Legislative Update for Week Ending April 11, 2014

Legislative Update for Week Ending April 11, 2014

This week, the Centers for Medicare and Medicaid Services (CMS) announced the final 2015 payment rates for Medicare Advantage (MA) plans, and Members of the House considered numerous budget proposals for fiscal year 2015. In addition, The Senior Citizens League (TSCL) saw three key bills gain support.

CMS Announces Final 2015 Rates

On Monday, CMS announced that Medicare Advantage plans – the privately run alternatives to traditional fee-for-service Medicare – will receive a 0.4 percent increase in payment rates next year. The increase came as a surprise to many insurers since back in February, CMS estimated that the plans would receive a 1.9 percent cut in payment rates next year. Both lawmakers and insurers launched an intense lobbying campaign following the release of the February estimate, predicting that the cut would result in increased premiums for seniors and higher out-of-pocket costs.

Many lawmakers, including Sen. Charles Schumer (NY), were pleased with Monday's announcement. Sen. Schumer stated, "This proposed cut would have been disproportionate, hurting seniors who would lose doctors or pay more. We're glad the administration heeded our call and reversed the policy."

Insurers, on the other hand, seemed wary of the payment rate increase. Karen Ignagni, President of America's Health Insurance Plans, said MA plans will still see an overall reduction in payment rates next year, and she remains concerned about the impact on seniors. Similarly, John Gorman, Chairman of the Gorman Health Group, said on Monday: "There will still be some benefit cuts and increased out-of-pocket costs, just much less than expected."

In the coming months, TSCL will keep an eye on the payment rate issue and its potential impact on plan enrollees. Currently, approximately 30 percent of seniors are enrolled in an MA plan. Should they wish to switch plans, they may do so in early October, when the open enrollment period begins.

House Considers Budget Proposals

This week, Members of the House debated and adopted House Budget Chairman Paul Ryan's (WI-1) fiscal year 2015 proposal. His plan lays out $5.1 trillion in spending cuts, and it would balance the budget by the end of the decade. It also proposes a major overhaul of Medicare by turning it into a premium support program in 2024 – a proposal that TSCL adamantly opposes. The budget blueprint will not be taken up by the Senate, but it does serve as an important priority-setting document for leaders in the House.

In addition to Chairman Ryan's proposal, Members of the House considered various other plans as well. They debated a proposal from Ranking Member of the Budget Committee Chris Van Hollen (MD-8) that would reduce the deficit by $1.8 trillion and raise $1.76 trillion in new taxes. Lawmakers also considered a version of President Obama's proposal, along with alternate plans from the Republican Study Committee, the Congressional Black Caucus, and the Congressional Progressive Caucus. None of these plans gained enough support to win passage.

This week marks the end of the fiscal year 2015 budget battle, since Members of the Senate will not be considering any proposals. Lawmakers will now turn their attention towards the upcoming elections, and most will return to their home states and districts this weekend for a recess that will last through the next two weeks.

Three Bills Gain Support

This week, two new cosponsors – Reps. Betty McCollum (MN-4) and Mike Thompson (CA-5) – signed on to the Social Security Fairness Act (H.R. 1795), bringing the total up to one hundred and seventeen. If signed into law, the bill would repeal the Government Pension Offset (GPO) and the Windfall Elimination Provision (WEP) – two federal provisions that unfairly reduce the earned Social Security benefits of millions of state and local government employees each year.

In addition, one new cosponsor – Rep. Frank LoBiondo (NJ-2) – signed on to the Preventing and Reducing Improper Medicare and Medicaid Expenditures (PRIME) Act (H.R. 2305). The total is now up to fifty-four. If signed into law, the PRIME Act would take a number of steps to comprehensively prevent fraud, waste, and abuse within the two programs – a problem that TSCL believes must be addressed in order to ensure that scarce program dollars are being spent properly.

Finally, one new cosponsor – Rep. Juan Vargas (CA-51) – signed on to the Savings on Medical Expenses for Seniors Act of 2014 (H.R. 4104). Rep. Vargas is the bill's first cosponsor. If signed into law, the bill would make permanent the 7.5 percent threshold for the medical expense tax deduction for those sixty-five and older. The threshold is currently scheduled to increase to 10 percent of adjusted gross income in 2017, which would mean that fewer seniors would qualify for much-needed relief. By preventing the threshold hike from occurring, H.R. 4104 would save the average senior nearly $900 a year in qualifying tax deductions.

TSCL enthusiastically supports H.R. 1795, H.R. 2305, and H.R. 4104, and we were pleased to see support grow for each of them this week.