A year ago there were hopeful signs that a permanent fix would be done in the payroll tax cut extension. Didn't happen. A permanent fix for this problem in the payment formula pops up at least once a year, when it comes time to legislate a temporary fix. It's been that way since the 1990s, when Congress passed a payment formula that set what doctors and other providers would get in reimbursement for caring for Medicare patients. But that formula quickly proved to be too stingy, and didn't keep up with rising health care costs on the provider side, so every year it has to be adjusted. It's an annual event because, so far, legislators haven't been able to agree to a way to pay for permanently repealing the formula.
And lately, it's been a popular hostage for Republicans to take. They know the fix has to be done to keep doctors and seniors on Medicare placated and to keep the program running smoothly. So they hold their breath and refuse to fix it until Democrats give in on something, usually tax hikes for people or corporations who could certainly afford to pay just a little bit more for the common good.
But now there's new hope in the CBO having given permanently fixing the formula a much smaller price tag than before. Last year's estimate for repealing the formula was $243.7 billion. Now it's $138.3 billion, thanks to much lower actual spending in Medicare than projected spending. In the past three years actual Medicare spending has slowed drastically, in anticipation of the reforms coming under the Affordable Care Act. (Yes, would-be Medicare "reformers," Obamacare is working to reduce spending in the program.)
There are a few proposals percolating in the House to make this fix permanent, but whether any one of them actually succeeds is really going to depend on whether House Republicans are willing to give up this very handy potential hostage.