White House, Congress Reach Budget Deal With Health Care Changes

On Monday, the Obama administration and congressional leaders reached an $80 billion, two-year budget agreement that includes major health care provisions, the Associated Press reports (Taylor, Associated Press, 10/27).

Budget Deal Details

The bipartisan budget deal would increase current spending limits for domestic agencies by $50 billion during the first year and $30 billion during the second year. An extra $32 billion in spending would come from an overseas contingency account, bringing the total budget agreement to $112 billion (Mascaro, Tribune Washington Bureau/Sacramento Bee, 10/27).

The agreement, which would apply to fiscal years 2016 and 2017, also would suspend the country's $18.1 trillion debt limit through March 2017. According to the Chicago Tribune/Los Angeles Times, the U.S. could risk its first-ever debt default if the federal borrowing limit is not raised by Nov. 3.

Further, the deal also would avert the possibility of a government shutdown until sometime in 2017 (Chicago Tribune/Los Angeles Times, 10/26). The House and Senate Appropriations committees need to produce an omnibus spending bill by Dec. 11 in order to avoid a government shutdown (Associated Press, 10/27).

Health Care Provisions

According to the Washington Post, the budget deal would prevent a premium increase for Medicare beneficiaries from taking effect (Snell, Washington Post, 10/27).

In July, Medicare actuaries predicted that monthly premiums would increase to about $159 for such beneficiaries, up from about $105. In addition, the actuaries predicted that deductibles for Medicare plans on average would increase to about $223 in 2016, up from $147 this year.

The projected premium increases could affect roughly 30% of the 51 million U.S. residents enrolled in Medicare Part B (California Healthline, 10/15).

The deal also would eliminate an Affordable Care Act mandate that requires large companies to automatically enroll employees in health plans unless the workers opt out of the coverage (Tribune Washington Bureau/Sacramento Bee, 10/27).

Spending Offsets Would Affect Medicare

According to the Post, the budget deal's spending increases would be offset by changes to:

• Medicare payments to physicians and other providers; and
• The Social Security disability insurance fund (Washington Post, 10/27).

The deal would:

• Cut certain Medicare payments for outpatient services provided by hospitals (Chicago Tribune/Los Angeles Times, 10/26); and
• Extend a two-percentage-point reduction in Medicare payments to physicians and hospitals through the end of a 10-year budget, which will fund an estimated $25.8 billion of the budget deal (Muchmore, Modern Healthcare, 10/27).

Next Steps

The House could consider the deal as early as Wednesday (Associated Press, 10/27). According to the TWB/Bee, the agreement will likely face opposition from both Republicans and Democrats (Tribune Washington Bureau/Sacramento Bee, 10/27).

Reaction

Some stakeholders applauded the deal. For example, Rep. Charlie Dent (R-Pa.) called the deal "a good start," adding, "The outline that was presented seems like a path forward" (Chicago Tribune/Los Angeles Times, 10/26).

However, others have expressed concerns about the deal.

Jim Dean, chair of Democracy for America, said, "The White House needs to know that any budget deal that cuts Social Security, Medicare or Medicaid benefits, or eligibility for those benefits, is unacceptable to the American people and roughly equivalent to declaring a holy war on struggling working families" (Tribune Washington Bureau/Sacramento Bee, 10/27).

Meanwhile, Rep. John Fleming (R-La.) said conservative lawmakers are "skeptical" of the deal "at this point" (Washington Post, 10/27).