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Budget and Medicare Bills Passed: Implications for Seniors
12-21-07

Before leaving Washington, for a holiday recess, Congress increased funding for Social Security and protected physicians from receiving cuts in their Medicare payments, but did not stop the overpayments made to Medicare Advantage plans. Monday night, the House approved a $515.7 billion domestic spending measure, 253 to 154. The funding level included for the Social Security Administration (SSA) in the measure is $150 million over the President's budget request – and $451 million over the FY 2007 level of funding. Language in the bill will also provide SSA with the ability to address the backlog in handling disability claims. Tuesday night, the Senate passed a $555 billion omnibus budget bill to fund the federal government for the rest of the fiscal year.

Also on Tuesday, the Senate sent the House legislation that would temporarily protect physicians from a scheduled cut in their Medicare payments, while extending funding for the State Children’s Health Insurance Program (SCHIP) through March 2009. “The Medicare, Medicaid, and SCHIP Extension Act of 2007,” S. 2499, would grant physicians a 0.5 percent increase while delaying a scheduled 10% pay cut for six months. To attract Republican support and avert a veto, the $6 billion package would be funded with relatively uncontroversial Medicare cuts. Democrats had long eyed Medicare Advantage (MA) private insurance plans, which are paid by the government at higher rates than traditional Medicare, to pay for a bill. But according to Congressional Quarterly, a White House veto threat - backed by Senate Republicans - forced Democrats to give up on almost all their early priorities for the legislation, including an ambitious expansion of SCHIP, a longer-lasting shield against cuts in Medicare payments to doctors, and the reduction of MA overpayments. The cost of the measure would instead be offset in part by taking money from a "stabilization fund" meant to pay private insurers for offering new services to beneficiaries in areas with few Medicare services. “It looks like we will have a government spending bill, Medicare legislation, and SCHIP funding,” said George J. Kourpias, President of the Alliance. “But it would have been so much better if Senate leaders had been able to pass the Medicare Advantage cuts they wanted, so seniors could stop subsidizing insurance companies.”