Narrowing target for cuts
Providers seem likely to get caught in cross hairs
The congressional panel looking to enact long-term deficit reductions appears increasingly likely to target Medicaid providers in a final proposal expected within the next two weeks. Preliminary proposals from members of the deficit reduction supercommittee and recent discussions with members of Congress have left provider and Medicaid advocates more concerned about Medicaid cuts than at any point since the panel began meeting two months ago.
“We’ve gotten much more concerned about the cuts over the last week,” Dr. Bruce Siegel, CEO of the National Association of Public Hospitals and Health Systems, said in an interview. “Some politicians think that they can cut Medicaid and get away with it, politically” (See related story, p. 14).
Those growing concerns stemmed from leaked details of competing Republican and Democratic proposals by members of the Joint Select Committee on Deficit Reduction, which is charged with identifying at least $1.2 trillion in 10-year deficit reductions by Nov. 23.
Both proposals would undertake Medicaid and Medicare cuts, but Republicans have placed a particular emphasis on Medicaid cuts. The Democratic plan would derive about $400 billion in savings from Medicare, according to congressional sources, with the savings roughly split between providers and beneficiaries. Also, the plan’s Medicaid cuts would range from $50 billion to $100 billion and would come mostly through reductions to states. The GOP plan is more aggressive in cutting both programs, according to congressional sources, with about $500 billion coming from Medicare and $185 billion from Medicaid.
The exact form Medicaid cuts would take under the proposals was not specified by con- gressional sources, but several common options have emerged in recent leading deficit reduction proposals, including a blended federal medical assistance percentages rate, and limiting state use of provider taxes.
A proposed federal match to state Medicaid and Children’s Health Insurance Program spending would aim to standardize the matching rate that now varies by state. Several deficitreduction proposals have included such a measure, including President Barack Obama’s recommendations to the supercommittee in September that would result in some states receiving a total of $14.9 billion less over 10 years.
The bipartisan agreement to cut both programs appeared to extend outside the 12-member deficit panel. Although not all Democrats on the panel supported the $3 trillion Democratic deficit reduction plan, House Minority Leader Nancy Pelosi withheld judgment last week on it while stressing that there were “no sacred cows” immune from cuts in the budget.
But Republicans are apparently readying a push for the inclusion of even larger savings from Medicaid.
House Speaker John Boehner (R-ohio) said at a news conference that because the federal healthcare entitlement programs and