Topics this week:
- “Fiscal Cliff” partially averted by American Taxpayer Relief Act of 2012
- Rep. John Boehner re-elected to Speaker of the House
- Hilary Clinton treated for blood clot
- Health Policy 101: Health Care Impacts of Fiscal Cliff deal
1. “Fiscal Cliff” partially averted by American Taxpayer Relief Act of 2012
On January 1, 2013 the Senate and House passed the American Taxpayer Relief Act of 2012 to ease the economic impact of the combined tax increases and spending cuts of the so-called “Fiscal Cliff”. The final deal came as a result of talks between Vice President Joe Biden and Senate Minority Leader Mitch McConnell. The deal was supported by Republican Speaker of the House John Boehner but was publically opposed by the next ranking House Republican, Eric Cantor and was not supported by a majority of House Republicans. President Obama signed the bill into law the following day on January 2, 2013. Key provisions in the bill are as follows:
- Taxes increased for the wealthy: Bush era tax cuts were made permanent for individuals with incomes below $400K and married couples with incomes below $450K. For all others, the top income tax rate increased from 35% to 39.6% and capital gains tax rate for this bracket increased from 15% to 20%. Estate (death) taxes also increased from 35% to 40% for the value of inheritances over $5.25M. A phase out of some tax deductions for individuals making over $250K and couples making over $300K was also included.
- Tax relief for middle class: Middle class taxes will remain at 2012 levels. Additional middle class tax relief comes from a permanent indexing of the Alternative Minimum Tax (AMT) to inflation. This will stave off an average of $3,700 in additional taxes for 28 million middle class filers. However, all tax filers (including the middle class) will see some tax increases with the expiration of the two-year old payroll tax cuts, increasing the rate from 4.2% to 6.2%.
- Spending cuts delayed: Budget “sequestration”, the scheduled across the board spending cuts of the Budget Control Act of 2011, has been delayed for 2 months to allow more time for negotiations over entitlement reform at a cost of $24B. Federal unemployment benefits were extended for another year at a cost of $30B. Also, The Medicare “Doc Fix” was passed, as it has been every year since 2002, to delay the cumulative 26.5% cut in Medicare physician reimbursements due to the sustainable growth rate (SGR) (see Health Care 101 below for more details).
Sources:
http://www.nytimes.com/2013/01/02/us/politics/senate-tax-deal-fiscal-cliff.html
http://www.nytimes.com/2013/01/02/us/politics/house-takes-on-fiscal-cliff.html?pagewanted=1
http://www.businessweek.com/articles/2013-01-02/the-fiscal-cliff-deal-and-taxes-well-all-pay-more
2. Rep. John Boehner re-elected to Speaker of the House
The 113th Congress convened on Thursday, January 3rd and re-elected Rep. John Boehner to Speaker of the House. He received 220 out of 426 votes from the Republican controlled House. Only nine House Republicans voted against Boehner.
Going into the vote, the Speaker had been criticized by Republicans for his backing of the American Taxpayer Relief Act of 2012, which allowed the first income tax increases since 1993 without any significant reduction in federal spending. In addition, he has received criticism for postponing a vote on the $60.4B relief bill for Hurricane Sandy victims, most notably from New Jersey Governor Chris Christie who is a possible 2016 Republican presidential candidate.
Sources:
http://tv.msnbc.com/2013/01/03/boehner-re-elected-house-speaker-in-tense-vote/
http://www.nytimes.com/2013/01/03/opinion/dereliction-of-duty-hurricane-sandy-aid.html?_r=0
3. Hilary Clinton treated for blood clot
Secretary of State, Hillary Clinton, was discharged from New York Presbyterian Hospital on Wednesday (1/2) after spending three days being treated for a blood clot that was found in her head. She was diagnosed with a right transverse sinus venous thrombosis, a clot in the vein that is situated in the space between the brain and the skull behind the right ear. It did not result in a stroke, or neurological damage. She is being treated conservatively with blood thinners and is expected to make a full recovery.
