October 5, 2022
An automatic reduction of Medicare spending, also known as sequestration, is scheduled to decrease Medicare reimbursements to physicians by almost 8.5% beginning January 1, 2023. Massive new federal government spending under the Biden Administration and the Democrat Congress will trigger mandatory cuts to Medicare unless Congress acts. The total adjustment to Medicare is a combination of a 4.5% reduction to the conversion factor used by Medicare to determine physician payments, and a 4% PAYGO, short for "pay as you go," reduction.
Under the Balanced Budget and Emergency Deficit Control Act of 1985, sequestration is automatically generated each year as a budget enforcement tool. Typically, this tool is incorporated into laws to either discourage or encourage specific budget objectives or goals. If these are not met due to current laws enacted or withheld, a sequester is triggered reducing specific federal spending. Because Medicare is considered mandatory spending it is often impacted by these spending cuts.
Sadly, Congress regularly ignores these budget protections that are designed to responsibly manage taxpayer funds, instead treating them as a budget gimmick to claim another spending bill is paid for when they have no intention of following through on the spending cuts. This results in compounded reductions like we see this year and will almost certainly face again in the future.
Make no mistake, extensive budget cuts under sequestration will not resolve the structural issues with Medicare. The federal budget's largest programs, including Medicare, are growing at unsustainable rates. According to CBO estimates, total Medicare spending in fiscal year 2020 was about $836 billion and will increase to about $1.7 trillion in fiscal year 2030. Considerable reforms to Medicare and our broader healthcare system should curb hikes in Medicare spending while simultaneously improving the program for healthcare providers, physicians, and patients.
Americans intuitively know that postponing Medicare cuts and simultaneously expanding Medicare will not fix our broken healthcare system or resolve the challenges facing healthcare providers and patients every day. I am proud to have co-authored a budget with the Republican Study Committee that would make necessary reforms to Medicare, while maintaining the promises we have made to our seniors. Unfortunately, when the government recklessly overspends, it makes it impossible to effectively spend on our necessary priorities.
Again, thank you for taking the time to reach out to me and let me know your opinion on this important issue. Please feel free to subscribe to my newsletter by visiting https://good.house.gov/ or contact me with any future concerns. I am honored to represent you and the people of Virginia's 5th District in the House of Representatives.
Sincerely,
Bob Good
Member of Congress
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