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With Medicare vote, G.O.P. splitting from Bush

Despite the president's opposition, the bill passed with vetoproof majorities.

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But the mood in much of the GOP caucus was more subdued. "I don't know why the president would veto this bill with a significant vote on both sides of the aisle," said Sen. Michael Enzi (R) of Wyoming, who opposed the bill. "People will just stay with their votes to be consistent – and the vote would be the same."

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In fact, these votes mirror a pattern of Congress deferring mandated cuts in physician fees. The "sustainable growth rate" system for determining annual physician fees was set up in the Balanced Budget Act of 1997 in a bid to rein in soaring entitlement costs. In 2002, the SGR system reduced fees by almost 5 percent, but it has been deflected by legislative action since 2003.

Without a legislative fix, many doctors currently in the Medicare system would probably opt out of it, say lawmakers who backed the bill. "The California Medical Association tells me that if those mandated cuts [in physician fees] took place, we could lose 60 percent of doctors who currently take Medicare patients," says Sen. Dianne Feinstein (D) of California.

But critics say that view ignores a longer-term entitlement crisis. "Congress is preventing what would otherwise be a significant reduction in fees paid to Medicare to go into effect, but it in no way solves the fundamental problem of Medicare in general – or the very significant problem of how we reimburse physicians and the perverse incentives of the current system," says Gail Wilensky, a senior fellow at Project Hope in Bethesda, Md., and former chair of the Medicare Payment Advisory Commission from 1997 to 2001.

The current system encourages and rewards physicians who do more and complex services, she says. "Even once we are able to reconfigure how we pay physicians under Medicare, which is one of the most serious issues we need to face in the short term, the long-term unfunded liability of Medicare is staggering," she says.

Health experts estimate that the current unfunded liability of Medicare is more than $70 trillion.

"This is Kabuki theater that happens every year: Congress promises cuts in Medicare reimbursement rates for doctors, because it's the low-hanging fruit, rather than making structural changes. Every year, they reverse themselves and don't do it," says Michael Tanner, senior fellow at the Cato Institute.

"In the end, we're going to end up not making any changes in the Medicare system at all, and we're hurtling toward insolvency," he adds.

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