Obama promotes value-based purchasing, Medicare rule changes in State of the Union address

In his first State of the Union address of his second term, President Barack Obama on Tuesday directly addressed some of the challenges and opportunities facing the federal Medicare program in the coming years, citing value-based purchasing in particular as an important change to the U.S. healthcare system, as well as proposing changes in pharmaceutical policy and in Medicare rules for wealthy seniors.

Just several minutes into a speech that was clocked at 60 minutes in length, President Obama told a joint session of Congress in Washington, D.C. that “On Medicare, I’m prepared to enact reforms that will achieve the same amount of healthcare savings by the beginning of the next decade as the reforms proposed by the bipartisan Simpson-Bowles commission. Already, the Affordable Care Act is helping to slow the growth of healthcare costs.” Then, stepping into new policy territory, the President told his audience that “The reforms I’m proposing go even further. We’ll reduce taxpayer subsidies to prescription drug companies and ask more from the wealthiest seniors.” Turning back to the value-based purchasing program built into the ACA, he said that “We’ll bring down costs by changing the way our government pays for Medicare, because our medical bills shouldn’t be based on the number of tests ordered or days spent in the hospital—they should be based on the quality of care that our seniors receive.”

President Obama added that “I am open to additional reforms from both parties, so long as they don’t violate the guarantee of a secure retirement. Our government shouldn’t make promises we cannot keep,” he said, “but we must keep the promises we’ve already made.”

In the official Republican rebuttal to the President’s State of the Union speech, Florida senator Marco Rubio criticized the ACA. Referring to it as “Obamacare,” Rubio said that “[M]ore government breeds complicated rules and laws that a small business can’t afford to follow.” Turning to the ACA specifically, Rubio said, “For example, Obamacare was supposed to help middle-class Americans afford health insurance. But now, some people are losing the health insurance they were happy with. And because Obamacare created expensive requirements for companies with more than 50 employees, now many of these businesses aren’t hiring. Not only that; they’re being forced to lay people off and switch from full-time employees to part-time workers.” Rubio did not cite a specific alternative to the ACA, but did bundle his criticism of that legislation in with a broader critique of what he saw as big-government policies, calling instead for economic growth via lower taxes and reductions in regulations.

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