THE SEQUESTER FESTER
Federal budget cuts triggered by the failure of the congressional “supercommittee” have state officials concerned.
Across-the-board cuts of about $1 trillion in domestic and social programs and Pentagon spending are supposed to take place in FY13, which begins Oct. 1 2012.
State budgets taking effect next year will overlap with the federal budget.
The Federal Budget Control Act that was activated by the supercommittee’s failure to cut spending or hike taxes will impose $1.2 trillion in cuts over 10 years in non-entitlement domestic programs. Among those cuts will be some payments to hospitals and other health care providers. (Source)
Under orders to cut the Pentagon budget by more than $450 billion over the next decade, Defense Secretary Leon E. Panetta is considering reductions in spending categories once thought sacrosanct, especially in medical and retirement benefits, as well as reductions in troop numbers and new weapons purchases.
In what he described as the most sensitive of the potential cuts facing an all-volunteer force, Mr. Panetta said the Pentagon was considering raising fees for the military’s health insurance program, TRICARE. Today, military retirees and families, who are guaranteed TRICARE for life, pay only $460 a year in fees — far below what they would pay if they worked for a private employer — although a modest increase for new enrollees began last month.
The White House and Pentagon have made clear that TRICARE fee increases would be phased in over a few years and would affect current retirees and troops serving today when they retire. (Source)
Read the specifics of the President’s plan to cut military health benefits.
The failure of the congressional “super committee” to reach a deal triggers a two 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.
HOSPITALS, DOCTORS HIT BY CUTS
As stipulated, automatic cuts are likely to hit hardest among hospitals, which are the biggest recipients of Medicare payments and account for nearly 50 percent of program spending.
Doctors suffer a double whammy from the collapse of the super committee. Physicians and clinics receive about 25 percent of Medicare spending.
Further, the breakdown in negotiations quashed hopes among doctors that the panel would eliminate an almost 30 percent cut in Medicare payments scheduled to go into effect in January under a 1997 balanced budget law.
A so-called permanent “doc fix” would have cost nearly $300 billion in lost savings, making it unlikely at a time of deficit reduction.
Analysts said the best healthcare providers can hope for is another short-term fix to stave off the payment reductions.
The automatic cuts would also reduce funding for insurers that participate in Medicare Advantage, a program segment that allows senior citizens to purchase private insurance.
(Source)
The sequester would also hamper the government’s ability to implement the Affordable Care Act by reducing the amount of money that’s needed to enact some programs.
Entitlement programs such as Medicaid and Social Security, however, would remain sheltered, as would funding for veterans programs, income tax credits and food stamps. Funding for these safety net programs is considered mandatory and would not be affected by the sequester. (Source)
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