With Medicare Doc Fix, House Republicans Move Left of Obama on Health Reform

StethoscopeThe fallout from yesterday’s House vote to bind our children and grandchildren further into debt servitude to bail out an unreformed Medicare continues.

Before the vote, Chris Jacobs of America Next (Louisiana Governor Bobby Jindal’s think tank) warned that Medicare could not survive reform if the so-called “doc fix” passed. Writing after the unfortunate vote, Jacobs explains that House Republicans have actually moved left of Obama on Medigap reform:

The House legislation responds to this by making some types of Medigap coverage illegal. It would prohibit the sale or issuance of any policies that insulate beneficiaries from the Medicare Part B deductible of $147.

In contrast, the Obama administration’s budget plan took a more conservative approach to this problem. It proposed a “premium surcharge for new beneficiaries beginning in 2019” choosing first-dollar Medigap coverage. Under its approach, insurers could still offer, and seniors could still purchase, insulating Medigap insurance—but they would have to repay taxpayers for additional Medicare spending engendered by their generous supplemental coverage.

The Committee on a Responsible Federal Budget (CRFB) has extended the estimate of the bill’s fiscal effect to twenty years, double the ten years covered by the Congressional Budget Office. The result? $500 billion added to the debt.

Most encouraging is U.S. Senator Ben Sasse, who has written an excellent op-ed in Politico condemning the House GOP for rejecting its own budget resolution in favor of the seriously flawed doc fix:

Unfortunately, the House’s SGR package misses an opportunity to solve Medicare’s underlying problems. Rather than offering bold policy solutions, this bill relies primarily on command-and-control bureaucracy. It substitutes the flawed SGR formula for more than 120 pages of new rules to govern the practice of medicine. (While I support the goal of paying for quality and results, I have little faith in Medicare bureaucrats’ actually achieving that objective.)

Let’s hope that Senator Sasse will not stand alone when the U.S. Senate takes up this disastrous bill.

What can be done to rescue victory from defeat? Amend the legislation such that the doc fix is limited to two years, mirroring the Children’s Health Insurance Progam (CHIP) extension in the House bill.

This would buy enough time for the next president to sign effective reforms, as proposed in the GOP’s budget resolutions.

Comments (3)

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  1. Bob Hertz says:

    A Medicare supplement Plan F covers the $147 deductible.

    A Medicare supplement Plan G does not cover the deductible – so the Plan G premium is a little less.

    John, if you can tease out any proof that this makes a hill of beans of difference in overall Medicare spending, I will be glad to read it.

    But at first glance it seems utterly trivial.

    My own research shows that about 70% of Medicare spending is on very large claims, whether transplants or bypasses, and $147 makes no difference here.

    • The Congressional Budget Office agrees with you. CBO’s estimate is that the Medigap reform as described in H.R. 2 would reduce costs by less than one billion dollars over ten years – trivial in the context of this bill.

      The thing is, Congress could have passed the Medigap reform as a standalone bill and President Obama would have signed it. It is in his budget!

  2. Silas Knudsen says:

    I have Plan F and I pay a monthly premium of $202.00. I don’t understand these so called experts who are mostly academics who have never run a benefit plan and by eliminating Plan F they are doing away with competition.

    I have worked in the benefits field since 1967 and I have managed one trust with 475,000 employees and their families. I really wish that the congress would start talking to people who know what they are doing on a practical basis and stop listening to the Harvard Types who get their jollies out of postulating theoretical BS.