Senate Sends Budget Deal With ACA, Medicare Changes to Obama
On Friday, the Senate voted 64-35 to approve a two-year budget deal (HR 1314) that would raise the country's spending limits and make changes to several health care programs, the New York Times reports (Herszenhorn, New York Times, 10/30).
The House on Wednesday voted 266-167 to approve the deal (California Healthline, 10/29). The legislation now heads to President Obama (Snell, "PowerPost," Washington Post, 10/30). The U.S. could risk its first-ever debt default if the federal borrowing limit is not raised by Nov. 3.
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.
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, 10/29).
According to "PowerPost," several Republican senators raised objections to the budget deal, including Sens. Ted Cruz (Texas) and Rand Paul (Ky.), who are seeking the Republican presidential nomination ("PowerPost," Washington Post, 10/30). During a speech, Paul called the agreement a step in the wrong direction.
Meanwhile, Senate Minority Leader Harry Reid (D-Nev.) called the agreement "a victory for bipartisanship and for the American people." He added, "Together, Democrats and Republicans have proven that, when partisan agendas are set aside, we can find common ground for the common good" (New York Times, 10/30).
Budget Deal Could Threaten Other Health Bills
If it is signed into law, the budget could pose barriers to two health care-related bills by taking away nearly $13 billion in funding for the measures, The Hill reports.
According to The Hill, the deal could threaten the:
- 21st Century Cures Act (HR 6), a broad bill that aims to accelerate the development and regulatory approval of medical innovations; and
- Restoring Americans' Healthcare Freedom Reconciliation Act (HR 3762), which aims to repeal portions of the ACA through the budget reconciliation process.
Both measures have been passed by the House and the Senate is expected to take action on the bills before the end of the year.
The budget agreement could leave HR 6 -- which would be funded by $5.4 billion in revenue from U.S. petroleum reserves sales -- with only $350 million in such offsets because the budget deal would be funded by about $5 billion through the same revenue.
Meanwhile, HR 3762 -- which also included a provision to eliminate the ACA's mandate that large companies automatically enroll employees in health plans unless the workers opt out of the coverage -- could be stalled because the provision helped the House and Senate meet the strict revenue-related requirements needed to use the reconciliation process (Ferris, The Hill, 10/29).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.