House Republicans and Democrats are working on a deal to permanently end an annual reduction in Medicare reimbursements, but conservatives are wary the proposal could add to the deficit.
“There is a bipartisan effort under discussion to do a permanent fix by the end of the month,” a top GOP aide told the Washington Examiner. “There’s hope we could actually resolve this once and for all in the next two weeks.”
The government’s payments to doctors who treat Medicare patients will drop by 21.2 percent at the end of the month unless Congress takes action to “fix” the reduction.
It’s an annual problem tied to Medicare’s sustainable growth rate, which is meant to control the rising costs of medical care.
The growth rate has instead required Congress to step in each year with legislative patches to prevent the reduction in payments, which many believe would ultimately result in a reduction in care for seniors who rely on Medicare.
Congress has long sought to permanently “fix” the reductions tied to the sustainable growth rate, but proposals are costly and it has been difficult to find ways to pay for such a proposal.
The House plan under discussion is not fully paid for, according to sources familiar with the plan, and could be coupled with an extension of the Children’s Health Insurance Program, which serves impoverished families.
The Congressional Budget Office said last month that freezing doctor payment rates at their current levels would cost $137 billion over the next decade.
Conservative organizations are already gearing up for a fight if the plan is not paid for with cuts elsewhere in the budget.
Dan Holler, a spokesman for the conservative Heritage Action for America, said leaving the sustainable growth rate in place has saved taxpayers $165 billion since 2003.
“Any permanent solution must be financed with permanent Medicare savings, period,” Holler said. “Americans didn’t hand Republicans a historic House majority to engage in more deficit spending and budget gimmickry. Any deal that only offsets a fraction of the cost, like the one currently being discussed behind closed doors and leaked to the press, is a non-starter for conservatives.”
Ryan Ellis, tax policy director for Americans for Tax Reform, said the plan under discussion in the House will lead to significant federal savings over the long term, despite some costs in the next ten years.
Ellis said the savings will come from planned reforms to Medicare, including means testing for recipients, as well as proposed changes to the Medigap program.
“The long-term savings to Medicare from the means testing and Medigap reforms will outweigh the cost of repealing SGR,” Ellis told the Examiner. “We should have official numbers early this week. Conservatives should be for a Medicare reform package which reduces the net unfunded liabilities of the entitlement.”
