MA plans off hook for now

October 1, 2007

Washington, D.C.-House legislation that proposed to fund expanded coverage for children by cutting payments to Medicare Advantage (MA) plans was put on hold last month in an effort to reach a speedy compromise for reauthorizing the State Children's Health Insurance Program (SCHIP). The legislators agreed to adopt the less-costly Senate proposal, which increases tobacco taxes to expand SCHIP into a $60 billion program over five years. The House bill sought $75 billion for SCHIP and proposed to cut payments to MA plans to offset a lower increase in cigarette taxes. Both plans are much more costly than the $30 billion program proposed by the White House.

WASHINGTON, D.C.-House legislation that proposed to fund expanded coverage for children by cutting payments to Medicare Advantage (MA) plans was put on hold last month in an effort to reach a speedy compromise for reauthorizing the State Children's Health Insurance Program (SCHIP). The legislators agreed to adopt the less-costly Senate proposal, which increases tobacco taxes to expand SCHIP into a $60 billion program over five years. The House bill sought $75 billion for SCHIP and proposed to cut payments to MA plans to offset a lower increase in cigarette taxes. Both plans are much more costly than the $30 billion program proposed by the White House.

Congressional leaders pledged to take up the MA rate cut proposal as part of a separate Medicare reform bill. That legislation also would address the scheduled 10% reduction in Medicare payments to doctors; the cut goes into effect January 1, 2008, unless Congress rescinds it, as the legislators have done in previous years.