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Fixing 4.3 Percent Cut Shouldn't Raise Premiums, AARP Argues
Beneficiary pressure may doom physician rescue


If you're waiting for Congress to step in and save you from the 4.3 percent pay cut that awaits you in 2006, be aware that beneficiaries are putting pressure too.

American Association of Retired Persons CEO William Novelli wrote to Senate Budget Committee Chair Judd Gregg (R-NH) to warn him against raising beneficiaries' premiums any further. The April 19 letter notes that "Medicare providers should be paid fairly, but each time reimbursement is increased, beneficiaries shoulder 25 percent of the cost through their monthly premiums."

If the budget ends up giving more money to physicians instead, Novelli asks Gregg to bear in mind the potential effect on beneficiaries. "Following last year's record-breaking Part B premium increase, another sizable increase is already expected, and these escalating premiums have created a serious financial burden for beneficiaries," Novelli writes.

So the AARP wants Gregg to spare beneficiaries "from any new costs associated with increased provider payments." If Gregg agrees to this suggestion, taxpayers would shoulder the entire increase for physician payments. So the net effect of the AARP's pressure may be to make a rescue of physicians pay less likely.