AARP has sent a letter to congressional leadership urging Congress to prevent $25 billion in automatic cuts to Medicare in 2018 that would result from the enactment of tax reform legislation currently under consideration and the $1.5 trillion deficit increase that would result. The bill (H.R.1) would have an immediate and lasting impact, including fewer providers participating in Medicare and reduced access to care for Medicare beneficiaries.

The text of the letter from AARP CEO Jo Ann Jenkins to congressional leadership reads:

On behalf of our members and all Americans age 50 and older, AARP is writing to express concerns about the potential for automatic cuts to Medicare beginning in January 2018.  AARP, with its nearly 38 million members, represents millions of individuals whose health care depends on Medicare.  We urge you to act now to prevent these cuts to Medicare.

The Congressional Budget Office (CBO) recently provided an explanation of the impact H.R. 1 and its $1.5 trillion deficit increase will have on Medicare and other programs.  The CBO estimated that because of statutory pay-as-you-go and the increase in the deficit, Medicare providers will be subject to an automatic $25 billion cut in fiscal year 2018, and additional cuts in subsequent fiscal years.

It is of paramount interest to our members, and other older Americans, that you act to prevent these spending cuts as soon as possible.

The sudden cut to Medicare provider funding in 2018 would have an immediate and lasting impact, including fewer providers participating in Medicare and reduced access to care for Medicare beneficiaries.  Health care providers may choose to stop accepting Medicare patients at a time when the Medicare population is growing by 10,000 new beneficiaries each day.  Cutting reimbursement in 2018, and possibly each year thereafter, would discourage health care providers from treating this growing population.

We need to protect and strengthen the Medicare program and ensure there is a health care workforce able and willing to take on new patients. Furthermore, Medicare Advantage plans and Part D prescription drug plans may charge higher premiums or cost-sharing in future years to make up for the cuts now.  These cuts also come at a critical time in the program when providers are adopting the new payment systems.

An across-the-board cut to provider reimbursement will leave health care providers fewer resources to invest in their practices, and make them less inclined to take on risk in new alternative payment models. The sudden payment cut will stifle the transition toward payment based on value, having implications for future Medicare cost growth.  In any event, Medicare beneficiaries will pay the price for these sudden and significant cuts.

Our members and other older Americans are counting on you to preserve their access to Medicare services, including their doctors and hospitals.  We urge you to act swiftly to prevent automatic cuts to Medicare.

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