Follow up on closed door deal
The Washington Post is reporting that “Sen. Hillary Rodham Clinton (D-N.Y.) and Rep. John D. Dingell (D-Mich.) will introduce legislation to restore Senate-passed language that would cut payments to private insurers in Medicare by $26 billion over the next decade, the lawmakers said yesterday.
As part of a broad budget-cutting bill, the Senate approved legislation that targeted private HMOs participating in Medicare by changing the formula that governs their reimbursement, lowering payments $26 billion over the next decade. But after lobbying by the health insurance industry, House and Senate Republican negotiators last month made a critical change that had the effect of eliminating all but $4 billion of the projected savings, according to the Congressional Budget Office.
Language inserted into the budget compromise stipulated that a key part of the formula change could be applied only in 2008, 2009 and 2010. The result, CBO analysts say, was a $22 billion swing in the insurance industry’s favor.”