Randy Kuhl's press release on HR 3162, the State Children's Health Insurance Program (S-CHIP), is headlined "Kuhl Votes Against Measure That Cuts Senior's Medicare Benefits". Since this bill is likely to become a campaign issue, it's worth seeing why that headline is a little right and a lot wrong.
S-CHIP reauthorization increases the number of children covered by the bill, so costs will rise. One way the bill pays for itself is cuts to the Medicare Advantage program, which is a subsidy paid to HMOs and other insurance programs.
Medicare Advantage began as a program to allow private insurance programs and HMOs to provide coverage to Medicare patients. When those programs were first allowed to be part of Medicare, they received 5% less than fee-for-service providers, since they were supposed to be more efficient. After 25 years of lobbying, the "more efficient" private sector providers are paid 12% more than regular providers, which amounts to an additional $1,000 per Medicare recipient.
The extra money paid to Medicare Advantage HMOs leads to three things: additional benefits for seniors in Medicare Advantage, higher profits for HMOs, and increased fraud:
Senate investigators released to Congress interviews and documents that indicate sales agents in at least 39 states have used unethical or illegal practices. Such practices have included the enrollment of dead or mentally incompetent Medicare beneficiaries, the impersonation of Medicare representatives and the use of personal information stolen from federal records...
Even if Medicare Advantage led to no fraud and no extra profits for HMOs, the fact remains that it unfairly rewards about 20% of Medicare recipients. Cutting the Medicare Advantage subsidy to fund S-CHIP makes good fiscal sense and it is fundamentally fair.
So, Randy Kuhl's press release is technically right about Medicare. A small minority of seniors will lose benefits because of this bill. S-CHIP also means one less gravy train for HMOs, and one less source of Medicare fraud.
Kuhl's press release makes two other claims, about higher taxes and immigration. I'll deal with them in a later posting.