Ranking Member Levin Opening Statement at Health Subcommittee Hearing on Medicare

May 18, 2017 Issues: Health Care

(Remarks as prepared)

Thank you, Dr. Miller for joining us today and for the important role MedPAC plays in informing Medicare policy. Unfortunately, today’s proceedings are a painful reminder that this Subcommittee failed to have a single hearing or take any action at all on the most consequential health legislation that Congress will consider this session, and perhaps for many years. 

The Republican health care bill would rip coverage away from 24 million Americans while handing out nearly $1 trillion in tax cuts, primarily for the wealthy and corporations.

It guts Medicaid by cutting more than $800 billion from the program and shifting costs to patients. It allows states to eliminate or weaken crucial market reforms, including essential health benefits, community rating requirements, and protections for older workers. Every Republican Member of the Subcommittee voted for this misguided legislation that was opposed by doctors, hospitals, patient advocates, AARP and nearly every other major stakeholder in our health care system. 

This hearing is about Medicare. With all that is deeply harmful in the Republicans’ American Health Care Act, there has been less attention paid to the damage it does to Medicare. The bill eliminates the 0.9 percent pay roll tax on high-earners, depriving the Medicare Hospital Insurance Trust Fund of $75 billion to benefit people making more than $200,000.

It grants a windfall to wealthy investors by eliminating the tax on unearned income, including capital gains and dividends. And it provides a $28.5 billion tax break to pharmaceutical companies, which will create a shortfall in the Part B Trust Fund. Beneficiaries will be directly responsible for a portion of this shortfall – causing an $8.7 billion premium increase.

These provisions would benefit the rich and shorten the solvency of the Medicare Trust Fund. What’s more, they fundamentally break a promise we heard over and over again in 2016 – that the President would not cut Medicare or Medicaid.            

While Republicans have pushed this proposal, with all of its harmful provisions, they have neglected to address the important issues that Medicare faces. Perhaps the most important of which is the prescription drug spending crisis. I hope we can spend some time discussing this issue in greater detail today. 

Skyrocketing drug costs have devastating consequences for the middle class and for federal health programs. The Medicare Trustees have told us that program spending in Part D increased by 15 percent in 2015 alone. In Part B, GAO has found that Medicare often pays more for physician-administered drugs than other federal payers, including Medicaid and the VA.

MedPAC has made a number of recommendations to address Medicare prescription drug spending. Notably, the Commission has pointed out perverse incentives that impact industry behavior and contribute to higher costs.

I hope this hearing will provide us with an opportunity to discuss these and other important issues with the careful attention they deserve.

Thank you again for joining us, Dr. Miller. I look forward to hearing your testimony.

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