Creative Ways to Help Kids

A few days ago, I mentioned that the Democrats are scratching around for creative ways to refinance the kids health insurance plans run by the states, which are running out of money. They'd not only like to shore up the existing programs, but expand them to cover the 9 million children in this country without health insurance. Today's Kaiser Daily Health Policy Report suggests Rep. Pete Stark (D-CA), chairman of the House Ways & Means Subcommittee on Health, may be going after the Medicare Advantage plans to raise the dough.

What are Medicare Advantage plans? A few years ago, the Republican Congress allowed Medicare to make extra payments to insurance companies to begin enrolling seniors in health maintenace organizations (HMOs) instead of traditional fee-for-service Medicare. Now, I had always thought that HMOs were supposed to cost less money. But as every report about the launch of these so-called Medicare Advantage plans has shown, they are costing more -- a lot more.

How much? According to the Medicare Payments Advisory Commission, it's about 12 percent more. And according to the Congressional Budget Office, paying the insurance companies the same fees as regular Medicare would save $65 billion over the next five years. Hmmm. That's almost exactly how much it would cost to cover 9 million kids, and if I'm not mistaken, the money would count as the "pay-for" under House rules since Medicare Advantage payments come out of the general treasury, not the Medicare trust fund.

The insurance company spokesperson quoted in the piece defends the extra payments as necessary to meet all the extra benefits the seniors get in their HMOs plus lower co-pays. That's a politically loser of an argument. If it boils down to extras for seniors who already have insurance versus money to insure every kid in America, the kids should win hands down. This is one grandfather nearing Medicare age who'd certainly vote for giving it to the kids.