Legislative Update for Week Ending January 23, 2015

Legislative Update for Week Ending January 23, 2015

This week, the House Energy and Commerce Health Subcommittee held a two-day hearing on the future of Medicare’s flawed sustainable growth rate (SGR) formula.

House Committee Debates SGR’s Future

On Wednesday and Thursday, the House Energy and Commerce Health Subcommittee met with several expert witnesses to debate the SGR, the flawed formula that determines payment rates for doctors who treat Medicare patients. The SGR has not worked as intended since 2003, and it regularly calls for 20 to 30 percent pay cuts for doctors, threatening access to quality medical care for seniors. Lawmakers have been debating the SGR’s future for more than ten years, and in recent months, they have come closer than ever before to settling on a solution.

Both chambers have agreed to the policy parameters of the deal – the only obstacle to passing a permanent fix has been the $144 billion cost. Many lawmakers feel that the cost of the legislation must be offset with cuts elsewhere, but recently, leaders revealed that they would consider passing the package without a pay-for. When asked whether the bill would require an offset back in November, Senator Orrin Hatch (UT), Chairman of the Senate Finance Committee, said “It might not, let me put it that way.” Similarly, Congressman Phil Roe (TN-1), Co-Chair of the GOP Doctors Caucus, said “Yes, I’ll vote for it with no offsets.”

However, at this week’s Health Subcommittee hearing, it became clear that most lawmakers on the panel would not vote for a package without a pay-for, and many suggested that they would like to cover the cost with cuts from within the Medicare program. Several subcommittee members backed the following Medicare changes: increased means testing for Parts B and D, combined deductibles for Parts A and B, limited coverage for Medigap plans, and an increased age of eligibility.

One of the expert witnesses – Joe Lieberman, former Senator from Connecticut – agreed that modifications to the program will be necessary in order to offset the cost of the SGR’s repeal. He said, “If we’re going to solve this problem, everyone has got to help, including the beneficiaries.” Another panelist, Dr. Marilyn Moon – a Fellow at the American Institutes for Research and the Director of the Institute’s Center on Aging – disagreed. She stated, “Beneficiaries should not be penalized for the poor policy-making decisions that were made several years ago.”

TSCL agrees with Dr. Moon, and while we remain hopeful that lawmakers will be able to negotiate a permanent replacement to the SGR in the months ahead, we do not support offsets that would reduce Medicare benefits or require seniors to pay more for their health care. Lawmakers have until March 31st to come up with a solution. Should they fail to reach a compromise, doctors who treat Medicare patients could face a pay cut of more than 20 percent. We will keep a close eye on the evolving negotiations in the coming weeks, and we will post updates in the Legislative News section of our website.