House Approves Two-Year Budget Deal With Health Care Implications

On Wednesday, the House voted 266-167 to advance a bipartisan budget deal (HR 1314) with major health care provisions, The Hill reports.

Every Democrat and 79 Republicans voted to approve the deal. According to The Hill, the agreement drew staunch opposition from conservative lawmakers who denounced spending increases included in the measure (Lillis/Schroeder, The Hill, 10/28).

The legislation now heads to the Senate, which is expected to approve the deal before next Tuesday (Modern Healthcare, 10/28). The U.S. could risk its first-ever debt default if the federal borrowing limit is not raised by Nov. 3.

Budget Details

The budget agreement would apply to fiscal years 2016 and 2017. The deal would increase current spending caps for domestic agencies by $50 billion during the first year and $30 billion during the second year. An extra $32 billion in spending over two years would come from an overseas contingency account, bringing the total budget agreement to $112 billion.

The agreement also would suspend the country's $18.1 trillion debt limit through March 2017 (California Healthline, 10/27).

Health Care Provisions

If approved, the budget agreement would lessen, but not eliminate, a premium increase for about 15 million Medicare beneficiaries. Under the agreement, monthly Medicare Part B premiums would increase to about $120, rather than to $159, for roughly 30% of beneficiaries. Meanwhile, annual deductibles for all Medicare beneficiaries would increase to about $167, rather than to $223.

Funding to offset portions of the projected increases would come from a loan to the supplemental medical insurance trust fund. The loan would be repaid through a $3 monthly surcharge on premiums for the 30% of beneficiaries who will experience the increase. Beneficiaries with higher incomes, who also pay higher Medicare premiums, would see larger surcharges.

Further, the agreement would extend a two-percentage-point reduction in Medicare payments to physicians and hospitals through the end of a 10-year budget, which will fund an estimated $25.8 billion of the deal.

The budget agreement also would:

• Prevent a cut to Social Security disability benefits;
• Eliminate an Affordable Care Act mandate that requires large companies to automatically enroll employees in health plans unless the workers opt out of the coverage;
• Require generic drugmakers to give greater discounts to Medicaid if prices of the drugs rise more quickly than inflation. The provision is expected to save $1 billion over a decade; and
• Bar physician practices that are not part of a hospital's main campus from billing through the hospital's outpatient system (California Healthline, 10/28).

Physician Groups Generally Support Deal

According to MedPage Today, while the budget deal includes some negative provisions for providers, experts say physicians generally should support the agreement.

For example, the American College of Physicians said it supports the budget deal's rebate requirements for drugmakers. ACP President Wayne Riley said, "This is an important first step to addressing barriers to patient access to needed medications because of the rising costs of generic drugs and other medications."

Further, Wanda Filer, president of the American Academy of Family Physicians, said the deal's provision to lessen Medicare premium increases "promises a degree of continued health security for elderly and disabled Americans." In addition, she noted that lifting the country's debt limit could make funding available for "programs [that] are vital to continuing the effort to meet the needs of family physicians," such as the Agency on Healthcare Research and Quality (Frieden, MedPage Today, 10/28).