The Ever-More-Desperate Health Care Budget Gimmicks
I attracted a lot of angry comments last October when I wrote that I didn't trust the Democrats to be much more fiscally responsible than the Republicans. What made people especially angry was that I argued that ObamaCare had made our fiscal problems worse--yes, even if its deficit-reduction measures all worked, a proposition of which I am deeply skeptical. That's because ObamaCare used up all the most obvious and politically feasible cuts in Medicare--and when that proved insufficient, some that weren't obvious or politically feasible, like requiring every small business owner in the land to issue 1099s to people they bought supplies from.
This graph from Michael Cannon shows exactly what I was worried about
What it shows is how Obama is paying for the two year "Doc fix", which will prevent scheduled cuts to doctor reimbursements from taking place. Congress has temporarily delaying the cuts (known as the Sustainable Growth Rate, or SGR) on an annual basis since early last decade. Since the SGR is a cumulative mechanism that was supposed to restrain cost growth, the compounded cuts have now grown so big that they would amount to slashing doctor reimbursements by more than 20%. This is obviously politically impossible.
- Limit the taxes that states can place on Medicaid providers, which has had the effect of increasing the federal contribution to state Medicaid budgets: $18 billion over 10 years
- Claw back "erroneous payments" to United Healthcare under Medicare Advantage: $6 billion one time
- Limit the ability of brand name pharmaceutical manufacturers to cut side deals with generic manufacturers to end patent challenges: $8.8 billion over 10 years
- Shorten the market exclusivity period for biologic drugs from 12 years to 7: $2.3 billion over 10 years
- Lower Medicaid reimbursements for home medical equipment: $6.45 billion over 10 years