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Medicare Access and CHIP Reauthorization Act of 2015

By Congressman Jim McDermott

On April 16 the President signed into law the Medicare Access and CHIP Reauthorization Act of 2015 (“MACRA”). This legislation breaks a dysfunctional cycle that for too long has threatened the Medicare program with cuts that would jeopardize the health security of American seniors.

As progressives who care deeply about Medicare, we need to have a thoughtful discussion of what this legislation does and what it represents for our healthcare system. In many ways, MACRA is a historic achievement that shows that Congress is still capable of working constructively to solve a stubborn problem. But the bill is not perfect, and it reflects the spirit of compromise that is inherent in the legislative process.

To truly understand MACRA, we have to be mindful of its history. In 1997, a Republican Congress enacted the Balanced Budget Act, which contained a misguided provision that created the Sustainable Growth Rate formula (the “SGR”). The SGR is a crude cost-containment mechanism designed to control growth in Medicare spending by cutting payments to physicians when health spending grows faster than the national economy.

Many of us thought this was a bad idea at the time, and we voted against it. We worried that the cuts would be too severe and could devastate the Medicare program.

Unfortunately we were right, and it quickly became clear to everyone that implementing the SGR formula would lead to catastrophe. In 2003, Congress intervened by enacting a patch to temporarily avert draconian cuts. This was the first of what would ultimately be 17 “doc fixes” that postponed the SGR crisis but neglected the underlying problem.

Without a permanent fix, the health system lurched from crisis to crisis, without Congress ever finding a solution that would put an end to this dysfunction.

By passing MACRA, we have finally broken this cycle and solved this problem. The bill eliminates the draconian, across-the-board SGR cuts and moves us toward a system that will contain healthcare costs by paying doctors based on the value of the services they provide.

This is not perfect legislation. Beneficiary groups and retiree advocates are rightfully disappointed that it will be paid for in part by shifting costs onto Medicare beneficiaries. Provisions that raise premiums on the 2% of beneficiaries with the highest incomes and that increase cost-sharing for beneficiaries enrolled in some Medigap plans are particularly worrisome and deserve criticism.

But these flaws are part of a broader package of reforms that present a meaningful victory for progressives. Not only will MACRA strengthen MediMedicare Access and CHIP Reauthorization Act Continued from Page 1 care by repealing the SGR, it will also bolster programs that are critical to the health security of the American people. It extends funding for the Children’s Health Insurance Program, which covers 8 million children from low-income families. It averts a primary care funding cliff that would have decimated community health centers serving 28 million low-income people, teaching health centers, and the National Health Service Corps. And it eases the burden that Part B premiums impose on our most vulnerable seniors by making the Medicare Qualifying Individuals program permanent.

But what is most encouraging is that this bill shows the American people that their Congress can work constructively to solve a major national problem. Despite Tea Party obstruction, it is possible to address complicated issues in a thoughtful way, passing bills through regular order and coming to meaningful compromises that are in the best interest of the country. The result may be imperfect, but fixing a major problem like the SGR is an accomplishment that we should celebrate and look to build upon as we continue to fight for the health security of the American people.

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