One-year Medicare patch in the works

Senate leaders agreed on Monday to a tentative plan to enact a one-year extension to the 25 percent cut to Medicare pay scheduled for Jan. 1. As we reported previously, the idea behind the year-long patch is to give lawmakers time to create a viable, long-term alternative to the sustainable growth rate (SGR) formula currently used to pay physicians who accept Medicare.

According to Politico and other news outlets, this time would be bought by turning some of subsidies granted to health insurance consumers under health reform in 2014 into more of a loan. Specifically, the change would require people whose income rises above the eligibility level (of four times the poverty level) during the year to repay more of the subsidy than the law currently requires. In addition, the proposal would raise the amount that individuals and families would have to pay back to the government if they misrepresented their income level.

Roughly 200,000 individuals are expected to be affected by the subsidy reforms, freeing up about $19.2 billion to fund physicians' Medicare reimbursement during 2011. Because the payback amounts are to be determined on a sliding scale based on income, officials say that the changes would have a minimal impact on those with the lowest incomes.

Although some health lobbyists have predicted a degree of pushback from liberal democrats to the plan, a Senate aide told the Hill on Tuesday that the measure agreed to by Majority Leader Harry Reid (D-Nev.), Minority Leader Mitch McConnell (R-Ky.), Finance Committee Chairman Max Baucus (D-Mont.) and ranking member Charles Grassley (R-Iowa) is expected to be brought up for approval by unanimous consent sometime today.

To learn more:
- read the article in Politico
- see the story from the Hill
- check out the post in the Wall Street Journal Health Blog