When states don't pay at the full Medicare rate, it's more like being on Medicaid.

Obviously, physicians should also be required to accept the Medicare rate as payment in full, just as hospitals and nursing homes do.

"We should also track our increases to the cost-of-living increases in the Medicare rate."

The Government would set maximum national payment rates for hospitals, doctors and services based on market conditions, or about 35 percent higher than Medicare rates.

There were also hopeful signs of progress in Congress on improving Medicare rates for insurers.

The Medicare supplementary rate will increase to $155.07 from $126.30.

Doctors who don't accept Medicare rates must accept a "maximum allowable actual charge."

Worse yet, doctors were required by Jan. 1 to choose Medicare rates or the maximum allowable charge approach.

If the policyholder is treated in a private hospital, the insurers will probably pay the Medicare rate, leaving the individual to pay the rest.

Under pressure from Congress, Medicare rates for rural hospitals were raised 3 percent this year.