In Florida, Sen. Bill Nelson ... got a $25 billion to $30 billion carve-out for Medicare Advantage patients in their state.
The Nelsons are becoming whipping boys for Republicans upset with the Senate health care reform bill. Sen. Ben Nelson, D-Neb., is being targeted for a Medicaid provision in the bill that benefits only his state. ( Read our related item here .) And now Sen. Bill Nelson, D-Fla., is being accused of tucking in a special gift for 800,000 Florida seniors. Sen. John McCain calls it the "Florida Flim Flam." Karl Rove prefers the "Sunshine State Sweepstakes." At issue in this case is Medicare Advantage, a program used by nearly 1 million Florida seniors. We'll let Rove, the former adviser to President George W. Bush who was talking on Fox News, explain the rest. "In Florida, Sen. Bill Nelson -- no relation to Ben, except in his habits -- got a $25 billion to $30 billion carve-out for Medicare Advantage patients in their state," Rove said Tuesday. "Every Medicare Advantage policyholder in America, except those in Florida, will see a huge cut in the federal support for those policies, and as a result, a dramatic decline in their benefits and an increase in their premiums, except if you live in Florida." Rove, McCain and many Republicans are accusing Nelson of sticking a big, fat goody in the health care bill for the folks back home. And only the folks back home. Is that what's happening? First, a short lesson on what we're talking about, Medicare Advantage. Medicare Advantage is an optional program that lets Medicare recipients 65 and older receive their benefits through private health insurance plans, instead of through the traditional Medicare program. The idea behind the program was to save the government money, but it hasn't worked out that way. Under the program, the government pays Advantage companies a set amount per enrollee, about $10,000, and they make a profit if they keep average costs below that level. The reimbursement amounts to about 14 percent more, on average, than the government spends on a traditional Medicare beneficiary. The extra money allows companies to offer Medicare Advantage members additional services, such as prescription drug, vision and dental coverage at a much lower cost, as well as other perks like gym memberships. About 11 million people are enrolled in the program nationwide. To help pay for changes to the health care system, Democrats are considering deep cuts to Medicare Advantage reimbursements, about $120 billion spread between now and 2019. That proposal has most Republicans, and in this case the Democrat Nelson, nervous. Nelson spokesman Dan McLaughlin picks it up from here. Nelson opposes Medicare Advantage, and voted against it -- believing it costs too much, McLaughlin said. But in the current debate Nelson was hesitant to strip benefits from seniors who already had them. He asked for the 11 million seniors currently enrolled in Medicare Advantage to be grandfathered into the new system under the old rules. At a cost of $35 billion, Nelson was told that was too expensive. Instead, Senate leaders offered Nelson $5 billion to help protect current Medicare Advantage recipients, McLaughlin said. So Nelson added a provision to the bill that protects seniors most affected by the proposed cuts or changes. Specifically, the money targets communities and areas where the cost of service is highest and allows those people to use the old rules. McLaughlin equates it to a cost-of-living adjustment. The language in the health care bill, which begins on Page 894, never mentions Florida or any specific state. Rather it creates a difficult-to-follow formula to determine just who should be protected from the changes. We should note that Nelson's provision wasn't a last-minute addition to secure his support on the larger bill. The Medicare Advantage exemption was included in the health care reform bill that passed the Senate Finance Committee in October. We'll also note that the Senate Finance Committee widened the pool of Medicare Advantage beneficiaries protected from the new rules. The total additional cost is expected to be around $7.5 billion over 10 years, McLaughlin said. Independent analysts at the Kaiser Family Foundation say the protections will cost around $5 billion between 2012 and 2019. So who benefits? Floridians for sure. "Florida will definitely be treated more generously than most other states," said John Rother, executive vice president for policy and strategy for AARP. But not just Floridians. Of the 1 million or so Floridians participating in Medicare Advantage, about 800,000 are expected to be protected from possible cuts. But so are people living in New York and Los Angeles, as well as in Oregon, McLaughlin says. A spokesman for Sen. Bob Menendez, D-N.J., confirmed that New Jersey seniors also will benefit from Nelson's protections to Medicare Advantage. And Sen. Charles Schumer, D-N.Y., said this: "We got a special protection worth billions of dollars to stop Medicare cuts for 800,000 New York seniors." Menendez said a total of five states would receive protections. To be honest, we're not sure how many states or people will be protected since senators and their staff are using different numbers and estimates. We'll update this item when we find out. But what we do know is this: Nelson's provision in the health care bill will protect some seniors in Florida and others in Oregon, New York, New Jersey and California. A chief critic of the provision, McCain, and the independent Kaiser Family Foundation, both say it will cost about $5 billion. McLaughlin, Nelson's aide, puts the total at about $7.5 billion. That flies in the face of Rove's statement on Fox News, "In Florida, Sen. Bill Nelson ... got a $25 billion to $30 billion carve-out for Medicare Advantage patients in their state." ( UPDATE: After our story published, Rove penned a column for the Wall Street Journal that put the dollar figure at a revised $3.5 billion.) Though Florida may see the lion's share of the benefit, Florida isn't specifically carved out of any potential Medicare Advantage cuts. The current Senate legislation includes a complicated formula designed to protect seniors most at risk of big cutbacks. We rate Rove's claim Barely True. Editor's note: This statement was rated Barely True when it was published. On July 27, 2011, we changed the name for the rating to Mostly False.
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