How health reform can help cut the federal deficit

The Patient Protection and Affordable Care Act can cut the federal deficit over the next 75 years, but only if its cost-containment measures are sustained, the General Accountability Office says.

The reform law counts on reducing Medicare and Medicaid payments to hospitals serving a disproportionate share of low-income patients, as well as to Medicare Advantage organizations, according to the GAO report

Measures designed to slow future growth in healthcare spending include productivity adjustments--the reduction of payment updates for many Medicare services--and creation of a 15-member Independent Payment Advisory Board (IPAB) to recommend ways to reduce costs, GAO notes.

The IPAB is controversial because Republicans believe authority to cut Medicare payments should lie with Congress, The Hill's Healthwatch reported. A bipartisan bill backed by the American Medical Association was introduced earlier this year to repeal the IPAB, dubbed the "Death Panel" in the early days of healthcare reform debate.

Significant uncertainties about the law's effect on healthcare spending include advances in medical technology, future policy decisions and the cost and availability of health insurance, according to the GAO report.

If the law is enforced as is, the Affordable Care Act will be responsible for 1.2 percent of an assumed 1.5 percent decline in the federal deficit as a share of the U.S. economy over the next 75 years, The Hill noted. But if the cost-containment measures are phased out, the deficit increases by 0.7 percent of gross domestic product.

To learn more:
-download the report
-read report highlights
-here's the Hill's Healthwatch blog post