Medicare pay cut for doctors creates conundrum for Republicans

With the December 1 scheduled pay cut to doctors who serve Medicare patients looming, the Senate voted last week to postpone the planned 23 percent pay cut until January 1, 2011.  The House is expected to quickly follow.  

At issue are the cuts designed in 1997 to be phased in over time to help lower the cost of Medicare spending.  However, those cuts have been repeatedly delayed, accumulating over time.  This one month delay is expected to cost the federal government $1 billion and will come from cuts to providers of therapy services.

This temporary delay has disappointed physicians groups like the American Medical Association and advocates for seniors who fear the pay cut will impact the quality of care seniors receive.  Lobbyists for doctors and seniors had been seeking a 13-month solution to the issue.  However, Chair of the Senate Finance Committee, Senator Max Baucus (D-MT) and ranking member Senator Charles Grassley (R-IA) have promised to find a longer-term solution in the next month. Yet, this longer-term solution being crafted will likely have to be voted on by a Congress that looks quite different than today. 

With its new majority in the House and significant gains in the Senate, Republicans have vowed (refusing to give details) to massively cut spending by the federal government.  At that same time, however, many of the Republicans rode into office stoking the fears of seniors that Medicare will be cut by $500 billion under health care reform.  Now in a position to actually have to govern, it will be interesting to see how they handle these competing interests – entitlements for vote-often-and-always seniors vs. real deficit reduction. 

When this new batch of Republicans arrives in Washington, we will likely just see more of the same – lots of rhetoric about deficit reduction while refusing to make any meaningful cuts in government spending and advocating billions of dollars more in tax cuts for the wealthiest Americans.  Just look at Tea Party favorite, Senator-elect Rand Paul (R-TN).  Running on a platform to balance the federal budget and slash that size of government, Paul wants to end any cuts to physicians who treat Medicare patients (50% of Paul’s patients are on Medicare). He also wants to extend all of the Bush tax cuts, a move that will add hundreds of billion of dollars to the federal budget deficit (unless counterbalanced by massive spending cuts across the board), creating little or no stimulus for the ailing economy.

When rhetoric meets the entitlement-spending road, the road usually wins. 

 

Note:  13% percent of Californians are on Medicare.