April 14, 2015

United States Senate
Washington, D.C.  20510

Dear Senator:

On behalf of the millions of members and supporters of the National Committee to Preserve Social Security and Medicare, I am writing to share our views with you on the House-passed bill, H.R. 2, the “Medicare Access and CHIP Reauthorization Act,” and on amendments that may be offered by Senators Ben Cardin (repeal the therapy caps), Michael Bennet (extend funding of the Children’s Health Insurance Program), John Cornyn (repeal the individual mandate) and Mike Lee (require additional offsets).

A top priority on the National Committee’s Legislative Agenda is to reform Medicare provider payments by replacing the sustainable growth rate (SGR) volume-based payment system with one that rewards quality, efficiency and innovation.  Therefore, we support Title I of H.R. 2, which is based on the bipartisan, bicameral legislation developed in the last Congress.  It repeals the SGR and moves toward a payment system based on quality of care and care coordination, which is especially important for beneficiaries with multiple chronic conditions.

While the National Committee supports the payment system reforms in H.R. 2, we oppose plans to pay for nearly half of the offsets in the bill by increasing costs for Medicare beneficiaries.  Most of this offset would come from further means testing Medicare Part B and D premiums.  Higher-income Medicare beneficiaries are already paying more and expanding Medicare means testing of premiums further erodes the social insurance nature of the program.  It also reaffirms our concern that interest in using means testing as an offset for various pieces of legislation is ongoing and will result in more middle-class seniors shouldering the cost of higher and higher premiums.

Cost savings would also be achieved by requiring Medigap plans to have a deductible.  These policies are purchased primarily by middle and lower-income beneficiaries to ensure their health care costs are affordable and predictable.  Making Medigap coverage less comprehensive could cause some people to forgo necessary care, which could lead to higher health costs.  Even without the offsets paid by beneficiaries, the Kaiser Family Foundation estimates that Medicare beneficiaries would automatically contribute $58 billion over the next ten years in Part B premiums to replace the SGR.

In addition, our support for SGR legislation is contingent on including provisions to make the Qualified Individual (QI) program and the therapy cap exceptions process permanent.  The “Medicare Access and CHIP Reauthorization Act” would make the QI program permanent, but not the therapy cap exceptions process. 


Senator Cardin’s amendment to repeal the therapy caps is an even better improvement than making the exceptions process permanent, and we urge you to vote in favor of this proposal.  Removing the therapy caps for occupational, physical and speech-language therapy would help ensure that Medicare beneficiaries, especially those with chronic conditions such as Parkinson’s disease and multiple sclerosis, continue to receive the ongoing therapy they need to remain as independent as possible.

Senator Bennet’s amendment would provide a four-year, clean extension of funding for the Children’s Health Insurance Program (CHIP) to maintain the enormous gains made in children’s coverage over the past two decades.  We support this amendment because it would continue health coverage for 8 million children from low- to moderate-income families.

Senator Cornyn’s amendment to repeal the individual requirement to purchase health insurance would undercut the ability of the Affordable Care Act marketplace exchanges to offer affordable health coverage. Requiring individuals to purchase health insurance is necessary because it spreads health risks across the entire population, thus healthier and/or younger individuals would help keep overall expenditures lower. Younger enrollees benefit from risk sharing between generations as they age and require more health care.

Senator Lee’s amendment to require that the cost of H.R. 2 be fully offset would likely result in the enactment of additional proposals to shift costs to Medicare beneficiaries.  Of all Medicare stakeholders, seniors and people with disabilities are least able to shoulder the burden of paying more out-of-pocket costs.

The National Committee would support an SGR package that does not require seniors and people with disabilities to pay more for Medicare, and that is paid for in part by physicians who will benefit from repealing the SGR.  We also support paying for this package by restoring rebates from drug manufacturers for the drugs prescribed for individuals who are dually eligible for Medicare and Medicaid and for people receiving the Medicare Part D Low-Income Subsidy (LIS).  Additional offset proposals we support include increasing manufacturer discounts for brand name drugs in Medicare Part D to 75 percent, effectively closing the coverage gap “donut hole” for brand name drugs in 2017, three years sooner than under current law; promoting lower pharmaceutical costs by providing for faster development of generic versions of biologic drugs; and prohibiting “pay-for-delay” agreements between brand name and generic pharmaceutical companies that delay entry of generic drugs into the market which would provide prescription drug savings and would lower costs for beneficiaries.

Repealing and replacing the flawed SGR formula is important for Medicare providers and for Medicare beneficiaries who are concerned about losing access to their doctors, but increasing payments to physicians should not come at the expense of beneficiaries.  Please oppose H.R. 2, the “Medicare Access and CHIP Reauthorization Act,” in its current form, Senators Cornyn and Lee’s amendments, and support Senator Cardin and Bennet’s amendments.


Max Richtman
President and CEO