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Inside Health Policy: Brady, Alexander Push For Medicare Reforms In Light Of CBO Report

Brady, Alexander Push For Medicare Reforms In Light Of CBO Report

January 26, 2016

The Congressional Budget Office estimates that the Medicare Hospital Insurance Trust Fund will be exhausted in 2026, and House Ways & Means Chair Kevin Brady (R-TX) and Senate health committee Chair Lamar Alexander (R-TN) say that should spur health care reforms. Brady says Ways & Means will move ahead with hospital and post-acute care reforms, while Alexander suggests President Obama push reforms from a 2013 GOP bill based on Simpson-Bowles deficit reduction proposals that would cut health spending by $689 billion over 10 years.

CBO’s budget and economic outlook, released Monday (Jan. 25), says federal health spending including Medicare, Medicaid and the Affordable Care Act outpaced other entitlement programs for the first time in 2015, and spending on health care programs is expected to almost double in a decade from $1.1 trillion in 2016 to $2 trillion in 2026. CBO also says about three-fifths of total spending on public health care programs would finance health care for those 65 and older. Under current law, the Medicare Hospital Insurance Trust Fund would be exhausted in 2026, CBO says.

“CBO has once again confirmed what we all know: Medicare as we know it is unsustainable and we need to act now to save it,” Brady says in a statement.

However, CBO’s report arrives in an election year, so some stakeholders doubt it will spur deficit-reduction efforts this year.

Loren Adler, a research director at the Center for a Responsible Federal Budget, said the higher deficits for 2016 and beyond are due in part to the two-year budget deal from December that delays Obamacare taxes and includes a bevy of business tax cuts, plus a result of the Sustainable Growth Rate deal from spring of last year. Both parties agreed to make those change without paying for them.

But Brady says his committee is “moving ahead with actions large and small to save Medicare,” pointing to a series of reform bills introduced last year: the Medicare Post-Acute Care Value-Based Purchasing Act (H.R. 3298), the Medicare Crosswalk Hospital Code Development Act (H.R. 3291), the Medicare IME Pool Act (H.R. 3292) and the Strengthening DSH and Medicare Through Subsidy Recapture and Payment Reform Act (H.R. 3288).

“These measures set the stage for Medicare premium support options that give seniors more choices tailored to their health care needs and protect the Medicare guarantee,” Brady says.

Inside Health Policy previously reported that the crosswalk bill could set the stage for combining Medicare Part A and Part B. Prior to taking over the Ways & Means Committee — when he was chair of the health subcommittee — Brady said in the near-term he wanted to change how Medicare paid for graduate medical education, to smooth out rural disparities and to apply pay-for-performance approaches to providers other than physicians. Long-term, Brady said he wanted to tackle larger changes to Medicare.

Hospitals have been uneasy with the bills, and the American Health Care Association opposes the post-acute care value based purchasing bill.

Meanwhile, Alexander said the president should look to reform Medicare.

“I hope the president seizes on [Monday’s] grim news as an opportunity to take advantage of Republican and Democratic ideas — such as reforms included in the Fiscal Sustainability Act — to help rescue seniors facing a bankrupt Medicare program,” Alexander said.

Alexander and Sen. Bob Corker (R-TN) introduced the bill in 2013, which is based on the original Simpson-Bowles deficit reduction proposal, that would reduce health spending by an estimated $689 billion over 10 years. The bill’s provisions include reforming Medicaid, prohibiting Medigap coverage after 2017 and raising the Medicare eligibility age. — Michelle M. Stein (mstein@iwpnews.com)

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