Americans’ finances are under pressure. Groceries cost more. Gasoline and heating oil make up a big chunk of our monthly budgets. Home ownership is getting harder to achieve. And, inflation, while much improved from when it skyrocketed under President Biden’s watch, still affects every American.
Unfortunately, Medicare – the program that nearly 62 million seniors rely on – is ignoring this economic reality. And this has serious consequences for how (or even if) you receive care from your local doctor’s office.
Physicians who see Medicare patients are reimbursed under the Medicare Physician Fee Schedule (MPFS), which sets the prices doctors are reimbursed for office visits, procedures, and other services. No surprise, but Washington is getting it wrong: since 2001, Medicare reimbursement to physicians have dropped a precipitous 33%, even when adjusted for inflation and practice costs. In a similar time frame, the cost of running a private physician practice, essentially a small business, has increased by nearly 40%.
It doesn’t take an economist to see that math doesn’t work America’s small-town doctors.
To compensate for government price fixing, physicians are cutting back on seeing Medicare patients, clinics are at risk of closing, and doctors are considering moving or retiring. As a result, patients – especially those outside of big cities – are finding it harder to get care. If you’ve ever wondered why you had to drive over an hour or wait weeks to get an appointment, the broken Medicare payment system is why.
As the nation ages, so do our doctors. A significant number of physicians will reach retirement age within the next decade, if they haven’t already. Right now, there are not enough physicians to replace them, in part, because chronically low reimbursement makes it harder for young doctors to enter or remain in practice.
The Association of American Medical Colleges projects a national shortage of up to 86,000 physicians by 2036. It’s rural communities that will feel the squeeze the most, leaving millions with fewer options for preventative care. If we continue to kick the can down the road, patients will be forced into higher-cost hospital settings, further driving up healthcare spending. Meanwhile, the total number of Americans enrolled in the Medicare program is projected to increase to about 77 million in 2030, suggesting an upswing in demand for care just as the supply of physicians crashes.
While President Trump’s administration has rightly recognized this issue and provided physicians a long-overdue increase for 2026, the troubling reality is that without a long-term plan to fix this problem, our healthcare system will reach a breaking point.
It’s time for Washington to strengthen Medicare. No American family can simply ignore inflation without consequences, and neither can Medicare. A system that falls this far behind isn’t fiscally responsible; it's failing the very people it was meant to serve.
At a bare minimum, Medicare should automatically account for inflation when updating physician payments, just like every other part of the economy does. In addition, policymakers should take a closer look at policies that force reimbursement changes in one area of care to be offset by cuts in another.
Quietly and systematically, Medicare is fanning the flames of a national doctor shortage by cutting reimbursement every year and refusing to adjust for inflation. If policymakers turn a blind eye to this trend, we risk alienating voters and stoking critics’ calls for Medicare-for-All and flawed schemes for European-style socialized medicine.
With the midterms approaching, lawmakers need to demonstrate that they understand Americans’ frustration with unfilled promises and endless red tape. A good way to start? Enacting reforms that increase patients’ access to their local physicians.
Main Street doctors need long-term stability and predictability to keep their doors open and continue caring for their communities. That means fair treatment, payment updates that reflect real-world costs, and an end to policies that punish independent practices and push care into larger, more expensive systems.
It’s already complicated and difficult to navigate the Medicare system. Real Medicare reimbursement reform that helps patients and their physicians is how you earn trust at the ballot box.
