House Passes Medicare Reform Bill, But Critics Warn Beneficiaries Will Pay the Price

As leaders of the Republican and Democratic Parties in the House of Representatives were congratulating themselves on passing an actual piece of legislation on Thursday, critics of the bill aimed at restructuring Medicare payments to providers are warning--despite the feel-good mood provided by the bipartisan achievement--it will be the elderly and low-income beneficiaries of the program who will ultimately pay the heaviest price if the proposed changes become law.

The Hillreports:

The House on Thursday overwhelmingly voted to repeal automatic payment cuts to doctors under Medicare, endorsing a rare bipartisan deal that Speaker John Boehner (R-Ohio) negotiated with Democrats.

The bill, which passed by a vote of 392-37, puts Congress on the precipice of ending a fight nearly two decades old over a formula known as the sustainable growth rate (SGR).

Since 2003, lawmakers have put off cuts under the Medicare formula 17 times, perennially punting the solution through short-term "fixes" that, over time, ran up the cost of abolishing the formula to nearly $200 billion dollars.

Facing a new deadline for the cuts at the end of March, Boehner said he decided it was time to make a deal.

"This is what we can accomplish when we focus on finding common ground," Boehner said after the bill passed. Minority Leader Nancy Pelosi (D-Calif.) said she hoped the compromised bill "will be a model for things to come."

Defenders of the Medicare program, however, were quick to issue warnings that it will be those individuals who benefit most from the nation's public health program who end up on the losing side if and when the bill passes the Senate and reaches the desk of President Obama, who has already indicated his desire to sign it.

"Unfortunately, the SGR replacement package from the House is not sufficiently balanced; it asks too much from beneficiaries - and nothing from the pharmaceutical or insurance industries - without providing enough for beneficiaries in return," said Judith Stein, Executive Director of the Center for Medicare Advocacy.

And Joe Baker, President of the Medicare Rights Center, made a similar argument, saying that although the proposal is a step in the right direction, it ultimately "comes at a steep cost, asking too much from Medicare beneficiaries in return for too little."

The new law, Baker said, would give "pay raises to doctors, while shifting $30 billion in higher costs to some beneficiaries and granting a small measure of security to low-income seniors and people with disabilities. This security afforded to low-income beneficiaries through a permanent Qualified Individual (QI) program should be celebrated, but Congress can and should do better."

According to an evaluation by the CMA:

Of the portion of the SGR package that will be offset, roughly half (approximately $35 of the total $70 billion over 10 years) would come from Medicare beneficiaries through changes that will increase their out-of-pocket costs for health care, including:

• Adding deductibles to Medigap plans purchased in the future;
• Further means-testing premiums for higher-income beneficiaries, and
• Overall increases in Part B premiums.

At the same time, neither the pharmaceutical industry nor the insurance industry is being asked to pay for any of this package, although doing so would pay for a major portion of the SGR replacement. Simply reinstating prescription drug rebates for low-income beneficiaries as they existed until 2006, for example, would save an estimated $116 billion over 10 years.

"Payment for an SGR fix should not rely on increasing out-of-pocket health care costs for people with Medicare, jeopardizing access to needed care, and further diminishing the already tenuous economic circumstances facing many beneficiaries and their families," said Ms. Stein.

Though she said her group appreciates the need, given the current dynamics in Congress, for some level of compromise she said her group would not endorse this piece of legislation as it stands.

"As the debate shifts to the Senate," she said, "we hope further balance and improvements for beneficiaries can be made."