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It's seniors vs. youths in health care debate Medicare would take hit to expand children's program

Many federal lawmakers want to find a way to expand a popular children's health insurance program in a way that will bring benefits to up to 50,000 more children in New York State.

But Tom Martin of Williamsville is one of 2.8 million Empire State senior citizens who might end up helping to pay for it.

To finance the expansion of the children's health insurance program, Congress is considering a cut in subsidies for the popular Medicare Advantage plans that provide health care to about two out of five seniors in Western New York.

And people like Martin aren't very happy about that since the cuts could mean reduced services from Medicare HMOs. Martin, 79, praises the care he got from Independent Health after a 2004 heart attack, and he said similar programs need to keep their funding.

"It's a wonderful idea" to expand children's health care, Martin said. "But be creative in the funding. Don't take it from somebody who's doing a great job."

The House this week will consider legislation to dramatically expand the State Children's Health Insurance Program, which also would be funded through a 45-cent-per-pack increase to the cigarette tax.

The battle over the legislation, the first great health care debate of the new Democratic Congress, is both ideological and generational.

It pits the Republicans who have been pushing the Medicare HMOs against the Democrats who back old-fashioned Medicare and a vast expansion of children's health insurance.

Democrats counter Martin's complaint by saying many Medicare HMOs aren't doing a great job -- and they are getting overpaid.

"We're going to protect Medicare and Medicaid from plunder by the HMOs," said Rep. John D. Dingell, D-Mich., who is chairman of the House Energy and Commerce Committee.

While it is unclear how that debate will play out, there's no question that it matters a lot in Western New York, where senior citizens have gravitated to the Medicare HMOs at twice the national rate.

Some 84,772 senior citizens in Erie and Niagara counties are enrolled in Medicare HMOs, versus the 123,385 still in traditional Medicare, according to the U.S. Department of Health and Human Services.

Martin's story helps explain why so many have made the move. After his heart attack, he spent a week in the hospital and several weeks in a rehabilitation facility -- and all he paid was $250.

"Then Independent Health sent nurses to my home, physical therapists to my home, and they called and asked how I was," Martin said. "They were just incredible."

With subsidies nationwide that are 12 percent higher than traditional Medicare, Medicare HMOs have been able to provide dental care, exercise classes and other extras that were previously uncovered by the federal health care plan for senior citizens.

Critics, however, call those higher subsidies overpayments. They are demanding that Medicare HMO subsidies be cut to the same per-patient levels as doctors get.

Critics also say that under the status quo those overpayments to HMOs would continue just as payments to regular doctors under Medicare are set to be cut 10 percent next year.

Meanwhile, the Alliance for Retired Americans, a group that favors traditional Medicare, points to a CBS News report earlier this month that found widespread problems with Medicare Advantage plans.

That report focused on confusion about benefits and the unscrupulous marketing practices of some private health plans -- and it quoted a Kentucky woman who had to call 911 to get a Medicare Advantage salesperson out of her house.

"I'm glad someone called 911," said George J. Kourpias, president of the alliance. "This is an emergency."

At the very least, it is a very complex situation.

Dr. Michael W. Cropp, president of Independent Health, said that nonprofit HMOs, like those in the Buffalo area, are getting a bad rap because of the practices of some for-profit HMOs.

The bottom line, he said, is that if Congress makes the cuts it is discussing, senior citizens in Medicare HMOs will either have to pay more or lose benefits, or both.

"The impact would be devastating to our members," he said. "There's no way we could offer the richness of benefits we offer now."

Yet advocates of traditional Medicare say it's indefensible for HMOs to continue to receive the subsidies they were granted as an incentive to start Medicare Advantage plans. They say the overpayments, if continued, would drain the Medicare trust fund by 2015, two years earlier than it would otherwise run out of money.

In addition, cutting the overpayments "will drive the rank mercenary plans out of the business," said Robert M. Hayes, president of the Medicare Rights Center.

The House bill would phase out those overpayments to HMOs over four years while expanding the State Children's Health Insurance Program, which currently covers about 6 million children, to an additional 5 million children.

That program, which according to the state Department of Health currently covers 16,657 children in Erie and Niagara counties, is up for renewal by Sept. 30.

Meanwhile, the Senate is considering a bill that would expand the children's health program by boosting cigarette taxes 61 cents while leaving the Medicare HMO payments untouched.

Health and Human Services Secretary Michael Leavitt said President Bush is worried about the cost implications of the vast increase in the children's health program and has threatened to veto it.

He accused congressional Democrats of expanding the children's health program as part of their eventual goal of "Medicare for all" -- a government-run health care system.

"We ought to reauthorize [the State Children's Health Insurance Program] and then move on to the bigger discussion of how we create access for every American to an affordable [health insurance] policy," Leavitt said.

Democrats, however, are demanding that the children's health program be dramatically expanded. Now aimed at children who are not poor enough to receive Medicaid, the state health insurance program would reach much farther into the middle class under the Democratic proposal.

"This new Congress promised Americans that it would take our country in a new and better direction," said Rep. Xavier Becerra, D-Calif. "Providing health care for five million uninsured children keeps that promise. This Congress also understands the need to improve Medicare for our seniors and give them better services for their taxpayer dollar."

But Leavitt said the proposed cuts to Medicare Advantage program are draconian enough to kill the program.

"It would likely go away," Leavitt said. "We'd be back to a one-size-fits all system."

Others said, though, that some cuts to Medicare Advantage are inevitable to make sure that it's on a level playing field with traditional Medicare.

"The overpayments will be cut," Hayes said. "The question is how much and when? No one in the industry believes the status quo is sustainable."


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