Health Care

CBO: Medicare deal adds $141 billion to deficit

by Peter Sullivan 03/25/15 02:41 PM ET

The bipartisan deal in the House to repeal automatic payment cuts to doctors under Medicare would increase the deficit by $141 billion over 10 years, the Congressional Budget Office said Wednesday.

But the congressional scorekeeper also found that the bill would cost less than keeping the current payment rates in place for a decade.

Supporters of the bill argue the second projection matters more, because lawmakers have never allowed the automatic cuts from the sustainable growth rate (SGR) to take effect. The CBO assumes that those cuts are in place when projecting that the bill adds to deficits.

{mosads}  ”The nonpartisan Congressional Budget Office confirmed today that H.R. 2, bipartisan legislation to strengthen Medicare and permanently repeal the Sustainable Growth Rate (SGR), will save taxpayers money and put the nation’s budget on a more sustainable path,” Speaker John Boehner’s (R-Ohio) office said in a statement.

Boehner’s office points to the $900 million in savings compared to current payment rates, and highlighted how the CBO projects savings from the bill in the second decade.

Overall, the budget office found that $73 billion of the $214 billion cost of the legislation is offset through spending reductions and revenue increases.

The bill includes reforms to Medicare’s payment system intended to make it incentivize quality rather than quantity in care.

The CBO said there is uncertainty in the projection of more than 10 years out, but that the most likely scenario is “small net savings.”

The Medicare legislation has gained support on both sides of the aisle, and appears headed for passage in the House on Thursday.

Some Senate Democrats have raised objections to some of the offsets, such as making wealthier seniors pay a higher share of their premiums, but have not come out firmly against the bill. The CBO projects the premium provision would save $34 billion.

Heritage Action for America, which opposes the bill because it is not fully paid for, announced a key vote against the legislation on Wednesday, pointing in part to the $141 billion in added deficits.

“Hearing that the SGR is going to be repealed without meaningful spending reductions is music to the ears of lobbyists around the country,” it said in a statement.

— This story was updated at 3:04 p.m.