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GOP takes on health care programs as it passes 2016 budget, announces candidates

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We’re already seeing the first real thrusts of Republicans’ strategy to take back the White House as majorities in the House and Senate pass the first Congressional budget in over five years and half a dozen of the party’s presidential hopefuls announce their campaigns for the 2016 election. The GOP has the spotlight to further its case for balancing the federal budget in part by changing Medicare and Medicaid and possibly moving closer to delivering on its promise to repeal the Affordable Care Act (ACA).

The Republican budget aims to cut federal spending by $5.3 trillion in the next decade, reducing $4.2 trillion from benefit programs that include Medicare and Medicaid. However, the Hill reports that two dozen vulnerable Republican incumbents seem to be keeping a low profile when it comes to what specific changes they would make to the programs to match the nonbinding budget blueprint. They’re not only thinking how they will counter Democrats’ opposition to their bills, but also how they will retain their voter base in the next election.

Republicans in the House and Senate are using budget proceedings and the upcoming 2016 presidential campaign to push for changes to the country’s health care program as it aims to reduce federal spending. White House image courtesy of Flickr via Creative Commons.

The Hill also notes that Texas Sen. Ted Cruz and Kentucky Sen. Rand Paul, both running for president, voted against their party’s budget plan, while Florida Sen. Marco Rubio voted in line with his party weeks after announcing his campaign. Democrats predictably voted in total opposition to the budget in the House and Senate.

The Washington Post reports that under fast-track budget rules, Senate Democrats would not be able to filibuster Republicans’ attempt to vote on legislation calling for an end to ACA. However, President Obama would be sure to veto any budgetary action that would do away with his administration’s signature health care law. It’s assumed Republicans will do something to replace ACA to respond to voter concern over losing their subsidized health insurance as a result of their action.

Bloomberg News reports that Senate Republican leaders are considering legislation that would extend the ACA tax credits through 2016 in the event the Supreme Court invalidates the federal exchange later this summer.

Some Members of Congress are quietly discussing other entitlement changes related to Social Security. According to the New York Times, Paul Ryan (R–Wisc.) and Gov. Chris Christie (R –N.J.), who has said he’s thinking about running for president, have suggested “means testing” and an increase in the retirement age to solidify Social Security. An outlier in the conservative discussions regarding entitlements has been presidential candidate and former Arkansas Gov. Mike Huckabee, who promised he would “never rob seniors of what our government promised them and even forced them to pay for” in a video announcing his second run for the white House.

As we move closer and closer to the 2016 election, talk about the major health care programs and the possible political implications of action those words may inspire, however unlikely, should only get more interesting. Agents may want to pay attention to any upcoming bills dealing with Medicare, Medicaid, ACA and Social Security in case clients voice concern based on their own perusal of the daily news.

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Thank bipartisanship for long-awaited end to “Doc Fix”

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House Speaker John Boehner (R–Ohio) and Minority Leader Nancy Pelosi (D–Calif.) are claiming passage of a bill that does away with the Medicare Sustainable Growth Rate (SGR) as victory for their respective parties. The Republican-controlled House passed HR2, The Medicare Access and CHIP Reauthorization Act, which will be voted on by the GOP-led Senate after spring recess.

Congress’ 18-year delay of Medicare provider payment cuts — otherwise known as the “Doc Fix” — is being replaced by a 0.5 percent provider payment increase over the next five years and changes to member premiums thanks to a bipartisan effort that is by no means the norm in today’s polarized political climate. The reform also calls for restructuring payment models to be based more on quality of care.

The Associated Press (AP) reports the reform will cost $210 billion over the next 10 years, with two-thirds of it being financed by other federal deficits. Medicare members and providers are expected to cover the other third, which comes out to about $70 billion.

According to AP, Medicare Beneficiaries whose incomes are $134,000 or higher will see increased premiums for medical services and prescription drugs starting in 2018. By 2020, the proposed law will require seniors who purchase Medicare Supplements to pay a minimum out-of-pocket cost of $147. Currently, the popular Plan C and Plan F Supplements usually have a $0 out-of-pocket cost.

Concern over increases in higher-income member’s monthly premiums and increased out-of-pocket costs has been expressed by Democrats as well as AARP and other senior interest groups.

The New York Times reports Judith A. Stein, executive of director of Center for Medicare Advocacy, said the reform package “Asks too much from beneficiaries and nothing from the pharmaceutical or insurance industry.”

A Kaiser Family Foundation FAQ says the bill permanently extends the Qualifying Individual or QI program, which provides premium payment assistance to low-income seniors.

Language related to the Hyde amendment, a 1979 provision annually renewed by Congress to restrict federal funding of most abortion services, cast doubt over the bill’s passage last week, just as it delayed passage of an anti-trafficking measure debated in the Senate earlier this month.

President Obama has endorsed the reform, which also includes provisions for the Children’s Health Insurance Program, Medicaid, funding for community health centers and funding for rural hospitals. The Senate is expected to pass the reform after it returns from a two-week-long-spring recess.

RB Insurance specializes in selling Special Needs Plans for individuals eligible for Medicare and Medicaid, including those eligible for the QI program. Learn more about QI and expanding your Book of Business by assisting low-income Medicare members by clicking here.

 

Could this finally be the year “Doc Fix” is repealed?

