Next week, Congress might actually fix a problem it’s punted for more than a decade.
Bipartisan leaders in the House and Senate are expected to announce Monday how they’ll pay for permanently fixing the faulty Medicare payment formula that has threatened to plunge doctors’ payments every year since 2002.
They agreed to a repeal-and-replace plan last year, but progress toward passing it was stymied due to disagreements over how to pay for it, as it’s estimated to cost $150 billion over a decade. Now lawmakers are close to brokering an agreement to approve the plan, but will pay for only about one-third of it.
The revenues will come primarily from requiring wealthier seniors to pay more for Medicare and restricting Medigap plans from covering deductibles for Medicare Part B, according to a Democratic aide. Some revenues will also come from changes to a program that helps people transition out of Medicaid and increasing a payment penalty on Medicare providers who have outstanding tax obligations.
The agreement is also expected to extend the federal health insurance program for children by two years and extend extra funding for community health centers, although by how much is still up in the air. The entire plan will cost about $210 billion, but just $70 billion will be paid for.
The deal would free Congress from having to bypass deep Medicare cuts every year with temporary funding boosts known as the “doc fix.” Last year, top House and Senate committees rolled out bipartisan legislation that would permanently end the annual reduction and they reintroduced it Thursday.
The plan would repeal Medicare’s sustainable growth rate, a mechanism implemented yearly to control the rising costs of medical care. It would replace the SGR with a 0.5 percent annual increase in payments over the next five years. The bill would also streamline Medicare fee-for-service programs into one system and would improve payment accuracy and encourage doctors to improve the quality of their care.
“It’s a chance to get rid of Washington’s most infamous budget gimmicks,” House Speaker John Boehner, R-Ohio, said Thursday. “I’m encouraged by what I’ve seen.”
House Minority Leader Nancy Pelosi, D-Calif., told reporters she is eager to end the annual SGR cuts to Medicare but is awaiting details of the larger deal, which could include requiring higher-income seniors to pay more for Medicare services.
“Yes, we’ve been working on that,” Pelosi said. “It’s something that has to happen. It’s not a doc-fix, it’s a fix for America’s seniors so that they can continue to see their doctor under Medicare.”
Conservatives are wary of the deal because it may add to the deficit in the initial ten years. But supporters say that overall the deal would reduce Medicare spending.
