Issue Position: Health Care

Issue Position

In the 113th Congress, Senator Murkowski is continuing her work to repeal the Affordable Care Act. She is also leading efforts to allow Medicare providers greater flexibility in directly negotiating with their patients, as well as working to find ways to improve health care in rural areas of the state.

Patient Protection and Affordable Care Act:

Senator Murkowski opposed the Affordable Care Act when it was enacted and has voted this year to prohibit funds to implement the ACA and to repeal the Affordable Care Act. As a member of the Senate Appropriations Committee, she has also voted against funding the Affordable Care Act and to prohibit implementation of the employer mandate and individual mandate.

In the 113thCongress, Senator Murkowski has also cosponsored the following bills relating to the Affordable Care Act:

S. 40 - the American Liberty Restoration Act, which would repeal the individual mandate;

S. 399 - the American Job Protection Act, which would repeal the employer mandate; and

S. 232 -- the Medical Device Access and Innovation Protection Act, which would repeal the medical device tax; and

S. 1525 - the Trust But Verify Act, which would delay health insurance exchanges from opening until a full inspection of data networks' security is conducted to maintain information privacy; and

S. 1488 -- which would delay individual and employer mandates until 2015.
Last year Senator Murkowski outlined a number of concerns with the Affordable Care Act before the United States Supreme Court ruled to uphold the mandate to purchase health care insurance as a new tax on Americans. Senator Murkowski believes that the Supreme Court finding this $2.6 trillion health care overhaul constitutional under Congress' power to tax further permits governmental overreach into our health care and other choices. Like many Alaskans, Senator Murkowski finds the decision of the Supreme Court troubling, especially since the president pledged not to raise taxes on middle-income Americans, yet the foundation of this 900 page law is a new tax called the individual mandate. If there is one thing Alaskans agree on, it is that they don't like new taxes. Moreover, Alaskans are disproportionately affected by the ACA taxes.

Three ACA taxes will disproportionally hurt Alaskans because Alaska is a high cost-growth state, where shipping costs are higher, fuel costs are higher, food costs are higher and health care costs rank between the first and seventh highest nationwide. As a result, incomes are higher. Without any of these new taxes being indexed for a high cost-growth state and for higher costs of living, these taxes will affect more Alaskans than residents in the Lower 48.

One of the taxes is a new, unprecedented 3.8 percent tax on "investment" income for individuals earning $200,000 and married couples earning $250,000 or more. On January 1, 2013, "investment" income, which includes capital gains, interest and dividends, began being taxed at an additional 3.8 percent for amounts above $200,000/$250,000. This tax is in addition to any other taxes paid on capital gains, interest, dividends, and certain rental income, as well as gains on a non-primary residence home or any other property.

There is also a new increase in Medicare Payroll taxes, totaling 2.34 percent. Just like the investment tax, the Medicare Payroll tax is not indexed for cost of living, therefore more Alaskans will be captured by the tax as compared with the Lower 48.

The third tax of particular concern to Alaska is the so called "Cadillac tax", a 40 percent tax on health care benefits which will hit Alaskans hard because the state's insurance premiums are among the highest in the nation. In fact, Alaska ranks number one in highest premiums for individuals with employer based health coverage according to the federal Agency for Healthcare Research and Quality. In Alaska, employer based family plans rank among the top ten most expensive plans in the nation.

The new 40 percent tax is assessed on health care plans that are valued at $10,200/individual and $27,500 for a family plan and $11,500/individual/$29,450 family for early retirees and high risk professions. The value is the cost or price of a plan and is estimated to hit approximately 50 percent of insured Alaskans, including many state and municipal employees, as compared to only 10-15 percent of the rest of the U.S. This tax provision alone will cost Alaskans an estimated $450 million to subsidize the health care law.

Aside from this new onerous 40 percent tax on individual health care benefits, the Senator understands the difficulty Alaskan employers face in recruiting workers. The additional 40 percent tax on health benefits is an important concern for workers and could either require Alaskan employers to pay higher wages to offset this tax or employees will think twice about working in Alaska versus flocking to the Lower 48.

