Deficit Reduction Starts with Honest Budgeting
Honest Budgeting Starts with Repealing the SGR
It’s time for Congress to put an end to dishonest budgeting. The Joint Select Committee on Deficit Reduction (JSCDR) has a unique opportunity to address numerous long-standing policy issues in a real way – outside of historical obstacles and limitations. Any JSCDR proposal that fails to address the over $300 billion “debt” associated with the sustainable growth rate (SGR) will only continue 12 years of fatally flawed budgeting that has contributed to the dangerous situation in which we find our fiscal and economic health today.
The SGR is a hazard to the Medicare program and to the U.S. economy. It prohibits innovation, contributes to access issues for millions of seniors, and serves as a disincentive to physician participation in the Medicare program. Deficit reduction starts with honest budgeting. And honest budgeting starts with repealing the SGR.
The AOA believes that the issues associated with the Medicare physician payment formula must be a top priority for the JSCDR. We recognize that this process is designed to promote deficit reduction. However, true deficit reduction cannot be achieved without addressing a systemic flaw in our nation’s largest health program.
Over the past decade Congress has intervened 12 times to prevent cuts in Medicare payments – including 5 times in 2010 alone. While these cuts have prevented immediate negative impacts on the Medicare program, they have exacerbated the long-term challenges. The cost of long-term reform continues to grow and is reaching in unimaginable levels. In 2005, the cost of repealing the SGR was less than $50 billion. Today, that cost has swelled to $300 billion and will exceed half a trillion dollars by 2016.
Any proposal put forth by the JSCDR aimed at addressing the financial stability of the Medicare program must address the SGR in a meaningful and long-term manner. The President, the Medicare Trustees, the Congressional Budget Office (CBO), and numerous deficit reduction bodies, all agree that the budget estimates used in the current economic and debt debates fail to tell the true story about our financial health, since they assume that projected Medicare cuts will be implemented. Everyone acknowledges that these cuts will never be realized, yet our economic policies continue to incorporate the cuts.
The unfunded liability around physician reimbursement is a ball and chain on the long-term health of the U.S. economy, and on Medicare. Congress: End dishonest budgeting. Repeal the SGR.