In a surprising move yesterday, the Centers for Medicare and Medicaid Services (CMS) announced a reversal in their previous plans to cut payments to Medicare Advantage (MA) plans by 2.2 percent in 2014. Instead, CMS announced MA plans will now receive a 3.3 percent increase in payments next year. So, what changed their position so dramatically?
Listening to reports on recent budget negotiations in Washington may lead you to believe compromise between the two parties is near impossible, considering what sounds like countless irreconcilable differences. However, an article in yesterday’s New York Times shows that House Republicans and the Administration may not be as far apart as it may seem, at least when it comes to Medicare.
Tomorrow marks the third anniversary of the enactment of the Affordable Care Act. The legislation expands health insurance to about 30 million people by expanding Medicaid and creating a new health insurance exchange for individuals to purchase subsidized insurance. Those spending increases are paid for in a number of ways, including provider payment and Medicare Advantage cuts, fees on health industry companies, and upper-income tax increases.
In a Wall Street Journal breakfast yesterday, Senate Majority Whip and former Fiscal Commission member Dick Durbin (D-IL) reiterated his support for entitlement reform in a comprehensive debt deal. We've said time and time again that the only way lawmakers are likely to resolve our long-term debt problem is by putting everything on the table, and we commend Durbin for his approach.
Late last week, the Council of Economic Advisors (CEA) released the annual Economic Report of the President outlining the Administration's latest economic policies and priorities.
We've discussed many times before the important role entitlement reform plays in addressing our long-term debt. As the baby boomer generation continues to age and health care costs continue to grow faster than the economy, federal health care spending is expected to rise and comprise a growing share of the federal budget.
The Urban Institute's Robert Berenson, John Holahan, and Stephen Zuckerman recently released a very useful paper entitled "Can Medicare Be Preserved While Reducing the Deficit?" The paper presents a number of Medicare reforms for beneficiaries, providers, and health insurance plans, with gross savings of $735 billion and savings of $600 billion net of a repeal of the Sustainable Growth Rate (SGR) formula.
We've said frequently on this blog that controlling health care spending will be a crucial part of putting the debt on a sustainable path. After all, federal spending on health is expected to grow from 4.9 percent of the economy in 2013 to 6.4 percent in 2023 under our realistic baseline and to much higher levels thereafter.
As promised, the Brookings Institution's Hamilton Project has released the remaining papers in its series "15 Ways to Rethink the Budget." We will be discussing the papers a series of blog posts. We covered two defense proposals on Friday, and next we focus on their Medicare proposals which affect both beneficiaries and providers in the program.
A popular secondary story from the newest CBO baseline centers on the "doc fix," the patch that prevents a large cut to physician payments due to the Sustainable Growth Rate (SGR) formula. The American Taxpayer Relief Act (ATRA) put off a 27 percent cut to physician payments for 2013, but left in place cuts for future years (now scheduled to be 25 percent in 2014).