A rare event happened on Thursday, as the U.S. House approved by a large bipartisan majority a bill changing a major entitlement program. Iowa Republicans Rod Blum (IA-01) and Steve King (IA-04) were among those who opposed the Medicare Access and CHIP Reauthorization Act of 2015.
Background: Reimbursements to doctors who treat Medicare recipients have long been subject to a “sustainable growth rate” formula Congress adopted in 1997. The idea was to reduce the federal government’s expenses in running the Medicare program. Robert Greenstein and Paul N. Van de Water explained last week,
The formula turned out to be badly designed, however, and to produce severe unintended consequences. In many cases, it would have cut Medicare payments below doctors’ actual costs of providing medical services. If allowed to take effect today, it would cause a 21-percent cut in physician reimbursement rates on April 1, almost surely triggering a large-scale exodus of doctors from Medicare.
Congress has responded by acting every year or two on a bipartisan basis to prevent these unintended deep cuts from taking effect by temporarily imposing an alternative payment formula. For the most part, these alternative formulas have frozen physician payment rates or held them below the rate of inflation. As a result, the current Medicare physician payment rate is a stunning 17 percent below the rate in 2001, adjusted for increases in the cost of producing physicians’ services.[2]
Congress has approved those short-term “doc fixes” 17 times during the past 12 years, regardless of whether Democrats or Republicans controlled the House and Senate. The latest “doc fix” is set to expire on March 31.
For some time, staffers for House Speaker John Boehner and Minority Leader Nancy Pelosi have been working on a long-term solution to lift the threat of cuts to doctors who treat Medicare patients. The compromise has something for both sides, Peter Sullivan reported for The Hill.
Democrats would not insist on tax hikes in legislation ending the Medicare formula, Pelosi told Boehner.
“That was, from our point of view, the breakthrough,” said Michael Steel, a Boehner spokesman. […]
Democrats view it is a victory that two-thirds of the deal is not paid for, that it includes priorities like funding for the Children’s Health Insurance Program, and that Boehner did not insist on cuts to health programs that they thought would be harmful.
Greenstein and Van de Water summarized the key points of the deal:
House Republican and Democratic leaders have worked out compromise legislation that would: (1) permanently fix Medicare’s flawed physician payment formula, which repeatedly threatens drastic 20- to 30-percent cuts in physician payment rates; (2) offset part of the cost of fixing the payment formula, primarily by trimming Medicare provider payments and modestly raising Medicare premiums for some high-income beneficiaries; and (3) extend funding and current policy for the Children’s Health Insurance Program (CHIP) and several expiring Medicare and Medicaid provisions for two years. The compromise also makes permanent both the Qualifying Individual (QI) program, which defrays Medicare Part B premiums for low-income Medicare beneficiaries, and the Transitional Medicaid Assistance Program, which enables families receiving Medicaid to maintain that coverage for up to a year as they transition from welfare to employment. In addition, it extends the Maternal, Infant, and Early Childhood Home Visiting (MIECHV) program for two years and provides $7 billion in new funding for community health centers over the next two years.
Iowa’s version of the Children’s Health Insurance Program is called HAWK-I, and it covers tens of thousands of children who might otherwise go uninsured. Extending federal funding for CHIP will make life easier for Iowa lawmakers, who are still working on a budget for the fiscal year that begins July 1.
I was unfamiliar with that “Qualifying Individuals” program; Edwin Park explained the basics here.
No bill is perfect, including the Medicare Access and CHIP Reauthorization Act of 2015. Some deficit hawks complained that the changes to Medicare weren’t fully paid for; the Congressional Budget Office estimated that between 2015 and 2025, the bill would increase federal budget deficits by about $141 billion. A handful of House Democrats opposed the deal, possibly because of language that reaffirms the Hyde amendment restrictions on federal funds for abortion services.
Nevertheless, the bill attracted immense bipartisan support, passing the House on March 26 by 392 votes to 37 (roll call). Iowa Democrat Dave Loebsack (IA-02) and Republican David Young (IA-03) were part of the majority supporting the bill. I have not seen any official comment from Loebsack or Young, which is surprising given how many of their constituents benefit from Medicare and/or HAWK-I.
Just four Democrats and 33 Republicans cast no votes. Blum explained in a Facebook status update,
Today I voted “No” on the legislation to repeal the SGR. I understand the need to fix this problem, but adding $140 billion to our national debt is not the answer, especially the day after we voted to balance the budget. Washington, DC needs to learn fiscal responsibility to get our country back on a sustainable path.
It’s clever for Blum to avoid using the word “Medicare” in his Facebook post. “SGR” (the abbreviation for “sustainable growth rate”) probably doesn’t mean a thing to 99.9 percent of Blum’s constituents. I’d wager that most of the people who read his status update have no idea that he voted against the best chance to fix a big problem for doctors who serve Iowans on Medicare.
King’s statement on his vote was more straightforward:
“Today is the day that the United States House of Representatives has finally decided to fix the doc fix,” said King. “The doc fix is known as the SGR – the sustainable growth rate and that’s the rate that doctors and healthcare providers compensate for their services under Medicare. This is about a $210 to $213 billion dollar cost over 10 years. I have long argued that we need to solve this problem rather than do the doc patch, which is a band aid that we have been doing over years. This one addresses it for the full scope of a decade.
Normally I would be for such a proposal because I expected that when we had a Republican majority in the House and in the Senate that we would find offsets and savings elsewhere in government so that we could pay for this very expensive doc fix – which I believe the doctors deserve. In the end we are at $210-213 billion in expenditures with only $70 billion worth of offsets.
I believe in a balanced budget amendment to the United States Constitution and fiscal responsibility – that’s the promise that I made before I was elected to this job. I’m going to continue to push for a balanced budget and I want to preserve the argument that we can find offsets and we can get to balance. If we sacrifice the argument we will always be in deficit spending and we will see this $18 trillion of the national debt go up clear through the roof. This is why I voted no on the doc fix today, and not because I don’t want to help the doctors.”
Thing is, on March 25 (just one day before the Medicare deal came to the House floor) both Blum and King voted for budget blueprints that included tens of billions of dollars of unpaid-for increases in military spending.
Iowans should ask Blum and King why they were willing to add more defense spending to the national credit card but rejected a bill that is so important for Iowans who rely on Medicare or HAWK-I.
Incidentally, neither King nor Blum addressed the part of the bill that reauthorized the state children’s health insurance program. King has voted against funding for this program before, calling it “Socialized Clinton style Hillarycare for Illegals and their Parents.” I don’t know whether Blum is also philosophically opposed to the program that makes HAWK-I coverage available for thousands of his constituents.