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Medicare is the cornerstone on which all other government health care programs rest.  Unfortunately, the deteriorating financial conditions of this program are threatening beneficiary access to its benefits.  In their most recent report, the Medicare Trustees projected that the account that funds Medicare’s hospital benefit will be exhausted in 2026.  Reports like this illustrate that we can no longer let politicians in Washington deny the danger to Medicare – it is all too real, and the health of our nation’s seniors is far too important.  We have to save Medicare to avoid disruptions in benefits for current seniors and to strengthen the program for future generations.

Medicare Reimbursements for Physicians

As you may know, Medicare reimburses health care providers for various procedures they perform.  These reimbursements are made according to a fee schedule, which is updated annually by a formula called the Sustainable Growth Rate (SGR).  If spending exceeds the established targets, payment rates to providers are cut; if spending is below the target, payment rates are increased.  The intent of the formula is to place a restraint on overall increases in Medicare spending for physicians' services.  However since 2003, Congress has chosen to override current law in order to prevent reimbursements from being cut as a result of the formula.  These temporary patches have resulted in spending nearly $170 billion to avoid the unsustainable cuts imposed by the SGR. 

Rather than passing temporary fixes, I have long preferred to address the more important matter of wholesale reform to the Medicare reimbursement system.  Physicians should not have to wait on Congress to act every year in order to prevent pay cuts that are arbitrarily determined by an outdated formula.  Fundamental reforms to Medicare and our broken health care system are urgently needed.  That is why I was pleased to support H.R. 2, the Medicare Access and Children’s Health Insurance Program (CHIP) Reauthorization Act of 2015. 

H.R. 2 would provide stability for seniors, foster a more patient-centered system, and provide structural reforms that would strengthen Medicare.

In part, this legislation would start to move us to a patient-centered system.  It would cancel the cuts and instead give doctors a modest increase for the next five years.  Every year after, doctor payments would grow to depend more and more on results.  Our plan would set up one streamlined program that would reward doctors who met performance goals and improved seniors' health.  Over time, Medicare would reward quality over quantity, and seniors would get better care because of it. 

Our plan would also achieve savings by making two other structural reforms.  First, we would ask higher income seniors to contribute more to their care—something we have called for in the House Republican budget for years.  Starting in 2018, seniors who make more than $133,000 a year would pay a higher premium for their doctor and prescription-drug coverage.  Secondly, our plan would discourage unnecessary doctor visits and give seniors the incentive to seek out the most effective care.  Many seniors have "Medigap" insurance—a private plan that helps pay for costs that Medicare does not cover, such as co-payments and deductibles.  These plans insulate people from costs and, experts believe, encourage the overuse of health care.  Beginning in 2020, this agreement would prohibit Medigap plans for covering the first $147 of out-of-pocket spending, so cost is once again a consideration in health care decisions.

Further, this legislation continued the extenders included in the Protecting Access to Medicare (PAMA) Act of 2014 and provided funding for Community Health Centers through 2017.  These provisions helped ensure that individuals will have easier and more affordable access to their health care.  Additionally, it reauthorized the Child Healthcare Insurance Program (CHIP), a program that provides health care coverage to more than 8 million children and pregnant women, for two years.  (You may be interested to know, on January 22, 2017, the House passed a Continuing Resolution to provide government funding, which was later signed into law by President Trump.  As part of that legislation, the Children’s Health Insurance Program (CHIP) was funded through FY 2023, marking the longest reauthorization in the program’s history. )

On March 26, 2015, the House passed H.R. 2 in bipartisan fashion and with my support by a vote of 392 to 37.  The bill was subsequently passed in the Senate and signed into law by President Obama on April 16, 2015.  I was happy to join my colleagues in this important step toward patient-centered health care.  After years of manufactured crises, this bill will give doctors the certainty they need and seniors the security they deserve.  And although we have a lot more work to do to save Medicare, this plan is a firm step to strengthen the program.

House Proposals to Reform Medicare

Our government has a spending problem—a problem so large that it is driving up our debt, hurting our nation’s ability to create jobs, and threatening our future.  In the past, Washington has not been truthful about the magnitude of these problems facing our country, but we can no longer afford to put off an honest, fact-based conversation on how to solve them.

No one person or party is responsible for the looming crisis.  Yet the facts are clear: major spending increases have failed to deliver promised jobs.  The safety net for the poor is coming apart at the seams.  Government health and retirement programs are growing at unsustainable rates.  The Affordable Care Act has created a tremendous fiscal burden. 

The House-passed budget incorporates the House passage of the American Health Care Act and protects the health and retirement security of those who need it.  With the creation of Medicare in 1965, the United States made a commitment to help fund the medical care of elderly Americans to ensure that a serious illness would not exhaust their life savings or the assets and incomes of their working children and younger relatives. 

Recognizing the problems facing Medicare, the House-Passed Budget:

  • Strengthens health and retirement security by taking power away from government bureaucrats and empowering patients with control over their care.

  • Incorporates the House passed American Health Care Act

  • Establishes that Medicare will provide a premium-support payment and a list of guaranteed coverage options – including a traditional fee-for-service option – from which recipients can choose a plan that best suits their needs.

  • Provides premium support, competitive bidding, and more assistance for those with lower incomes or greater health care needs will ensure guaranteed affordability for all seniors.

Allowing the federal government to break its promises to current seniors and to future generations is unacceptable.  The reforms outlined in the budget passed by the House protect and preserve Medicare for those in and near retirement, while saving and strengthening this critical program so that future generations can count on it to be there when they retire.

Reform aimed to empower individuals — with a strengthened safety net for the poor and the sick — will not only ensure the fiscal sustainability of this program, the federal budget, and the U.S. economy, but it will also guarantee that Medicare can fulfill the promise of health security for America’s seniors.  I remain dedicated to finding a viable solution that will protect Medicare for future generations.

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