To amend title XVIII to reform the Medicare Advantage program.

Bill Number

H.R. 3467

Origin Chamber

House

Congress

119th Congress, Session 1

Policy Area

Health

Status

Introduced

Latest Action

2025-06-03: Sponsor introductory remarks on measure. (CR H2408-2410)

Last Updated

2025-06-04T13:17:08Z

AI-Generated Summary

Purpose of the Legislation

This bill, H.R. 3467, aims to reform the Medicare Advantage (MA) program—a private insurance option under Medicare that provides health benefits to eligible seniors and people with disabilities—by introducing changes to payment methods, enrollment processes, risk adjustments, and coverage requirements. The goal is to control costs, promote efficient care delivery, and standardize certain aspects of MA plans while limiting some flexibilities for private insurers.

Key Provisions

• Capitated Payment Requirement: Starting January 1, 2028, MA plans must pay providers a fixed amount per enrolled patient (capitated basis) for benefits, rather than fee-for-service payments. Exceptions apply to plans available in the prior year (limited to existing enrollees) and specialized plans for people with special needs, like chronic conditions.
• Payment Adjustments:
• Reduces the blended benchmark amount (a formula used to set MA payments based on local fee-for-service Medicare costs) to 75% of its current level starting in 2028.
• Modifies risk adjustment (which accounts for enrollees' health status to ensure fair payments): From 2028, adjustments will use only diagnoses from in-person or virtual doctor visits, exclude reviews of medical records or separate health assessments, and draw from the two years before the payment year.
• Eliminates bonus payments tied to quality performance for qualified MA plans starting in 2028.
• Allows the Secretary of Health and Human Services (HHS) to provide "stop-loss" payments to MA plans with unexpectedly high costs compared to projections, based on audited patient encounter data (records of services provided), while keeping overall spending budget-neutral (no net increase in federal costs).
• Enrollment Changes:
• Automatic enrollment: From 2028, eligible individuals (those in Medicare Parts A and B) will be automatically signed up for the lowest-premium MA plan available in their area. If multiple low-premium plans exist, HHS decides how to assign people. Individuals can opt out.
• Lock-in period: Once enrolled in an MA plan from 2028 onward, individuals must stay in that plan (or another MA plan) for three years and cannot switch to traditional Medicare (fee-for-service under Parts A and B), except in cases of hardship, such as a serious illness defined by HHS.
• Hospice Care Mandate: Starting in 2028, all MA plans must cover hospice care (end-of-life services for terminally ill patients), removing previous options for plans to exclude it.
• Stark Law Exception: Adds a new exemption to the Stark Law (a rule prohibiting doctors from referring patients to entities where they have financial ties, to prevent conflicts of interest). This allows referrals for durable medical equipment (like wheelchairs) or Medicare Part D drugs (prescription coverage) when provided under an MA plan.

Significant Changes to Existing Law

• Shifts MA from flexible payment models to mandatory capitated payments, reducing insurer discretion and aiming to align incentives with preventive care over volume-based billing.
• Lowers payment benchmarks and tightens risk adjustment rules, which could decrease overpayments to plans that previously benefited from looser diagnosis coding.
• Introduces automatic enrollment and a three-year lock-in, overriding current voluntary choice in MA participation and limiting switches to traditional Medicare—major departures from the program's emphasis on beneficiary options.
• Mandates hospice inclusion in MA plans, ending prior exclusions that shifted such care to traditional Medicare.
• Creates a targeted exception to the Stark Law for specific MA-related services, easing restrictions on provider referrals in this context.

Potential Impacts

• On Government Agencies: The Centers for Medicare & Medicaid Services (CMS, part of HHS) will face increased administrative burdens for implementing automatic enrollment, auditing encounter data, defining hardships, and ensuring budget neutrality in stop-loss payments. This could lead to higher oversight costs but potential long-term savings through reduced MA overpayments (estimated at billions annually in current critiques).
• On Citizens: Medicare-eligible individuals (about 65 million, with over half in MA) may experience less choice in plans and providers due to automatic enrollment and lock-in rules, potentially simplifying decisions for some but frustrating others who prefer traditional Medicare. Lower premiums from automatic assignment could benefit low-income seniors, but reduced plan incentives for quality bonuses might affect care quality. Hospice mandates ensure consistent end-of-life coverage.
• On International Relations: No direct impacts, as this is a domestic health policy focused on U.S. Medicare.

Main Stakeholders Affected

• Medicare Beneficiaries: Primarily older adults and disabled individuals; changes could limit options but promote affordability and coordinated care.
• MA Plan Insurers (e.g., UnitedHealth, Humana): Face revenue reductions from lower benchmarks and stricter risk adjustments, plus operational shifts to capitated models and data reporting.
• Healthcare Providers: Doctors and hospitals may see steadier payments under capitated systems but more scrutiny on diagnoses; the Stark exception could facilitate referrals for certain equipment and drugs.
• Government: CMS and HHS for enforcement; taxpayers via potential federal savings from curbed MA costs.

Notable Legal, Constitutional, or Political Implications

• Legal: The bill amends the Social Security Act (title XVIII) and requires CMS rulemaking for details like hardship definitions and enrollment logistics, potentially leading to lawsuits over implementation fairness or data privacy in risk adjustments.
• Constitutional: Automatic enrollment and lock-in periods could raise due process concerns if seen as infringing on personal choice in healthcare benefits, though they align with Medicare's regulatory framework. No direct First Amendment or equal protection issues apparent.
• Political: Reinforces debates on privatizing Medicare (MA is private-run), with critics arguing it reduces beneficiary autonomy and favors insurers, while supporters may view it as cost-control amid rising MA enrollment (now over 50% of Medicare users). Passage could influence broader healthcare reform discussions, especially in budget negotiations.

This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.

Sponsor

Rep. Schweikert, David [R-AZ-1]

Recent Actions

• 2025-06-03: Sponsor introductory remarks on measure. (CR H2408-2410)
• 2025-05-15: Referred to the Committee on Ways and Means, and in addition to the Committee on Energy and Commerce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
• 2025-05-15: Referred to the Committee on Ways and Means, and in addition to the Committee on Energy and Commerce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
• 2025-05-15: Introduced in House
• 2025-05-15: Introduced in House

Bill Versions

• To amend title XVIII to reform the Medicare Advantage program. — issued 2025-05-15 — PDF (7 pages)