House Budget Committee Approves Budget Resolution, Which Includes Medicare and Medicaid Proposals of Concern
March 18, 2016 11:16 AM
On March 16, 2016, the U.S. House of Representatives Budget Committee approved a fiscal year 2017 budget resolution, including Medicare and Medicaid proposals. The budget resolution, which proposes $1.07 trillion in discretionary spending for FY2017 and $7 trillion in deficit reduction over ten years, would change Medicare into a premium-based system, combine Medicare Part A and Part B, limit supplemental insurance, and turn Medicaid into a block grant program. The resolution would also repeal the Medicaid expansion under the Affordable Care Act (ACA), as well as the ACA in its entirety. While NAHC supports targeted reforms to the ACA, such as repealing the Independent Payment Advisory Board, NAHC opposes the proposals in the resolution restructuring Medicare and Medicaid that create barriers to home care and hospices services.
The Committee also passed an amendment to the resolution encouraging leaders to attach “sidecar” legislation that would cut an additional $30 billion over two years and $150 billion over a decade. While the full House may have enough votes to pass the legislation along with the budget resolution on the House floor, the Medicare and Medicaid proposals would unlikely pass the Senate and would be opposed by the President. The potential companion legislation would include H.R. 4725, the Common Sense Savings Act, which was passed out of the House Energy & Commerce (E&C) Committee this week. H.R. 4725 would reduce the Medicaid provider tax from 6 – 5.5 percent. Some states use the tax on nursing homes to generate in-state funds that qualify for federal matching funds. The proposal would have the effect of reducing federal Medicaid funding to the states. Another proposal in H.R. 4725 would eliminate the enhanced Federal Medical Assistance Percentage for the Children’s Health Insurance Program starting in FY2016 through FY2019.
The Budget Committee passed the budget resolution by a vote of 20-16 and the E&C Committee passed H.R. 4725 by a vote of 28-19.
In its Legislative Blueprint for Action, NAHC stated that any efforts to change the Medicare program through vouchers, premium support or some other mechanism, would place many seniors at risk, seriously erode support for the program, and set a dangerous precedent for other programs. While preparing the Medicare program for the changing coverage needs and demographics of the 21st century, Congress should ensure that Medicare continues to provide dependable, affordable, quality health care to older and disabled Americans. NAHC also stated that any proposals to revise the current cost sharing approaches through combined deductibles and copayments (or their equivalents) should be rejected. Cost sharing standards should incentivize high value services such as home health and hospice. Medicare beneficiaries should be able to purchase supplemental insurance to cover co-pays and deductibles without any limitation.
The budget also contains positive provisions such as repealing the Independent Payment Advisory Board and language recognizing the burden of recent regulations on Medicare providers and the effect of reducing their margins. “Washington’s response to this problem has been to impose more mandates, rules, and regulations to try to control costs, which leads to fewer services and less care for seniors,” the budget resolution states. “Medicare currently pays approximately 67 percent of what private insurance pays for hospital services. In many instances, reimbursements for services fall well below the costs of providing care. By 2040, the Medicare Trustees estimate that approximately half of all hospitals, 70 percent of skilled nursing facilities, and 90 percent of home health agencies will have negative margins. This will cause many providers to withdraw from participating in the Medicare program and would unquestionably limit access to quality care for beneficiaries.”
The budget resolution and “sidecar” legislation demonstrate the importance of attending this year’s Home Care & Hospice March on Washington Conference to ensure Congress rejects proposals that would create barriers to home care and hospice. In addition to the actions by Congress, President Obama released his budget request earlier this year that included a new proposal related to hospice services titled, “Reform of Medicare Hospice Payments,” which includes among other provisions a cut to the hospice inflation update; as well as several repeat proposals from last year of great concern to the home health community including the introduction of a home health copayment; further cuts to post-acute care provider payments, including home health care; provisions for a bundled payment program for post-acute providers; as well as value-based purchasing for post-acute care providers (more information about the President’s budget request is available here). The March on Washington Conference is taking place April 3 – 5 in Washington, D.C.
Make sure to register for the March on Washington Conference here.