House of Representatives Passes Entitlement Reform

Reforms Reduce Spending, Increase Certainty

Washington, March 26, 2015 Contact:

In a bipartisan vote Thursday, the House of Representatives overwhelmingly passed legislation to permanently reform Medicare and physician reimbursements.  Congressman Brad Wenstrup (R-OH), a doctor of nearly 30 years, supported the changes to Medicare that reduce projected deficit spending and increase certainty for physicians and seniors in the program.

“This is a big step: this legislation includes the first real entitlement reforms in nearly 20 years, something that is not only necessary to ensure that Medicare remains for our children and grandchildren, but is also critical to securing our nation’s fiscal future,” Wenstrup highlighted.

The legislation also restructured Medicare’s physician reimbursement system, known as the Sustainable Growth Rate (SGR) after decades of expensive short term patches.

“As a physician, I’ve seen the very real effects of the manufactured crises created by the perpetual ‘doc fix,’” Wenstrup continued. “I am pleased that Congress has acted in a bipartisan manner to finally fix this broken system and do the right thing for our seniors, patients, physicians and taxpayers.”

The legislation must also pass the Senate, before heading to President Obama, who has indicated his support.

10 Things You Should Know About the Permanent Doc Fix

1. H.R. 2 strengthens Medicare and provides stability for seniors and their doctors.  The legislation moves beyond the sustainable growth rate (SGR) to a better system that ensures seniors have access to their doctors and the high-quality care they deserve.

2. H.R. 2 establishes the first real, structural entitlement reform in nearly two decades – offsetting all new spending without tax increases.  These reforms – increased means-testing and prohibition of Medigap “first-dollar coverage” – have long been part of Republican budgets.   For the first time, however, Democrats agreed to these reforms without demanding tax hikes – a breakthrough and a win for conservatives.

3. With these structural reforms, H.R. 2 reduces the deficit over the long term.  Looking ahead – 20, 30, and 40 years down the road – these reforms will produce hundreds of billions in durable savings for taxpayers, while the status quo only provides the illusion of savings.  As an example, former CBO Director Douglas Holtz-Eakin writes that these reforms “will continue to reap benefits in the years beyond the budget window,” estimating $230 billion in savings in the second decade alone.

4. With these structural reforms, H.R. 2 drives more competition into Medicare, bending the cost curve and putting these programs on a more sound financial footing.  While additional reforms are necessary, these policies are an essential first-step toward larger reforms.

5. After 17 short-term patches since 2003, H.R. 2 ends the cycle of cliffs and “must-pass” ‘doc fix’ bills that have often served as vehicles for more spending and new programs. 

6. H.R. 2 strengthens Medicare’s ability to fight fraud, waste, and abuse by, among other things, removing Social Security numbers from beneficiaries’ Medicare cards, preventing Medicare payments for deceased and ineligible individuals, and removing burdensome reporting policies for employers.

7. H.R. 2 extends the Children’s Health Insurance Program (CHIP) and traditional Medicare extenders for two years, giving House committees time to lay the groundwork for better reforms under a new president.

8. By extending CHIP, H.R. 2 keeps more than three million Americans from becoming uninsured or enrolled in ObamaCare exchanges.

9. H.R. 2 applies traditional Hyde Amendment protections to Community Health Centers, National Health Service Corps, and Teaching Health Centers.  

10. H.R. 2 is supported by leaders of both parties, at least 75 physician groups, and a number of conservative organizations, including Americans for Tax Reform, American Action Forum, the Galen Institute and the National Taxpayers Union.