President Obama blamed GOP lawmakers at a press conference Friday after an eleventh hour meeting between the White House and congressional leaders failed to come up with a plan to avert sequestration. Republicans blame the president for persisting that tax hikes are part of the deal. Budget reduction ideas have been put forth and rejected by all sides.
Sequestration requires the government to make a two-percent across-the-board cut. Doctors, hospitals, insurers and other health care providers will be subject to the cuts starting April 1. Cuts to the Medicaid program are exempt.
The sequester going into effect requires the federal government to cut spending by $85 billion this fiscal year. The government is on track to spend $3.796 trillion in 2013. That equates the sequester with about 2.24% of the federal budget, and despite alternate claims from the left, sequestration still leaves the government with a higher spending level than in 2012, when spending reached $3.528 trillion.
If a deficit reduction deal is eventually negotiated, it could result in deeper cuts to Medicare. Providers would not escape untouched, and it could have a direct impact on beneficiaries. President Obama is open to increasing the Medicare Part B and D premiums paid by higher-income beneficiaries, while House Speaker John Boehner proposes raising the Medicare eligibility age.
Unless Congress passes an alternate deficit-reduction package, Medicare providers will consequently see $11.085 billion in reimbursement cuts in 2013, according to preliminary OMB estimates. The the Congressional Budget Office (CBO) estimates that Medicare budgetary reductions will total $123 billion from 2013 to 2021.
In a letter to Congress sent Sept. 12, 2012, the American Medical Association wrote, “The combination of the sequestration cut and looming Medicare Sustainable Growth Rate (SGR) payment cut would not only impede improvements to our health care system, it could lead to serious access to care issues for Medicare patients as well as employment reductions in medical practices.”