Bipartisan Budget Bill a Pretty Good Deal for Seniors
The bipartisan budget bill passed by Congress early this morning is, on balance, good news for seniors and the federal programs that provide them with financial and health security.
“Seniors will feel these changes in their pocketbooks and even in the way they feel physically,” says Max Richtman, president and CEO of the National Committee to Preserve Social Security and Medicare. “We have been fighting for these measures for quite some time and are happy to see Congress take action on a bipartisan basis.”
On the positive side, the budget bill:
*Closes Medicare Part D “donut hole” in 2019. The prescription drug coverage gap embedded in the original law, which the Affordable Care Act has been gradually closing, will be altogether eliminated one year early. This will save seniors thousands of dollars in out-of-pocket prescription drug costs.
*Repeals Medicare therapy caps. The bill scraps arbitrary caps on physical, speech, language and occupational therapies that have cost seniors money – or delayed care at crucial times. Beneficiaries will now find it easier – and more affordable – to get the therapies they need without undue interruption.
*Lifts non-defense domestic spending caps, allowing Congress to appropriate more adequate funding for the Social Security Administration’s operating budget. The SSA has suffered from draconian budget cuts since 2011 which have impinged on customer service, even as 10,000 Baby Boomers retire every day. This badly-needed (but yet unspecified) higher level of funding should allow SSA to improve customer service for the program’s 67 million beneficiaries.
On the negative side, the bill increases Medicare premiums for some individuals by further expanding Medicare means-testing. “Congress continues to expand Medicare means-testing, and they will not stop until middle-class seniors are burdened with higher Medicare premiums,” says Richtman.
Here is a more detailed summary of the budget bill’s implications for seniors:
SUMMARY OF PROVISIONS RELEVANT TO THE NATIONAL COMMITTEE
IN THE BUDGET DEAL/CONTINUING RESOLUTION
• The two-year budget deal will increase the discretionary spending caps by $80 for defense programs and $63 billion for non-defense programs.
• The bill will keep federal agencies operating at current levels through March 23.
• The specific line item amounts for federal agencies are not in the budget deal. They will be determined in an FY 2018 Omnibus Appropriations bill that is likely to be considered in late March.
• However, according to Rep. Steny Hoyer, “Democrats secured an [unspecified] increase in funding for the Social Security Administration so that seniors and other beneficiaries get better services from regional offices.”
• Under the bill, the statutory debt limit will be suspended until March 1, 2019
Medicare Provisions Supported by the National Committee:
Section 50202. Repeal of Medicare payment cap for therapy services; replacement with limitation to ensure appropriate therapy. This section would permanently repeal the annual payment limits (“caps”) for outpatient therapy services, including physical therapy, speech- language pathology services, and occupational therapy, beginning January 1, 2018. It would require continuation of the current practice that a modifier be included on claims over the current exception threshold indicating that the services are medically necessary. It would also lower the targeted manual medical review threshold above which claims may be subjected to review of medical necessity documentation from the current per-beneficiary therapy expenditure amount of $3,700 to $3,000.
Section 50207. Extension of funding outreach and assistance for low-income programs;
This section would extend for two years, at current law levels, funding for outreach and education activities for Medicare beneficiaries, specifically, for the State Health Insurance Programs (SHIPs), Area Agencies on Aging, Aging and Disability Resource Centers, and The National Center for Benefits and Outreach Enrollment. This section would also require the Administration for Community Living to report on the amount and use of funding provided to states.
Section 50301. Extending the Independence at Home Demonstration Program. This section would extend and expand the Medicare Independence at Home demonstration to provide a broader base of experience to inform future legislative efforts. Specifically, it would extend the length of the demonstration by two years; increase the cap on the total number of participating beneficiaries from 10,000 to 15,000; and give practices three years to generate savings against their spending targets.
Section 50203. Medicare ambulance services. This section would extend the temporary increase in ambulance fee schedule rates for all ground ambulance services (i.e., 2 percent urban add-on payment and 3 percent rural add-on payment) and the super-rural ambulance add-on payments for five years through December 31, 2022. It would also require the Secretary of Health and Human Services (HHS), in consultation with stakeholders, to develop a data collection system for ambulance providers and suppliers to collect cost, revenue, utilization, and other information determined appropriate by the Secretary.
Section 53116. Closing the Donut Hole for Seniors. This section would accelerate the closure of the Part D program coverage gap, the phase known as the “donut hole” where beneficiaries are responsible for a greater portion of their prescription drug costs, with the beneficiary contribution decreasing to 25 percent of prescription costs in 2019, instead of 2020 under current law. In addition, it would increase the percentage that a drug manufacturer must discount the cost of prescriptions in this phase from 50 percent under current law to 70 percent, with the plan responsible for 5 percent, starting in 2019, thus reducing federal spending. The 70 percent manufacturer discount would continue to count toward beneficiary true out of pocket cost as under current law.
Medicare Provisions Opposed by the National Committee:
Section 53114. Adjustments to Medicare part B and part D premium subsidies for higher income individuals. This section would, starting in 2019, increase the percentage that beneficiaries with a modified adjusted gross income (MAGI) of at least $500,000 ($750,000 for a couple filing jointly) pay in Part B and Part D premiums from 80 percent to 85 percent. It would freeze these this new income threshold through 2028, at which point the threshold would be indexed to inflation.
Extending the Budget Control Act of 2011 (BCA) Medicare sequester. To meet the spending reduction goals required by the BCA, automatic spending reductions (also known as “sequestration”) are made to certain programs. While both Social Security and Medicaid are exempt, Medicare is not. Under the sequester, Medicare payment to health care providers and private Medicare insurance companies were reduced by 2 percent. The budget deal extends the Medicare sequester for another three years – until 2028.