July 26, 2007
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The government now pays HMOs between 112 and 119 percent of what it costs to cover a person on Medicare. So if it costs the government $100 to cover Sadie Sickly of Illness, Ohio, the government will pay Selfless HMO Inc. $119 to take Mrs. Sickly off their hands. Selfless HMO Inc. – and lots of real life HMOs – make a boatload of money off Medicare Advantage because of this government subsidy.
The Congressional Budget Office thinks that 119 percent subsidy could be cut, and HMOs would still make money and patients would still get good services. So House Democrats want to reduce the government subsidy for HMOs to help pay for an increase in SCHIP funding. Pretty straightforward.
HMOs – surprise, surprise –
do not want that Medicare Advantage subsidy to be cut. Neither does
President Bush. He thinks
the free market is so cool that it should be $ub$idized by the government.
You see, he doesn't want the government encroaching on the health care system, so he's going take your tax dollars and give them to HMOs so they can encroach on the health care system."