New SGR Repeal Bill Would Delay ACA Mandate

Published Online: March 14, 2014
Katie Sullivan, MA
The Sustainable Growth Formula (SGR) Repeal and Medicare Provider Payment Modernization Act has been framed as a bipartisan solution to establishing a permanent “doc fix.” The only problem, it seems, is how Congress will pay for the SGR’s elimination.

“The general framework makes a lot of sense,” said Darshak Sanghavi, MD, a fellow and managing director of the Brookings Institution's Engelberg Center for Health Care Reform. “The problem with the bill is how the fix will be paid for, which lawmakers are still trying to work out.”

The House of Representatives just passed one particular highly contested solution: an amendment to the SGR repeal plan that would delay the financial penalty imposed on uninsured individuals under the Affordable Care Act (ACA) for 5 years. The Congressional Budget Office suggests that the delay could save an estimated $170 billion over 10 years, which is well over the $138 billon cost to repeal the SGR formula. But it would also increase the number of uninsured individuals by 13 million—to an estimated total of around 43 million uninsured individuals—by 2018, and inflate individual premium rates by as much as 20%.

While the amendment means the government would be able to fund the SGR repeal through the savings they obtain from reduced subsidies, some have argued that the amendment is an assault to the ACA, suggesting that it undermines the health law. Representative Michael Burgess (R-Texas) argues that it should be seen as a cost-effective solution.

“This bill repeals the sustainable growth rate formula, avoiding potentially devastating across-the-board cuts slated for 2014, and does so at a cost far lower than what Congress has already spent or would likely spend over the next 10 years’ time,” he said.

Representative Dave Camp (R-Michigan), chair of the House Ways and Means Committee, also added his own comments about the bill and amendment:

“We have a real opportunity to repeal the SGR once and for all, to provide seniors, and the doctors who care for them, some much-needed certainty. The legislation today provides stability for physicians so they will no longer face the uncertainty of massive cuts, but it also begins the process of improving how we pay for medical care to focus on positive results for seniors.”

The amendement is unlikely to pass through the Senate.

Around the Web

Bipartisan Bill to Repeal SGR Hits Partisan Rocks [Medscape]

Paying for SGR Fix with Mandate Delay would Add Millions to Uninsured, CBO Says [Modern Healthcare]

Paying for a Permanent Solution: How Cost Still Stands in the Way of SGR Repeal [Becker's Hospital Review]

House Advances Bill to Delay ObamaCare Mandate [The Hill]