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Senate Bill Proposes 3-year Doc Fix; Up Eligibility to 67

Senators Joe Lieberman (I-CT) and Tom Coburn, M.D. (R-OK) revealed their bipartisan proposal to save Medicare and reduce the debt. The Lieberman/Coburn proposal would delay reimbursement cuts for docs for three years, but would raise Medicare eligibility to 67 and increase out-of-pocket expenditures for high earners. The bill would save more than $600 billion over 10 years, based on reviews of Congressional Budget Office (CBO) estimates, and up to an additional $100 billion savings from implementing the program integrity provisions. Click here for background material detailing the proposal.

“We can’t balance our budget without dealing with mandatory spending programs like Medicare. We can’t save Medicare as we know it. We can only save Medicare if we change it. And that’s what the Medicare Reform Plan Tom Coburn and I are proposing will do,” said Senator Lieberman.

“Our plan recognizes that continuing Medicare as it is currently structured is a financial impossibility. Medicare as we know it may not exist in five years if Congress does not take steps now to preserve the program. Every year we wait makes the inevitable task of structural reform more difficult. I’m encouraged Senator Lieberman has put a serious and significant Medicare reform proposal on the table,” Dr. Coburn said.

The proposal also contains a three year fix to the Medicare physician reimbursement formula that is paid for and will bring stability and payments to the Medicare provider system, ensuring access for seniors.

Unless Congress intervenes again at the end of the year, beginning January 1, 2012, physicians (that are paid under Part B) who accept Medicare will face a 30% reduction in their reimbursements. Such dramatic reductions could prevent physicians from being able to provide medical care to seniors on Medicare without taking a financial loss.

The systemic flaws with the SGR mechanism have led lawmakers and leaders in the health care community to call for its redesign. Therefore, the Lieberman/Coburn proposal provides for a three year “bridge” so that Congress can develop a new funding mechanism to reimburse Medicare providers. CBO estimates that extending the SGR for three years costs $37.7 billion over 10 years. This cost will be fully offset by savings within the overall proposal.

The proposal also:

  • Extends the solvency of Medicare Part A (Hospital Insurance) by allocating half of the savings from the proposal to the Hospital Insurance Trust Fund.
  • Reduces Medicare’s 75-year unfunded liabilities by an estimated $10 trillion and significantly reduces the fiscal impact of Medicare Part B and Medicare Part D on the federal budget.
  • For the first time in the history of the Medicare program, the proposal will provide seniors with an annual out-of-pocket-maximum benefit within the Medicare program to protect them from bankruptcy in the event of a major illness or long term health condition.
  • Preserves Medicare as a government program for current and future enrollees.


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