To drill down further as to what the health care law actually means for Alaskan individuals and employers, a UAA study found that the health care law is expected to result in 45,000 Alaskans losing health care coverage from their employers. This means that some Alaskans will give up their private coverage and instead fall onto the government rolls through Medicaid or into the state exchange. Alaskans are estimated to pay over $280 million in various excise taxes to the federal government under the law.

In its February 2013 report, the Congressional Budget Office (CBO) also determined that more Americans will lose their employer based insurance as a result of the health care law. In a six month period, from August 2012 through February 2013, the CBO shifted up its estimates from 4 million to over 7 million American workers who will lose their employer based health coverage. Senator Murkowski is concerned about the loss of employer based coverage under the health care law, especially for Alaskans who will now have to pay among the highest premiums in the nation to comply with the mandates under the health care law.

Senator Murkowski believes that Congress can do better than raising taxes on Americans in an attempt to address health care challenges. She believes we need to pass legislation that reforms the nation's medical malpractice system that is currently being driven by the practice of defensive medicine. The Senator also wants insurance to be sold across state lines in order to create national competition among insurers and to give Alaskans greater options when choosing health care benefits. And most importantly, to cut costs, the Senator wants to create incentives for health care providers to be reimbursed for the value of their services rather than the volume of their services.

In 2012 the Senator held a roundtable event with small business owners and physicians to get the "bottom line" on what the health care law means for Alaskans. Video from the roundtable can be viewed below.

Medicare Patient Empowerment Act:

In February, 2013, Senator Murkowski introduced S. 236, the Medicare Patient Empowerment Act. The bill would allow seniors to continue the relationships they have with their physicians, even if their doctors do not participate in Medicare or are not taking new Medicare beneficiaries. Under the legislation, Medicare would pay the amount typically covered, with the patient responsible for paying or negotiating any differences between the going Medicare rate and the physician's fees. It would also allow doctors to charge a lower rate for Medicare patients - a practice currently not permitted.

The Senator has seen a growing need to improve Medicare, and with access to care being a major issue in Alaskan communities she sees this bill as an important step in fixing Alaska's and our nation's healthcare system. The Senator believes that her bill cuts through the mandates, paperwork and reporting requirements and takes the D.C. bureaucrats out of the relationship between seniors and their physicians. The three licensed physicians serving alongside Senator Murkowski in the U.S. Senate are original co-sponsors of the bill.

Rural Health Care:

Senator Murkowski has made access to care a cornerstone of her commitment to Alaska's rural and veteran community. She has been a strong advocate for the Indian Health Care Improvement Act, which was signed into law on in 2010. As Vice Chair of the Senate Committee on Indian Affairs during the 110th Congress, Senator Murkowski worked to pass the Indian Health Care Improvement Act in the Senate, by an 83-10 vote.

As Ranking Member of the Interior Appropriations Subcommittee the Senator works to increase funding for the Indian Health Service (IHS), a program that is chronically underfunded. In the Senate's FY14 Interior Appropriations Bill, the Senator worked to ensure that IHS staffing packages are properly funded nationwide, and directed $66.2 million towards staffing Alaska's facilities.

Senator Murkowski also remains concerned that extensive travel requirements and lengthy scheduling delays create unnecessary burdens for those who've served to access medical care. In response to the Senator's efforts, the VA initiated the "Alaska Care Closer to Home Program" which enables Alaska veterans to receive VA paid healthcare from community providers if the VA cannot provide that healthcare in Alaska.

As a result of a field hearing of the Senate Committee on Indian Affairs that the Senator convened and MilCon/VA language inserted by Senator Murkowski, in 2012 the VA entered into agreements with components of the Alaska Native healthcare system to provide healthcare at VA expense to rural Alaska veterans. During a Senate MilCon/VA Appropriations Subcommittee hearing in April 2013, the Senator highlighted Alaska's pioneering approach to inter-agency agreements to serve Alaska's veterans.

Medicare Reimbursement Rates:

In January Senator Murkowski voted for H.R. 8, which includes a year-long extension of the Medicare physician reimbursement rates, averting a 26.5 percent cut to these reimbursements. While this legislation addresses the immediate problem, the Senator believes that the Sustainable Growth Rate (SGR) formula must be reformed to give Medicare doctors, nurses, physicians assistants and health providers who are small business owners a more stable and predictable reimbursement rate so they can plan and budget for their overhead costs to ensure their patients have access to their care.

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