Report: Boehner-Pelosi Replacement for Medicare Payments Would Increase Debt by $400 Billion Over 20 Years

Melissa Quinn /

Specific details of a plan to replace how Medicare doctors are paid has yet to be released. But, the Committee for a Responsible Federal Budget estimates the deal will add hundreds of billions of dollars to the national debt over the next two decades.

According to a report released by the group today,  the replacement for the Sustainable Growth Rate proposed by House Speaker John Boehner and Minority Leader Nancy Pelosi would add $400 billion to the national debt by 2035.

“In other words, proponents of the ‘second-decade theory’ appear to be looking only at one side of the ledger,” the group said today. “They are counting the long-term savings while ignoring the long-term costs.”

Boehner and Pelosi have reportedly agreed to a $210 billion deal that would replace the Sustainable Growth Rate and implement a new payment system for Medicare physicians.

Only approximately $65 billion of Boehner and Pelosi’s $210 billion plan would be paid for during the first 10 years, according to reports, and the remainder—more than $140 billion—would be added to the deficit.

“In other words, proponents of the ‘second-decade theory’ appear to be looking only at one side of the ledger. They are counting the long-term savings while ignoring the long-term costs,” said @BudgetHawks.

Supporters of the deal argue long-term savings achieved through proposed reforms like means testing outweigh the short-term costs of replacing the Sustainable Growth Rate in the first decade. However, the Committee for a Responsible Federal Budget argues the proposal would add to the debt both this decade and next decade.

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“It does not appear this plan would come even close to paying for itself over the long-term,” the group said.

The Sustainable Growth Rate is the formula used to determine payments to Medicare doctors. The formula has long been deemed unworkable by Republicans and Democrats alike, and over the last 14 years, Congress has passed 17 “doc fixes” to stabilize payments to physicians as the costs of health care have outpaced the economy.

The latest “doc fix” expires March 31, and if lawmakers don’t agree to a solution by then, Medicare doctors could take a 21 percent cut in payments.

Some outside groups like Americans for Tax Reform have come out in support of Boehner and Pelosi’s deal.

“Conservatives should hate SGR, and view its replacement with large structural Medicare reforms as a win-win of the highest order,” Ryan Ellis, the tax policy director for Americans for Tax Reform, wrote last week.

However, others such as Heritage Action for America, the sister organization of The Heritage Foundation, argue the proposal leads to massive deficit spending.

“For more than a week, the speaker and his allies have been pushing incomplete information to lawmakers and the media,” Dan Holler, spokesman for Heritage Action, told The Daily Signal. “With CRFB’s analysis, we now confirm the deal is a budget buster of epic proportions. It’s time to bound the Boehner-Pelosi boondoggle and pursue real reforms—reforms that don’t add hundreds of billions to our national debt.”

A spokesman for Boehner’s office could not be reached by The Daily Signal.