House GOP Looks Ahead to Huge Medicare Overhaul in 2016

The doc fix is done, Obamacare lives, but the GOP still has health policy plans.

Two people walk inside a Medicare Services office on the last day for enrollment in the Medicare Part D program May 15, 2006 in New York City.
National Journal
Aug. 10, 2015, 1 a.m.

For years, Re­pub­lic­ans have openly pined for push­ing Medi­care fur­ther in­to the private sec­tor. But they have been re­strained by the prac­tic­al real­it­ies of di­vided gov­ern­ment and the polit­ic­al risks of a plan that Demo­crats have said would turn the pop­u­lar in­sur­ance pro­gram in­to a vouch­er sys­tem.

Con­ser­vat­ives on Cap­it­ol Hill, however, have not sur­rendered the dream and now are plan­ning to un­der­take the dirty work to make it a le­gis­lat­ive real­ity. House Re­pub­lic­ans will start work­ing next year on draft­ing a Medi­care “premi­um-sup­port” bill, ac­cord­ing to Ways and Means Health Sub­com­mit­tee Chair­man Kev­in Brady.

It is the most am­bi­tious item on the up­com­ing le­gis­lat­ive agenda that the Texas Re­pub­lic­an laid out in an in­ter­view with Na­tion­al Journ­al.

Brady said his pan­el wants to start the la­bor­i­ous work of cre­at­ing ac­tu­al le­gis­lat­ive text, likely in pre­par­a­tion for 2017 un­der a new Con­gress and pres­id­ent at the earli­est. This year’s House budget en­dorsed the policy, as it has for sev­er­al years un­der Re­pub­lic­an con­trol.

It would fol­low the first two of Brady’s self-de­scribed steps to sav­ing Medi­care. The first was the “doc fix” deal re­form­ing phys­i­cian pay­ments, passed this spring. He also hopes to ad­vance in the fall a pack­age of re­forms that would, among oth­er things, sim­pli­fy Medi­care hos­pit­al pay­ments and in­tro­duce pay-for-per­form­ance to post-acute care.

Then comes premi­um sup­port.

“Next year, what we hope to turn to is the third and fi­nal step for sav­ing Medi­care in the long term, which is of­fer­ing bet­ter and smarter per­son­al­ized Medi­care op­tions for seni­ors,” Brady said. He spe­cific­ally named com­bin­ing Medi­care’s hos­pit­al and phys­i­cian cov­er­age, with an out-of-pock­et spend­ing cap, and “provid­ing a per­son­al­ized Medi­care op­tion that most call premi­um sup­port.”

The de­tails of how the policy would ac­tu­ally work are what Brady and his staff plan to start craft­ing next year. Premi­um sup­port gen­er­ally means that Medi­care would provide seni­ors with a set amount of money to pur­chase a private health plan. In some it­er­a­tions, the tra­di­tion­al Medi­care pro­gram would con­tin­ue as an op­tion.

“It is do­ing the le­gis­lat­ive work, get­ting the [Con­gres­sion­al Budget Of­fice] scores, mak­ing sure those plan op­tions work both from a budget stand­point and a health care stand­point,” Brady said.

It could be polit­ic­ally fraught: Just 26 per­cent of Amer­ic­ans fa­vor mov­ing to premi­um sup­port, ac­cord­ing to a Ju­ly poll by the Kais­er Fam­ily Found­a­tion. Pres­id­ent Obama re­peatedly at­tacked 2012 Re­pub­lic­an pres­id­en­tial nom­in­ee Mitt Rom­ney over the policy, link­ing him to past House budgets that in­cluded it, which had been pro­duced by then-vice pres­id­en­tial can­did­ate and now-Ways and Means Chair­man Paul Ry­an.

Asked about any polit­ic­al risk in a pres­id­en­tial elec­tion year, Brady em­phas­ized that the bill wouldn’t ne­ces­sar­ily move in 2016, just that the “hard work” of put­ting to­geth­er le­gis­lat­ive lan­guage would be­gin.

“There is an aw­ful lot of ground­work that needs to be done on that,” he said.

The oth­er longer-term pro­ject that Brady plans to un­der­take is com­bin­ing Medi­care’s hos­pit­al and phys­i­cian cov­er­age (known as Part A and Part B). De­tails are still to be de­term­ined, but the concept, which has been floated for some time, would stream­line the pro­gram by hav­ing seni­ors pay one de­duct­ible for both kinds of care. There would also be a cap on out-of-pock­et costs that they would have to pay, Brady said.

Obama re­portedly ex­pressed an open­ness to the idea dur­ing the 2011 budget ne­go­ti­ations. But the pro­pos­al has also been cri­ti­cized by oth­ers who al­lege that, by com­bin­ing the two de­duct­ibles, it would in­crease costs for seni­ors who don’t use hos­pit­al care.

Be­fore the work on those more ex­pans­ive pro­pos­als starts, however, Brady wants to press for­ward with some Medi­care hos­pit­al-pay­ment re­forms that have been in the works for a while. In the lame-duck ses­sion last year, he re­leased a dis­cus­sion draft with a lit­any of pro­pos­als, and his pan­el held a hear­ing last month on the is­sue.

He said he ex­pects a num­ber of smal­ler bills to move this fall in tan­dem, rather than as a lar­ger bill, and for them to earn bi­par­tis­an sup­port. Be­fore Con­gress left for its Au­gust re­cess, four bills were in­tro­duced. But the clock of pres­id­en­tial and con­gres­sion­al polit­ics is tick­ing.

“Be­fore things start to close down next year with the Sen­ate elec­tion and the pres­id­en­tial elec­tions and all that,” Brady said, “we think this fall may be the last real chance to move health policy through both bod­ies.”

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