Topics this week:
- 'Fiscal Cliff’ Negotiations and Potential Impacts on Medicare
- Obama Administration Releases New Rules for Health Insurers and Employers
- State Health Exchanges Receive Extended Deadline
- Health Policy 101: AAMC Message on Preserving Graduate Medical Education and Medicare Payments
1. ’Fiscal Cliff’ Negotiations and Potential Impacts on Medicare
Discussions continue to take place in the nation’s capitol over the looming “fiscal cliff” debate in which Congress and the President need to reach consensus on a budget agreement that will correspond with the timeline set by the Budget Control Act of 2011. Unless an agreement is reached, significant budgetary measures such as tax increases and spending cuts will go into effect in January that could have serious consequences for the nation’s economy.
Several news sources reported earlier in the month that both parties are optimistic about reaching a deal that will achieve debt reduction, stabilize the economy and set up a process for long-term savings. After a meeting with House Speaker John Boehner, Obama stated that "It was a constructive meeting. And everyone agreed that while we may have our differences, we need to come together, find solutions and take action as soon as possible,”
Details are still in the works, but it is likely that negotiations could include expiration of tax breaks for top income earners, tax increases on other provisions and also potential spending cuts to entitlement programs such as Medicare. Reports suggest that the recent election has given Democrats increased resolve against cuts to these benefit programs. Meanwhile, major advocacy organizations are trying to stake their claims in the negotiations in order to protect their constituencies, such as AARP interest in protecting access to Medicare for older Americans.
If a deal is not reached, then the measures set out by the Budget Control Act of 2011 will go into effect, the results of which are given greater attention in the AAMC Action Alert featured later in the update.
The specific components of the “fiscal cliff” are itemized below with estimates their revenue/impact included next to them.
i. Expiration of Bush Tax Cuts ($325 billion over two years)
ii. Sequestration ($1.2 trillion in deficit reduction over ten years)
iii. Payroll Tax Cut Expiration (increase in Social Security tax rate to 6.2%)
iv. Changes to Alternative Minimum Tax (an additional ~24 million Americans required to pay the AMT)
v. Expiration of provisions that delay the Medicare Sustainable Growth Rate (payments for physician services drop by 27%)
vi. New taxes beginning related to the ACA (Medicare surtax on high-income households)
vii. Expiration of unemployment benefits (unemployment benefits reduced to 26 weeks from 99 weeks, affecting ~2 million claimants)
2. Obama Administration Releases New Rules for Health Insurers and Employers
Last week, the U.S. Department of Health and Human Services released key details on the rules overseeing how insurers can set up health insurance policies for Americans as part of the new health care law. The rules were long-awaited as they would determine what the protections would for access to insurance, the essential benefits offered by those insurance policies, and the rates of premiums Americans would be expected to pay based on certain factors.
Of note, there are protections that remain, such as the “requirement that insurers accept all applicants, even those with health conditions, and not charge higher rates based on health, gender or occupation,” while additional provisions allow for changes that state that “premiums can vary based on age and tobacco use, including allowing tobacco users who enroll in programs aimed at helping them quit to be exempted from extra premium costs set out in the law.”
The rule announcement received support from major consumer interest groups such as AARP and the American Cancer Society, while also drawing concerns from other consumer advocates who worry that the regulations do not go far enough in their protections offered to Americans as well as insurers and business groups who feel that the rules go too far in restricting the variability of insurance plans and premium rates that are able to be offered.
Sources:
http://www.kaiserhealthnews.org/Stories/2012/November/20/administration-releases-new-rules-for-health-law.aspx
http://www.latimes.com/health/la-na-healthcare-regulations-20121121,0,166862.story
3. State Health Exchanges Receive Extended Deadline
The states who have yet to provide information on how they will plan to set up the health insurance marketplaces, known as exchanges, will now have until December 14th of this year to decide if they will manage the creation of their own exchange. So far, only 17 states have committed to creating their own exchanges, which could mean that more states will rely on the federal government to oversee the organization and development of these exchanges. Still, time will tell on the decisions of these states, many of which were waiting until the outcome of the recent election (and the future of the Affordable Care Act was more certain) to move forward with plans.
To find out where your state lies in the map of states who are setting up exchanges themselves, partnering with the federal government, or are still waiting to make a decision, check out this feature in Kaiser Health News.
Source:
http://www.kaiserhealthnews.org/Stories/2012/November/15/deadline-extended.aspx
4. AAMC Action Alert on Preserving Graduate Medical Education and Medicare Payments
As mentioned earlier in the update, there is legitimate concern over the ramifications of the results of budget sequestration as a part of the Budget Control Act. The nation’s health care providers and training hospitals rely on funding through the Medicare program to finance key programs that prepare the next generation of the country’s physicians. Cuts to these programs threaten the work of these important institutions. The AAMC has compiled and disseminated an action alert message for constituents to contact their Senators and Representatives on this important issue. See an excerpt from the letter below:
“Sequestration threatens Medicare hospital and physician payments at a time when Medicare already fails to cover the cost of care. The 2 percent sequester of Medicare will cut provider payments by $10.7 billion. In addition, despite the 2 percent limitation on Medicare cuts for "individual payments for services furnished" under Parts A and B, sequestration will have a significant impact on Medicare's long-standing support for graduate medical education (GME) and will ultimately limit teaching hospitals and physicians ability to care for all patients and train the next generation of physicians. If we are to address the health challenges of an aging and increasingly diverse population, and remain a vibrant force in the global economy, America needs more investment in the health professions workforce, not less. I urge you to work on a solution that avoids sequestration -- and the devastating impact of across-the-board cuts -- on programs that benefit all Americans.”
If you agree with the messages in this action alert, let your Congressperson and Senator know and take action now by going to the AAMC Legislative Action Center here.
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
--------------------------------------------------------------------------------
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