Medicare, Medicaid Advocates Cast Wary Eye On Budget Deal
Medicare and Medicaid have so far dodged the budget knives wielded by the GOP. But those who depend on the programs know that their luck may soon be running out, thanks to the budget deal signed by President Obama on Tuesday.
"Choices have to be made by Nov. 23," says health industry consultant Robert Laszewski. "And we're going to see political blood on the floor like we have never seen before."
The problem for health care providers – and, potentially, patients – is that a "supercommittee" of 12 members of Congress; six from each chamber and each party; is charged with coming up with $1.5 trillion in deficit reduction in a very short period of time. "Medicare and Medicaid are just a huge part of the budget and you can't ignore the fact that the supercommittee is going to have to deal with health care costs. There's just no getting around it," Laszewski says.
Likely near the top of the list to get trimmed will be payments to doctors, hospitals and other health care providers. That includes those who already saw their Medicare reimbursements cut in last year's health law.
That's not sitting well with those health groups.
"Hospitals have repeatedly demonstrated a willingness to accept shared sacrifice and do what is best for our country, but our first commitment is to patients, whose access to care could be curtailed by further cuts to Medicare funding for hospital care," said Rich Umbdenstock, president and CEO of the American Hospital Association.
Doctors face an even bigger problem. They're already looking at a 29.5 percent pay cut next Jan. 1 unless Congress acts to change it.
"And our concern, of course is that this will affect access to care for senior citizens," said Cecil Wilson, immediate past president of the American Medical Association. "It will make the Medicare program not reliable and physicians will have to have to make really excruciating choices whether they can... still see the number of Medicare patients they have been seeing. "
But to fix the doctor pay problem will cost more than $300 billion. Industry consultant Laszewski says that just digs the hole deeper for the supercommittee working on the deficit issue.
"So you could almost take this $1.5 trillion requirement for the commission and add $350 billion to it. Because they're starting $350 billion in the hole."
And to find that additional money the committee may not just turn to health providers, but to program beneficiaries as well.
Beneficiaries and benefits are exempt from the cuts that would take effect if the supercommittee deadlocks and can't come up with a plan. Or if it comes up with a plan and Congress doesn't approve it. But the committee itself can do whatever it wants.
One thing Laszewski says is unlikely is raising Medicare's eligibility age. But that's only because the required savings have to come within the next 10 years, and that's too soon to make people so near retirement wait for their Medicare benefits.
On the other hand, he says he wouldn't be surprised to see wealthier beneficiaries asked to pay a little more, because "you can always tax rich people starting tomorrow."
Which, of course, is not sitting well with groups that represent Medicare beneficiaries.
"There aren't enough people in the categories that are talked about; wealthy people, to have much of an impact," says Max Ritchman of the National Committee to Preserve Social Security and Medicare. As a result, he says, new costs aimed at the wealthy would inevitably be passed on to the middle class as well.
Meanwhile, David Certner of the AARP says his group is concerned that the whole deficit debate has been too narrowly focused on just what the federal government pays for health care.
"Health care costs are a problem," Certner says. But "going after Medicare and Medicaid doesn't go after health care costs, at least not in the way (budget cutters are) going about it."
Certner says the main goal of budget cutters recently has been not to save money in health care, but to move it around.
"Most of the debate the last couple months has really been about cost shifting, whether it was to the states, to employers, and, particularly from our perspective, to beneficiaries," he says.
Meanwhile, Laszewski warns that the political atmosphere is one the likes of which he has never been seen before.
While Congress has certainly cut spending to Medicare and Medicaid in the past, provider groups have always been effective in staving off draconian cuts, usually with high effective lobbying.
But Laszewski says this time could be different. There's only going to be 12 members of the supercommittee, and the budget deal has them on a pretty tight leash.