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2015 could be the year the Medicare Sustainable Growth Rate (SGR) problem, more commonly referred to as the “Doc Fix,” is permanently taken care of by Congress. A bipartisan endgame to the unpopular cost-saving formula both parties have been hesitant to deal with has Medicare providers anxious about payment changes, and Medicare members are concerned about possible increases to their premiums or deductibles in light of a repeal.

McClatchyDC, an online newspaper covering politics, reported Friday that a bipartisan bill that would replace the SGR and create a 0.5 percent pay increase for the next five years was unveiled. The bill would adopt a payment model based more on quality of care than volume of care, and it would also require physicians to receive a minimum amount of payment through the Alternative Payment Models by 2020, McClatchy reports.

News outlets have noted how unusual it is for House Speaker John Boehner (R–Ohio) and Minority Leader Nancy Pelosi (D–Calif.), oftentimes each others’ political adversary, to be working together to repeal the “Doc Fix.” The Associated Press reported earlier this week that the two leaders have been meeting to form a strategy to block a 21 percent cut in Medicare provider payments that would go into effect on April 1 if no action is taken. They are also interested in continuing funding for the Children’s Health Insurance Program, which works with state Medicaid programs to assist low-income children nationwide.

In addition to seeing a 21 percent pay cut, many Medicare Advantage providers who have their reimbursement level tied to rates under Original Medicare could also see cuts if an agreement is not reached.

Year after year, addressing the issues posed by the Medicare Sustainable Growth Rate (SGR) has proven to be a tough pill for Congress to swallow. There’s a possibility it could be repealed this year in a new bipartisan effort.

For the past 18 years, lawmakers have delayed the SGR from taking effect to incentivize doctors to continue providing services to Medicare members. SGR was formulated by Congress in 1997 to reduce the federal deficit by basing Medicare provider payments on economic growth, the Kaiser Family Foundation notes in a special FAQ about the “Doc Fix.”

“In 2002, doctors were furious when they came in for a 4.8 percent pay cut [under SGR],” Kaiser says in the FAQ. “Every year since, Congress has staved off the scheduled cuts. But each deferral just increased the size of the fix needed the next time.”

According to Kaiser, the Republican-controlled House and Senate would need to find a way to pay for up to $70 billion of a $200 billion reform package. One possibility is increasing Medicare Part B premiums for higher-income beneficiaries ($80,000 or more per year for an individual) and requiring all Medicare Supplement members to pay a $250 minimum deductible on an annual basis.

Repealing the “Doc” Fix is explicitly mentioned in President Obama’s budget proposal for the next fiscal year and may be alluded to in the Republican proposal.

This is not the first time hopes have been high to fix the “Doc Fix” once and for all. NPR reported in 2013 that multiple bills were passed by the Democrat-controlled Senate and Republican-run House to repeal it. Interest groups representing the medical industry and Medicare members voiced opposition to them, though, because they did not want to see doctors and seniors pay for the issue Congress brought on itself by continuously putting off the SGR from going into effect.

In a press release dated January 22, 2015, AARP, the nation’s largest senior interest group, expressed its position on current efforts to end the SGR:

“[A]ny SGR proposals should not include shifting costs onto Medicare beneficiaries through higher cost-sharing or reduced benefits,” the release said.

According to the press release, AARP president-elect Eric Schneidewind has testified before Congress on behalf of seniors, saying the group “firmly believes that any discussion of offsets to pay for Medicare reimbursement reform must include savings from prescription drugs.”

 Our Director of Sales, Training and Compliance, Rob Bever, contributed to this post. If you have further questions about the “Doc Fix” and how it may affect you and your clients, give us a call at (800) 997 3107. Subscribe to our blog for more updates!

GOP looks to privatize Medicare in 2016 budget unveiling

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Republicans in the House and Senate unveiled their respective budgets for fiscal year 2016 this week, proposing major changes to health care programs as part of their strategy to balance the federal budget within the next decade. House Republicans presented “Balanced Budget for a Stronger America” on Tuesday, which would privatize Medicare, restructure Medicaid to be based on block-grant distribution to states and repeal the Affordable Care Act. On Wednesday, the GOP-controlled Senate announced a less specific version of the budget with a similar cost-cutting goal.

The annual drafting of the federal budget tends to survey parties’ ideology and political goals more than it sets a legally binding limit on how much can be spent by a program. In other words, Congress hasn’t decided how it will spend taxpayer dollars on health care for 2016, so for now Medicare, Medicaid and the Affordable Care Act remain status quo. Any changes that do occur may also be implemented by Congress in stages and are contingent on lawmakers being able to agree across party lines. Disagreement within the Republican party will also influence debate.

The Republican budget is a response to the budget President Obama laid out last month. The Kaiser Family Foundation, a nonprofit, nonpartisan health care news and analysis organization, has pulled together parts of the president’s plan that deal with Medicare in an easy to follow article you can read here.

As Congress continues to set the budget for the next fiscal year, which begins on October 1, The Agent’s Advantage will keep you updated on possible structural changes to Medicare and other health care programs we work with. Agents working with Medicare Advantage plans, especially C-SNP and D-SNP plans, should pay close attention to developments in Congressional budget debates as they will likely impact them financially if the proposed budgets are passed in their current form.