Congress is Running out of Time
As we’ve previously reported, the Senate will return for votes starting on September 15 while the House won’t be back to begin voting until September 20. Various Congressional committees are back at work this week, however.
With the end of the 2021 fiscal year on Sept. 30 fast approaching, they face a massive workload if they hope to finish by then. Technically, they are supposed to pass legislation funding the federal government for fy2022. No one expects that will happen but they still must pass a “continuing resolution” which will keep the government going for an additional period, giving them time to pass the new budget. If they don’t do that the government will shut down.
Then they must raise the debt ceiling so the government can borrow more money to pay its bills.
A government shut down, while causing some problems, isn’t as bad as breaching the debt ceiling. That's known as a “technical default,” as some government obligations won’t be met on time depending on how long the stalemate lasts. The Treasury Department would have to rely on whatever cash is left on hand and daily revenue inflows.
The first day of each month — when big payments go out for Medicare reimbursements, military salaries, veterans’ benefits, pensions for military and civilian federal employees and more — is particularly bad. The third day of each month and Wednesdays, when Social Security benefits go out, aren’t great either. Interest payments to Treasury's creditors go out on the 15th and at the end of each month of beginning of the next.
Obviously, action on those legislative matters are of great concern to TSCL and to seniors in general.
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Democratic Majority Divisions Put Medicare Changes at Risk
As we’ve reported in the past, the Democrats have the narrowest of majorities in both the House and the Senate. They can’t afford to lose any Democratic votes in the Senate and only 3 in the House. That’s crucial because Republicans in both Houses are almost unanimously opposed to the legislation Democrats want to pass, so Democrats have to do it on their own.
That matters because there are two other legislative measures the Democrats want to pass before the end of this month: President Biden’s infrastructure bill and a reconciliation (tax and spending) bill. The reconciliation bill is what will set the parameters for funding the government for the next fiscal year.
To make matters worse for them, the Democrats are divided on how to proceed with those bills and unless they can come to an agreement those measures will go nowhere.
The reconciliation bill is one of the most complex tax and spending bills ever contemplated, with virtually no area of the budget or tax code left untouched. The Democrats want it to contain measures that are extremely important to seniors, including dental, hearing and vision benefits being covered by Medicare. They are hoping to craft it in such a way as to only need 51 votes for passage.
They also hope to include prescription drug price reductions in this legislation, something most Republicans have so far refused to support and which the drug industry is spending million in lobbying efforts to stop.
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Congress Needs to Act to Stop Medicare Insolvency
The Congressional Budget Office has predicted the Hospital Insurance Trust Fund, which pays for hospital and most institutional services under Medicare Part A, will be depleted by 2027.
However, the Medicare Trustees estimate it will be 2025. Whichever it is, the date of insolvency is fast approaching.
If that happens, full payments to providers for services covered under Part A would be delayed, which ultimately could harm the level of care patients receive.
Although several changes are needed to shore up Medicare Part A, lowering the cost of prescription drugs is one of the ways to help fix this problem and it’s why TSCL strongly supports legislation to do that.
Once Congress finishes with its work that we’ve described above, it must start to work on shoring up both Medicare and Social Security to keep them from becoming insolvent.
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Medicare Advantage to get Closer Look
Medicare Advantage plans could face increased scrutiny as policymakers try to get Medicare spending under control. The Medicare Payment Advisory Commission (MedPAC), a congressional advisory panel, wants to take a closer look at Medicare Advantage's effect on federal spending.
Spending per beneficiary is growing faster for people on Medicare Advantage and other private plans than it is for people on traditional Medicare and Part D prescription drug plans, according to a MedPAC analysis. While traditional Medicare spending per beneficiary grew at a 4% rate from 2011 to 2019, private coverage like Medicare Advantage and Program of All-Inclusive Care for the Elderly plans grew 6.9% annually.
That has experts worried, as Medicare Advantage enrollment has surged in recent years. More than 26 million people on Medicare are enrolled in private coverage, making up 42% of all Medicare beneficiaries and 46% or $343 billion in federal Medicare spending, according to the Kaiser Family Foundation.
On top of that, the Centers for Medicare and Medicaid Services could overpay Medicare Advantage plans by $200 billion over the next decade because federal policy encourages them to make their beneficiaries seem as sick as possible, according to a Health Affairs article.
Policymakers are starting to run out of patience with the Medicare trust fund headed toward insolvency in the very near future.
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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.