In MCM’s ongoing effort to keep our loyal readers apprised of things that will affect their businesses, it’s time to remind one and all that the Super-Committee’s budget cuts are due in less than three months.
Yep, in 83 days or so, six Republicans and six Democrats are supposed to come up with (at least) $1.2 trillion in cuts. If they don’t, automatic cuts will be triggered beginning in 2013, including a two percent cut in Medicare (and that’s assuming the pending SGR cuts hit on January 1…)
Couple of key points that bear mentioning;
1. the $1.2 trillion is spread over the next decade. Cuts could be back-loaded to minimize political fallout – and probably will be (if the group reaches agreement)
2. the automatic cuts take effect January 2013 – a lifetime away in political terms. Congress could do something else to prevent some of the automatic, or Group of Twelve cuts from occurring, modify the cuts, or pass a “fooled you, we were just kidding” law.
Back to the committee. As we’ve noted, it’s difficult to see how they can hit their target unless health care is addressed.
There’s no consensus on whether the twelve will manage to reach consensus or not. With an election year coming up, it’s hard to see how the GOP’s folks will agree to any kind of revenue increases, while Dems have been quite public about their intent to prevent cuts to entitlements. And if they don’t, as Steve Davis noted in an online piece on AISHealth, “Across-the-board reductions in Medicare payment could translate to more cost shifting by providers, which could lead to higher premiums charged by commercial plans and/or increased cost shifting onto employee-based coverage”.
That said, there’s some hope that statesmen-like traits will somehow take hold in the group and we’ll actually see them arrive at a grand bargain. If such a happy event occurs, expect to see:
– subsidies for Medicare Advantage programs cut
– a potential increase in eligibility age for Medicare recipients
– decrease in hospital reimbursement under Medicare
– means testing premiums for Medicare
You’ll note these are all focused on Medicare. Medicaid is unlikely to be cut dramatically – but then again, we just don’t know.
This all supposes the SGR cuts to physician reimbursement actually take effect on January 1 2012 – which is about as likely as our house getting power this week (no chance at all). If it doesn’t, there’s another $300 million or so in cuts that will have to be made.
What does this mean for you?
Watch carefully what happens with the Super Committee…It WILL affect you.
Sep
1
