes left-wing columnist Paul Krugman.
Krugman blames Medicare deficits on the Medicare Modernization Act. Not Part D, but Medicare Advantage private fee-for-service plans. He asserts that these rapidly growing plans cost the government 17% more per beneficiary, while threatening to “undermine Medicare’s universality.” Insurance companies “cherry-pick healthier and more affluent older Americans, leaving the sicker and poorer behind”—in the wonderful “traditional” Medicare system that leftists want all Americans to have.
Krugman notes, correctly, that previously payments to doctors were maintained through “bipartisan fudging.” That is, “politicians from both parties got together to waive the rules. In effect, Congress kept Medicare functioning by expanding the federal budget deficit” (NY Times 7/11/08).
President Bush vetoed the bill preventing a 10.6% cut in Medicare fees because it was attached to payment cuts to Medicare Advantage plans. In addition, in his veto message he stated: “[The bill] would imperil the long-term fiscal soundness of Medicare by using short-term budgetary gimmicks that do not solve the problem; the result would be a steep and unrealistic payment cut for physicians—roughly 20% in 2010—likely leading to another expensive temporary fix” (Iglehart JK, N Engl J Med 10.1056/NEJMp0805760).
Krugman is exultant because the Democrats’ ability to stop a filibuster and override a veto make “the odds of achieving universal health care, soon,…look a lot higher than they did just a couple weeks ago.”
The AMA also celebrated, calling the legislation a significant victory. Through paid advertisements, the AMA exerted intense pressure on Republican senators initially opposed to the measure, Iglehart noted. The bill also staves off the scheduled 2009 cut.
“Good job, AMA leadership,” writes Dr. Thomas LaGrelius, president of the Society for Innovative Medical Practice Design (SIMPD). “You made the enemy very happy.”
The bill also killed competitive bidding for new equipment, which reportedly would have saved the program billions of dollars. For example, copayments for an oxygen concentrator for Medicare beneficiaries now total $1,428 over 36 months—more than double the purchase price. Medicare rents it for $198.40/mon, and the copayment is 20%. Medical equipment suppliers lobbied fiercely against this provision (Consumer Power Report #136, 7/18/08, citing Michael Leavitt, “Will Congress Continue a Medicare Scam?” Wall St J 7/9/08). (DME suppliers posted numerous comments in response to this article, regarding the value of the follow-up services they provide, and the Medicare rules and regulations.)
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