CBO: Bill to block controversial Medicare change would cost $395M

A Republican-backed bill to block a controversial Medicare proposal from the Obama administration would increase government spending by $395 million over a decade, the nonpartisan Congressional Budget Office said Tuesday. 

{mosads}The CBO made its estimates based on a bill from Rep. Larry Bucshon (R-Ind.) that would stop an Obama administration proposal aimed at fighting high drug prices by changing how Medicare pays for some drugs. 

The proposal has drawn strong opposition from the pharmaceutical industry, as well as some doctors’ groups, though the White House has argued that drug companies are simply worried about a dip in their profits. 

The CBO estimates the proposal would save Medicare money, and therefore the bill to block it would cost about $1.1 billion over 10 years. However, the CBO assumes that the administration would come up with other programs to save money if it were blocked from this specific program. 

While there is uncertainty about what those other programs would be, the CBO estimates the administration could find $750 million in other savings, so the final effect of the bill would be $395 million in increased spending. 

The proposal in question would shift Medicare Part B, which pays for drugs administered in doctors’ offices, away from paying a percentage of the cost of a drug, and toward paying a flat fee. The idea is that this change would reduce an incentive for doctors to prescribe higher-priced drugs so that they get paid more. 

Republicans have argued that the administration is overstepping its authority by making changes to Medicare through an “innovation center” created by ObamaCare, and without congressional action. 

Some congressional Democrats have also expressed concern about the proposal’s effect on rural doctors, among other issues. 

The reform is only a proposal at the moment, and the final rule is expected to be narrowed to address some of the Democrats’ complaints.