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Congress must preserve access to healthcare during budget battle

Tuesday, Oct. 25, 2005
Congress Must Avoid Cutting Consumers’ Access to Healthcare During Budget Reconciliation Votes
(WASHINGTON, D.C.) – As Congress prepares to vote this week on budget reconciliation bills, Consumers Union is urging members to avoid cutting programs that will dramatically impact consumers’ access to healthcare.
“Consumers are being whacked by higher energy prices and their incomes are losing ground to inflation. This is not the time to ask them to pay more for healthcare,” said Bill Vaughan, senior policy analyst for Consumers Union.
Consumers Union urges House members to eliminate a provision in their Medicaid reconciliation package to charge poor Medicaid beneficiaries more for healthcare. Further, the states should not be given the option to reduce the package of benefits, because Medicaid beneficiaries are so poor that if Medicaid does not cover a healthcare service, it is unlikely they can afford to pay for it out-of-pocket.
CU also opposes the House provision encouraging the sale of Long Term Care Insurance Partnership policies without adequate consumer protections. CU has documented severe consumer problems with these policies, particularly the failure to warn buyers about future rate increases and rate hikes that have forced thousands to give up their policies, thus wasting their investment.
“It makes no sense to encourage low- and middle-income people to buy long-term care insurance policies as a way to save Medicaid money, when those policies fail to protect the consumer against outrageous rate hikes,” Vaughan said. “People need help with long-term care expenses. They don’t need to be encouraged to waste their money on poor insurance products.”
The Senate version of the Long Term Care Insurance Partnership provision includes consumer protections, but needs to be strengthened further by requiring that policies comply with the premium protections of the National Association of Insurance Commissioners 2000 model law and regulations.
The Senate bill also eliminates cuts in payments to doctors and actually provides a small payment increase. CU supports the need to pay physicians enough so they will want to serve the 43 million Medicaid beneficiaries, and the physician payment formula needs to be reformed to avoid large payment cuts to doctors. But Congress must remember that one-fourth of any increase in payments to physicians is passed on to seniors in higher Medicare Part B premiums.
“Congress needs to be sensitive to the impact on many middle-income seniors of ever-rising Medicare premium costs,” Vaughan said.
The Senate bill pays doctors $10.8 billion more over the next few years, with $2.7 million of that paid by seniors – an increase in premiums of roughly $2.50 per month over the next two years. The Medicare Payment Advisory Commission (MedPAC) has pointed to other areas where money could be saved in the Medicare Part B program, including cracking down on excessive charges by X-ray and imaging providers. Cuts in areas identified by MedPAC would mean that Part B premiums would not have to be so dramatically increased to pay for physician pay hikes
“We urge the Senate and House to make intelligent, quality-improving savings to protect seniors and people with disabilities against sky-rocketing Part B premium increases,” Vaughan said.

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Contact: Bill Vaughan, 202-462-6262