Senator Hatch Proposes Major Federal Health Reforms in Dear Colleague Letter
Monday, February 18, 2013
by: VNAA Policy Team

Section: Public Policy and Advocacy

On January 24, Senator Orrin Hatch (R-UT), ranking member on the Senate Finance Committee, released a dear colleague letter outlining his proposals for structural changes to the Medicare and Medicaid programs. While many of these changes have received bi-partisan support in the past in broad policy discussions, it is unclear that any of these changes could make it through the legislative process. (See proposals listed below.) 

VNAA, and several of its Utah members, recently met with Senator Hatch’s congressional staff to discuss how hospice and home health services might be impacted if these proposals were enacted. Of greatest concern is the proposal for Medicare Beneficiary Cost-Sharing. Senator Hatch’s office views the five proposals as a starting point for discussion but is clear that changes are needed including new measures to increase beneficiary responsibility. Senate Democrats, while appreciative of Senator Hatch’s efforts to bring bi-partisan solutions to the table, remain convinced new revenues are needed to close loopholes and raise taxes before any discussion of cuts to Medicare or Medicaid are considered. 
Senator Hatch’s proposals: 
  1. Adjust Medicare Eligibility Age 65 to 67: Raise the eligibility age for seniors each year by two months until it reaches the new eligibility age of 67.
  2. Modernize the Medigap Program: Limit the supplemental Medicare Insurance plans, also known as Medigap plans, from covering initial out-of-pocket expenses.
  3. Medicare Beneficiary Cost-Sharing and Catastrophic Limit: Create a single combined annual deductible for Medicare Part A and B services and establish a coinsurance rate for any amounts above the deductible. The proposal also includes a catastrophic cap to protect seniors.
  4. Increase Quality and Lower Costs with Competitive Bidding: Allow health plans to compete with traditional Medicare fee-for-service to proved seniors guaranteed comprehensive Medicare benefits. Private insurers and Medicare would submit bids to provide these benefits, then the federal government would provide each senior with risks-adjusted payment based on the bids allowing seniors to choose their preferred plan. If the plan they chose costs less than the government payment, the senior would receive the difference back in the form of lower premiums or additional health benefits.
  5. Strengthen Medicaid and Improving Patient Care with Per Capita Caps: Limit the amount of federal dollars spent for each Medicaid beneficiary. Spending limits would be based on beneficiary eligibility categories and adjusted for patient health condition.
To read the full letter from Senator Hatch please click here.
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