JONATHAN CHAIT MARCH 24, 2010
Of all the conservative complaints about health care reform, the one I find most baffling is the notion that the financing is phony because it fails to account for physician pay increases. The complaint is 100% phony. And yet it continues to be repeated over and over in the conservative media, recycling through a misinformation feedback loop.
The complaint gained new momentum and publicity last week, when right-wing icon Paul Ryan requested that the Congressional Budget Office calculate the cost of health care reform combined with physician pay increases. The result was cited as proof of the "true" cost of Obamacare.
Let me explain this again. In 1997, Congress changed the formula for reimbursing doctors under Medicare. Due to poor design, they created a formula that would impose massive reimbursement cuts that were never intended by Congress. As a result Congress has regularly restored the unintended cuts. Yet because the law remains on the books, the budget assumes the cut will go into effect every year even though it won't. In other words, the budget baseline is off by about $200 billion a year, which is the rough cost of filling in this hole.
Doctors have been agitating Congress to permanently fix this, as they don't appreciate the year-to-year drama of Congress saving them from a draconian payment reduction. In an early version of health care reform, the House considered including a permanent "doc fix," which would have pleased the physicians as well as solved a longstanding fiscal problem. They decided not to do so, because they were having a hard enough time coming up with enough revenue to pay for the changes they were imposing in health care reform, let alone taking care of this as well.
In any case, this is not one of the costs of health care reform. It is a cost that would have happened regardless of whether health care reform passed. Moreover, the imaginary future savings of cutting physician reimbursement is not one of the cost offsets for health care reform. Over the next decade, the new law will create $800 billion in new obligations for the government and $938 billion in new savings.
I have yet to see anybody explain why the Democrats have some obligation to cover the cost of a government policy that would occur whether or not reform becomes law. Is it possible that conservatives believe that anybody proposing a health care reform has some obligation to solve this problem, even though the problem would occur anyway? I suppose it's possible. But I'd point out that none of the Republican plans account for the doc fix. The House Republican health care plan makes no provision for the doc fix. Ryan, who has endlessly flayed Obama for failing to provide such a fix, has no such provision in his "roadmap."
Ryan, who has nonetheless made the absence of the doc fix into a crusade, requested that the CBO score the cost of Obamacare plus a doc fix. The CBO dutifully produced such an analysis:
You asked about the total budgetary impact of enacting the reconciliation proposal (the amendment to H.R. 4872), the Senate-passed health bill (H.R. 3590), and the Medicare Physicians Payment Reform Act of 2009 (H.R. 3961). CBO estimates that enacting all three pieces of legislation would add $59 billion to budget deficits over the 2010–2019 period.
In other words, a member of Congress asked the CBO to add up the combined budgetary sum of the health care bill (HR 3590) plus the reconciliation fixes (HR 4872) and then throw in the doc fix. This hardly constitutes an endorsement of Ryan's claim that the doc fix is part of the cost of enacting Obamacare. If Ryan asked CBO to add in the cost of continuing the Iraq war, it would have done that, too. And, of course, Ryan was not requesting this to obtain information from CBO -- all CBO did was add the budgetary cost of the doc fix to the cost of Obamacare, something an elementary school student could have done. The point of this request was to add CBO's imprimatur to Ryan's disingenuous claim.
Ryan's stunt has further deepened the confusion among suspicious conservatives. Former Bush healthcare speechwriter Jeffrey H. Anderson complains that the Democrats directed CBO not to score the doc fix:
The only reason that the White House could ever claim, however implausibly, that its health-care bill would not dramatically increase deficits was because the Democrats instructed the CBO to give the bill credit for "savings" from reducing doctors' pay under Medicare by over 20 percent and never raising it back up.
This is categorically false. Democrats did not instruct the CBO to credit savings from reducing physician pay toward the health care bill. Every dollar of new health care spending is offset by different savings. The purported cut in physician pay is not part of those savings. There are parts of the CBO score you can legitimately suggest underestimate the cost of health care reform -- most prominently, the slowdown in value of the tax credits over the second ten years. (I'd argue that there are places where CBO is underestimating cost savings, as well.) But the doc fix is simply not a legitimate complaint.
I dwell on this example because it's a perfect case study of the broader phenomena of right-wing media creating a closed information circuit, in which even claims that are demonstrably false questions of fact can circulate unchallenged. Other such closed information circuits can be found in American culture, but none of them is the dominant faction of a major political party.