[House Document 110-131]
[From the U.S. Government Publishing Office]
110th Congress, 2d Session - - - - - - - - - - - - House Document 110-131
VETO MESSAGE ON H.R. 6331
__________
MESSAGE
from
THEPRESIDENTOFTHEUNITEDSTATES
transmitting
NOTIFICATION OF THE VETO OF H.R. 6331, THE ``MEDICARE IMPROVEMENTS FOR
PATIENTS AND PROVIDERS ACT OF 2008''
July 15, 2008.--Ordered to be printed
To the House of Representatives:
I am returning herewith without my approval H.R. 6331, the
``Medicare Improvements for Patients and Providers Act of
2008.'' I support the primary objective of this legislation, to
forestall reductions in physician payments. Yet taking choices
away from seniors to pay physicians is wrong. This bill is
objectionable, and I am vetoing it because:
It would harm beneficiaries by taking
private health plan options away from them; already
more than 9.6 million beneficiaries, many of whom are
considered lower-income, have chosen to join a Medicare
Advantage (MA) plan, and it is estimated that this bill
would decrease MA enrollment by about 2.3 million
individuals in 2013 relative to the program's current
baseline;
It would undermine the Medicare prescription
drug program, which today is effectively providing
coverage to 32 million beneficiaries directly through
competitive private plans or through Medicare-
subsidized retirement plans; and
It is fiscally irresponsible, and it would
imperil the long-term fiscal soundness of Medicare by
using short-term budget gimmicks that do not solve the
problem; the result would be a steep and unrealistic
payment cut for physicians--roughly 20 percent in
2010--likely leading to yet another expensive temporary
fix; and the bill would also perpetuate wasteful
overpayments to medical equipment suppliers.
In December 2003, when I signed the Medicare Prescription
Drug, Improvement, and Modernization Act (MMA) into law, I said
that ``when seniors have the ability to make choices, health
care plans within Medicare will have to compete for their
business by offering higher quality service. For the seniors of
America, more choices and more control will mean better health
care.'' This is exactly what has happened--with drug coverage
and with Medicare Advantage.
Today, as a result of the changes in the MMA, 32 million
seniors and Americans with disabilities have drug coverage
through Medicare prescription drug plans or a Medicare-
subsidized retirement plan, while some 9.6 million Medicare
beneficiaries--more than 20 percent of all beneficiaries--have
chosen to join a private MA plan. To protect the interests of
these beneficiaries, I cannot accept the provisions of this
legislation that would undermine Medicare Part D, reduce
payments for MA plans, and restructure the MA program in a way
that would lead to limited beneficiary access, benefits, and
choices and lower-than-expected enrollment in Medicare
Advantage.
Medicare beneficiaries need and benefit from having more
options than just the one-size-fits-all approach of traditional
Medicare fee-for-service. Medicare Advantage plan options
include health maintenance organizations, preferred provider
organizations, and private fee-for-service (PFFS) plans.
Medicare Advantage plans are paid according to a formula
established by the Congress in 2003 to ensure that seniors in
all parts of the country--including rural areas--have access to
private plan options.
This bill would reduce these options for beneficiaries,
particularly those in hard-to-serve rural areas. In particular,
H.R. 6331 would make fundamental changes to the MA PFFS
program. The Congressional Budget Office has estimated that
H.R. 6331 would decrease MA enrollment by about 2.3 million
individuals in 2013 relative to its current baseline, with the
largest effects resulting from these PFFS restrictions.
While the MMA increased the availability of private plan
options across the country, it is important to remember that a
significant number of beneficiaries who have chosen these
options earn lower incomes. The latest data show that 49
percent of beneficiaries enrolled in MA plans report income of
$20,000 or less. These beneficiaries have made a decision to
maximize their Medicare and supplemental benefits through the
MA program, in part because of their economic situation. Cuts
to MA plan payments required by this legislation would reduce
benefits to millions of seniors, including lower-income
seniors, who have chosen to join these plans.
The bill would constrain market forces and undermine the
success that the Medicare Prescription Drug program has
achieved in providing beneficiaries with robust, high-value
coverage--including comprehensive formularies and access to
network pharmacies--at lower-than-expected costs. In
particular, the provisions that would enable the expansion of
``protected classes'' of drugs would effectively end meaningful
price negotiations between Medicare prescription drug plans and
pharmaceutical manufacturers for drugs in those classes. If, as
is likely, implementation of this provision results in an
increase in the number of protected drug classes, it will lead
to increased beneficiary premiums and copayments, higher drug
prices, and lower drug rebates. These new requirements,
together with provisions that interfere with the contractual
relationships between Part D plans and pharmacies, are expected
to increase Medicare spending and have a negative impact on the
value and choices that beneficiaries have come to enjoy in the
program.
The bill includes budget gimmicks that do not solve the
payment problem for physicians, make the problem worse with an
abrupt payment cut for physicians of roughly 20 percent in
2010, and add nearly $20 billion to the Medicare Improvement
Fund, which would unnecessarily increase Medicare spending and
contribute to the unsustainable growth in Medicare.
In addition, H.R. 6331 would delay important reforms like
the Durable Medical Equipment, Prosthetics, Orthotics, and
Supplies competitive bidding program, under which lower payment
rates went into effect on July 1, 2008. This program will
produce significant savings for Medicare and beneficiaries by
obtaining lower prices through competitive bidding. The
legislation would leave the Federal Supplementary Medical
Insurance Trust Fund vulnerable to litigation because of the
revocation of the awarded contracts. Changing policy in mid-
stream is also confusing to beneficiaries who are receiving
services from quality suppliers at lower prices. In order to
slow the growth in Medicare spending, competition within the
program should be expanded, not diminished.
For decades, we promised America's seniors we could do
better, and we finally did. We should not turn the clock back
to the days when our Medicare system offered outdated and
inefficient benefits and imposed needless costs on its
beneficiaries.
Because this bill would severely damage the Medicare
program by undermining the Medicare Part D program and by
reducing access, benefits, and choices for all beneficiaries,
particularly the approximately 9.6 million beneficiaries in MA,
I must veto this bill.
I urge the Congress to send me a bill that reduces the
growth in Medicare spending, increases competition and
efficiency, implements principles of value-driven health care,
and appropriately offsets increases in physician spending.
George W. Bush.
The White House, July 15, 2008.