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“ Democratic priorities are clear: we will fight to get the economy back on track, we will create jobs, and we will help unemployed workers. ” |
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Democrats Fight to Strengthen Medicare by Ending Wasteful Overpayments to HMOs
Washington, D.C. -- House Democratic Leader Nancy Pelosi joined Congressman Leonard Boswell of Iowa and 50 Democratic cosponsors in introducing the Medicare Preservation and Anti-Privatization Act yesterday, which would eliminate the estimated $46 billion in overpayments to HMOs that were included in the Republican prescription drug bill.
Since the enactment of the Republican bill late last year, payments to private insurers have already been increased to 107 percent of the amount paid to the traditional Medicare program, giving HMOs an extra $500 million this year alone.
"It is appalling that under the Republican Medicare prescription drug law, taxpayers have to pay private plans more than they would have paid for the same people in traditional Medicare," Pelosi said. "The $46 billion in wasteful overpayments to HMOs could have been used to create a better benefit for seniors – one that is affordable, defined, and guaranteed under Medicare, without huge gaps in coverage that leave seniors without help just when they need it most."
Boswell said: "It is a clear reflection of Republican priorities that seniors and the disabled have to wait until 2006 for the drug benefit to begin, while HMOs get $500 million right away. Dumping money into HMOs weakens Medicare, and does not lower drug prices or provide seniors the better prescription drug benefit they deserve."
Chief Medicare Actuary Richard Foster confirmed in testimony before a Ways and Means Committee hearing on March 24 that his projections do not show private plans saving money at any point. To the contrary, this approach is actually costing Medicare billions of dollars. "Republicans have argued for years that private plans would lower Medicare’s costs, but these overpayments prove otherwise," Boswell said.
"Democrats are fighting for better ways to lower the costs paid by seniors and the disabled -- allowing the government to negotiate lower drug prices and allowing the safe reimportation of prescription drugs from Canada and other countries," Pelosi said.
President Bush’s failed economic policies have already hurt Medicare. The loss of nearly 3 million private sector jobs and declines in wages and household income have reduced revenue for the Medicare Trust Fund, which is funded through payroll taxes. Taking $46 billion away from Medicare to give to HMOs adds additional strain.
“ Democrats are united in presenting a New Direction for America, one that will make our nation as strong as its people, one that brings opportunity, security, and prosperity to all Americans. ”
Democratic Leader Nancy Pelosi
