This week, the House Ways and Means Health Subcommittee held a hearing on the future of the Sustainable Growth Rate (SGR) formula. In addition, one key bill was re-introduced in the Senate, and three bills gained critical support.
Health Subcommittee Discusses SGR Repeal Plan
On Tuesday, the House Ways and Means Subcommittee on Health met to discuss viable alternatives to the SGR – the flawed formula that is currently used to determine reimbursements for physicians who treat Medicare patients. Lawmakers are hoping to pass legislation by the end of this year that would repeal the SGR and reform the Medicare physician payment system to reward quality instead of quantity.
At Tuesday’s hearing, members on both sides of the aisle seemed to agree that the formula must be repealed and replaced this year. Many of them also seemed set on a blueprint that was put together earlier this year by Reps. Dave Camp (MI-4) and Fred Upton (MI-6), the Chairmen of the Ways and Means Committee and the Energy and Commerce Committee, respectively. Their proposal would reform the system in three phases, and it would ultimately establish a variety of payment models for physicians to choose between.
Rep. Allyson Schwartz (PA-13) – one lawmaker that has been spearheading the SGR repeal efforts in the House – left the hearing feeling optimistic. She told reporters: “There’s a lot of agreement … There’s a strong feeling on the part of the members that we have to get this done this year.” However, much work remains to be done and the legislation is still in the planning phase. One key element that has yet to be discussed is how the $138 billion reform plan will be paid for. Like Rep. Schwartz, TSCL is hopeful that Congress will successfully repeal the SGR this year and develop a sustainable path forward. We will continue to monitor the negotiations in the coming months, and we will post updates here in the Legislative News section of our website.
Social Security Fairness Act Re-Introduced
On Wednesday, Sen. Mark Begich (AK) re-introduced the Social Security Fairness Act (S. 896) in the Senate. His bill would repeal the Government Pension Offset (GPO) and the Windfall Elimination Provision (WEP) – two provisions that unfairly reduce the earned Social Security benefits of millions of teachers, firefighters, peace officers, and other state or local government employees each year. TSCL believes that the GPO and the WEP should be repealed immediately so that dedicated public servants receive the retirement security they deserve. Sen. Begich’s bill would do just that, and we look forward to helping him build support for it this year.
Key Bills Gain New Cosponsors
This week, two new cosponsors – Reps. John Sarbanes (MD-3) and Zoe Lofgren (CA-19) – signed on to Rep. Peter DeFazio’s (OR-4) Consumer Price Index for Elderly Consumers (CPI-E) Act (H.R. 1030). The cosponsor total is now up to thirteen. If signed into law, Rep. DeFazio’s bill would base the Social Security COLA upon the spending patterns of seniors. Currently, it is based upon the way that young, urban workers spend their money – a method that underestimates the spending inflation that seniors experience. A study conducted by TSCL this year found that seniors have lost 31 percent of their purchasing power since 2000 – a clear sign that the current COLA is growing too slowly.
Rep. DeFazio’s No Loopholes in Social Security Taxes Act (H.R. 1029) also gained a new cosponsor this week. Rep. John Dingell (MI-12) signed on, bringing the total up to twenty-six. If signed into law, H.R. 1029 would subject all income over $250,000 to the Social Security payroll tax. Currently, the payroll tax is capped at $113,700 and no income over that amount is taxed. Rep. DeFazio’s bill would reportedly add another fifty years to the solvency of the Trust Fund responsibly, without reducing benefits for seniors.
In addition, twenty new cosponsors signed on to Rep. Rodney Davis’s Social Security Fairness Act (H.R. 1795) this week, bringing the total up to twenty-one. Like Sen. Begich’s new bill, H.R. 1795 would repeal the GPO and the WEP if signed into law. The new cosponsors are: Reps. Richard Hanna (NY-22), Janice Hahn (CA-44), Rick Larsen (WA-2), Chellie Pingree (ME-1), Juan Vargas (CA-51), David Loebsack (IA-2), Niki Tsongas (MA-3), Michael Michaud (ME-2), Carol Shea-Porter (NH-1), Glenn Thompson (PA-5), Jared Huffman (CA-2), David Joyce (OH-14), Zoe Lofgren (CA-19), Jon Runyan (NJ-3), Eric Swalwell (CA-15), Albio Sires (NJ-8), Dina Titus (NV-1), Dutch Ruppersberger (MD-2), Ben Ray Lujan (NM-3), and Judy Chu (CA-27).
TSCL is very supportive of H.R. 1030, H.R. 1029, and H.R. 1795, and we were pleased to see support grow for them this week.