At the end of February, the federal government was set to cut payments to Medicare by 2.2 percent. Suddenly, on April 1, the whole situation was reversed: Not only were funds for Medicare not cut, they were increased by 3.3 percent. To Washington outsiders, it sounds like an April Fool's joke, but it wasn't.
Why the turnaround? There were two reasons to increase the amount, according to Jessica Stone, a policy analyst at the Committee for A Responsible Government, a non-partisan group dedicated to educating the public on fiscal issues. The first and main reason was that the 2.2 percent cut was based on flawed formula used to calculate the Medicare payout.
"Every year Congress ends up patching the sustainable growth rate, an antiquated rule, and Congress never lets those cuts go into place," Stone says. "Medicare Advantage providers were really happy about that."
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