Congress Sends ‘Mixed Signals’ on Medicare Legislation

Congressional leaders are "sending mixed signals about the timing of any move to work through" Medicare legislation in 2006, The Hill reports. According to The Hill, lawmakers have proposed a number of bills related to the Medicare prescription drug benefit and "several of [Medicare's other] perennial problems," but the Bush administration and Republican leaders in both chambers are "said to be wary of opening the door to a wider debate on Medicare this year."

Any action on the bills likely will not occur until after the August congressional recess, and "speculation is rampant" that House and Senate leaders could postpone final action until after the midterm elections this November, The Hill reports.

Senate Finance Committee Chair Chuck Grassley (R-Iowa) and Rep. Nancy Johnson (R-Conn.), chair of the House Ways and Means Subcommittee on Health, have sponsored bills (S 2810, HR 5399) that would eliminate the financial penalty for Medicare beneficiaries who missed the May 15 enrollment deadline for the prescription drug benefit. The Johnson bill is expected to come under discussion on Wednesday at a Ways and Means Committee hearing on the implementation of the drug benefit, The Hill reports.

However, despite support from some Republican lawmakers, the Bush administration and congressional leaders "have been cool to the idea" of waiving the penalty, and legislators "have few realistic options available to pay for a package containing these or other costly provisions," The Hill reports.

According to The Hill, the "biggest driver behind Congress' tackling of Medicare this year ... is a strong desire by many lawmakers to prevent a cut in Medicare's payments to physicians." With medical malpractice reform legislation defeated last month, the American Medical Association has turned its primary lobbying efforts toward stopping the scheduled cuts, which would begin next year without legislation.

However, proposals to repeal the cuts or change the payment formula could face opposition because of the projected high costs of a repeal. The Congressional Budget Office estimated that maintaining the current payment level for one year would cost about $10 billion, The Hill reports.

Meanwhile, the nursing home and physical therapy industries are pushing for Congress to postpone or eliminate planned caps on the amount of therapy Medicare beneficiaries can receive. The caps are scheduled to go into effect Jan. 1, 2007, but eliminating them would cost more than $500 million, according to The Hill.

Sen. John Ensign (R-Nev.) and Rep. Phil English (R-Pa.) have proposed legislation (S 438, HR 916) that would repeal the caps (Young, The Hill, 6/14).

The "real problem" with the Medicare drug benefit "is that this program eventually will replace existing public and private spending for drugs with new taxpayer financing -- at a time when entitlement costs already are growing much more rapidly than the tax receipts that are supposed to pay for them," Robert Moffit, director of the Center for Health Policy Studies at the Heritage Foundation, writes in a Washington Times opinion piece. According to a Heritage Foundation analysis, the cost of Medicare, Medicaid and Social Security will "boost federal spending from 20% of gross domestic product to almost 38% ... by 2050" without "serious entitlement reform," Moffit writes.

He says that Congress should enact legislation that would require higher-income Medicare beneficiaries to pay more toward Part B premiums. "The next step should be to start transforming Medicare from a defined-benefit program to a defined-contribution program," Moffitt writes.

He also says that Baby Boomers should be encouraged to carry private health coverage into retirement and should receive a capped government contribution toward premiums. Moffit concludes, "Congress can delay taking action, but every delay raises the tab for taxpayers" (Moffit, Washington Times, 6/14).