House Passes Bill on Savings Accounts For Disabled, Funded by Medicare Changes

A bill that would make tax-free savings accounts available to people with disabilities passed the House by a 404-17 vote Dec. 3.

Twelve Democrats and five Republicans voted against the bill.

Although the Achieving a Better Life Experience (ABLE) Act (H.R. 647) enjoyed bipartisan support, lawmakers said they were concerned about the bill’s use of Medicare offsets.

Rep. Jim McDermott (D-Wash.) during floor debate said funding the bill by cutting Medicare would be an “unprecedented and dangerous course” of action that “jeopardizes our safety net.” He said he appreciated the bill’s goal, but he couldn’t support it because of the offsets.

“If we vote to make these cuts, we’re taking the first step down a slippery slope,” McDermott said.

Rep. Frank Pallone Jr. (D-N.J.) also said he was concerned about using billions of dollars in health-care offsets for a non-health-care bill. He noted that lawmakers’ efforts to find the offsets needed to pay for a permanent fix of Medicare physician payments under the sustainable growth rate “have fallen flat.”

The bill goes to the Senate next. Pallone said he hopes the Senate will send the bill back to the House without the offsets, “so we can have a better bill.”

The ABLE Act, which was introduced in 2013 by Rep. Ander Crenshaw (R-Fla.), has 380 co-sponsors in the House and 74 in the Senate. It would make tax-free savings accounts available for people with disabilities and their caretakers to cover qualified expenses such as education, housing and transportation.

According to a summary, the bill would supplement, but not supplant, benefits provided through private insurance, the Medicaid program, the Supplemental Security Income (SSI) program, the beneficiary’s employment and other sources. Specifically, the bill would exempt the first $100,000 in ABLE account balances from being counted toward the SSI program’s $2,000 individual resource limit. Medicaid eligibility wouldn’t be affected, but states would be required to recover benefit costs from an individual or his or her estate after death.

The Congressional Budget Office estimates the cost of the bill at $2 billion over 10 years. The bill is paid for through $638 million in revenue offsets and $1.4 billion in spending cuts.

Ways and Means Committee ranking member Sander M. Levin (D-Mich.) said in a floor statement that he understood why lawmakers were uneasy about using health-care dollars to pay for a tax bill, but he emphasized that the offsets were bipartisan, and the bill would benefit too many people to vote against it.

“There has been active bipartisan work on paying for this bill. And there is broad agreement on the revenue offsets,” Levin said. “I understand the concern about Medicare offsets, and think it is important as we proceed on this bill to stress that it must not be considered a precedent for using Medicare savings to pay for unrelated costs associated with tax changes.”

Medicare Cuts
To offset the costs, the legislation includes a provision that would prohibit Medicare from spending an estimated $444 million for vacuum pumps used to treat erectile dysfunction in the next decade, a cost-saving move that may frustrate people who can’t afford drugs such as Pfizer Inc.’s Viagra.

Medicare’s prescription-drug benefit, created in 2003, generally isn’t permitted to cover Viagra or other erectile-dysfunction drugs. A bill under consideration by Congress would put a similar ban on the pump devices some people use as an alternative.
The legislation also includes a provision that would accelerate the application of relative value targets for misvalued services in the Medicare physician fee schedule.

According to the bill summary, the Protecting Access to Medicare Act (PAMA), which provided physicians with relief from the sustainable growth rate, contained a provision that requires the health and human services secretary to reduce payments to doctors across the board if the secretary fails to identify and correct payment values for individual services (e.g. diagnostic tests, surgeries) that are overpaid. President Barack Obama signed PAMA in April.

Under the accelerated time frame, the secretary would be required to identify overpayments one year earlier than previously required, beginning in 2016. The provision would also reduce the number of years the policy is in effect from four to three. The target would be 1 percent of payments in 2016, 0.5 percent in 2017 and 0.5 percent in 2018, according to the bill summary.
The CBO estimated that moving the effective dates and revising the first-year target for this policy would reduce spending by $365 million.

The legislation also contains as an offset a provision that would delay for one year—through Dec. 31, 2024—the inclusion of oral-only drugs in the end-stage renal disease (ESRD) prospective payment bundle. The CBO estimated the provision would save $380 million.

The bill was combined with a bill concerning extensions of temporary tax breaks (H.R. 5771).

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