New proposal: Halt Medicare reimbursement cuts for 3 years

July 6, 2011

A new bipartisan proposal attempting to ?save? Medicare would impose a 3-year ban on further cuts to Medicare reimbursement to physicians. Other aspects of the plan make its future questionable, however. The proposal includes political landmines, such as raising the Medicare eligibility age and requiring more out-of-pocket payments from Medicare beneficiaries who can afford them.

A new bipartisan proposal attempting to “save” Medicare would impose a 3-year ban on further cuts to Medicare reimbursements to physicians.

The plan from U.S. Senators Joe Lieberman (I-Connecticut), and Tom Coburn, MD (R-Oklahoma), noted that, without further intervention from Congress, physicians paid under Part B will face a 30% reduction in reimbursements and would not be able to “provide medical care to seniors on Medicare without taking a financial loss.”

The two senators are calling for a 3-year “bridge” without cuts to allow time to come up with a new funding mechanism. The cost of that, $37.7 billion, would be offset by savings in their overall proposal, which would defray $600 billion in costs over a decade, according to Lieberman and Coburn.

The problem is that the overall proposal is studded with political landmines, such as raising the eligibility age by 2 years to 67, and requiring higher out-of-pocket payments by wealthier Medicare patients.

The proposal also seeks to cap the amount that Medicare beneficiaries would have to pay for care in the event of a serious illness, which would allow them to purchase less Medigap insurance.

Democratic leaders in Congress already have expressed strong opposition, making the future of the proposal uncertain.

The co-chairs of President Obama’s bipartisan National Commission on Fiscal Responsibility and Reform (also known as the deficit commission) were not as negative, however. In a statement on Lieberman’s official Senate page, co-chairs Erskine Bowles and Alan Simpson said that their group did not recommend raising the Medicare eligibility age but “we did make it clear that such action should be considered in the long run if our Medicare proposals were insufficient in reducing the rate of growth in healthcare cost(s).”

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