A potential longer-term fix to a costly annual Medicare problem is actually not that permanent, according to a report from a federal actuary.
The Centers for Medicare and Medicaid Services’ Chief Medicare Actuary, the top authority on the program, has issued a report charging that a House-passed bill to amend Medicare’s Sustainable Growth Rate — a schedule that reduces physicians’ payments for Medicare customers annually — won’t be a permanent fix at all.
The SGR may officially reduce physician payments each year, but Congress annually passes “doc fix” legislation to avert the cuts to ensure that doctors don’t stop seeing Medicare patients altogether. The House of Representatives passed a longer-term fix several weeks ago with Democratic support, as some Republicans balked because cost increases were not fully offset with spending cuts.
The issue has starkly split even conservative groups. Boehner and some conservative advocates are touting the compromise bill as a real step forward on sorely-needed entitlement reform that will ultimately lower spending. Other conservative thinkers, however, have accused the establishment of reversing its position on paying for the changes to Medicare, as Boehner argued in 2009. (RELATED: GOP Leadership, WSJ Both Flip On Spending Battle Over Doc Fix)
The bill, which the Senate will consider next week, will increase the budget deficit by $141 billion over 10 years, according to the Congressional Budget Office.
The bill will increase net federal health care spending by $102.8 billion over the next decade, according to the actuary. That includes a $210 billion gross spending increase on Medicare, countered by higher Medicare premiums in Parts B and D that will bring in $55 billion more and cuts to Part A.
Even so, the actuary has charged that even with the billions in increased spending, the bill won’t be a permanent fix to the physician payment problem.
“We anticipate that physician payments rates under H.R. 2 would be lower than scheduled under the current SGR formula by 2048 and would continue to worsen thereafter,” the report concludes. “Absent a change in the method or level of update by subsequent legislation, we expect access to Medicare-participating physicians to become a significant issue in the long term under H.R. 2.”
The conservative group Americans for Tax Reform, which supports the legislation, points to the billions in savings in different parts of Medicare. The actuary found that spending in Medicare Part B if the bill passes would be lower than both current law and an alternative projected baseline. There’s also another $400 billion in savings in Part A, according to the report — and while Medicare Part D isn’t included in the analysis, ATR argues that “you have to assume it’s in the hundreds of billions too.”
“The central claim conservative supporters have made is that this bill reduces the unfunded liabilities of the Medicare program,” ATR’s Ryan Ellis told The Daily Caller. “Now we have proof.”
“This is what entitlement reform looks like — the gains start small, but grow huge over time.”
The Heritage Foundation, which opposes the bill, says the report shows that the legislation isn’t worth the billions it will cost, according to an analysis from Heritage’s Paul Winfree.
“Rather than a permanent replacement to the Sustainable Growth rate, it is much more likely that the House doc fix will be a shorter term patch requiring another series of patchwork legislation just nine years from now,” Winfree wrote Friday.