Medicare

The Doc Fix Is In

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Fix me, doc!

The doc fix is back (yet again). And whaddaya know, it's gumming up the new health care law.

During the health care debate, critics (including me) charged that the health care law's cost estimates weren't believable in part because they didn't include any attempt to address the way that Medicare's physician reimbursement formula called for large and growing payment cuts—now about 25 percent. Those planned cuts had been systematically overridden by Congress throughout most of the decade and replaced with a number of small reimbursement hikes funded through deficit spending. (This year alone Congress has passed five temporary delays in the rate cuts.) So the law's cost estimates assumed that the lower payment rates would take effect and ignored the (potentially very high) cost of paying to keep the rates from dropping.

Democrats argued that the doc fix was a separate issue, unrelated to the new law and therefore unnecessary to include in the bill or the cost estimates. But that was pretty hard to believe: Reports indicated that Harry Reid had used the doc fix to buy support for the health care overhaul from the American Medical Association, and an early draft had included a fix. The cost proved to be too much.

And as of this week, it's even harder to buy the line that the doc fix is somehow unrelated to the new health care law: Senate leadership has reportedly reached a deal to delay the called-for cuts and pay for a one year extension of Medicare's payment rates. And they're paying for it by taking money out of the health insurance subsidies included in the health care overhaul:

In 2014, some consumers will be able to buy health insurance through exchanges, web portals similar to Orbitz or Expedia. Low- and middle-income consumers will be eligible for tax subsidies to help pay for their coverage. The deal announced Tuesday would change how much money consumers would have to repay if they misreport their income or their income grows mid-year.

Under the health care reform law, if a person gets more of a tax subsidy than they're eligible for, they would have to repay no more than $250. Families would have to repay no more than $450. The deal on the table would raise those caps to between $600 and $3,500, depending on income.

The changes would free up about $19.2 billion to cover the one-year Medicare patch, according to Congressional aides familiar with the Congressional Budget Office estimates. It would impact about 200,000 people. 

Another Politico report indicates there may be some pushback from liberals unhappy with the idea of cutting into ObamaCare's insurance subsidies. The problem at this point is that they need to find a way to pay for the $19 billion cost of the extension. But there just aren't that many plausible ways to raise revenue left at this point; most of the "pay-fors" with any heft went to pay for ObamaCare.  

More on the doc fix and the health care overhaul here.

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18 responses to “The Doc Fix Is In

  1. Suderman, I can’t speak for the rest of the commenters on these boards, but I would like to personally thank you for your extended coverage of the Obamacare story. You’ve done an excellent and thorough job over the last year or so. The information is appreciated.

  2. Another make-believe “offset” to cover new spending.

    Promising not to spend money in 2014 does not offset spending actually occurring in 2011.

    Why anybody accepts this transparent (and insulting) ficion as “pay-as-you-go” is beyond me.

  3. Shouldn’t “progressive” countries just solve this crisis by threatening to draft any doctors and health care workers who refuse to accept the lowered reimbursements? From each according to his ability and yadayadayada.

    1. These things start out small, then they grow. Didn’t I already cover this! What do you guys want from me!

      1. Oh, sheesh! Well you QUIT it with the trolling to get some schlub to post something inflammatory like ‘die in a fire’ like the Secret Service guys are prodding ya to do cause they want something to do besides watching you get a fat lip in a pickup game of roundball, Mr. President? It ain’t gonna happen here! Burp, get over it, and go sneak another smoke in the Oval or somethin!

    2. You’re stealing MNG’s idea.

  4. “Under the health care reform law, if a person gets more of a tax subsidy than they’re eligible for, they would have to repay no more than $250. Families would have to repay no more than $450. The deal on the table would raise those caps to between $600 and $3,500, depending on income.”

    Isn’t this the same horrible, awful, no good, very bad business practice credit card companies and banks used with overdraft fees?

    How fucking bad is ObamaCare when they’re relying on people making a mistake on the paperwork to generate $19,200,000,000.00 a YEAR for the program?

    1. Numbers like $19.2 billion should be written out in full (lots of zeros–and the additional .00 just adds to the effect) more often. Makes the number itself more impactful.

    2. Pretty fucking bad when that’s a feature, not a bug.

    3. I think it’s more about repaying the money than actually paying a separate fee as well.

      But anyway, you know that when the government does it, it’s not illegal. Without the profit motive, the government’s motives are always pure.

    4. “Isn’t this the same horrible, awful, no good, very bad business practice credit card companies and banks used with overdraft fees?”

      No?

      There’s no penalty there, as I read it, there’s just partial repayment of the subsidy.

      1. “There’s no penalty there, as I read it, there’s just partial repayment of the subsidy.”

        It’s partial repayment of a subsidy for which people aren’t eligible which is going to pay and/or offset expenses to the tune of $19,200,000,000.00 a year?

        So they’re going to be… erroneously(?)… paying over $19,000,000,000.00 to people, but it’s okay because we’ll get some of it back at an indeterminate point in the future?

        That doesn’t strike me as being “better”.

    5. The obvious solution is to get rid of the rule entirely. If you got more of a subsidy that you were warranted, you should be obligated to return the excess amount in whole.

      The doc fix financing plan (whatever you think of the doc fix itself) seems a pretty good one.

  5. I suggest that doctors – or medicare – or the patients issue “MBS” – medical backed securites. We could even have them rated…uh, by some gubermint accredited nationally statistically rating agencies. Large banks could bundle these MBS into CDO (collateral debt obligations) – of course, to facilitate trading of these instruments, we would have to start some kind of semi-public-private organization – call it Mannie, and maybe another, call it Meddie. you see where this is going.

  6. Kick that can a little further down the road. We’ve already started digging into 2014 budgets to “pay for” 2012 expenditure increases.

    Guess what? The doc fix will be on agenda again next year. The problem will be larger then.

  7. Maybe it’s a windows bug, but the calculator program shows 19.2 billion (19,200,000,000) divided by 200,000 people equals 96,000 per person. Only in the land of gov’t accounting is 96k between 600 and 3500, unless they’re lying (oh heavens no!) about the # of people impacted or the amount of revenue raised. Maybe they just expect Bernank to print the rest of the money…

  8. I think I’ve posted this before in response to the same pun. The fix is in

  9. “Under the health care reform law, if a person gets more of a tax subsidy than they’re eligible for, they would have to repay no more than $250. Families would have to repay no more than $450. The deal on the table would raise those caps to between $600 and $3,500, depending on income.”

    Hmmm, so if I apply for the maximum subsidy even though I’m not qualified for any subsidy, I only have to pay part of the subsidy back? Sweet! What’s all the fuss about, this Obamacare stuff is great!

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