Senate passes Medicare bill with Kennedy's help

WASHINGTON (Reuters) - A Medicare bill opposed by the White House won final congressional approval on Wednesday with the help of Sen. Edward Kennedy, who returned to the Senate floor for the first time since brain surgery last month.

With Kennedy’s dramatic and surprise appearance, he and fellow Democrats overcame a Republican procedural hurdle and, on a voice vote, passed the measure earlier approved by the House of Representatives.

“Aye,” declared a smiling Kennedy of Massachusetts -- a Democratic icon, the party’s leading liberal voice and a longtime champion of expanding health care. Democratic as well as Republican colleagues applauded.

“Win, lose or draw, I wanted to be here. I wasn’t going to take the chance that my vote could make the difference,” Kennedy said after the vote.

The bill would cancel a scheduled 11 percent pay cut to doctors who treat Medicare patients. It is largely funded by cutting about $13 billion in reimbursements to insurers such as UnitedHealth Group Inc and Aetna Inc that contract with the Medicare program.

The Bush administration opposes any effort to trim payments to private health plans. The president has said the move would limit plan choices for seniors. But doctors and the seniors’ group AARP waged an aggressive lobbying effort to prevent the doctors’ pay cut.

“This is pretty much a done deal. The president is not going to win this fight,” Ipsita Smolinski, a health care analyst with JP Morgan, said after the Senate vote.

The White House had no comment.

Medicare is the federal health insurance program for 44 million elderly and disabled Americans. About 10 million seniors use the private plans known as Medicare Advantage.

Last month, an effort to clear a Republican procedural hurdle on the bill in the 100-member Senate came up one vote short of the needed 60.

After Kennedy cast his vote to end the roadblock, nine Republicans who had earlier opposed the measure voted for the popular election-year bill.

Kennedy underwent surgery for removal of a malignant brain tumor on June 3. He has been undergoing chemotherapy and was not expected to return to the Senate until at least late this month.

But in a telephone call late Tuesday with Senate Majority Leader Harry Reid, a Nevada Democrat, Kennedy said he wanted to come back early to help in the fight for Medicare, aides said.

Kennedy entered the Senate to a standing ovation, accompanied by his son, Rep. Patrick Kennedy, a Rhode Island Democrat. Following behind was presumptive Democratic presidential nominee Barack Obama, an Illinois senator.

Tourists in the normally quiet visitors gallery rose, applauded and cheered Kennedy, his party’s leading liberal voice. Kennedy’s wife, Vicki, and niece, Caroline Kennedy Schlossberg, were among those in the packed gallery.

The bill garnered a veto-proof majority of 69 in favor, with 30 opposed. Republican Sen. John McCain of Arizona was the only member of the Senate not to vote. He was campaigning as his party’s presumptive presidential nominee. He told reporters traveling with him he would have opposed the measure.

The shares of companies that operate one lucrative version of the Medicare Advantage program, called “fee-for-service,” will be weaker on Thursday, predicted Lehman Brother analyst Tony Clapsis.

“The big losers are certainly anyone who is playing in the private fee for service program,” Clapsis said, citing Humana Inc, Universal American Corp and Coventry Health Care Inc.