Fiscal Cliff: What Is At Stake for Medicare,
Medicaid as Budget Battles Get Underway?
Medicare and Medicaid are big targets as the Congress
and White House begin urgent task of preventing the government from
falling off the “Fiscal Cliff’
Nov. 15, 2012- The budget negotiations scenarios
that may include Medicare are discussed by Mary Agnes Carey of Kaiser
Health News in an interview by Jackie Judd. They also look at where the
“doc fix” (Medicare pay raise for doctors) fits into the budget picture
and whether Medicaid cuts are possible.
JACKIE JUDD: Good day, this is Health on the
Hill. I’m Jackie Judd. A year ago this month, negotiations on Capitol
Hill to reduce the federal deficit collapsed. A year later, have the
political dynamics shifted enough so that there is an opportunity for a
deal? And if so, how might that affect Medicare and Medicaid? Here to
sort through that question is Mary Agnes Carey, senior correspondent for
Kaiser Health News.
Mary Agnes, you’ve spent a lot of time this week
listening to what people were saying on Capitol Hill. Are you hearing
anything different? Is the tone different? Could there be a deal?
MARY AGNES CAREY: Everyone seems to be
talking about a “balanced approach.” We hear this from the president. We
hear it from Democrats. We hear it from Republicans. The president and
Democrats are saying to Republicans, “If you move on taxes, if you ask
some high-income individuals to pay more on taxes, we’ll move on
entitlements, on Medicare and Medicaid.”
People seem very, very open to
this idea of avoiding the fiscal cliff, of avoiding these automatic
spending cuts that are set to kick in in January. But the thing we have
to remember from watching Capitol Hill for a long time is that this is
where folks always are at the beginning of a negotiation.
JACKIE JUDD: And when it comes to Medicare,
is the struggle over, as it always seems to be, how to balance the pain
between the patient and the provider?
MARY AGNES CAREY: Right. That is definitely
the balance that’s in the works. If you ask beneficiaries to contribute
more, what do you ask the providers to do?
For example, some ideas that are out there, they’ve
been around for a while: Do you look at the fee-for-service Medicare
structure on co-payments and deductibles? Combine those into one
deductible, for example, but add a catastrophic cap, which doesn’t exist
in fee-for-service Medicare.
On providers: As we know, their payments will
continue to increase over the next ten years, but under the health care
law they’re going to do so at a slower rate. So do you go back to
providers, to hospitals, to the nursing homes, to home health care
agencies, and take more from them?
And how do you balance that pain to get an equal
JACKIE JUDD: At this point last year, the
president was suggesting that he could go along possibly with raising
the eligibility age. Is that something that his liberal base is
suggesting this year can be in play?
MARY AGNES CAREY: Chris Van Hollen, who is
in the House Democratic leadership, suggested, in fact, this week that
it should be in play. But there are others -- Chuck Schumer comes to
mind, a Democratic senator from New York. He had a forum at the Press
Club about a month ago, and he suggested that the eligibility age would
not be raised and that it was extremely unpopular. But again, it’s one
of those items – same thing happened in Social Security. If you
gradually raise it over a period of time, the thought is it doesn’t
happen right away, it doesn’t affect beneficiaries right away, but over
time you can save a lot of money.
JACKIE JUDD: The “doc fix.” That, separate
and apart from the fiscal cliff negotiations, comes up at about the end
of the year. Does it get folded into these discussions?
MARY AGNES CAREY: That’s what I think.
Because the political will, the momentum that it will take to get this
big package would mean you stick in everything you can. And that’s an
additional pressure point, because if Congress doesn’t step in,
physicians who accept Medicare reimbursement are going to be cut 27
percent in January.
Congress routinely steps in to fix it – I think it
will be folded into the bigger deal, if there is one.
JACKIE JUDD: And Medicaid: Less in the
crosshairs, it seems this time. But what’s possible there?
MARY AGNES CAREY: There are a lot of ideas
out there. For example, instead of the federal government picking up a
fixed percentage of a state cost, you would have something called a
Medicaid per-capita cap. Some people love this. Some people hate it.
Nonetheless, it’s on the table.
Congress could also step in and change a state’s
ability to assess provider taxes in Medicaid which affect their federal
share of money. And another idea that has been out there is something
called the blended rate. Instead of the federal government reimbursing
states at one rate for Medicaid or the Children’s Health Insurance
Program, you blend those.
But, again, the concern here from people who
represent Medicaid beneficiaries is: Will this simply mean less money
and cuts in services for those beneficiaries?
JACKIE JUDD: Congress, lawmakers go home
soon for Thanksgiving. Then they come back. If they want to get back
home before Christmas, it only gives them 3-4 weeks to make all of this
Have you heard any suggestion yet that this could
be pushed over to January, with the argument that the new Congress
should deal with these big issues?
MARY AGNES CAREY: That argument is certainly
out there, but also if you allow that to happen, if you allow the
Bush-era tax cuts to expire, if you don’t patch the alternative minimum
tax in the tax code, if you allow the doc fix to not be fixed and those
cuts to happen, that’s a lot of mess for the next Congress to clean up.
And while we’ll have some new members in January
and some members who are staying, it’s still divided government.
Democrats still control the White House and the Senate. Republicans
still control the House. So there’s some thought that if you can’t get
the big deal, you at least get a down payment with the details filled in
JACKIE JUDD: OK. Thank you, Mary Agnes Carey
of Kaiser Health News.
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