U.S. Medicare bill with big HMO cuts faces Senate vote

WASHINGTON, June 26 (Reuters) - A bill with about $13 billion in cuts to private health insurers in Medicare is expected to face a vote in the U.S. Senate as early as Thursday, as backers work off momentum from an unexpected victory earlier this week.

Health insurers such as Aetna Inc (AET.N: Quote, Profile, Research), Humana Inc (HUM.N: Quote, Profile, Research) and UnitedHealth Group (UNH.N: Quote, Profile, Research), which contract with the government to sell insurance to seniors, would be the biggest losers if such a bill passes. Senators have abandoned efforts at a compromise with less harsh cuts, lawmakers said.

The legislation won unexpected overwhelming support, including from Republicans, in the House of Representatives earlier this week. That has boosted chances, once seen as slim, that it could garner enough votes to sustain a promised presidential veto.

"Democrats have clearly gained momentum in the past 24 hours," said Tony Clapsis, an analyst at Lehman Brothers based in Washington. "We are expecting a lot of uncertainty heading into a possible afternoon vote."

U.S. lawmakers face a June 30 deadline to pass legislation blocking a scheduled 11 percent pay cut for doctors who accept Medicare patients -- considered a highly unlikely outcome in an election year. Cuts to the private plans would help keep doctors' payments intact.

About 10 million of the 44 million Medicare beneficiaries are enrolled in private health plans, which contract with the government's Medicare insurance for the elderly and disabled.

Critics, including many Democrats and the seniors group AARP, point to a government report finding private plans are paid between 13 percent and 17 percent more than the government spends treating Medicare patients not enrolled in a private plan.

The bill would delay a government competitive bidding program opposed by the durable medical equipment industry, which includes oxygen makers such as Apria Healthcare Group (AHG.N: Quote, Profile, Research) and equipment maker Invacare Corp. (IVC.N: Quote, Profile, Research).

It also includes a provision requiring pharmacy benefit managers such as Medco Health MDHC.PK and Express Scripts (ESRX.O: Quote, Profile, Research) to pay pharmacies more promptly, opposed by the industry.

Senate Majority Leader Harry Reid of Nevada said Thursday morning that if a deal was not reached, he would be willing to do votes over the weekend, putting off lawmakers' vacations,expected to begin Friday. (Editing by Maureen Bavdek)