Medicare, Medicaid and the 'Fiscal Cliff': Cuts Inevitable

When Congress and the president resume work, expect Medicare and Medicaid to be on the chopping block once again as the federal government faces a so-called “fiscal cliff” at the end of this year.

The Huffington Post’s Ryan Grim and Sarah Bufkin have put together a fairly complete summary (“Fiscal Cliff Talks Will Likely Target Medicare, Social Security, Programs For The Poor“) of where the executive and legislative branches of our federal government currently stand and where they likely will go as the nation faces record deficits.

“Under the Budget Control Act of 2011, the law setting up the fiscal cliff, Congress placed caps on the federal government’s discretionary spending starting in 2012 and running through 2021,” the authors write. “According to the Center for Budget and Policy Priorities, those caps will force the U.S. to cut its nondefense discretionary spending by $900 billion over the next decade.”

For healthcare providers, look to Medicare and Medicaid to take the brunt of the cuts that will be coming. “Given how much Congress has already cut from discretionary spending, Medicare’s eligibility age, means-testing and higher premiums are all likely to be discussed when budget negotiations resume,” the authors write.

When the president and Congress last attempted to tackle Medicare in 2011, “the White House did give some indication that it would be willing to broker a compromise on Medicare,” the authors write. “During his talks with House Speaker John Boehner (R-Ohio), Obama allowed that he could be open to raising the eligibility age to 67 and to increasing premiums for those seniors in the highest income brackets.”

That age increase, however, would not kick in for a decade; the Democrats in exchange wanted tax increases that would begin the year after the election. As a result, no deal was struck.

“To make a real impact on the deficit … more than anything, lawmakers will likely target Social Security, Medicare, Medicaid and a host of other social programs that help those with the fewest advocates in Washington, including people on food stamps, veterans, retiring federal workers, home health care workers and the elderly,” the authors conclude.