Democrats Blast Bush Plans for Revamping Medicare
Wed Mar 20, 6:30 PM ET
By Julie Rovner

WASHINGTON (Reuters Health) - Medicare beneficiaries would be better served if the program were changed to more closely resemble the program that provides coverage to some 9 million federal workers and their families, Bush administration officials told a US House subcommittee Wednesday.

But subcommittee Democrats and other witnesses said the proposal is actually an attempt to undermine Medicare by stripping it of government-guaranteed benefits.

"The president's framework for strengthening Medicare includes the principle that Medicare's coverage should be improved to give beneficiaries the same kind of reliable healthcare options and access to innovative benefits that all federal employees and many other Americans enjoy," Bobby Jindal, Health and Human Services (news - web sites) assistant secretary for planning and evaluation, told the House Energy and Commerce Subcommittee on Health.

"Private plans like those offered to federal employees have long been the choice of millions of Medicare beneficiaries because these plans allow beneficiaries to receive more up-to-date benefits than those available under traditional Medicare," Jindal testified.

Under the Federal Employees Health Benefits Plan (FEHBP), some 200 private insurance plans bid to offer coverage to federal workers, retirees and their families.

Energy and Commerce Committee Chairman Billy Tauzin (R-LA) echoed Jindal's enthusiasm for expanding private choices available in Medicare. "Members of Congress have excellent healthcare benefits and participate in a system that improves automatically over time. Why shouldn't our nation's seniors?" Tauzin said. "Why should our seniors have to wait for an act of Congress before adding an innovative new benefit to the Medicare program? Under an FEHBP model, seniors wouldn't have to," he added.

But Democrats said the experiences with the struggling Medicare+Choice program, which has seen hundreds of plans drop out or cut benefits as healthcare costs have risen while payments have not, shows that the private sector cannot adequately serve the senior market.

"The retirement safety net was not put in place because liberals wanted to make the federal government bigger, and it should not be dismantled because conservatives want to make the federal government smaller," said Sherrod Brown of Ohio, the subcommittee's ranking Democrat. "The safety net was put in place because the private sector couldn't make a profit offering health insurance to seniors so they stopped doing it," he added.

Janice LaChance, former director the US Office of Personnel Management, which runs the FEHBP, said in a written statement submitted to the subcommittee that Congress ought not use the federal program as a model, given the fact that FEHBP premiums have risen by nearly 50% over the last 5 years, making coverage unaffordable for many of those the program is supposed to serve.

"Until the affordability issue is thoroughly examined and the reasons for the premium increases completely understood, I would urge the members of this subcommittee to proceed with extreme caution before applying the principles of FEHBP to Medicare," LaChance wrote.

Other Democrats said that Republicans' real aim is not to increase choices for seniors, but to privatize Medicare to get its growing costs off the government books. "In reality it is simply an attempt to limit the government's financial contribution to Medicare and pass the extra costs on to seniors," said John Dingell of Michigan, the committee's ranking Democrat.