Congress this week passed — by a veto-proof margin — legislation to cancel a 10.6 percent pay cut to doctors who care for Medicare patients. But President Bush says he'll veto it anyway, because the bill also reduces funding to private insurance plans that participate in Medicare.
ANDREA SEABROOK, host:
While the world remembers a medical pioneer, Washington continues to skirmish over Medicare. It started with a scheduled 10 percent pay cut for doctors. First, the Senate rejected a bill to cancel that pay cut. This week, though, the bill passed. It was a scene. Ted Kennedy flew back from Massachusetts, where he's being treated for a brain tumor for what he thought would be a pivotal vote. Then, nine Republicans changed their votes. That gave the bill veto-proof majorities in both houses. Still, President Bush says he'll veto it, and that means when doctors get their checks this week their pay will be cut.
To make sense of all this, NPR's Julie Rovner is with me now. Hi, Julie.
JULIE ROVNER: Hi, Andrea.
SEABROOK: Let me make sure I have this straight: everyone, including President Bush agrees that this pay cut for doctors should not happen. Then there are enough votes in Congress to override President Bush's veto and he's still going to veto this anyway? Why?
ROVNER: Well, two words: Medicare Advantage. That is the private plan program under which private insurers are paid by the government to provide Medicare to about 20 percent of Medicare beneficiaries. All the budget analysts say that those plans are being overpaid and this bill would reduce those payments very, very slightly to make up for the physician pay cut. The president doesn't like that and that's why he's vetoing this bill. Actually, the Republicans don't really like it either but they're going along.
SEABROOK: So, why would the Senate Republicans who change their vote, why would they do that?
ROVNER: Well, three words in this case: the American Medical Association. Over the July 4 recess, the AMA launched a blistering ad attack in the states of senators who voted no, particularly but not exclusively senators who are up for reelection. Here's a clip from one of those ads:
(Soundbite of advertisement)
Unidentified Man: Across America, families celebrate our nation's birthday, but there's no celebrating for the millions of seniors, the disabled and military families who will lose their access to health care.
SEABROOK: Military families? Aren't military families covered under a different law than Medicare?
ROVNER: Yes, that's right. Military families are not part of Medicare but this is yet another twist in this story. The pay scales that's used for doctors in Medicare, which covers about 44 million seniors and the disabled, is also used for the Tricare program, which covers about nine million active-duty members in the military and their families. So, if doctors stop taking these patients, which many have threatened to do if the cut actually takes effect for real, you're talking about more than 50 million people who could potentially be affected by this.
SEABROOK: Julie, I think it's really interesting, this Medicare bill. And all the talk about it has been about the issue of paying doctors - how much they'll get paid for their services, the cut in that. But there's a lot more in this bill.
ROVNER: There is and, you know, we've talked about the doctors and we've talked about the private insurance companies and whether they're cut one's pay and or the other's pay. But there are really many more aspects to this bill that no one has really talked about. For instance, assuming that Congress overrides the president's veto, this bill would establish mental health parity for Medicare.
Right now if you get mental health care under Medicare, instead of paying 20 percent of the bill you have to pay 50 percent of the bill. This would change that gradually. And this bill would extend a program that allows people with low incomes to have their Medicare premiums paid. A lot of people with very low incomes have a program that's permanent but this is a program that continues to lapse and Congress has to keep renewing it, and this bill would do that.
And also there was in the Medicare Prescription Drug bill that passed in 2003, there was a kind of inexplicable ban on coverage of minor tranquilizers. They're called Benzodiazepines. And this would…
SEABROOK: That's Xanax, that's Ativan…
ROVNER: Exactly, and…
ROVNER: …valium. This would actually repeal that. This is something also that people have been working for for quite a long time. So, there are a lot of other things in this bill that nobody has talked about.
SEABROOK: NPR's Julie Rovner. Thanks so much, Julie.
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Senators were surprised to see Sen. Edward Kennedy (D-MA) return to the Senate floor for a pivotal Medicare vote Wednesday afternoon. They were even more surprised minutes later, when a bill that just days earlier seemed mired in partisan limbo passed by a veto-proof 69-30 margin.
Kennedy's unexpected appearance was just the latest twist in the saga of a Medicare bill that has defied predictions at every turn.
Almost until the vote was over, it seemed that Kennedy's was the vote that would send President Bush the bill to cancel a 10.6 percent pay cut to doctors that officially took effect July 1. Then Republicans started to change their votes — "lots of Republicans who said they weren't going to change their mind at the last minute. I mean, this was a stampede at the end," said health policy analyst Robert Laszewski.
Laszewski, who consults for health insurance companies, says passage of the bill is significant not just because it cancels the cut for doctors, but because of how the bill is paid for — by trimming payments to private insurance plans that serve Medicare patients.
"Democrats used the impending 10.6 percent cut to accomplish something I think that they would consider more important — and that is to begin to stem the tide against the expansion of private Medicare," he said.
Indeed, Republicans and Democrats always agreed that doctors shouldn't have their Medicare pay cut. But they were divided over where to get the money. Democrats, like Sen. Dick Durbin of Illinois, say the private plans are an obvious target because they are already getting overpaid by Medicare.
"We believe that they can cut back on their profits. They can reduce their costs. And they can still help seniors," Durbin said during the Senate debate Wednesday.
But Republicans, like Utah's Orrin Hatch, have steadfastly refused to cut the private plan program, known as Medicare Advantage.
"We finally figured out how to provide choice to Medicare beneficiaries in both rural and urban areas and how to pay plans appropriately. But my friends on the other side cannot leave a good thing alone and insist on making changes to a program that is working very well today," Hatch said.
The bill passed the House two weeks ago by an overwhelming 355-59 margin; far more than the number needed to override the veto threatened by President Bush. But when it got to the Senate, Republicans refused to go along. There, it fell one vote short of the 60 required to move to a final vote.
Enter the American Medical Association. It was the nation's biggest independent spender on television last week, with ads targeting Republicans who voted against the bill. One of the ads intoned over pictures of seniors that "a group of U.S. senators voted to protect the powerful insurance companies at the expense of Medicare patients' access to doctors."
It was clear from the debate that at least some senators had been rattled by the campaign. One was Texas Republican John Cornyn. After he voted against the bill, the Texas Medical Association unceremoniously yanked its support for his re-election campaign. Cornyn tried to make it up by offering a bill to fix doctors' Medicare problems not just this year, but into the future.
Senate Finance Committee Chairman Max Baucus (D-MT) quickly batted Cornyn down, calling Cornyn's bill "a big warm kiss on doctors to show to them they love doctors when in fact this is going nowhere."
But it was still unclear as of Tuesday whether any Republicans would switch their votes, leaving Democrats still one vote short of the 60 needed to get the measure to President Bush. So Kennedy called Senate Majority Leader Harry Reid on Tuesday night, volunteering to fly back to Washington for the vote.
In the end, it turned out, Kennedy's vote wasn't strictly necessary. Nine Republicans switched from no to yes, joining the nine who voted for the bill the first time. The final tally was a veto-proof 69-30, with only Republican John McCain noticeably absent.