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[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.

                                  
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