Wide bipartisan agreement on Medicare doc fix, and on not paying for it

The good news: Congress finally found a broad consensus on an issue. The bad news: They still haven’t abandoned the broad consensus to perpetuate deficit spending. The “doc fix” for Medicare that rolls back reimbursement cuts to providers — cuts that Congress passed to control costs — won Senate approval 92-8 last night, even though an effort to cut other areas of the budget to pay for the bill failed:


America’s doctors can rest easy: Not only has Congress ensured they will be paid in full for the services they render to Medicare patients, it has ended the yearly ritual putting that in doubt.

The Senate voted 92-8 to approve a long-term “doc fix,” as the legislation adjusting Medicare fees has long been known, less than three hours before federal officials would have reduced payments to health-care providers by 21 percent. President Obama has indicated that he will sign the bill, which also extends the federal Children’s Health Insurance Program, a key Democratic priority.

Despite the last-minute nature of the vote, it was lauded by Hill leaders as a bipartisan triumph for both removing a yearly headache from the legislative calendar but also by implementing modest reforms to Medicare, including future incentives for doctors to deliver better care as well as premium hikes for the wealthiest Medicare recipients.

“Instead of kicking this important Medicare payment issue down the road again, a strong bipartisan majority in Congress voted to finally solve the problem and ensure that seniors on Medicare don’t lose access to their doctors,” Majority Leader Mitch McConnell (R-Ky.) said in a statement.


McConnell says this ends the “kick the can” on the doc-fix by ending the requirement first established in 1997 to keep the reimbursements from rising past the rate of inflation. This was an early example of Congress mistaking price for costs, and thinking that controlling the former equated to controlling the latter. (ObamaCare makes the same mistake on an industrial scale.) Thanks to lots of different factors — incentives to seek care (in part because of subsidies to do so), innovation, and sheer longevity — the costs of treatment went up a lot faster than inflation, which meant that price-fixing ended up forcing doctors to reconsider Medicare patients. That’s why political pressure to reset the reimbursement rates forces an annual waiver of the 1997 restriction, and why it was pointless in the first place.

So McConnell’s right about ending that little game of “kick the can.” He couldn’t be more wrong about the major-league version of “kick the can,” though:

Utah Republican Sen. Mike Lee had introduced a potential amendment to the bill that would have subjected the bill to spending rules known as pay-as-you-go, which would have required the cost of the bill to be fully offset by spending cuts or tax increases. Lee’s amendment, which required 51 votes to pass, fell short at 42-58.

While both sides of the aisle agreed that the Sustainable Growth Rate — a schedule that steadily decreases payments to physicians for Medicare patients, which Congress annually prevents in a ‘doc fix’ bill — needed to be reformed, the GOP has been split on whether it should require the cost increases in the law to be entirely offset instead of increasing the budget deficit.

The Congressional Budget Office has pegged the cost of the measure at $141 billion, while the federal government’s top Medicare expert, the Medicare actuary, has warned that the bill’s fixes won’t be permanent.

In order to pass the reform, the Senate waived the pay-as-you-go requirements that the legislation be budget-neutral, 71-29.


In other words, we’re still kicking the can down the road on the unsustainable fiscal structure of Medicare, and on deficit spending in general. To fix the problem of Congress’ initial fix of the problem, it will cost $141 billion (although that appears to be a ten-year projection from CBO). We still, however, haven’t actually fixed THE problem, which is runaway spending growth in Medicare. ObamaCare hasn’t fixed it, obviously, and there seems to be no will in addressing the issue in either party. Indeed, this round of kick the can on deficit spending had overwhelming support in both parties.

So who will stand up for fiscal sanity and entitlement reform? The Washington Post notes the eight dissenters in the Senate:

Eight Republicans opposed final passage: [Ted] Cruz, [Mike] Lee, David Perdue (Ga.), Marco Rubio (Fla.), Ben Sasse (Neb.), Richard Shelby (Ala.), Jeff Sessions (Ala.) and Tim Scott (S.C.).

One big surprise among the majority: Rand Paul. That’s a change from his deficit-hawk beginnings in the Senate.

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