Medicare, Medicaid could be cut with debt agreement

The Senate today voted 74-26, following yesterday's House 269-161 vote, to pass legislation that will raise the debt ceiling by $2 trillion during the next decade, according to a CBS News article and Associated Press (AP) article. Although President Obama stressed that spending cuts will not affect Medicare beneficiaries, according to the White House blog, professional healthcare organizations, including the American Hospital Association (AHA), are fearful the debt limit agreement means capped expenditures for seniors, as well as reimbursement cuts to providers.

The federal government now must borrow about 40 cents for every dollar it spends, according to an AP Q&A. Adding to the current U.S. bill of $14.3 trillion, the debt ceiling will initially grow by $900 billion, followed by cuts of $917 billion over 10 years, in which Medicare and Medicaid will not be affected, reports AHA News Now.

The second part of the agreement will further cut spending and raise the debt ceiling by an additional $1.2 to $1.5 trillion, based on the recommendations of a bipartisan committee that could consider program reductions, including Medicare and Medicaid, according to the article.

"America's hospitals find it difficult to support a debt ceiling proposal that could negatively affect Medicare for our nation's seniors," said AHA President and CEO Rich Umbdenstock in a press release yesterday. "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."

Although AHA stated that Medicare provider payments could face cuts of up to 2 percent over nine years, the Administration explained that the committee is not only targeting cuts, but more specifically aiming to reduce the national deficit.

"The Budget legislation specifically calls for deficit reduction--not simply spending cuts--and does not anywhere require the Committee to work off a current law baseline," said Gene Sperling, director of the National Economic Council and assistant to the President for economic policy on the White House blog. "The bottom line is that the Joint Committee can reduce the deficit through tax reform and eliminating tax expenditures just like it can cut spending. What it ultimately does is up to the members of that Committee," he continued.

For more information:
- read the CBS article
- visit the White House blog about Obama's speech
- read the AP article
- read the AP Q&A
- read the AHA News Now article
- see the AHA press release
- here's the White House blog post
- here's the full House legislation (.pdf)