Hospitals, insurers oppose health bill compromise on Medicare buy-in

Groups representing doctors and hospitals are coming out against the inclusion of a Medicare "buy-in" in the Senate health bill, The Washington Post reports. The groups joined Republicans in arguing "that a plan by liberal Democrats to allow uninsured individuals as young as 55 to buy into Medicare would be financially untenable and would jeopardize access to health-care services for millions of Americans."

The organizations, including the American Hospital Association, the Federation of American Hospitals and the American Medical Association, said the proposal would hurt their members because Medicare pays providers at a lower rate than private insurers. "Hospital representatives said the idea also would violate a deal they reached with the White House this year to give up $155 billion in Medicare payments over the next decade. The concession helped to lower the cost of a health-care package that promised hospitals a pool of at least 30 million newly insured customers" (Murray and Montgomery, 12/10).

USA Today: "Though the idea gained traction on Capitol Hill — and got a boost from President Obama — the outcry from the medical groups underscored the difficulty lawmakers are facing as they look for compromises that can win broad support for the Senate's bill, which would cost $848 billion in the first 10 years. 'Bringing more people into a system that doesn't work very well is not a good answer,' said Jeffrey Korsmo, executive director of the Mayo Clinic Health Policy Center. 'The current Medicare program is not sustainable'" (Fritze, 12/10).

The New York Times: "The American Hospital Association issued an action alert on Tuesday urging its members to oppose the plan and to call their senators' offices. ... The Federation of American Hospitals also issued a bulletin ... 'Any Medicare Buy-In would invariably lead to crowd out of the private health insurance market, placing more people into Medicare,' the group said. 'It is critical that you contact your Democratic Senators today!'" (Pear and Herszenhorn, 12/9).

The Wall Street Journal: "The insurance industry's trade association, America's Health Insurance Plans, opposed the measure to fix companies' medical-loss ratios at 90%. Medical-loss ratios are closely watched measures of how many premium dollars companies spend on patient care versus administrative costs and profits." Insurers say it would be very difficult to reach and could hurt their abilities to "weed out fraud and run other programs designed to cut costs and improve wellness."

Drug companies as well could see less money for medicines under the Medicare plan than what private insurers give them, the Journal reports (Johnson and Rockoff, 12/10).

Related KHN story: Democrats' Ideas To Expand Medicare Raise Hackles Of Doctors, Hospitals, Insurers (Appleby, 12/9).

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This article was reprinted from khn.org with permission from the Henry J. Kaiser Family Foundation. Kaiser Health News, an editorially independent news service, is a program of the Kaiser Family Foundation, a nonpartisan health care policy research organization unaffiliated with Kaiser Permanente.