Legislative Update for Week Ending November 30, 2012

Legislative Update for Week Ending November 30, 2012

Talks to avert the Fiscal Cliff continued this week with the introduction of two new proposals – one from the Obama Administration and one from Republican Senator Bob Corker (TN). Meanwhile, one House Subcommittee met to discuss options for reducing waste, fraud, and abuse within Medicare.

Fiscal Cliff Talks Continue

Two new plans to avert the fiscal cliff and reduce the deficit comprehensively were introduced this week. One of them was offered by the Obama Administration in a Thursday meeting between Congressional leaders. Though details of the proposal were not announced publicly, those in attendance confirmed that it would: allow upper-income tax rates to increase, postpone automatic spending cuts for one year, cut $400 billion in entitlement programs like Medicare, provide a temporary “doc fix,” and extend the current payroll tax holiday, among other things.

Many at the meeting were unsatisfied with the proposal, and one Republican aide told reporters: “After weeks of negotiations, they just demanded all of their favorite proposals with no sign of compromise whatsoever.”

Another comprehensive plan to avert the cliff was introduced as legislation on Tuesday by Sen. Bob Corker (TN). His plan would: make all of the current tax rates permanent, reform Social Security by adopting the “chained” CPI and raising the retirement age, reform Medicare structurally by switching to a premium support-like model and raising the eligibility age, and provide a two-year “doc fix” for Medicare providers, among other things. As expected, Democrats rejected this proposal immediately, saying that the cuts to Medicare and Social Security benefits are unacceptable.

Neither plan introduced this week is expected to be adopted, though both of them serve as serious conversation starters and certain aspects of them may show up in a final deal. The Senior Citizens League sincerely hopes that lawmakers will responsibly avert the fiscal cliff without making harsh benefit cuts to Medicare or Social Security, and we will continue to educate them about the potential consequences. In addition, we encourage you to contact your Members of Congress to request their support for fair COLAs, a long-term solution to the “doc fix,” and an end to the payroll tax holiday. To find contact information for your Members of Congress, click HERE.

Panel Examines Options for Reducing Fraud, Waste, and Abuse

At a House Energy and Commerce Subcommittee hearing on Wednesday, lawmakers on both sides of the aisle agreed that fraud, waste, and abuse within Medicare must be tackled more aggressively. However, leaders could not agree which path forward should be taken, and it appears as though they are far from reaching a compromise.

There seemed to be a consensus between Republicans on the Health Subcommittee that Medicare should move forward with “smart” identification cards to cut down on inaccurate payments and identity theft. They also agreed that the Affordable Care Act should be amended so that anti-fraud efforts are no longer classified as administrative costs. The current medical loss ratio rules, which state that insurers cannot spend more than 20 percent of their revenues on administrative costs, are restrictive, they said.

Most Democrats, on the other hand, seemed to favor a different plan of attack that would allow for more experimentation by the Centers for Medicare and Medicaid Services (CMS). Rep. Henry Waxman (CA-30), the Committee’s ranking Democrat, stated: “If Congress is considering giving CMS additional funding to test new fraud-fighting activities, first we should give them the flexibility to test different interventions and compare the results, not mandate one very prescriptive activity.”

Fraud within Medicare is an enormous problem that totals $60 billion each year, and The Senior Citizens League (TSCL) believes that it can no longer be ignored. We sincerely hope that lawmakers will agree on a plan of attack soon in order to ensure that every program dollar is appropriately spent. We will continue to monitor the evolving negotiations and post updates here in the legislative news section of our website.