Deficit Talks Continue to Focus on Health-Related Cuts

Lawmakers continue to struggle with how to handle the issue of potentially raising the federal debt ceiling and cutting overall federal spending. However, health-related cuts seem to be at the forefront of all potential discussions relative to reducing the federal budget deficit.

Changes to the Medicare and Medicaid reimbursement formulas for providers are at the top of the list for many as a means of potentially saving money. Providers who serve children in the Children’s Health Insurance Program (CHIP) may also see their reimbursement rates cut or blended with the Medicaid rate. Other options include reducing and gradually eliminating federal reimbursements to hospitals for “uncompensated care” provided to Medicare beneficiaries, or extending the Medicaid rebates drug makers get to the “dual eligible” population (people who receive both Medicare and Medicaid benefits). Finally, a popular target of cuts in conservative circles is the new Prevention and Public Health Fund created by the health care reform law. This program, which has yet to be implemented, would supply $15 billion in funding over the next 10 years to support preventive care programs. That’s a laudable goal, but also one many lawmakers are now concerned that we cannot afford.


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