Health care funding would account for more than half of the estimated $5.3 trillion in 10year government spending cuts proposed under the Housepassed budget resolution for fiscal year (FY) 2013. The House last week voted 228 to 191 to approve the budget resolution, H Con Res 112.
The budget proposal would eliminate the defense and domestic discretionary automatic spending reductions scheduled to take effect in January 2013 under the sequestration process put in place by the “Budget Control Act” (BCA).
But it would keep in place the approximately $6 billion in 10year Medicare cuts triggered by the law.
The resolution will serve as House Republicans’ tax and spending framework for the fiscal year beginning Oct. 1, as well as their statement of fiscal principles heading into the fall elections. The proposal is sure to cause a stir with the Democratic- controlled Senate, since it calls for limiting discretionary appropriations for FY 2013 below the BCA’s spending caps and sets different parameters for spending on defense and domestic programs. Senate Majority Leader Harry Reid, D-NV, plans to stick to the spending limits set in the debt-limit law.
The House budget proposal, drafted by Budget Committee Chairman Paul Ryan, R-WI, would replace the debt-limit law’s sequester with a combination of alternative savings. In addition to reducing discretionary spending by $19 billion below the BCA’s cap, the resolution directs six House committees, including the Ways and Means Committee, to cut $261 billion in mandatory spending over 10 years through budget reconciliation.
The budget cannot specify how the committees meet those instructions, but a summary of the plan suggests that they could come from changes to federal workers’ pensions, repealing “recent expansions of the federal role in financial services,” health care changes, means-testing entitlement programs, and changes in medical liability laws. Ways and Means would be expected to look at Medicare provider cuts as one option to meet its target of $53 billion in savings over 10 years.
Reshaping Medicare. Starting in 2023, Medicare would transition to a premium support program, with workers currently under age 55 choosing between private plans and a traditional fee-for-service option through a newly created Medicare Exchange. An annual competitive bidding process would determine the amount of the federal contribution, with the per capita cost of the program capped at Gross Domestic Product growth plus 0.5%.
Among other proposals, the budget plan would rescind the individual subsidies and Medicaid expansions included in the “Patient Protection and Affordable Care Act,” while keeping the $500 billion in Medicare cuts included in the law; increase the Medicare retirement age by two months per year until it reaches 67; combine Medicare Parts A and B and increase means testing for Parts B and D. The budget also would convert Medicaid into a block grant program, reducing federal Medicaid spending by $5 billion in FY 2013 and $810 billion over 10 years.
For more on the budget proposal, AHA members can access the March 20 AHA Special Bulletin by going to “Advocacy Issues atwww.aha.org and clicking on “Special Bulletins” under “Tools & Resources.”