CHN: Medicare Improvements Become Law

To the surprise of many, a Medicare bill canceling a scheduled 10.6 percent pay cut to Medicare physicians and which included various improvements for low income Medicare beneficiaries became law on July 15. The House passed H.R. 6331, the Medicare Improvement for Patients and Providers Act of 2008, with an overwhelming majority, 355-59, on June 24. However, support in the Senate was not as strong. The Senate tried to pass the bill on June 26 before the July 4th recess but fell one vote short of the 60 votes needed to move to debate the bill and vote on final passage.   The vote was 59-39, with all Democrats present voting for the bill.
Democratic leaders planned to bring the bill up for a second vote after recess and began wooing a short list of Republicans to support it, hoping that one of them would switch their vote. On July 9, with the likelihood of passage still very uncertain, the Senate held the second vote on H.R. 6331. Passage still seemed doubtful until Senator Kennedy (D-MA), who is recovering from brain-tumor surgery and was absent during the previous vote, surprised many and appeared to cast the much-needed 60th vote. When it became clear that the bill was destined for passage a number of Republicans switched their votes to be on the winning side. In the end 69-30 Senators voted for cloture. The bill subsequently passed by a voice vote.

H.R. 6331 was sent to the President’s desk on July 15. In spite of the broad support for the bill, President Bush vetoed it citing his opposition to cuts to private Medicare plans, known as Medicare Advantage. The cost of H.R. 6331 was offset by cutting bonus payments to Medicare Advantage. These private plans have been paid at higher rates than traditional Medicare. Congress quickly moved to override the President’s veto. That same afternoon of July 15 both the House (383-41) and Senate (70-26) overrode the veto making the bill law.

Though the main impetus for H.R. 6331 was preventing scheduled physician pay cuts, the bill also included a number of provisions for low-income individuals.  For starters, it extended the Qualified Individuals (QI) program through December 31, 2009 and increased funding for the program. QI provides payment of Medicare Part B monthly premiums for individuals with incomes between 120 and 135 percent of the federal poverty line.  It is an expansion of the Specified Low Income Medicare Beneficiary Program. When Congress established the program in 1997 it only appropriated a limited amount of funds to each state to pay for the expansion. The bill also placed a limit on the out-of-pocket expenses that beneficiaries who are dually eligible for Medicare and Medicaid and are enrolled in Special Needs Plans must pay. Effective 2010, the asset test for the Medicare Savings Program (MSP), which assists qualified low-income individuals with Medicare premium payments and cost-sharing requirements, will be increased to $11,710 for individuals and $23,410 for couples. The MSP asset test will also be indexed to keep up with inflation for the first time since the program was authorized in 1986. The late enrollment penalty for Part D will be eliminated for certain low-income individuals and the MSP application will have to be translated to languages most commonly used by Medicare beneficiaries.

Another important provision in the bill is that it sets prohibitions and limitations on marketing schemes for Medicare Advantage and prescription drug plans.

For a more detailed analysis of the bill please see the Center for Medicare Advocacy, Inc.’s summary at:

Budget Report 2012 - Self-Inflicted Wounds