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Medicare, Medicaid Advocates Cast Wary Eye On Budget Deal

Medicare and Medicaid have so far dodged the budget knives wielded by the GOP. But those who depend on the programs know that their luck may soon be running out, thanks to the budget deal signed by President Obama on Tuesday.

"Choices have to be made by Nov. 23," says health industry consultant Robert Laszewski. "And we're going to see political blood on the floor like we have never seen before."

The problem for health care providers – and, potentially, patients – is that a "supercommittee" of 12 members of Congress; six from each chamber and each party; is charged with coming up with $1.5 trillion in deficit reduction in a very short period of time. "Medicare and Medicaid are just a huge part of the budget and you can't ignore the fact that the supercommittee is going to have to deal with health care costs. There's just no getting around it," Laszewski says.

Likely near the top of the list to get trimmed will be payments to doctors, hospitals and other health care providers. That includes those who already saw their Medicare reimbursements cut in last year's health law.

That's not sitting well with those health groups.

"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," said Rich Umbdenstock, president and CEO of the American Hospital Association.

Doctors face an even bigger problem. They're already looking at a 29.5 percent pay cut next Jan. 1 unless Congress acts to change it.

"And our concern, of course is that this will affect access to care for senior citizens," said Cecil Wilson, immediate past president of the American Medical Association. "It will make the Medicare program not reliable and physicians will have to have to make really excruciating choices whether they can... still see the number of Medicare patients they have been seeing. "

But to fix the doctor pay problem will cost more than $300 billion. Industry consultant Laszewski says that just digs the hole deeper for the supercommittee working on the deficit issue.

"So you could almost take this $1.5 trillion requirement for the commission and add $350 billion to it. Because they're starting $350 billion in the hole."

And to find that additional money the committee may not just turn to health providers, but to program beneficiaries as well.

Beneficiaries and benefits are exempt from the cuts that would take effect if the supercommittee deadlocks and can't come up with a plan. Or if it comes up with a plan and Congress doesn't approve it. But the committee itself can do whatever it wants.

One thing Laszewski says is unlikely is raising Medicare's eligibility age. But that's only because the required savings have to come within the next 10 years, and that's too soon to make people so near retirement wait for their Medicare benefits.

On the other hand, he says he wouldn't be surprised to see wealthier beneficiaries asked to pay a little more, because "you can always tax rich people starting tomorrow."

Which, of course, is not sitting well with groups that represent Medicare beneficiaries.

"There aren't enough people in the categories that are talked about; wealthy people, to have much of an impact," says Max Ritchman of the National Committee to Preserve Social Security and Medicare. As a result, he says, new costs aimed at the wealthy would inevitably be passed on to the middle class as well.

Meanwhile, David Certner of the AARP says his group is concerned that the whole deficit debate has been too narrowly focused on just what the federal government pays for health care.

"Health care costs are a problem," Certner says. But "going after Medicare and Medicaid doesn't go after health care costs, at least not in the way (budget cutters are) going about it."

Certner says the main goal of budget cutters recently has been not to save money in health care, but to move it around.

"Most of the debate the last couple months has really been about cost shifting, whether it was to the states, to employers, and, particularly from our perspective, to beneficiaries," he says.

Meanwhile, Laszewski warns that the political atmosphere is one the likes of which he has never been seen before.

While Congress has certainly cut spending to Medicare and Medicaid in the past, provider groups have always been effective in staving off draconian cuts, usually with high effective lobbying.

But Laszewski says this time could be different. There's only going to be 12 members of the supercommittee, and the budget deal has them on a pretty tight leash.

Copyright 2014 NPR. To see more, visit http://www.npr.org/.

Transcript

MELISSA BLOCK, host: Medicare and Medicaid largely escaped the axe in the deal's first round of cuts. But as NPR's Julie Rovner reports, people who depend on those programs worry that they're still in the crosshairs.

JULIE ROVNER: The new date for health care watchers is November 23rd. That's when the so-called Super Committee of 12 House members and senators will have to come up with an additional $1.5 trillion in deficit reduction. Health industry consultant Bob Laszewski says there's no way health programs will be left out of that package.

BOB LASZEWSKI: Medicare and Medicaid are just a huge part of the budget. And you can't ignore the fact that we've - that the Super Committee is going to have to deal with health care costs. There's just no getting around it.

ROVNER: Likely near the top of the list to get trimmed will be payments to doctors, hospitals and other health care providers. That includes those who already saw their Medicare reimbursement cut in last year's health law.

They're suddenly going to find that they're going to have to give again, and they're going to have to give big.

That's not sitting well with those health groups. Rich Umbdenstock heads the American Hospital Association.

RICH UMBDENSTOCK: These are already programs that underpay hospitals by about 90 cents or less on each dollar, and so additional cuts are just untenable at this time.

ROVNER: Doctors face an even bigger problem. They're already looking at a 29.5 percent pay cut next January 1st unless Congress acts to change it. Cecil Wilson is the immediate past president of the American Medical Association.

Dr. CECIL WILSON: And our concern, of course, is that this will affect access to care for senior citizens. It will make the Medicare program not reliable, and physicians will have to have to make really excruciating choices of whether they can still see the number of Medicare patients they have been seeing.

ROVNER: But to fix the doctor pay problem will cost more than $300 billion. Health industry consultant Bob Laszewski says that just digs the hole deeper for the Super Committee working on the deficit issue.

LASZEWSKI: In order to salvage something here for the physicians, providers elsewhere are going to take some pretty big hits just to help prop up the doctors.

ROVNER: And it might not just be providers. Beneficiaries and benefits are exempt from the cuts that would take effect if the Super Committee can't come up with a plan. But the committee itself can do whatever it wants, and Laszewski says he wouldn't be surprised to see wealthier beneficiaries asked to pay a little more.

LASZEWSKI: Because you can always tax rich people starting tomorrow.

ROVNER: Which, of course, is not sitting well with groups that represent Medicare beneficiaries. Max Ritchman is with the National Committee to Preserve Social Security and Medicare.

MAX RITCHMAN: There aren't enough people in the categories that are talked about - wealthy people - to have much of an impact.

ROVNER: Meaning, he says, that any new cost to patients would inevitably be extended to those in the middle class as well. David Certner of the AARP, meanwhile, says his group is concerned that the whole deficit debate has been too narrowly focused on just what the federal government pays for health care.

DAVID CERTNER: Health care costs are a problem. Going after Medicare and Medicaid doesn't go after health care costs, at least not in the way they're going about it.

ROVNER: He says the main goal of budget cutters recently has been not to save money in health care but to move it around.

CERTNER: Most of the debate this, you know, the last couple months, has really been about cost shifting, whether it was to the states, to employers and, particularly from our perspective, to beneficiaries.

ROVNER: While Congress has certainly cut spending to Medicare and Medicaid before, provider groups have always been effective in staving off draconian cuts in the past. But Laszewski says this time could be different. There's only 12 members of the Super Committee, and the budget deal has them on a pretty tight leash. Julie Rovner, NPR News, Washington. Transcript provided by NPR, Copyright NPR.

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