With the Debt Ceiling issue made into law last week there has been a lot of talk about what may happen with Medicare and Medicaid. These programs make up roughly 23% of the federal spending per year and the overall costs have been increasing at an extraordinary pace with no reversal of this trend on the horizon.
These increasing costs, unfortunately, have placed a very big bulls-eye on the backs of these two programs but, as of right now with the new law and the first rounds of cuts coming in the form of $917 billion that is to be reduced over the next 10 years they will not be affected.
This is great news for now but by November 23, 2011 it can all be changed.
Yes, in less than 3.5 months the super committee that has been assembled to make suggestions on what should happen next with the Budget has been asked to find at least an additional $1.2 trillion in reductions over 10 years. This super committee can look at anything in the Budget and propose cuts to anything it deems necessary, like Medicare & Medicaid – it can also advise that taxes need to be raised too.
And for even some more bad news, if Congress can’t agree on a new Debt Deal by November 23, 2011 this new law has triggers that will automatically cut $1.2 trillion across the board starting in 2013. These cuts will include a 2% reduction in Medicare payments to hospitals & other types of services.
Will this super committee get the job done or will politics get in the way?
The answer to this question may just be the devil in the details. The big difference between this super committee and the ones in the past is that even if this committee does nothing, if Congress allows bickering to get in the way and if November 23rd comes & goes with nothing passed the Budget will be cut automatically and done completely out of the control of Congress.
So, as of right now there is good news for Medicare & Medicaid, but, and there is always a but, it doesn’t look great in the very near future for both programs.
Even a 2% rate reduction to payments to hospitals will affect most Seniors. According to Rich Umbdenstock, the president and chief executive of the American Hospital Association “cutting hospitals will mean decreased access for seniors, that’s why the total Medicare program – including caregivers – should be exempt from cuts that could overload emergency rooms, shut trauma units and reduce patient access to the latest treatments”.
May Congress heed his advice and put this to rest once and for all