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Ex-Medicare leader: We're overpaying

Congress should take money away from insurers, he contends.

By KRIS HUNDLEY, Times Staff Writer
Published March 10, 2007

ST. PETE BEACH - Tom Scully, one of the key architects of the senior drug program enacted when he ran Medicare from 2001 to 2003, believes the new benefit plans are working just fine.

But even Scully, a self-described "evil for-profit guy," believes the insurers running private Medicare Advantage plans are getting way too much money from the federal government.

"I think they Congress should take some of it away," he said of insurers who now receive about 11 percent more than what traditional Medicare spends on a beneficiary. "There's been huge over-funding."

That kind of talk might be surprising coming from a champion of Medicare privatization like Scully, especially since he advocated "priming the pump" with higher reimbursements to bring private insurers back into the Medicare market in 2003.

But through his nearly 30 years in Washington, D.C., Scully, 49, has confounded friends and foes alike with his candor. Friday was no exception as he addressed an audience of hospital executives and financial analysts during Raymond James' annual health care conference here.

He calls Medicare "a big dumb check-writer" and is convinced private insurers can provide better and less expensive care in the long run.

He believes the Democratic push to allow the government to negotiate Medicare's drug prices is "meaningless politics that will consume lots of energy, but it's not going to happen."

And Scully is optimistic that Democrats and Republicans are slowly coming together on providing universal health coverage, which he favors.

"But it will take until at least 2009," he said. "It's the biggest issue outside Iraq. But it will make passing the Medicare drug plan look like child's play."

Kris Hundley can be reached at hundley@sptimes.com or (727)892-2996.

[Last modified March 10, 2007, 00:11:46]