Legislative Update for Week Ending February 15, 2013

Legislative Update for Week Ending February 15, 2013

This week, President Obama gave his fifth State of the Union Address, where he spoke about making “modest” changes to Medicare and overhauling the immigration system. In addition, some lawmakers voiced their support for a new sequester replacement strategy this week, and one key bill gained five new cosponsors.

Obama Speaks on Medicare Changes, Immigration Reform

In his fifth State of the Union Address on Tuesday evening, President Obama urged Congress to tackle the deficit with tax reform and “modest” changes to the Medicare program. Specifically, he proposed that Congress reduce prescription drug subsidies, increase means testing, and repeal and replace the Sustainable Growth Rate (SGR) formula that is currently used for determining reimbursements to physicians who treat Medicare patients.  He said, “Those of us who care deeply about programs like Medicare must embrace the need for modest reforms.”

President Obama also spoke about comprehensively reforming the immigration system. He stated, “Real reform means strong border security … Real reform means establishing a responsible pathway to earned citizenship … And real reform means fixing the legal immigration system to cut waiting periods … Send me a comprehensive immigration reform bill in the next few months, and I will sign it right away.”

The Senior Citizens League (TSCL) strongly agrees that the SGR must be addressed in the near future in order to preserve seniors’ access to quality medical care. However, the President’s proposal to increase means testing raises some concerns. New means testing measures were recently introduced with the passage of the Affordable Care Act, and we fear that if costs continue to rise for high earners, some may abandon Medicare, driving up costs for those who cannot afford to purchase private insurance. TSCL also has some concerns about the President’s plan for immigration reform, since it is currently unclear whether those immigrants with provisional legal status would have access to Social Security and Medicare benefits before they are granted citizenship.  We will continue to monitor the issues that were addressed on Tuesday evening, and we will provide updates as more details become available.

New Sequester Replacement Strategy Emerges

This week, a number of lawmakers spoke favorably about a new sequester replacement strategy that would let $85 billion in automatic cuts take effect on March 1st, and allow Congress to restructure them later on in the month. Rep. Kevin Brady (TX-8), chairman of the Joint Economic Committee, stated this week: “The best time to redesign the automatic spending cuts will come with the [expiration of the] continuing resolution on March 27th. The cuts will occur on March 1st. Then there will be a fight in the CR over the design.”

Lawmakers on both sides of the aisle believe that the deadline is flexible since those agencies affected will be able to adjust their operations temporarily until Congress is able to reverse or reduce the cuts later on. Sen. Benjamin Cardin (MD) explained this week, “It’s not a cliff that you fall off. That doesn’t happen on March 1st. But there is pain on March 1st.”  In addition, Senate Minority Whip John Cornyn (TX) stated, “I think what’s going to happen is the sequester is going to go into effect, and then the serious negotiations will probably start.”

With two weeks to go before the deadline hits, it remains unclear which plan of attack lawmakers will take, and how doctors who treat Medicare patients will be affected. On March 1st, they will face a two percent cut in reimbursements from Medicare – a cut that TSCL fears could affect seniors’ access to medical care. We will continue to monitor the negotiations as they unfold in the coming weeks, and we will provide updates here in the Legislative News section of our website.

Key Bill Gains Support

This week, five new cosponsors – Reps. Robert Brady (PA-1), Kurt Schrader (OR-5), Paul Tonko (NY-20), William Enyart (IL-12), and David Scott (GA-13) – signed on to Rep. Allyson Schwartz’s (PA-13) Medicare Physician Payment Innovation Act (H.R. 574), bringing the cosponsor total up to thirteen. If signed into law, Rep. Schwartz’s bill would repeal the SGR, stabilize payments to physicians, and set up a five-year trial period during which the Centers for Medicare and Medicaid Services would test and evaluate new payment models.

TSCL strongly supports H.R. 574 since the SGR breeds uncertainty within the Medicare program, and many physicians are threatening to stop accepting Medicare patients if the issue is not addressed soon. Rep. Schwartz’s bill would increase stability within the program for both physicians and beneficiaries, and we were pleased to see support for it grow this week.