Medicare is in serious need of fundamental reform.
The old way in which Medicare reimbursed physician services was broken and needed to be scrapped.
It was understandable that Congress wanted to find a permanent solution to the Medicare “Doc Fix” rather than relying on another short-term patch.
The “Doc Fix” that was enacted in March provided a real opportunity to replace the broken system with a sustainable payment model and enact meaningful entitlement reforms.
Unfortunately, as my colleague Bob Moffit and I have covered, that opportunity was missed and Congress passed a regrettable bill.
On March 26th , the House voted overwhelmingly to pass a 181 page bill to keep prices for services paid to doctors seeing patients with Medicare from being reduced.
The bill was sold by House Speaker Boehner, R-Ohio, under the disguise of a “Titanic entitlement reform.”
The vote occurred less than 48 hours after the bill was distributed to members of the House, less than 24 hours after the Congressional Budget Office (CBO) completed the bill’s cost estimate, and 14 days before Medicare’s chief actuary finished its assessment of the bill.
Running the risk of stating the obvious, members of the House voted for this bill based on talking points delivered by House leadership and little else.
Following passage in the House, the “Titanic” bill went to the Senate for consideration, where the upper house was busy considering its budget resolution.
After finishing a series of votes on the budget at 3:30 a.m. and before adjourning for a scheduled recess, the Senate Republican caucus met in a room off the floor to decide whether to simply accept the House-passed bill or to push the debate until further examination.
Thanks to a small group of deficit hawks, the Senate vote was delayed until after the recess. The group included Sens. Cruz, R-Texas, Lee, R-Utah, Cotton R-Ark., Sasse, R-Neb., Sessions, R-Ala., and Vitter, R-La.
The senators based their initial objection on the Congressional Budget Office’s assessment that the bill would increase the deficit by $141 billion over 10 years (based on my own calculation it would increase the debt by $174 billion).
But they also came to the table with ideas that would have significantly improved the bill.
Specifically, the senators offered an amendment that would have guaranteed that the bill would not add to the deficit while buying more time to come up with meaningful entitlement reforms.
By this point, however, leadership in both chambers was committed to getting the House-passed bill across the finish line in the Senate to the point of seeming to completely disregard valuable analysis from budget and Medicare experts.
And what was the result?
Well, according to President Obama, the “legislation builds on the Affordable Care Act” by forcing greater provider consolidation.
It’s no wonder that the president cheered on this legislation.
And what about the “Titanic” entitlement reform?
More like the S.S. Minnow.
To its credit, the bill contained small changes to Medi-gap policies and some additional means testing for higher income Medicare beneficiaries.
However, these savings are minuscule relative to the new Medicare spending authorized in this legislation.
Within 25 years, according to the Congressional Budget Office’s, Medicare spending (net of premiums for Medicare Parts B and D) will be equal to 5.1 percent of the economy—that’s up from where it was at 4.7 percent before this bill passed.
That’s not surprising given that the Congressional Budget Office‘s found that the bill would “raise federal costs relative to current law during the decade after 2025,” while the Medicare actuary found that the bill would only begin to reduce the deficit after 2048 when payments to physicians would be less than they would be had the doc fix never been patched.
In other words, the pay-fors won’t begin offsetting the new costs until the youngest member of the House who voted for the bill—Rep. Elise Stefanik ,R-N.Y., who turned 31 two weeks ago – will be nearly eligible for Medicare.
Even with all the analysis that’s developed following enactment of the bill, Boehner continues to unfairly criticize conservatives by suggesting that all those who raised concerns of the bill have “lost all credibility on this topic when they decided to oppose Medicare reforms that will save the federal government hundreds of billions 20, 30, and 40 years down the road.”
The speaker is just plain wrong about this.
As Philip Klein has said, “don’t buy John Boehner’s spin.”
Members of Congress should continually be reluctant about accepting any trades for increased spending today paid for with the promise of “Titanic” reforms in the future.
Rather than voting on the basis of talking points and shaky promises, reforms on major entitlement programs should be properly evaluated to guarantee that taxpayers aren’t left at the table with a very large bar tab to support Congress’ bad habits.