Health spending still in jeopardy despite end of super committee

Nov 23 2011

Although Medicare and Medicaid were largely protected when the panel broke up, budget cutters will continue to eye them, and other health programs will likely have funding reduced.

Kaiser Health News: Health Programs Facing Cutbacks After Super Committee's Failure
The failure of the congressional super committee could mean automatic budget cuts totaling billions of dollars for everything from Medicare to biomedical research, starting in 2013. But some health care interests stand to fare better than others (Serafini and Carey, 11/21).

USA Today: Panel's Inability To Cut Debt Deal Reflects Divide
For now, the panel's inability to reach a deal leaves Congress with a range of unfinished budget items that could have been part of a larger bargain over federal taxes and spending. Social Security payroll tax cuts expire at the end of the year, meaning taxes could go up nearly $1,000 annually for someone who makes $50,000. More than 1 million unemployed workers could lose their jobless benefits beginning in January, when those benefits are scheduled to expire. Medicare reimbursement rates for doctors will be cut 27% unless Congress steps in by the end of the year, leaving many seniors without a doctor (Korte, 11/22).

Bloomberg: Deficit Panel's Failure Aims At Defense While Sparing Medicaid 
Cuts to Medicare, the federal insurance program for the elderly and disabled, are limited to a maximum of 2 percent for payments to hospitals, doctors and other health providers and to private health plans participating in the Medicare Advantage program. Medicare paid about $168 billion to hospitals in 2010, and about $116 billion to health plans, according to the program's trustees (Przybyla, 11/22).

Politico: The End Of The Road On Health Entitlements? Nope.
It would be easy to conclude that the supercommittee's failure means that the big, expensive health care entitlement programs -; Medicare and Medicaid -; are untouchable. It would also be wrong. The real lesson of the supercommittee's collapse is that the political elements have to line up just right to put the brakes on Medicare and Medicaid spending. It can be done, budget and health care analysts say (Nather, 11/22).

CQ HealthBeat: Lawmakers Still On The Hook To Make Medicare Cuts This Year
The announcement late Monday by the deficit reduction panel that it couldn't reach agreement on a legislative package to reduce deficit spending doesn't get lawmakers off the hook to make cuts this year to the popular Medicare program. While members of Congress may not have to worry about making Medicare cuts in 2012, they likely will have to decide by next month how to trim $25 billion, or considerably more, over 10 years, to offset the cost of must-pass legislation to avoid a 27.5 percent cut in payments to doctors scheduled for Jan. 1. And it's all but certain that most, if not all, of that $25 billion will come out of Medicare (Reichard, 11/21).

The Hill: As Health Lobby Looks Past Super Committee, 'Doc Fix' Trumps New Medicare Cuts
Healthcare lobbyists quickly pivoted Monday from the deficit-cutting super committee to looming cuts in Medicare payments to doctors. The congressional super committee's failure to reach an agreement on the federal deficit triggers a 2 percent across-the-board cut in Medicare payments. But those cuts don't take place until 2013, leaving plenty of time to search for an escape hatch. The more pressing concern in the immediate aftermath of the super committee announcement is a nearly 30 percent cut in doctors' payments that is set to kick in at the end of this year. The super committee's demise is a mixed bag for the American Medical Association and other groups that wanted the 12-member panel to tackle Medicare's payment formula (Baker, 11/21).

Medscape: Failure of Super Committee Blows Doc-Fix Opportunity
Organized medicine had lobbied the super committee to recommend repealing the SGR formula, which would cost some $300 billion if Congress merely froze Medicare rates for 10 years. Martin said the super committee had more leeway than lawmakers normally enjoy to juggle the federal budget to find $300 billion to offset this cost. In addition, any proposal emanating from the super committee could not be amended or filibustered, provided that it met its November 23 deadline (Lowes, 11/22).

Reuters: U.S. Healthcare Cuts Minimal, More Pain Looms
The breakdown of deficit talks in Congress will exact little pain on the U.S. healthcare industry, but it's a temporary reprieve from steeper cuts that could be put back on the table in 2013. The failure of the congressional "super committee" to reach a deal triggers a 2 percent across-the-board cut to Medicare, the government program that provides coverage to millions of older and disabled Americans. That translates into about $123 billion over the next decade -- far lighter than the $500 billion to $700 billion in cuts that could have hit hospitals, doctors and beneficiaries, as well as insurers, drugmakers and nursing homes, if the panel had reached a deal (Morgan, 11/21).