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Health Insurance Reform Mythbuster: Health Insurance Reform and Medicare Physician Payment Reform

This afternoon, the House passed H.R. 3961, the Medicare Physician Payment Reform Act.  Opponents of reform have been spreading myths about H.R. 3961 - including that it will harm seniors and that it is fundamentally fiscally irresponsible. 

MYTH:   The Medicare Physician Payment Reform Act will force seniors to pay much higher Medicare premiums than they do now.  

FACTRather than harming seniors, the Medicare Physician Payment Reform Act tackles seniors' number one concern:  that they can keep their doctors.  As the AARP has stated: “[We must] do away with the current payment formula so seniors can have the peace of mind that comes with knowing they can see the doctor of their choice and get the care they need.” 

The bill will prevent a 21 percent cut in Medicare physician payment rates scheduled for January 2010 and provide permanent reform - replacing the current, broken system with a stable, sustainable one, which will guarantee high-quality care for seniors. 

Taken together with the health insurance reform bill - which will lower premiums, extend the solvency of the Medicare Trust Fund by five years, improve preventive and primary care for seniors, and eliminate the donut hole drug coverage gap - this bill is a good deal for seniors.  That is why this bill has been endorsed by all of the major national seniors' organizations - including AARP, Leadership Council of Aging Organizations, Center for Medicare Advocacy, Medicare Rights Center, and the National Committee to Preserve Social Security and Medicare.

Some opponents have charged that this bill would result in much higher Medicare premiums for seniors.  These opponents are looking at estimates from CBO that compare Medicare premiums under the bill with premiums under a completely unrealistic “current law baseline” - a baseline that assumes that Congress would let the 21 percent cut in Medicare physician payment rates in January 2010 go into effect, as well as additional drastic cuts in these payment rates in each of the next several years.  The fact is that Congress has blocked these projected cuts in payment rates in every one of the last seven years - and everyone has known that the cuts in the baseline would never go into effect.  As a result, a comparison of premiums under the bill to the unrealistically low premiums (based on unrealistically low Medicare payments to doctors) which seniors would never have paid under the “current law baseline” is truly meaningless.

MYTH:  Providing a permanent reform of the current Medicare physician payment system is fiscally irresponsible.

FACT:  The fact is that not fixing the broken Medicare physician payment system is fiscally irresponsible.  Providing a permanent reform of the current Medicare physician payment system corrects a decade of mismanagement of the Medicare program by the Bush Administration and the Republican-controlled Congress.  Congressional Republicans created a type of fiscally-irresponsible one-year fix, which has had the result of making future payment cuts even steeper and more unrealistic, and efforts to fix the formula even more expensive. By contrast, this permanent reform creates a stable, sustainable baseline.

Furthermore, the cost of this bill was already included in the House-passed and President's budgets.  This money represents the ongoing care and maintenance of the Medicare program.

Finally, this bill fully complies with the requirements of H.R. 2920, the Statutory PAYGO Act of 2009, which the House passed in July and which also will be attached to H.R. 3961 after passage before the bill is sent over to the Senate.  The Statutory PAYGO Act requires that Congress pay for all new policies reducing revenues or expanding entitlement spending with savings elsewhere in the budget.  The Statutory PAYGO Act explicitly accommodates this physician payment reform bill because it is designed to maintain current spending policy (by preventing the scheduled draconian cuts) rather than provide new spending.