ASBA Update From Washington

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August 2008
by Jeff Gannon, ASBA Washington Representative

What's In A Name?
The devil is in the details of legislation

A familiar Washington tactic to disguise the true intent of legislation is to assign it a warm and fuzzy title. Examples include “The Employee Free Choice Act” that would eliminate the secret ballot in workplace unionization voting and the venerable “Fairness Doctrine” that would impose a regime of government regulation on the political content of radio and television broadcasts.

Such is the case with another bit of mislabeled of congressional slight of hand. Sen. Mike Crapo (R-ID) blew the whistle on H.R. 6331, innocuously named “The Medicare Improvements for Patients and Providers Act.” During the debate in Congress, sponsors of the legislation loudly accused opponents of wanting to cut physician compensation, a talking point parroted by media reports.

In an opinion piece about this issue, the Idaho Republican senator cited New York Times editorial writer Paul Krugman, “Ostensibly, Wednesday’s [July 9, 2008] vote was about restoring cuts in Medicare payments to doctors. What is was really about, however, was the fight against creeping privatization…. If the Democrats can win victories like this now, they should be able to put a definitive end to the privatization of Medicare next year.”

Sen. Crapo pointed out that the bill, passed over the veto of President Bush, rescinded some of the market-based principles introduced into the Medicare system in 2003. At the core of the debate was Medicare Advantage. The plan allowed seniors to opt out of the traditional fee-for-service program and get their Medicare benefits through private health plans that receive payments from Medicare. In 2008, 9.6 million (20% of recipients) participated in Medicare Advantage.

While passage of the legislation was a victory for those who advocate government control of America’s health care system, the outcome for seniors was not as encouraging. An innovation that used competition and to provide choice, flexibility and affordability would be eviscerated, forcing millions of seniors into a one-size-fits-all program. Under the new law, Medicare Advantage enrollment would shrink to an estimated 2.3 million by 2013 under the current baseline. Beneficiaries in hard-to-serve rural areas would be most affected, drastically reducing the options for health care choices. Lower income seniors would also be negatively impacted since 49 percent of Medical Advantage participants report income of $20,000.

Critics also say that the legislation would undermine the Medicare prescription drug program that effectively provides coverage to 32 million beneficiaries directly through competitive private plans or through Medicare-subsidized retirement plans. Moreover, the bill would only temporarily patch a fundamentally flawed system destined to crash at some point in the not too distant future unless significantly reformed.

Unfortunately in an election year, few politicians would risk being perceived as opposed to a measure purportedly beneficial to seniors. This accounted for the stampede to override Bush’s veto shortly before members of Congress left Washington to return to their districts for the August recess. All who voted for the bill will claim to have been a party to “saving Medicare”, but realistically have only kept it on life support.

Some also justified their support for this legislation by using scary words like “privatization” to describe the involvement of for-profit companies in the health care arena. Free markets and competition provide lower prices and higher quality in other areas, yet Washington politicians try to convince seniors that a government-run monopoly can do a better job than the private sector. However, one would be hard pressed to find a single instance in which that is the case.

The same tactics were employed during the 2005 national debate over Social Security reform. Ironically, the impending Medicare crisis was used as a pretext to postpone any action to forestall what the Bush administration described as a “train wreck.” Yet Washington failed to seriously address the Medicare debacle, leaving the solution — and the cost — to another time and perhaps another generation.

Neither of the presidential candidates seems inclined to substantively delve into the debate. The economic proposals of Washington insider Sen. John McCain and the “agent of change” Sen. Barack Obama are both lacking in any specificity to deal with a crisis that will not simply go away with tax cuts or tax increases.

The Medicare Improvements for Patients and Providers Act has a nice ring, but as with much that comes out of Congress, reading the fine print tells the real story.

Jeff Gannon is a legislative consultant, and his reports are updated monthly.