Axios Pro: Health Care Policy

September 18, 2023

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Welcome back, gang! Today we're looking at the balancing act House Republicans face as they mark up their 2024 budget while trying to make good on a pledge not to touch Medicare and Social Security.

  • Watch your inboxes tonight for an alert if the House passes the transparency bill as expected.

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1 big thing: House GOP goes on budget offense

Illustration of suit hand holding a dollar sword

Illustration: Eniola Odetunde/Axios

It's budget week in the House Budget Committee — which means another round of creative maneuvering around the political grenade that is Medicare, Axios' Caitlin Owens reports.

Why it matters: There are many ways to reduce Medicare spending without reducing seniors' benefits, but they all tend to get clumped together when it's politically advantageous.

  • The catch now is that one of these cost-saving policies — site-neutral payments — is a source of bipartisan interest in multiple committees.

Driving the news: The Budget Committee will mark up its 2024 budget on Wednesday, a spokesperson confirmed to Axios.

  • Chairman Jodey Arrington told Semafor last week that a markup on a balanced budget was "imminent," and that Medicare and Social Security would be untouched.
  • Balancing a budget without touching Medicare and Social Security would require enormous cuts to every other kind of government spending. But a big question is whether the budget will literally not address either program, or whether it just won't touch seniors' benefits.

Between the lines: The House is due to take up a bipartisan price transparency package today that, among other things, would require equal Medicare reimbursement rates for drugs administered at hospital-owned outpatient facilities and doctors' offices.

  • That's a small-scale form of site-neutral payments, which will save a few billion dollars over the next decade. But the larger-scale versions would save hundreds of billions of dollars, and are frequently included on lists of how to achieve substantial budget savings.
  • It wouldn't be surprising if they show up in the committee's budget, along with other policies like reducing payments to Medicare Advantage plans.

The intrigue: Another way to deal with Medicare in a 10-year budget is to assume the program costs the federal government less money over the next decade because of slower cost growth.

  • A recent attention-grabbing New York Times story explored how Medicare spending growth has been much slower over the last decade than expected, and the per-beneficiary spending has largely leveled off. No one really knows why.
  • The story raises the question: What if the Congressional Budget Office is overestimating Medicare cost growth and Congress doesn't have to slash spending by as much to balance a budget?
  • One GOP lobbyist said the committee has looked at using different Medicare cost growth estimates than CBO.

Yes, but: Budgets that assume lower Medicare growth without including policy changes to achieve that lower growth would "be a budget gimmick," said Josh Gordon, director of health policy at the Committee for a Responsible Federal Budget.

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