House Holds Hearing on Important Social Security Bill
Last week the Social Security Subcommittee of the House Ways and Means Committee held a hearing on the Social Security 2100 Act: A Sacred Trust. The bill was authored and introduced by Rep. John Larson (D-Conn.), who is chair of the subcommittee.
TSCL has worked long and hard with the Chairman’s office in support of the bill.
During the hearing Larson said, “There is a fierce urgency now to vote on Social Security. Seniors, people with disabilities, widows, and other beneficiaries cannot wait. Americans can’t wait, it’s time to move Social Security 2100: A Sacred Trust forward.”
Larson stated during the hearing that there would soon be action to move the bill forward, but he didn’t specify a date.
The bill adopts the Consumer Price Index for the Elderly as the basis of the annual cost-of-living adjustment (COLA), applies the payroll tax to wages above $400,000, combines the Old-Age and Survivors and Disability Insurance trust funds, includes a 2% benefit bump.
It would also extend the depletion date (when a 20% cut to benefits would occur) to 2038.
TSCL has called for a quick vote on the legislation.
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Cuts in Medicare Payments to Health Care Providers are Avoided
Also last week, we reported that the House of Representatives was expected to take up legislation to prevent billions of dollars in cuts to Medicare payments to health care providers. Those cuts would have taken place next year if Congress failed to vote to stop them.
As it turned out, both the House and the Senate voted for the legislation to stop the cuts and the bill was sent to President Biden for his signature.
The bill will delay 2% cuts to Medicare rates through March of next year and stop a separate round of 4% Medicare cuts totaling about $36 billion until 2023.
The 2% cuts were the result of legislation passed in 2011 that required spending reductions across the federal government beginning in 2013. Congress paused the cuts last year in response to COVID-19. The bill that passed Thursday would keep that pause in place until April 1, after which providers will see a 1% cut until June 30 and a 2% cut until the provisions in the 2011 law expire in 2031.
The 4% Medicare cuts are the consequence a budget law known as PAYGO that requires increases in the deficit be offset by raising revenue or reducing spending. The COVID-19 relief legislation enacted this year resulted in a larger budget deficit, triggering spending reductions.
The bill also includes a 3% increase in pay for providers paid under the Medicare Physician Fee Schedule, partially offsetting some cuts that are set to take effect next year.
Providers have urged Congress all year to avert the cuts, arguing they are still struggling financially under COVID-19.
Most House Republicans voted against the bill because it takes steps toward raising the debt ceiling, but it has enough support from Republicans in the Senate to pass.
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House Committee Report: Medicare Could have Saved Billions
After a three-year investigation into how pharmaceutical companies set their prices, the House Oversight and Reform Committee released its report last week that said Medicare could have saved more than $25 billion if allowed to negotiate better prices for the most expensive medicines over a five-year period.
According to the report, drug makers such as Pfizer Inc., Teva Pharmaceutical Industries Ltd., and Celgene Corp. specifically target the U.S. for price increases because there’s no government effort to control the price of medicine, according to internal documents released by the committee.
The findings show that companies studied by the committee raised prices of common brand-name drugs during the past five years by nearly four times the rate of inflation. The report seeks to debunk industry contentions that companies’ price strategy is needed to plow money back into researching and developing new medicines, finding that revenue is substantially greater than those investments.
The report found the government could have saved $25 billion from 2014 through 2018 if it were able to peg the price of just seven costly medicines in Medicare Part D, which covers outpatient drugs, to their cost to other federal programs that negotiate directly with drug makers.
Negotiating the price of insulin over a seven-year period would have saved an additional $16 billion.
Because of legislation allowing Medicare to negotiated drug prices with the drug manufacturers has passed the House of Representatives and is pending in the Senate, the big drug companies have launched a massive lobbying campaign to try and stop it in the Senate.
One of their tactics is to blame others for the huge price increases in drugs, specifically the “middle men” called Pharmacy Benefit Managers (PBMs), something most Americans were totally unaware even existed until this fight over reducing drug prices began.
The PBMs are fighting back with their own lobbying effort and as a result, adds attacking both sides are now widely broadcast on TV and other media.
Republicans on the Oversight Committee have sided with the big drug companies and countered the Oversight Committee’s report with a report of their own on the role pharmaceutical industry middlemen play in raising drug prices.
The Republican report outlined how pharmacy benefit managers distort drug markets to reap profits and, in some cases, make it harder for patients to access their preferred medicines.
The Democrats’ report seeks to rebut some of the pharmaceutical industry’s main arguments against allowing the government to seek lower drug prices, including that high profits are needed to afford development of innovative new drugs. It does this by showcasing how much money the companies spent on stock buybacks and executive bonuses, some of them tied to revenue targets achieved by price increases.
The 14 largest pharmaceutical companies in the U.S. spent $577 billion on stock buybacks and dividends from 2016 to 2020, $56 billion more than they spent on research and development over that time. This meant the companies spent more rewarding shareholders than on developing new medicines, the report said.
The 10 brand-name pharmaceutical companies at the center of the committee’s investigation paid their top executives more than $2.2 billion from 2016 to 2020, the report found. The highest paid executives on that list were paid $347.7 million in those four years.
The Democrats’ report also cited internal documents obtained by the committee finding that patient assistant programs—deployed by drug companies to cover copayments for some people who can’t afford them—actually drove up profits instead of operating as charitable enterprises.
Pfizer’s copay program kept patients on its brand-name drug Lyrica even after low-cost generics hit the market, the committee revealed. Teva and AbbVie noted in documents that donations to third-party organizations that subsidize the cost of medicines for people on Medicare attracted patients to their products.
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Panel Recommends Medicare Cuts in Nursing Home Payments
A congressional advisory panel on Friday moved to recommend that Medicare payments for nursing homes, home health agencies and inpatient rehabilitation facilities be cut by 5% in 2023, citing adequate reimbursement rates for the facilities.
Only long-term care hospitals would see a payment increase in 2023 under the draft recommendations adopted by the Medicare Payment Advisory Commission on the final day of its December meeting. The panel’s draft recommendation calls for 2% increase in the Medicare base payment rate for long-term hospitals, minus an applicable productivity adjustment.
Final commission recommendations will be voted on in January 2022. All final recommendations for 2023 will be included in the commission’s March 2022 report to Congress on Medicare payment policy.
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As we continue dealing with the Covid 19 pandemic, TSCL remains constant in our fight for you to protect your Social Security, Medicare, and Medicaid benefits. We’ve had to make some adjustments in the way we carry on our work, but we have not, and will not stop our work on your behalf.
For progress updates or for more information about these and other bills that would strengthen Social Security and Medicare programs, visit the our website at www.SeniorsLeague.org, follow TSCL on Twitter or Facebook.