The failure of the Joint Select Committee on Deficit Reduction — also known as the congressional supercommittee — to agree on a debt reduction strategy could have long-term effects on healthcare programs in the United States.
The committee, created over the summer under the authority of the Budget Control Act, was supposed to agree on budget cuts of at least $1.2 trillion by Wednesday. It announced Monday it could not come to an agreement.
Under the terms of the Budget Control Act, the failure means $1.2 trillion in automatic cuts will begin in January 2013. The bulk of these cuts will affect defense spending and Medicare, which faces a 2% reduction in provider payments between 2013 and 2021. Coverage levels for Medicare beneficiaries will not be affected.
However, Rich Umbdenstock, president and CEO of the American Hospital Association, said the cuts “will have an impact not just on the elderly and disabled beneficiaries of the program, but on their families. It will also have an impact on the ability of hospitals to provide essential public services to the communities they serve, given the impact that Medicare has on the entire healthcare system.”
Medicaid is not slated to face any cuts under the automatic triggers. But Congress must decide which discretionary programs will be cut, along with Medicare provider payments and defense spending. For example, portions of federal funding and, in turn, staffing levels for biomedical research at the National Institutes of Health and prevention of food-borne illnesses and infectious diseases at the Centers for Disease Control and Prevention could be at risk.
Another issue is the prospect of a 27% payment cut from Medicare to physicians scheduled to kick in at the beginning of next year. An agreement by the supercommittee might have budgeted money to negate the provision, but now a divided Congress must act to stop it from taking effect.
Peter W. Carmel, MD, president of the American Medical Association, said “the AMA is deeply concerned that continued instability in the Medicare program, including the looming 27% cut scheduled for Jan. 1, will force many physicians to limit the number of Medicare and TRICARE patients they can care for in their practices.”
Members of Congress have spoken about enacting legislation to modify the automatic cuts in the event of failure by the supercommittee. However, most of the talk has been about softening reductions to defense spending, meaning healthcare programs could be even more adversely affected.