CHA News Article

Report Examines AHCA and BCRA Implications for Medicare

A new report from the Kaiser Family Foundation analyzes the impact the Senate-proposed Better Care Reconciliation Act and the House-proposed American Health Care Act would have on the federal Medicare program. While both bills would leave many of the Affordable Care Act’s (ACA’s) changes to Medicare intact — including benefit improvements, reductions in payments to health care providers and Medicare Advantage plans, the Independent Payment Advisory Board, and the Center for Medicare and Medicaid Innovation — both would repeal many of the ACA’s tax and revenue provisions. These provisions include the Medicare payroll surtax on high-income earners, which provides additional revenue for hospital, skilled-nursing facility, home health and hospice benefits, and the annual fee paid by branded prescription drug manufacturers, which would decrease revenue to the Part B trust fund. In addition, the bills would reinstate the tax deduction for employers who receive Part D retiree drug subsidy payments, increasing Medicare Part D spending. According to the Congressional Budget Office, the overall impact of these changes would lead to higher Part A spending between 2018 and 2026; the Part A trust fund would be insolvent two years earlier than under current law.