JONATHAN CHAIT DECEMBER 6, 2010
Republicans have come up with another one of their patented plans to undermine the Affordable Care Act. The plan is to take funding out of the program to pay for physician reimbursement:
Republican Senate aides familiar with the issue told POLITICO they are seriously looking at the new law's $15 billion public health commitment to finance a one-year doc fix in the next session of Congress.
Let me explain what this means. In 1997, Congress adjusted the formula by which doctors are reimbursed under Medicare, with the intention of imposing a tiny cut. But Congress bungled the formula, and accidentily imposed a huge cut. Because that huge cut is on the books, Congress has to appropriate funds to bring doctors' reimbursement back to the normal level. Congress has been doing this regularly since 1997, a ritual known as the "doc fix."
The Republican plan, described in the Politico article linked above, is to demand that the doc fix start including spending cuts to offset the "cost" of the doc fix. And where will they get the spending cuts? Well, by taking money out of the PPACA.
I see a couple problems here.
First, the article only identifies one source of funding that Republicans propose to cut:
As for which part of the health reform law to pull funds from, Republicans have long derided the multibillion Prevention and Public Health Fund as wasteful spending, scoffing at its investment in bike paths and farmers' markets. One Republican Senate aide quipped that it was a "slush fund for jungle gyms."
The fund, which began this year with $500 million, will grow to a $2 billion per year allocation by 2015. Totaling $15 billion over the next 10 years, the fund would be nearly enough to offset an entire, yearlong doc fix.
So they want to eliminate a decade worth of public health fiunding in order to finance one year of higher physician reimbursement. At that right, they're going to run out of funding sources pretty quickly. Later in the article, Republican economist Douglass Holtz-Eakin is quoted proposing to cut subsidies for health care for the poor. That's a larger pool of momey but still runs into the same problem of requiring more years of cuts than years of doc fixes.
A second problem is that President Obama will veto any doc fix that relies on cutting the PPACA. So then the question is, what happens? The procedure for the last thirteen years has been to pass doc fixes without any offsetting costs, in part because the costs were an accounting fiction. If Republicans insist on offsetting the cost out of the PPACA, and Obama vetoes the plan, and doctors start getting massive pay cuts, what happens? I think the answer would be that doctors would get furious at Republicans for tying their salaries to a political demand that Obama would never accomodate. Then Republicans would back down and pass a doc fix. Which means the crusade to repeal the PPACA would be back to the starting point again.