James Capretta explains for National Review Online readers why a proposed permanent solution to the Medicare “doc fix” problem falls short of the mark.
For starters, despite claims made by supporters of the emerging bill, it is highly unlikely that the legislation will reduce long-term Medicare spending. The Congressional Budget Office has not yet released its official cost estimate for the bill, but the bill’s authors have said that the added cost of the permanent SGR repeal is expected to be about $210 billion over the first decade, and to grow from there. Meanwhile, the offsets will save $65 billion over a decade. The cost-reducing provisions will cover more of the total cost of the bill in the second decade because they won’t be fully in effect during the first years of implementation. But, even so, as the Committee for a Responsible Federal Budget has noted, it is not plausible that the savings will overtake the new spending. This legislation will permanently increase Medicare’s total costs.
Proponents of the law counter that the new spending shouldn’t be counted in this assessment because the SGR-mandated spending cuts were never going to happen anyway, and thus undoing them is just matching law with reality. But that’s not really accurate. Yes, the SGR cuts would continue to be undone, year by year, but, as past practice has indicated, the added costs have mainly been offset with actual spending cuts. So undoing the SGR and not fully paying for it will increase Medicare spending above what would occur under current law and what would likely occur if the SGR were to be pushed back one year at a time.
Some Republicans are also enthusiastic about the “reforms” the bill would make to Medicare’s physician-payment system. They shouldn’t be. Today’s system is the result of three decades of technocratic good intentions gone terribly awry.
Regardless of the merits of the current legislation, Congress needs to find a permanent “doc fix.” Why? Patrick Gleason and Katherine Restrepo explain here.
