Jackie Judd talks with KHN’s Mary Agnes Carey what Medicare changes would be part of the latest proposal from super committee Republicans to strike a deficit reduction deal. Also in the background is the status of a $300 billion fix of the sustainable growth rate formula that determines how much Medicare doctors get paid.
JACKIE JUDD: Good Day, this is Health on the Hill. I’m Jackie Judd.
It’s still all about the super committee on Capitol Hill, and so that is what our focus is here once again. Republicans, who had resolutely opposed tax increases as part of the deficit reduction package, are now offering a deal. KHN correspondent Mary Agnes Carey is here with us to discuss it. Welcome back, Mary Agnes.
MARY AGNES CAREY: Thank you.
JACKIE JUDD: Give us the outlines of the deal, what the Democratic reaction was, and how it may impact health care spending.
MARY AGNES CAREY: It’s part of a $1.2 trillion deficit reduction package over the next decade. Republicans were offering $300 billion in new tax revenues. And as far as looking into health care programs – on Medicare, we’re talking about things like having the higher income beneficiaries pay more for their parts B and D coverage. That’s already in the current law, but they would simply extend that, and that could be a revenue raiser. Also, increasing the Medicare eligibility age from age 65 to 67, that’s part of the mix. You could see some Medicare provider cuts. And on Medicaid, they’re looking at ideas like competitive bidding for durable medical equipment and looking at the prices that the Medicaid program pays for drugs.
JACKIE JUDD: Democrats, it didn’t take them long at all to say that this was not a substantially meaningful deal. What was the reaction?
MARY AGNES CAREY: They were very unhappy about it, in part because this revenue would be raised to reduce taxes for some of the highest income earners, and Democrats want to see those folks paying more in taxes as part of deficit reduction. So this has been an ongoing struggle between Democrats and Republicans. Patty Murray, who is a co-chair of the super committee, described it this way: “I’ve yet to see a real, credible plan that raises revenue in a significant way to bring us to a fair, balanced proposal.” So at this point, this is not sitting well at all with the Democrats.
JACKIE JUDD: And so on it goes.
MARY AGNES CAREY: On it goes.
JACKIE JUDD: November 23 is the absolute deadline for something to be done, if it is going to be done. A lot of speculation in Washington about whether it will happen or not. You looked back at this point in negotiations for other big deals. What was your conclusion?
MARY AGNES CAREY: Here’s my thought: It doesn’t look good right now. There are certainly a lot of obstacles. But it’s not uncommon in Washington for the deal to come together with the parties at the last minute. The calendar’s a pressure. As you mentioned, Nov. 23 is the deadline for the super committee to report a deal.
Let’s look back a little bit to last spring, for example. Lots of discussion over government spending, differences between the Democrats and the Republicans. We were going to have a shutdown. It was averted at the last minute.
In July, lots of concern about raising the debt ceiling. Democrats and Republicans and President Obama had very strong positions. People thought that maybe the United States was going to default in early August. It didn’t happen.
Now that said, I really do want to state that it’s a lot of obstacles to overcome. Democrats still want to see more tax revenue before they move on entitlements. And Republicans feel that if Democrats do not move significantly on entitlement reform, that they’re not going to move on taxes. Those strongly-held positions are still there, and it’s not clear if or how they’ll be resolved.
JACKIE JUDD: And lurking in the background is what we always call here the “doc fix.” By the end of the year if there is no change, doctors who take Medicare patients will see something approaching a 30 percent reduction in their payments. Where does that stand in this mix?
MARY AGNES CAREY: Physician groups would love to have this Sustainable Growth Rate, SGR, doc fix resolved for good. As we know this is something Congress faces every year, typically near the end of the year. The doctors face a large cut if Congress doesn’t step in. It would be great for physician groups if the super committee went big. If they had a large $3-4 trillion deal that raised a lot of revenue and could take care of a permanent fix, which now would cost $300 billion over the next decade.
But short of that, chances are the SGR will be resolved in some other piece of must-pass legislation, perhaps another continuing resolution, or some other legislative extender that has to pass by the end of the year.
JACKIE JUDD: So it’s only if the super committee reaches what’s called the Grand Bargain?
MARY AGNES CAREY: That’s the thought.
JACKIE JUDD: — that the doc fix could be included?
MARY AGNES CAREY: It could be, but then again you’ve got to look at that $300 billion over the next decade. That’s a heck of a lot of revenue to raise, and it’s very unclear whether or not they can get there.
JACKIE JUDD: That’s much, as always, Mary Agnes Carey of Kaiser Health News.
MARY AGNES CAREY: Thank you.