'Doc Fix' is good fiscal medicine: opinion

By Quin Hillyer

There are stands for principle, and then there are knock-down-drag-out fights over principle. On a Medicare reform bill slated for consideration right after Congress' two-week Easter break, Alabama's U.S. Sen. Jeff Sessions ought to decide that not every stand should be a full-fledged battle.

His Republican Alabama colleague, Richard Shelby, has a role to play, too. He should vote for the bill - because despite Sessions' reservations, the bill, H.R. 2, will do far more good than harm.

Just before the Easter break, the House passed H.R. 2 by a stunningly large 392-37 margin. Conventional wisdom holds that such a large margin in the House virtually guarantees Senate passage too. But the Senate is a different beast. Its rules and traditions could lead to an unfortunate legislative pincer movement.

AL.com Opinion

    While Sessions asserts that H.R.2 spends too much money, a number of Democrats are grumbling that an add-on provision financing a children's health care program lasts for only two years, rather than their desired four. As the immediate past Republican leader on the Budget Committee, Sessions wields considerable influence among GOP budgetary hard-liners. Here's hoping this is one time he doesn't use it.

    Here's why: The bill aims to provide a permanent replacement for a repeated, expensive budgetary maneuver known as the "doc fix." Such a replacement is desperately needed.

    In 1997, while passing a temporarily balanced budget, Congress created a formula limiting reimbursement rates for doctors serving Medicare patients. But lawmakers overdid it: The limits were so strict, they risked chasing doctors from the Medicare market altogether, which of course would leave the elderly facing a shortage of available physicians.

    At least every year - 17 times since 2003! -- Congress has spent the money to patch together a temporary "doc fix" - often using budgetary gimmicks (such as pushing costs into ensuing years) to pretend to find savings that match the extra spending in the "fix." The charade always takes time and concentration away from efforts at bigger, more lasting, more cost-saving budget reforms.

    After all these years, Congress finally found a bipartisan way to repair the formula forever. To do so, H.R. 2 would implement several Medicare reforms conservatives long have championed. Some of those reforms bring market incentives into play. Others tighten eligibility rules to achieve savings, and others are likely to block attempts at Medicare fraud.

    In return, conservatives agreed to extend the Children's Health Insurance Program (CHIP) for two years, at spending levels desired by congressional Democrats. This costs money, as do the new, more reasonable reimbursement rates for doctors. But here's the key: There's no way under the sun Congress was going to let the popular CHIP die anyway, and no way Congress would ever let the low reimbursement rates, and massive physician exodus from Medicare, go into effect.

    Therefore, the supposed new "costs" in this permanent-fix bill are mostly illusory. They assume a lower baseline of spending than Congress has ever actually used.

    With a more realistic baseline, this bill costs not a penny more over the first ten years, and saves significantly after that. Republican former Congressional Budget Office Director Douglas Holtz-Eakin says that even using the unrealistically low baseline, the reforms will save far more money in the second decade than it supposedly "costs" in the first. That's without raising taxes.

    Some of the most renowned fiscal-conservative groups in the country, such as the National Taxpayers Union, Americans for Tax Reform, and the Wall Street Journal editorial board, support H.R. 2. So does House budget whiz Paul Ryan, the 2012 Republican vice-presidential nominee. Sessions and Shelby ought not fight it, but embrace it.