Senate Budget Committee Adopts Budget Blueprint––Need for Revenue Continues to Endanger Medicare Advantage Funding

The Senate Budget Committee voted along party lines this past week to adopt a 2008 budget blueprint that includes substantial funding for the State Children’s Medicaid Program (S-CHIP), additional veterans care, and many other health care needs.

Most notably, the blueprint has only identified $15 billion of the $50 billion needed to expand the S-CHIP program. They plan to get that $15 billion from "certain overpayments to health care providers." The other $35 billion would need to come from “spending reductions.”

Target number one for picking up that needed money is the Medicare Advantage program that both MedPAC and CBO say is over funded--CBO says by $65 billion.

The managed care industry is picking up their lobbying efforts in response focusing on all the extra benefits Medicare Advantage seniors get and the popularity of the program. But that begs an important question. Just when did we decide that seniors in private Medicare Advantage plans should get better benefits than seniors in the traditional Medicare program? The industry had better have a good answer for that one.

The budget process is just beginning and has a long way to go. But Senate Democrats have started down the course we have been predicting since October—Medicare Advantage funding is in trouble.