Senator Max Baucus Is Crucial to the Health Insurance Industry's Continued Medicare Advantage Funding--But How Sympathetic Is He?

Everyone knows that House Ways and Means Subcommittee Chair Pete Stark is the Medicare Advantage program's biggest high-powered Congressional critic.

The view of Medicare Advantage health plan payments, particularly for the controversial Private Fee For Service (PFFS) program, is more moderate in the Senate. Undoubtedly, the House Democrats will be more aggressive in the cuts they want than will Senators.

The lynch-pin in the health plan industry's hopes to maintain the payments will be Senate Finance Chair Max Baucus. He had an important role in enacting the Medicare Modernization Act of 2003, which included Part D and the rejuvenated Medicare Advantage program, in the first place. With his good friend, and now Ranking Republican on the Finance Committee, Senator Chuck Grassley, he was crucial in getting the rural areas better payments and attracting the private Medicare plans to places like their home states of Montana and Iowa.

As the powerful Senate Finance chair from a rural state that is benefiting from the program, where Baucus comes out on this issue of Medicare Advantage (and PFFS) payments is likely going to be the place the whole Congress comes out on it. The cuts will be no more then he will go along with and they will be as big as he will want them to be.

At the heart of this debate is whether Medicare Advantage plans will be cut to fund other Democratic priorities such as S-CHIP and to offset upcoming Medicare physician fee cuts.

So, Baucus' comments on the issue and spending priorities are important:

February 9, 2006 Senate Finance Committee Hearing:
"On the issue of Medicare generally, the administration's priorities are again misdirected. For example, the administration would reduce payments to Medicare hospitals, home health care, and nursing home payments...and yet the same budget would maintain current overpayments to Medicare managed care--Medicare Advantage plans...I do not understand the administration's rationale for overpaying private Medicare plans while proposing cuts for other Medicare providers."

February 7, 2007 Baucus News Release from the Senate Finance Committee:
"If you are going to cut fee-for-service [the traditional government-run Medicare program], why not cut Medicare Advantage. That's where the experts say the fat is. I've seen many, many analysts say [Medicare Advantage plans] get more than they need. I've not seen any say they do not."

June 18, 2007 Kaisernetwork.org, regarding the recent moratorium on new Private Fee For Service sales, Senator Baucus said:
"I applaud plans for volunteering a suspension. I'd like to see CMS spend less time promoting private coverage and more time figuring out how to regulate the actions of insurers who sell directly to seniors."

With friends like these...

Recent post: MedPAC Recommends a Reasonable Road Map For Reducing Private Medicare Advantage Payments--Plan Would Equalize Payments Over a Five-Year Period