Pressing the White House on health reform: Medicare

Oct 30, 2009 11:24 AM

Polls show that older Americans are more dubious about health reform than younger people. That’s understandable in a way, because they’re the only group that already has guaranteed health care and thus has less to gain from reform. Meanwhile, the bills under consideration propose cutting hundreds of billions of Medicare dollars over the next decade to help pay for reform. No wonder seniors are worried.

I asked Nancy-Ann DeParle, director of the White House Office of Health Reform, to address the concerns of Medicare beneficiaries.

"There’s nothing in these bills that is cutting Medicare benefits," she said. "Beneficiaries will still have access to their doctors and the same benefits they have now. But … there are a number of ways in which we can make Medicare more efficient and actually strengthen it, make it more solvent."

For example, she said that right now, Medicare pays hospitals tens of billions of dollars extra to cover the care they give to uninsured patients who can’t pay their bills. "As the uninsured get covered, we can lower the payments," she said.

Further savings will come from health technology that makes doctors and hospitals more efficient, and from going after Medicare fraud more aggressively, she said.

I asked her specifically about Medicare Advantage, the private Medicare plans that now insure about one in four Medicare beneficiaries and are slated for significant cuts in the various reform bills.

"Several years ago," DeParle explained, "Congress gave those plans a substantial increase. So if you’re a beneficiary, your plan–not you–is being paid 14 percent more [than traditional Medicare] for each person."

"That sounds good," she continued, "but it turns out that taxpayers and you as a traditional Medicare beneficiary will be paying an average of $50 more a year for those extra benefits." Which, of course, only Medicare Advantage recipients are getting.

The administration, DeParle said, thinks it’s "a fair thing to do" to scale back those subsidies. "We don’t think the plans are providing more value or higher quality to Medicare than the traditional plans."

To people who are afraid that the subsidy cuts will cause their plans to cut back benefits, DeParle said, "The array of plans and benefits changes every year. No one can guarantee there won’t be changes, but we think these plans can become more efficient without cutting benefits."

We ran out of time before DeParle could discuss two other features of health reform legislation that will help Medicare beneficiaries.

One, reform will shrink and may eventually eliminate the hated "doughnut hole," the gap in drug coverage that happens once seniors run up a specified amount of expenses.

Two, for the first time Medicare will eliminate copays and deductibles for preventive services such as colonoscopies or mammograms.

—Nancy Metcalf, senior program editor

Take a look at more from our health-care reform interviews with Nancy-Ann DeParle, the director of the White House Office of Health Reform.