February 3, 2022
Senate Finance Committee hearing on hospital insurance trust fund and future of medicare financing
On February 2, the Senate Finance Subcommittee on Fiscal Responsibility and Economic Growth held a hearing entitled, "The Hospital Insurance Trust Fund and the Future of Medicare Financing." Witnesses representing the Medicare Payment Advisory Commission (MedPAC), physicians' groups, academia and think tanks testified on their proposals to address the sustainability of the Medicare program. The witnesses varied in their suggestions for how to address the looming insolvency of the program and reduce the rate of spending over time, offering solutions that included adjusting payments for certain providers and Medicare Advantage (MA), enhancing competition and transparency across the health care ecosystem, redesigning and/or combining the various parts of Medicare, and aligning incentives across payers, providers, and patients.
The lion's share of the questioning came from Subcommittee Chair Elizabeth Warren (D-MA), who expressed her concern over the perceived privatization of Medicare and need for additional anti-trust enforcement across the industry. Ranking Member Bill Cassidy (R-LA) expressed support for modernizing care delivery and speculated about ways to leverage financial incentives such as cost-sharing and gain-sharing to drive investment, better outcomes and lower costs for patients and the system. Other members asked the witnesses about how to design better value-based care models, such as Accountable Care Organizations (ACOs), along with other suggestions. Dr. Michael Chernew, Chair of MedPAC, said their June report will have suggestions outlining recommendations for improvements to these models.
Additional information is also available in the attached Tax Alert.
Finance hearing on Medicare financing