CBO Predicts Decline in Medicare Spending if SGR Remains

The Congressional Budget Office issued a report recently saying Medicare outlays over the next 10 years will diminish by $69 billion, but that’s counting on the Sustainable Growth Rate remaining in effect. Since 2003, Congress has overrode the SGR to prevent cuts to physician reimbursement, which is expected to shrink by 27.4% in March if Congress doesn’t reach agreement on a so-called “doc-fix.” If Medicare payments to doctors remain at the 2011 level over the next 10 years, Medicare spending will actually increase by $247 billion, according to the full CBO report. “If those payments were increased over time, the impact on Medicare outlays would be even greater,” the report states. Overall, the CBO projects a $1.1 trillion deficit in 2012, or roughly 7% of GDP. That’s roughly 2% below 2011 deficits, yet still the highest deficits from 1947 to 2008. Over the next 10 years, the CBO predicts the federal deficit will decline by 1.5% of GDP annually, according to the report.