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President's Budget Contains One Sorry Excuse of a Doc Fix

Posted By Kathryn Nix On February 16, 2011 @ 2:30 pm In Obamacare | Comments Disabled

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President Obama has received praise for including a two-year Medicare “doc fix” in his FY 2012 budget proposal, but hold the applause.

Every year, physician reimbursement for treating Medicare patients is scheduled to decrease according to the “sustainable growth rate” formula. This complex and unworkable policy is intended to create savings, but Congress has delayed the cuts for years, since allowing such dramatic cuts would cause many physicians to drop Medicare patients altogether, resulting in severely reduced access to care for seniors.

Physicians and patients need a permanent solution to this ongoing problem. Instead, the President’s budget continues to kick the can down the road by “paying for” a two-year fix only. This is not acceptable. Finding savings to extend the “doc fix” is the right thing to do, but the President’s budget uses long-term spending reductions over the next decade to pay for a short-term fix. Those savings won’t, then, be available to pay for preserving payment rates for physicians in those years—and that’s if they even occur at all.

The President would restrict the amount that states can tax health care providers in order to pay for Medicaid. Reducing the amount of funding states can provide for Medicaid would reduce the federal government’s obligation to match that funding by $18.4 billion [2].

At the same time that the President would act to reduce both state and federal funding for Medicaid, Obamacare requires states to increase eligibility for the program to include all Americans living under 138 percent of the federal poverty line. Growing Medicaid costs are already a huge burden to states. By removing all flexibility for states to innovate and reform their Medicaid programs themselves, Obamacare put the states in a difficult position. The President’s budget proposal would go even further.

If the President were serious about paying for the “doc fix,” the enormous cuts made to Medicare under Obamacare could have easily been used to extend sustainable payment rates to physicians and prolong the program’s solvency. Instead, Obamacare will use the savings to create a new entitlement program for low- and middle-class Americans to purchase government-subsidized health insurance.

In his State of the Union address, President Obama told the American people that it’s time to make the “tough choices that get America’s fiscal house in order.” The President’s budget not only fails to do this; it punts on finally addressing issues within Medicare and other unsustainable entitlement spending.

Co-authored by Bob Moffit.


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URL to article: http://blog.heritage.org/2011/02/16/presidents-budget-contains-one-sorry-excuse-of-a-doc-fix/

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[1] Image: http://www.foundry.org/wp-content/uploads/doctor_confused090720.gif

[2] $18.4 billion: http://www.kaiserhealthnews.org/Stories/2011/February/14/medicare-doc-fix-obama-budget.aspx?p=1

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