Committee for a Responsible Federal Budget

Marc Goldwein Testifies Before Energy and Commerce Health Subcommittee

Dec 9, 2014 | Health Care

Earlier today, CRFB Senior Policy Director Marc Goldwein testified before the House Energy and Commerce Health Subcommittee. The hearing, entitled "Setting Fiscal Priorities," discussed policy options to reduce health care spending. Also testifying were Executive Director of the Medicare Payment Advisory Commission Mark Miller, the American Action Forum's Director of Health Care Policy Chris Holt, and Georgetown Professor of Public Policy Judy Feder. The witnesses represented different perspectives and focused on different parts of the health care system.

Miller's appearance made up the first panel, and naturally, his testimony focused on Medicare. He gave some background on Medicare but focused on the types of savings policies that MedPAC has recommended in its reports. These policies include simple recommendations on annual payment updates (increases or decreases) or more far-reaching recommendations like site-neutral payments and bundled payments (two policies that were part of our PREP Plan). Questions for Miller spanned a far range of topics, including the Affordable Care Act's payment reductions.

The second panel had the other three witnesses. Goldwein's testimony focused on both the need to rein in health spending to control debt and the options available to do so. He noted the large run-up in debt that is projected to have in the coming decades and the central role health care plays in that.

For solutions, he focused on two different types of policies: "Benders" which have the potential to bend the health care cost curve and "Savers" which are not as transformative but lead to a better allocation of health care spending. In his oral testimony, he focused on the policies in the PREP Plan, which involve reforming Medicare's cost-sharing structure and provider payments to encourage more efficient care. His written testimony included many other options with the potential for bipartisan support.

Holt's testimony focused on options for reducing spending related to the Affordable Care Act. He offered many different ways to reduce health insurance premium subsidies, either by limiting the range of incomes to which they apply or reducing the subsidies at higher points of the income scale. He also proposed accelerating and increasing the decline in the federal matching rate for the Medicaid expansion. These savings, he suggested, could go towards replacing the Sustainable Growth Rate (SGR) or other Medicare reforms.

Feder noted that the recent slowdown in health care spending meant that Medicare and Medicaid growth was mostly a story of an aging population, which should be handled with new revenue. She noted that beyond that, there were a number of ways to reduce Medicare spending by increasing drug rebates in Part D, reducing Medicare Advantage plan payments, and refining various post-acute provider payments. She pushed back on suggestions of a premium support approach for Medicare.

Questions spanned many topics including the effectiveness of Medicare Advantage and Part D, the 340B drug program, Medicaid's role in deficit reduction.

The hearing certainly brought a wide array of perspectives, and it was very timely given the swearing-in of the new Congress next month and the need to address the Sustainable Growth Rate (SGR) formula shortly after that. Health care's continued central importance to the long-term budget outlook makes this hearing particularly important for policymakers looking to rein in the debt.

Click here for video of the hearing and witnesses' testimonies. Read Goldwein's full testimony here.

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