Health care programs a clear target in deficit reduction efforts

Dec 6 2012

As negotiators debate proposals to trim entitlement programs such as Medicare and Medicaid, stakeholders ranging from public hospitals to physician groups lobby to protect their interests.

Kaiser Health News: How The 'Fiscal Cliff' Affects Health Care: Six Questions
The impending "fiscal cliff" is a package of automatic spending cuts and tax hikes set to kick in next month unless President Barack Obama and Capitol Hill agree on a way to stop them. … The president and congressional Democrats have said they will reduce spending on entitlements, including Medicare, if Republicans will agree to increase tax rates on the highest earners. While Republicans have agreed to more revenue, they oppose increasing tax rates, preferring to focus on closing loopholes and eliminating some deductions. Here are a few questions and answers about what could happen in the weeks before the end-of-year deadline (Carey, 12/4).

Modern Healthcare: Likely Healthcare Deficit Targets Come Into View
As federal lawmakers remain stuck in negotiations to avert the fiscal cliff, healthcare experts say they're hearing the Medicaid provider tax, evaluation and management services and graduate medical education are payment areas lawmakers could cut to achieve entitlement-program savings as part of a deficit-reduction deal. White House Communications Director Dan Pfeiffer said in a statement that a letter from House Republicans on Monday-;intended as a counteroffer to an administration proposal last week-;"includes nothing new and provides no details on which deductions they would eliminate, which loopholes they will close or which Medicare savings they would achieve" (Zigmond, 12/4).

CQ HealthBeat: Zandi Says Credible Cliff Deal Requires $600 Billion In Medicare, Medicaid Cuts
Economist Mark Zandi appeared to give the House Republican leadership's proposal for entitlement changes a boost Tuesday by saying that a deficit reduction plan that would get the economy back on track would generate $600 billion to $700 billion in Medicare and Medicaid savings over 10 years. The framework House Speaker John A. Boehner, R-Ohio, proposed Monday includes $600 billion in Medicare and Medicaid savings. Last year Democrats first said they are willing to find $500 billion and then said they would agree to $400 billion in savings from the programs, according to people familiar with the negotiations. In his initial fiscal cliff proposal, President Barack Obama called for health care program savings closer to $400 billion (Reichard, 12/4).

The Hill: Safety-Net Hospitals: Don't Cut Medicaid
A coalition of public hospitals has launched a new campaign against cuts to Medicaid that could come as part of a deficit-reduction deal. At ProtectMedicaid.org, the National Association of Public Hospitals and Health Systems (NAPH) argues the low-income health insurance program is essential for a healthy economy. "Medicaid ensures access to quality healthcare for more than 60 million people … all at a lower per-beneficiary cost than private insurance and Medicare," NAPH writes (Viebeck, 12/4).

The Hill: Hoyer: Entitlement Benefit Cuts On The Table In Talks With GOP On 'Fiscal Cliff'
Entitlement cuts should remain on the table as party leaders seek to hash out an end-of-the-year budget deal, Rep. Steny Hoyer (D-Md.) said Tuesday. A number of Democratic leaders -; including Reps. Nancy Pelosi (Calif.), John Larson (Conn.) and Xavier Becerra (Calif.) -; have said they would support some spending reductions in Medicare, but that cuts to direct benefits should not be a part of the negotiations. Along with Senate Majority Leader Harry Reid (D-Nev.), they also maintain that Social Security reform has no place at all in the "fiscal cliff" talks (Lillis, 12/4).

The Hill: Baucus: Don't Shift Health Costs To Seniors In 'Fiscal Cliff' Deal
A deal to avoid going over the "fiscal cliff" should include controlling healthcare spending but shouldn't shift costs to seniors, Sen. Max Baucus (D-Mont.) said Tuesday. Baucus acknowledged that rising healthcare costs are a burden on federal spending, and he said controlling those underlying costs is the way to tackle entitlements. "Shifting costs to seniors is not the solution," Baucus said. "We cannot break the promise of Medicare and Social Security." Baucus chairs the powerful Senate Finance Committee, which has jurisdiction over Medicare and other healthcare programs. He's also up for reelection in 2014, and has been angling for a key position in negotiating a deal to avoid the fiscal cliff of automatic spending cuts and tax increases set to hit next month (Baker, 12/4).

Roll Call: Health Care Professionals Descend On Washington
From now through the end of the year, lawmakers can look forward to hearing from physicians, family practitioners, nurses, home health workers and anyone else who provides care to patients. On Nov. 29, four hospital executives held a briefing in the Rayburn House Office Building, while members of the American Academy of Orthopaedic Surgeons visited Capitol Hill. More such events by a variety of medical professionals are planned in the coming weeks. The visits are part of separate, but equally intense, efforts by health care groups to protect their members from potential Medicare payment cuts, especially in the ongoing deficit-reduction negotiations (Ethridge, 12/4).

Politico Pro: Another Patch For 'Doc Fix' – If Fiscal Cliff Doesn't Interfere
The "doc fix" problem comes up almost every year, but this year the fiscal cliff talks could make a difference. The fiscal cliff negotiations could bog down even another temporary solution to the perennial Sustainable Growth Rate problem. But there's also a long-shot chance that the cliff talks provide an opening to finally get full repeal of the outdated SGR formula. Still, the most likely outcome, according to several industry and K Street sources, is another patch: $25 billion for a yearlong fix. Physician groups, including the American Medical Association, are urging lawmakers to include the first steps toward SGR repeal in any grand bargain framework that would be filled in next year, according to Capitol Hill sources and health care lobbyists (Haberkorn, 12/4).

NPR: The Perilous Politics Of The Health Insurance Tax Break
There's not much in health care that economists agree on. But one of the few things that bring them together is the idea that excluding the value of health insurance from federal taxes is nuts. "It just doesn't make sense," says Jonathan Gruber, an MIT health economist and author of Health Care Reform. "And it's important to emphasize in this world where economists seem to agree about nothing, this is something where there's just broad and universal agreement" (Rovner, 12/4).

Meanwhile, polls suggest the public supports protecting Medicare and other entitlement programs -

National Journal: Poll Shows Public Wants Entitlements Left Untouched
As Democrats and Republicans in Washington remain at odds over how to reshape the nation's finances and prevent it from falling over the fiscal cliff, the public is supportive of cutting spending and at the same time more protective than ever of entitlement programs such as Medicare. Traditional cleavages of class and race, age and income, and even region are apparent in the latest edition of the United Technologies/National Journal Congressional Connection Poll, but they are far more muted than on issues such as President Obama's reelection or the fate of his signature health care law. When it comes to the tax and spending issues that are at the heart of negotiations in Washington, primarily between the president and House Speaker John Boehner, the public is eager to defend the entitlement programs that both leaders have acknowledged need to be reined in if the nation's $16 billion debt is to stop growing, let alone shrink (Cooper, 12/4).