Biden Signs Bill To Delay Medicare Cuts Until The End Of The Year

Congress has been weighing whether to cut Medicare spending since 2011, but it looks like, once again, these cuts are going to be delayed at least until the end of 2021. The Budget Control Act, which passed in 2011, included annual 2% cuts to Medicare spending as part of the government’s plan to reduce the debt and deficit; Congress has repeatedly voted to overturn the law, though, and the cuts have never gone into effect. When the pandemic hit last March, the cuts were again pushed off with the passing of the CARES Act, but were meant to go into effect on April 1. Now, President Biden has signed a bill to continue to delay these cuts until December. 

The Budget Control Act

illustration of a hand holding a large pair of scissors
President Biden has postponed Medicare spending cuts until the end of the year.

The Budget Control Act of 2011 Act proposed caps on Medicare spending from the years 2012 through 2021 in order to reduce the deficit by $1.2 trillion over that period. The Act included cuts to other programs, which would have gradually decreased each year; but for Medicare, cuts would have remained at 2% every year from 2014-2021. The cuts would have impacted payments made to providers and insurance plans, meaning Medicare providers would have billed Medicare as usual, but would only have been reimbursed at a rate of 98 cents on the dollar. 

Delaying The Medicare Cuts

These controversial cuts to Medicare, though, were never actually implemented, with Congress continually voting not to put them into place. The cuts were set to finally go into effect on April 1, so CMS held off processing any Medicare claims in April until Congress debated and voted on delaying the cuts. And now, with the pandemic, President Biden and the CMS have decided to push back the cuts again, so that doctors can get properly reimbursed for dealing with higher-than-usual patient loads during the current crisis. 

Doctors have made clear their position on this bill and the cuts it includes: “We strongly oppose these arbitrary across-the-board Medicare cuts, and the predictably devastating impact they would have on many already distressed physician practices,” James L. Madara, MD, CEO and executive vice president of AMA, said in March.

“The months ahead will be difficult as our nation launches an unprecedented effort to vaccinate the vast majority of Americans, while we simultaneously face the spread of new and potentially more harmful COVID-19 variants. Health care providers across the spectrum are ready to meet this challenge, but we need congressional help now,” leading industry groups wrote to top lawmakers in with a blue mask on with viruses all around himThe latest version of the law was passed by the House of Representatives in a 384 to 38 vote in favor of the bill, which had already passed 90 to 2 in the Senate. After the bill was passed, CMS directed Medicare contractors to release any claims held in April. 

The new provision of the law will hold off any Medicare reimbursement cuts until December 31, 2021.

The CARES Act Offers Flexibility for HRAs, FSA & HSAs

The Coronavirus Aid, Relief, and Economic Security (CARES) Act was created to provide economic assistance to families, workers, and businesses during these uncertain times. One important thing the CARES Act has done is to allow more flexibility for Health Savings Accounts (HSAs), Flexible Spending Accounts (FSAs), or Health Reimbursement Arrangements (HRAs). Now, some over-the-counter medications and other common healthcare items will be eligible for reimbursement. Prior to the passage of this act, these medications were only eligible for reimbursement with a prescription.

illustration of 3 bottles of medications, one with green pills and one yellow
The CARES Act has made over-the-counter medications eligible for reimbursement through HSAs, FSAs and HRAs.

The Changes

If you are an employer who offers HSAs, FSAs, or HRAs, it is important that you make your employees aware of the new rules put in place by the CARES Act. They can now use their HSA or FSA to get reimbursed for over-the-counter medicine, as well as for healthcare items like feminine hygiene products. Before this act was passed, employees needed a prescription from their doctor just to get something as simple as Tylenol reimbursed through their HSA, FSA, or HRA. The change began retroactively as of January 1, 2020, which means reimbursements can be filed for over-the-counter medicine or other newly eligible products purchased anytime since January 1, 2020.

What Is Considered Eligible?

The CARES Act has made thousands of items eligible for reimbursement, including the following medications and healthcare products:

3 tampons over a stack of wrapped up pads
Feminine hygiene products will also be covered for reimbursement.
  • Acne medications
  • Sleep aids
  • Digestive aids, including laxatives
  • Tampons, pads, and liners
  • Cold, cough, and flu medicine
  • Allergy and sinus medicine
  • Anti-inflammatory medicine
  • Pain relievers
  • Baby rash ointments
  • Medications for eczema and psoriasis
  • Acid controllers

You and your employees might have had a rough year, but the government has been working on ways to lessen some of the burdens. These over-the-counter medications and other healthcare products being offered for reimbursement without a prescription will allow your employees to seek treatment for simple things without having to go to the doctor and pay a copay. 

If you do not already offer a HRA or group insurance to your employees, but are considering choosing to help them with healthcare costs, EZ can help. We can review all the available plans in your area and help guide you towards the most affordable ones with the best coverage options. You care about your employees and we care about helping you find a plan that meets all your needs. We will provide you with one agent to work with you and compare all available plans in your area for free. To get instant quotes, simply enter your zip code in the bar above, or if you wish to speak directly with one of our agents, call 888-998-2027. There is no hassle or obligation.