Payment cuts to insurers who run Medicare Advantage plans are likely to be less than Congress is seeking but will nonetheless become a reality as the Bush administration seeks to save money, according to the former administrator of the federal agency in charge of Medicare.
Leslie Norwalk, who left her position as head of the Centers for Medicare and Medicaid Services on July 21, made comments on the future of the two programs at a Citigroup-sponsored investors meeting last week. Citigroup is an investment research firm located in New York City.
“Norwalk suggested that personnel changes in the Bush administration will place more fiscally conservative people in positions to make changes — sometimes in areas that would not require congressional approval. In addition, the influence of career staffers at the agency is likely to increase,” Citigroup reported.
She also cited the move by President Bush to nominate Jim Nussle, former Iowa Republican congressman, to head the Office of Management and Budget for outgoing head Rob Portman as a sign of the administration’s conservative bent.
In the House version of the children’s health insurance bill, Medicare Advantage plans are slated for a 9 percent to 10 percent reduction in payments. Ms. Norwalk reportedly touted Mr. Bush’s warm feeling for Medicare Advantage plans, which private insurers offer to people with increased health services in exchange for a higher reimbursement rate than traditional Medicare plans.
Though she says the privately enhanced plans will take a payment cut, it is not likely to be nearly as high as the House lawmakers are determined to reach, namely because the Senate Finance Committee supports the plans.
If cuts to the Medicare Advantage plans go through, companies like Humana, Wellcare and UnitedHealth will likely be forced trim the enhanced plans, meaning lower deductibles and copayments would end.
Ms. Norwalk reportedly further predicted that the controversial children’s health insurance legislation, known as the State Children’s Health Insurance Program, will get a two-year extension in Congress, rather than the five-year extension it normally gets. A two-year extension is less costly and would allow some relief for Congress not to take punitive action on Medicare Advantage plan payments, she said.
“The smaller the time frame is, the easier it is to fund,” she said. “And there will be more to help with the doctor payment issue.”
In other news
Legislation designed to require insurers to provide the same level of coverage for treatment of mental illnesses as they provide for physical illnesses is stalled.
Sen. Jim DeMint, South Carolina Republican, and lawmakers in eight other states derailed the bill that was on track to pass by a voice vote before the August recess. The legislators are concerned that the bill does not specify which mental conditions would be covered and, at least the Senate bill, does not distinguish between small and large employers. In addition, insurance plans would be exempt from the coverage requirements if mental health coverage costs increase total plan costs by more than 2 percent.
“The federal Mental Health Parity Act will pre-empt and invalidate services in Connecticut and elsewhere, undermining and undoing important protections for our most vulnerable citizens,” said Connecticut Attorney General Richard Blumenthal.
Mr. DeMint’s spokesman, Wesley Denton, said the senator would like more debatel. “This is a very large and costly mandate that could price a lot of Americans out of health insurance, and it needs to be considered carefully.”
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