GOP Proposal To Extend Tax Break Includes Two-Year Medicare 'Doc Fix' & Ryan, Wyden Introduce Bipartisan Proposal for Medicare Subsidies

Sat Dec 17 02:38:59 PST 2011

Description: Description: Description: Description: CAL/AAEM: California
Chapter of the American Academy of Emergency Medicine

December 9, 2011

GOP Proposal To Extend Tax Break Includes Two-Year Medicare 'Doc Fix' 

CaliforniaHealthline.com
<http://www.californiahealthline.org/articles/2011/12/9/gop-proposal-to-exte
nd-tax-break-includes-twoyear-medicare-doc-fix.aspx#ixzz1g8OkuXB4> 

On Thursday, House Republicans released a plan extending a $1,000 payroll
tax break -- set to expire at the end of 2011 -- that includes a two-year
"doc fix" to stave off scheduled cuts to Medicare physician reimbursement
rates, the New York Times reports (Steinhauer/Pear, New York Times, 12/8).

Background

Since 2002, Congress annually has passed a series of short-term bills to
block scheduled cuts to Medicare reimbursement rates.

The most recent "doc fix" bill, enacted in December 2010, is scheduled to
expire on Jan. 1, 2012, at which point physicians face a nearly 30% payment
rate cut (California Healthline, 11/21).

GOP Plan Details

The GOP plan -- the latest in a series of payroll tax break proposals from
both parties -- includes a 1% increase for reimbursement rates over the next
two years (New York Times, 12/8).

Citing delays caused by recent debt panel negotiations, Rep. Phil Gingrey
(R-Ga.) -- co-chair of the GOP Doctors Caucus -- said lawmakers do not have
enough time to design a permanent fix for the sustainable growth rate
formula that triggers the reimbursement cuts.

The plan would pay for the $38 billion fix in part by limiting Medicare
benefits for high-income beneficiaries (Daly, Modern Healthcare, 12/8). It
also would offset the cost by redirecting funding from the federal health
reform law that was intended for prevention and public health services.

The GOP proposal also limits unemployment insurance benefits for high-income
U.S. residents and gradually reduces the duration of long-term unemployment
benefits for all residents, from the 99 weeks now permitted in some states
to 59 weeks (New York Times, 12/8).

December 15, 2011

Ryan, Wyden Introduce Bipartisan Proposal for Medicare Subsidies

californiahealthline.com
<http://www.californiahealthline.org/articles/2011/12/15/ryan-wyden-introduc
e-bipartisan-proposal-for-medicare-subsidies.aspx#ixzz1gjdkHvb8>  

On Thursday, House Budget Committee Chair Paul Ryan (R-Wis.) and Sen. Ron
Wyden (D-Ore.) unveiled a proposal that would give Medicare beneficiaries
"premium support" to purchase traditional Medicare coverage or a private
health plan, the New York Times reports.

Details of Proposal

Under the plan, Medicare beneficiaries would receive a subsidy to purchase
coverage through an insurance exchange where private plans would compete
with traditional fee-for-service Medicare. The subsidy in each region would
be set by the cost of the second least costly option, regardless of whether
that was a private plan or the fee-for-service plan (Pear, New York Times,
12/14).

According to National Journal, the plan would provide more protection for
beneficiaries but potentially less budget savings than a previous Medicare
reform plan by Ryan.

The amount of the subsidy would vary based on the cost of the health plan
(National Journal, 12/14) Lower-income beneficiaries would receive a full
subsidy, while higher-income beneficiaries would receive less. The proposal
would not apply to beneficiaries currently enrolled in the program and would
take effect in 2022 (Radnofsky/Weisman, Wall Street Journal, 12/15).

Ryan and Wyden said they will not draft legislation for the plan. "There's
no point in drafting legislation if you know it's not going to pass," Ryan
said. He added that because of more pressing legislative issues, like the
payroll tax cut extension, he does not expect any major action on Medicare
until a new Congress is seated in 2013. In an interview on Tuesday, Ryan and
Wyden said they hope their proposal can help overcome the contentious
political climate of late. Ryan said, "We want to demonstrate that there is
an emerging consensus developing on how to preserve Medicare," adding, "We
want to move that consensus forward."

Cost Controls

Ryan and Wyden said that the measure could drive cost down lower than
current price controls by forcing private insurers to bid to provide
coverage and encouraging beneficiaries to chose the lowest cost plan, the
Washington Post reports (Montgomery, Washington Post, 12/14).

The proposal also would cap Medicare growth and prohibit spending from
increasing by more than the growth of the economy plus one percentage point.
Congress could cut payments to providers and suppliers who overspend or
increase premiums for high-income beneficiaries to stay within the limit
(New York Times, 12/14).

Ryan Moves Away From Controversial Plan

The Ryan-Wyden plan marks a departure from a controversial Medicare reform
proposal Ryan introduced in the spring, The Hill's "Healthwatch" reports
(Baker, "Healthwatch," The Hill, 12/14).

Ryan's original plan -- which would alter Medicare from a fee-for-service
program to one that would have beneficiaries purchase coverage on the
private market -- was included in the House-approved GOP FY 2012 budget
resolution (H Con Res 34). The plan was widely criticized by Democrats,
elderly voters and even prominent Republicans (California Healthline, 5/17).

Bipartisan ImplicationsRyan and Wyden's "unusual alliance" could lead to
complications for both parties in the 2012 presidential elections, according
to the Post (Washington Post, 12/14).

The GOP gained many House seats in 2010 with a campaign message that the
federal health reform law would damage Medicare. Democrats have hoped to
retake the House by arguing that Ryan and other House Republicans are
pushing to eliminate traditional Medicare, which could increase costs for
beneficiaries (New York Times, 12/14).

During debt panel discussions, members of both parties stood behind "premium
support" within Medicare, which could lead to major structural changes to
the program, according to lawmakers and health policy experts. Some experts
say that even though the panel failed to reach a deficit-reduction deal, the
group's work could frame the Medicare debate during next year's elections
and beyond.

Republicans traditionally have supported premium support. GOP presidential
candidates Newt Gingrich and Mitt Romney have endorsed variations of premium
support in Medicare.

Meanwhile, some Democrats on the debt panel said that a premium support plan
could work if it included enough protections for Medicare beneficiaries
(California Healthline, 12/28).

Ryan, Wyden Push for Proposal in Opinion Piece

In a Wall Street Journal opinion piece, Ryan and Wyden write that members of
both parties "are guilty of exploiting Medicare to frighten and entice
voters." However, they write that their plan outlines how "Democrats and
Republicans can work together to ensure that American retirees -- now and
forever -- have quality, affordable health insurance."

The pair argue that their proposal would give beneficiaries more options and
force private insurers "to develop better delivery models and design better
ways to care for patients with chronic illnesses" to keep their costs lower
than traditional Medicare.

Ryan and Wyden write that they "are under no illusions that [the reforms]
will pass tomorrow" but their plan is "proof that Democrats and Republicans
don't have to spend next year making Medicare reform more difficult"
(Ryan/Wyden, Wall Street Journal, 12/15).

Marcus Williams &
Brian Potts MD, MBA
Managing Editors, CAL/AAEM News Service

Contact us at: calaaem.news.service1 at gmail.com

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