Unless Congress can find a way around it, come April 1, Medicare physicians will suffer a 21 percent payment reduction. Congress is scrambling to head this off and replace the flawed Sustained Growth Rate formula for paying doctors under Medicare, but there is growing concern over the financing of such changes.
The Congressional Budget Office estimates the legislation now proposed would cost taxpayers an additional $175 billion over the first 10 years. The legislative language has not been available, but press reports indicate the total cost of the bill would exceed $200 billion and could add at least $130 billion to the nation’s deficits within the next 10 years.
At a briefing Tuesday at The Heritage Foundation, budget experts Maya MacGuineas, president of the Committee for a Responsible Federal Budget, and Joseph R. Antos, a resident fellow at the American Enterprise Institute and a former official at the Congressional Budget Office, focused on the financing of the pending congressional action.
MacGuineas argued the alleged funding mechanisms do not appear strong enough to reduce the costs to current and future taxpayers. She noted there are serious structural reforms of the current Medicare program that could address them, including those offered by the Committee for a Responsible Federal Budget. These would not only fund a permanent SGR fix but also would secure serious savings and enhance Medicare’s future fiscal solvency. Instead, she said, Congress again finds itself with a flawed, last-minute legislative solution to a major policy problem that has been festering for the past 13 years. Too many members of Congress, she said, seem ready to accept any proposal that comes along.
Antos reinforced MacGuineas’ argument that any SGR fix should be fully financed. He said that past offsets to fund temporary fixes have indeed resulted in slowing the growth of Medicare spending.
Antos also cautioned that the permanent SGR “fix” itself should not be oversold. The proposed “fix,” he said, does not substantially change the Medicare administrative payment system devised by Congress in the late 1980s over the adamant objections of the Reagan administration. Today, as a result of the first Bush administration’s concession to Congress, Medicare doctors’ payments are governed by a complex fee schedule reinforced by a rigid system of price controls. The SGR itself is only a troublesome part of this dysfunctional system, and it merely “controls the year-to-year increases in the prices Medicare pays to physicians.”
Going in the same basic policy direction as The Heritage Foundation, both MacGuineas and Antos emphasized the SGR needs to be replaced, but a permanent fix should be fully funded. Both urged Congress not to settle for just any “fix” to get the issue “off the table.” There are ample SGR funding alternatives that would enhance the financial health of the Medicare program without adding billions to the nation’s deficit.
Congress owes it to taxpayers to battle for the best, even if that means a more difficult and lengthy legislative process.
