How Medicare Pays for Care

A while ago Congress came up with a solution to control Medicare spending; however, the solution only solves the problem temporarily. “It sets spending targets. If they’re not met, fees paid to doctors, hospitals and nursing homes automatically are cut,” reports the Houston Chronicle. If targets aren’t met, these fees are supposed to be cut, but a majority of the time “those cuts have been triggered, Congress has stepped in at the last minute to soften or repeal them — usually with the provision that even larger cuts would take effect at some undetermined future date,” states the Houston Chronicle.

“On March 1, fees paid to doctors by Medicare will be cut by 21 percent unless Congress intervenes. The cuts would be bad for doctors and even worse for their Medicare patients. But the worst consequences would fall on the members of Congress who let it happen,” reports the Houston Chronicle. Normally, Congress would just not cut the payments, however, if the payments aren’t cut, Medicare costs would grow by billions of dollars a year over the next decade. The average $21 billion a year increase over the next 10 years is “a drop in the bucket compared to overall Medicare spending, which was almost $470 billion in 2008. But the 10-year, $210 billion total cost is large enough that House Democrats took it out of their health care reform bill to meet cost targets announced by President Barack Obama. Instead, they passed a separate bill to block the physician payment cuts.”

So that leaves Senate Republicans with a difficult decision. According to the Houston Chronicle,“ They can add to the deficit, something they’ve criticized Democrats for supposedly doing (health care reform actually would cut the deficit by about $130 billion over 10 years); increase taxes, something they’ve pledged never to do; or cut Medicare, something else they’ve demonized Democrats for allegedly doing.” But one thing that is not an option is waiting; according to the Houston Chronicle, “Medicare’s day of reckoning has arrived.”

What do you think is the best solution to fix how Medicare pays for care?

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