House Approves Medicare Payment Reform Legislation

On Friday morning, the U.S. House of Representatives passed an amended version of H.R. 4015 (237-182) that would repeal the flawed Sustainable Growth Rate (SGR) formula that serves as the underpinning of Medicare physician payment and provide for other Medicare payment reforms.

Unfortunately, the cost of the SGR repeal would be offset with a five-year delay in the tax penalties for individuals who do not obtain health insurance coverage. The delay in the penalties would have the effect of discouraging low income individuals and families from applying for health insurance. With the delay, it is anticipated that money would be saved because low income persons would not apply for insurance and receive the federal health insurance premium subsidies to which they are entitled under the Affordable Care Act. President Obama has indicated that he would veto any legislation that contains this offset provision.