Statement of Administration Policy: H.R. 2425 — Medicare Preservation Act of J.995

(House)
(Rep. Archer (R) TX and eight others)

The Administration strongly opposes H.R. 2425 because it would make $270 billion in unwarranted, excessive cuts in the Medicare program that will seriously harm the Nation's health care system and place an unfair burden on our senior citizens. For these reasons, if this legislation were presented to the President in its current form he would veto it.

H.R. 2425 would raise health care costs for beneficiaries and would enact the deepest cuts in health care provider payments in history, potentially forcing many rural and urban hospitals to close. It would also create incentives for physicians to refuse to take less healthy patients under the traditional Medicare program. Moreover, H.R. 2425, as reported by the committees, would invite Medicare fraud and abuse by relaxing critical rules that today outlaw kickbacks and that require providers to exercise due diligence in submitting accurate and true Medicare claims. We understand that the new base text includes language to address certain concerns with fraud and abuse provisions.

The Republican balanced-budget plan would extend the solvency of the Medicare Part A trust fund through 2006. However, the excessive cuts contained in H.R. 2425 are three times more than are necessary to restore trust fund solvency. The primary purpose of H.R. 2425 is to raid Medicare to pay for an excessive $245 billion tax cut that goes predominantly for the wealthy.

By contrast, the President's balanced budget plan would achieve solvency until the end of FY 2006 without imposing new cost increases on senior citizens and with less than one-half the overall Medicare cuts.