Clinton recently had a concussion as a result of a fall, and doctors initially thought she might have had a subdural hematoma, a condition that can be caused by minor head trauma. However, her type of clot is much more rare and combined with her history of prior clot, a DVT in 1998, suggests the possibility of a genetic cause such as an inherited thrombophilia. Other risk factors for blood clots include age, recent travel, malignancy, estrogen replacement and/or hormonal imbalances.
Clinton has announced that she will resign as Secretary of State this year, and is thought to be a possible democratic candidate for the 2016 presidential campaign. Earlier last month, embattled U.N. Ambassador Susan E. Rice withdrew her name from consideration to succeed Secretary Clinton after months of criticism over her comments about the terrorist attack that killed four Americans in Benghazi, Libya, in September. On December 21, 2012, President Obama nominated Senator John Kerry of Massachusetts to be the next Secretary of State.
Sources:
http://bostonherald.com/news_opinion/local_coverage/2012/12/docs_wary_hillary_clinton’s_health
http://www.cnn.com/2013/01/02/health/hillary-clinton-blood-clot-future/index.html
http://www.washingtontimes.com/news/2012/dec/13/susan-rice-withdraws-consideration-secretary-state/?page=all
http://articles.washingtonpost.com/2012-12-21/world/36017846_1_obama-nominates-john-kerry-republican-senator-chuck-hagel-president-obama\
4. Health Policy 101: Health Care Impacts of Fiscal Cliff deal
The recently passed American Taxpayer Relief Act of 2012, or “Fiscal Cliff Deal”, contains a $30B “Doc Fix” to prevent a 26.5% decrease in Medicare reimbursement rates to physicians. However, much of this $30B will be funded through cuts made to other parts of the health care system. Key items include:
- Medicare can recoup money for previous payments to health providers now considered “overpayments” – A transition to a new coding standard will enable Medicare to recoup past overpayments to health providers. Also, by increasing the statute of limitations from three to five years for recoveries, Medicare can go back as far as 2007 (vs. 2009) to recoup previous overpayments. ($11B savings)
- Medicare will decrease reimbursement amounts for treatments and therapies related to End Stage Renal Disease (ESRD) – The General Accountability Office issued a study previously suggesting Medicare is overpaying for dialysis and other treatments for ESRD. The fiscal cliff bill includes measures to lower pricing for bundled payments related to ESRD. Additionally, rates for non-emergency ambulance transport for ESRD patients will be decreased by 10%. ($5.2B savings)
- Medicaid will pay less to hospitals who treat indigent patients who cannot pay their hospital bills – Disproportionate Share Hospital (DSH) payments will be rebased, which will decrease the amount reimbursed to hospitals for indigent care. ($4.2B savings)
Groups representing hospitals said the new plans for reductions will hurt their ability to care for patients. Chip Kahn, president and CEO of the Federation of American Hospitals, also expressed dismay that hospitals funded much of the “doc fix”. “It is not in the best interest of patients or those who care for them to rob hospital Peter to pay for fiscal cliff Paul,” he said. Several of the measures target patients with End-Stage-Renal disease, specifically. Activists have criticized these measures as disproportionately affecting minorities, who represent a large share of patients who have chronic kidney disease.
Sources:
http://capsules.kaiserhealthnews.org/index.php/2013/01/doc-fix-in-senate-fiscal-cliff-plan-cuts-medicare-hospital-payments/
http://washingtonexaminer.com/fiscal-cliff-deal-by-the-numbers/article/2517271#.UOb0VEKMIsc
http://www.politifact.com/ohio/statements/2013/jan/04/marcia-fudge/marcia-fudge-claims-fiscal-cliff-deal-included-cut/
http://www.forbes.com/sites/aroy/2011/02/23/sebelius-class-act-is-totally-unsustainable-mandate-possible/
Your loyal Legislative Affairs team,
Brad Hunter – Northeast Region
Robert Sanchez – Central Region
Sean Vanlandingham – Southern Region
Claire Sadler – Western Region
Alexandra Printz – National Delegate
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To access previous updates see our blog at:
https://www.aamc.org/members/osr/communications/legislative_affairs/
For more Health Care Policy news go to:
https://www.aamc.org/members/osr/communications/legislative_affairs/49198/legislative_affairs_resources.html