As the debate over how to fund an expansion of the State Children's Health Insurance Program heats up, America's Health Insurance Plans has criticized the option of cutting funding to Medicare Advantage plans.
House Democrats on July 27 marked up the Children's Health and Medicare Protection, or CHAMP Act, which would allocate $90 billion to the expansion of SCHIP and block a scheduled 10 percent cut to physicians' Medicare pay in 2008.
The CHAMP Act would direct $50 billion to SCHIP expansion over five years, funded by a 45-cent per-pack tobacco tax levy and a cut to the subsidies paid to insurers of MA plans. The federal government currently pays 12 percent more to insurers offering MA plans than those offering traditional fee-for-service Medicare.
In a July 31 press briefing, AHIP President and CEO Karen Ignagni touted the success of Medicare Advantage plans, under which some 8.5 million seniors now receive Medicare services. "We know that because of Medicare Advantage, the premiums beneficiaries are paying are 25 percent less," Ignagni said. "This legislation would be devastating to millions of seniors who count on Medicare Advantage for their health security."
Congressional Democrats have argued that the MA subsidies should be eliminated to promote equity in Medicare plans. "It's very important to note that the CHAMP Act is in no way cutting Medicare," said Rep. Patrick Kennedy (D-R.I.). "The changes that are included in the CHAMP Act are intended to put Medicare Advantage and traditional fee-for-service Medicare on an equal footing."
Mohit Ghose, vice president of communications for AHIP, contended that the $50 billion reduction of funding would cause some states to lose their MA plans entirely. "When the (Congressional Budget Office) director says three million people would lose coverage if the cuts occur, that's not a Medicare cut?" Ghose asked. "I believe that it is inexcusable that members of Congress are pitting the needs of seniors against the needs of children."
"The Children's Health and Medicare Protection Act directly contrasts with the Republican agenda to privatize Medicare," said Rep. Pete Stark (D-Calif.) in a recent release. "It is the polar opposite of the Republican desire to put anti-government ideology ahead of children's health."