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The Other Major Deal: Doc Fix Extension

While everyone slices and dices the tax cut deal, another deal has apparently been forged to patch the Medicare sustainable growth rate, colloquially known as the “doc fix.” Senate leaders avoided a 23% cut to Medicare reimbursement rates with a one-year deal that would, wait for it, change the subsidies on the exchanges.

The deal pays for the must-pass patch to prevent a deep cut in Medicare doctors’ payments with changes in the tax subsidy program that some consumers will use after 2014 to buy health insurance on the new exchanges […]

The deal on the table would change how much money consumers would have to repay if their income status changes mid-year, pushing them out of the eligibility bracket. For instance, someone who qualified for a subsidy because he was unemployed in the first half of the year may have to repay a large portion of that subsidy if he finds a job. Few additional details were available Monday night.

So just to be clear, we’re planning to pay for high reimbursement rates for doctors, among the highest in the world, by penalizing lucky duckies who manage to lift their families out of poverty by essentially garnishing their new wages. This would raise $19.2 billion dollars in a direct transfer from workers to doctors.

Democrats are concerned that if they let the doc fix issue hang, they would see it used to repeal health care, or at least key elements of it. So instead, they’ll use it to go after people who bought health insurance on the exchanges and then “made too much money.” This has the additional element of sounding very unenforceable, unless we’re registering our new salaries with the government upon every change in job status.

A health lobbyist in the Politico article says “I think there’s going to be a little pushback from the progressive side.” Dare to dream.

It’s a pity there aren’t $19.2 billion dollars in pay-fors laying around that could handle it. Oh well, good thing our tax system is perfectly efficient and we’re not giving unnecessary tax breaks to millionaires and billionaires.

…If you’re looking for a health care-based offset for the doc fix, there’s always the public option.

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David Dayen

David Dayen