Over the long term, the savings from MACRA are enormous.
Tomorrow, the Senate will consider H.R. 2, a Medicare-reform bill that has already acquired a classic Beltway acronym, MACRA. Conservatives should give their full support: According to a report released last week, MACRA not only would pay for itself but would result in large net savings to the Medicare program over time, reducing unfunded liabilities and preventing massive new debt.
To oversimplify it, MACRA does two things to Medicare. First, it replaces a 21 percent planned payment cut to doctors — known as the “sustainable growth rate” or SGR — with a more durable payment system. (This is the devastating cut that has been repeatedly delayed with the “doc fix.”) Second, the bill strengthens means testing in Medicare and requires “Medigap” plans — which cover expenses Medicare does not, encouraging overuse — to expose patients to more costs when they seek treatment.
Some senators have expressed concerns with the bill related to its cost. The Congressional Budget Office projects that MACRA will spend more in the first decade than it saves – $141 billion. This was confirmed by the Center for Medicare Services (CMS) report last week. However, that same report confirms what conservative supporters of MACRA have been saying all along: Over the long term, the new payment regime will cost no more than current law — which assumes the 21 percent SGR cut — and yields even greater savings to the Medicare system.
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