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After Obamacare faceoff, GOP going after entitlements

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Reps. Diane Black, R-Texas, and Earl Blumenauer, D-Ore., sponsored legislation that would create a regional demonstration program for Medicare Advantage plans that allow the use of value-based design. (AP Photo)

Republican lawmakers, who for years have tried to kill Obamacare, are now turning their attention to ways to overhaul popular entitlements Medicare and Medicaid.

House members recently have pushed ways to reform the growing and expensive entitlement programs, with an emphasis on the free market and increasing restrictions for access.

Last week, House Republicans advanced a bill that would introduce several changes to Medicaid. While the bill is likely to be vetoed by President Obama, it shows where the GOP stands on reforming the entitlements for low-income Americans.

Among the reforms in the bill, called the Common Sense Savings Act, are measures restricting lottery winners from continuing to receive Medicaid coverage. States would have to take into account lottery winnings of $60,000 or more when determining whether a person is eligible for Medicaid.

Another provision eliminates enhanced Medicaid payments for prisoners.

Medicaid doesn't pay for most of the healthcare for incarcerated individuals. However, if a prisoner gets admitted to a hospital, that prisoner would be eligible for Medicaid and the state can get federal matching funds to pay for his treatment.

House lawmakers say that due to the Medicaid expansion under Obamacare, more prisoners are likely to be eligible for Medicaid in states that expanded the program. The federal government covers the costs of the Medicaid expansion for the 30 states and the District of Columbia that have expanded the program for low-income residents.

"Thus, prisoners' enrollment in Medicaid represents a significant cost shift to the federal government," according to a memo from the committee.

The bill would eliminate the matching funds available for those prisoners.

Democrats balked at the provision, saying Republicans are unfairly targeting expansion states.

"The legislation will punish these states that will expand Medicaid," said Rep. Gene Green, D-Texas, during the markup of the bill. "The savings in this provision come literally from leaving a hole in the state budget."

Other Democrats lashed out at the provision for lottery winners, saying protections are already in place to ensure lottery winners cannot use the program.

The bill could hurt people who may receive a lump sum payment for something such as selling a car, said Rep. Jan Schakowsky, D-Ill., during the markup hearing last week.

Republicans countered that the bill only affects the calculation of gross income used to verify Medicaid eligibility.

"This policy will not take away coverage for the elderly or the disabled," said Rep. Joseph Pitts, R-Pa.

Schakowsky said lawmakers have to make sure that people are not kicked off Medicaid for a month due to a lump sum payment.

"It is the continuity that we want to make sure, particularly the children and the seniors with disabilities, not to have to worry month to month about the paperwork and confusion about getting on and off Medicaid," she said.

While GOP lawmakers focus on reforming parts of Medicaid, they are trying to strengthen part of Medicare, the federal healthcare plan for seniors.

Medicare Advantage is a program that allows seniors to buy a private healthcare plan. The program enrolls about 18.5 million of 56 million Medicare beneficiaries, according to federal data as of January.

Republicans often point to improving Medicare Advantage as a way to help strengthen Medicare itself, with the program's free-market origins playing a huge part in their thinking.

"Of course, Medicare Advantage isn't perfect. But its popularity and market-based roots serve as an excellent example for needed entitlement reform," said Rep. Pat Tiberi, R-Ohio, head of the House Ways and Means Committee's health subcommittee.

Tiberi spoke during a hearing last week that primarily focused on how to strengthen Medicare, with a heavy focus on Medicare Advantage.

He called for the repeal of a cap on benchmarks, which are the basis for paying insurers under Medicare Advantage.

He instead calls for the use of value-based insurance design, which basically gives out financial incentives to insurers that increase healthcare quality but reduce costs.

Several members of Congress are trying to create such incentives. Reps. Diane Black, R-Texas, and Earl Blumenauer, D-Ore., sponsored legislation that would create a regional demonstration program for Medicare Advantage plans that allow the use of value-based design.

The idea is that the plans could reduce copayments or coinsurance for beneficiaries with specific chronic conditions. For instance, a typical plan could lower or eliminate a diabetic enrollee's out-of-pocket costs for test strips and insulin, according to a statement on the bill.

That would remove burdens on patients and encourage them to adhere to the medication and treatment while avoiding expensive services due to complications in the future.

"This is not about saving dollars. This is about quality care," Black said during a recent House hearing.

Black and Blumenauer's bill passed the House last year, but has stalled in the Senate.

The Centers for Medicare and Medicaid Services is starting a pilot program in 2017 to study value-based insurance programs for Medicare Advantage plans.

The CMS proposal has earned plaudits from Medicare advocacy groups.

If it is implemented with appropriate safeguards, value-based design could enable CMS to test a model that "achieves the triple aim of enhancing beneficiaries' healthcare experience, improving population health and reducing costs," according to the Center for Medicare Advocacy.