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Thursday, November 19, 2009

RATIONING IN THE REID BILL - ISSUE BY ISSUE - Medicare Commission

Rationing Issues with the Reid Senate Bill:
With the various concerns related to rationing and euthanasia, we will post a series of concerns - the following analysis being one among several.

The Medicare Commission

The Reid bill provides for an “Independent Medicare Advisory Board,” given the task of ensuring senior's Medicare meets budget goals (that will tighten each year).

For fiscal years 2015 through 2019, the bill sets a target rate of growth for Medicare midway between medical inflation and average inflation; for subsequent years the target is the growth in Gross Domestic Product per capita plus 1%.[1]

To the extent the Center for Medicare and Medicaid Services project that Medicare growth rates would exceed these targets, the Board would have to act to reduce the gap by specified percentages varying by year. This gap-reducing would likely come at the expense of reduction of Medicare Advantage benefits, and reductions in payments to doctors and so forth.

The Congressional Budget Office notes, “The provision would place a number of limitations on the actions available to the board, including a prohibition against modifying eligibility or benefits, so its recommendations probably would focus on [r]eductions in subsidies for non-Medicare benefits offered by Medicare Advantage plans; and [c]hanges to payment rates or methodologies for services furnished in the fee-for-service sector by providers other than hospitals [but hospitals would be included beginning in 2020], physicians, hospices [but hospices would be included beginning in 2020], and suppliers of durable medical equipment that is offered through competitive bidding.[2]

The recommendations of the Board would automatically go into effect unless Congress, through an expedited procedure, adopted another means resulting in the same reductions; to waive this would require a 3/5 vote. It would also require a 3/5 vote to repeal or amend the provisions of the Reid bill establishing the Board and its duties and authority; in 2017 there would be an expedited procedure essentially guaranteeing a vote on a proposal to repeal the Board, but this vote would require 3/5 of each House to pass.

[1] Section 3403, beginning on page 1000.
[2] Letter from Douglas Elmendorf, Director, Congressional Budget Office to Senate Majority Leader Harry Reid (November 18, 2009), p. 11.

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