Deficit-Reduction Plan Starting to Take Shape, but Deal Still Elusive
Although Republicans and Democrats still face significant challenges in reaching a deal that would avert the looming mandated spending cuts under sequestration, senior aides familiar with the ongoing negotiations say the essential elements of an eventual deal are coming into focus, the Washington Post reports (Montgomery/Kane, Washington Post, 12/10).
According to Reuters, the most-discussed scenario involves Republicans conceding on tax increases for higher-income individuals in exchange for significant concessions by Democrats, which would help reduce the costs of federal entitlement programs, such as Medicare and Medicaid (Cowan, Reuters, 12/10).
According to the Post, a compromise could include raising the top tax rate to no greater than 39.6% or shifting the target population from those making $250,000 annually -- as President Obama has proposed -- to those earning more than $375,000 annually. Meanwhile, Democrats would agree to some "high-profile" cuts in entitlements, such as an increase in the Medicare eligibility age, according to the Post (Washington Post, 12/10).
However, the negotiations could stall before a deal is reached because lawmakers continue to clash over specific details related to Medicare and higher tax rates, the Wall Street Journal reports (Paletta/Lee, Wall Street Journal, 12/11).
Democrats have said the Republican proposal, which includes $600 billion in automatic tax increases and reductions to federal health care programs in 2013, offers no details about how those savings will be achieved (Washington Post, 12/10).
On Monday, one day after Obama and House Speaker John Boehner (R-Ohio) met privately to discuss the issues, Michael Steel -- a spokesperson for Boehner -- said Republicans "continue to wait for the president to identify the spending cuts he's willing to make as part of the 'balanced' approach he promised the American people" (Wall Street Journal, 12/11).
White House Takes Medicaid Cuts Off the Table
On Monday, HHS announced that the Obama administration would no longer support a "blended rate" plan, which would have generated about $100 billion in federal savings by creating one payment formula for Medicaid, The Hill's "Healthwatch" reports.
The decision to abandon the plan -- which Obama included in his 2013 budget proposal -- comes as liberals have urged the administration to omit Medicaid from the so-called fiscal cliff negotiations, according to "Healthwatch" (Baker, "Healthwatch," The Hill, 12/10).
Health Providers Wary of Fiscal Cliff Talks
Some health care provider groups are warning that nearly all proposed reductions to Medicaid and Medicare reimbursement rates in a larger deal to avert the fiscal cliff could cause beneficiaries to lose access to physicians and treatments, the Journal reports.
American Hospital Association President Rich Umbdenstock said the payment reductions would affect hospital staffing and services, which ultimately would reduce beneficiaries' access to care (Radnofsky, Wall Street Journal, 12/10).
Federal Agencies Brace for Possible Cuts
Although the Obama administration has signaled some optimism about reaching a deal that would avert an estimated 8% in across-the-board spending cuts to about 1,200 federal programs -- including some related to drug approvals and food inspections -- the administration has ordered federal agencies to prepare contingency plans in case a deal is not reached, the New York Times' "Debt Reckoning" reports.
For example, officials at FDA -- which could face spending cuts of up to $318 million -- is considering limiting the number of inspections it conducts and delaying work on implementing a 2011 food safety law (Nixon, "Debt Reckoning," New York Times, 12/10).
U.S. Residents Most Concerned With Entitlement Reductions, Poll Finds
Thirty-five percent of U.S. residents are most concerned that an eventual deficit-reduction deal will include large cuts to federal entitlement programs, such as Medicare, while 27% are most worried about a tax increase, according to a new United Technologies/National Journal Congressional Connection Poll, the National Journal reports.
The poll -- which surveyed 1,001 U.S. adults between Dec. 6 and Dec. 9 -- found that 40% of women are most concerned about entitlement cuts, compared with 31% of men. Individuals with annual incomes of at least $75,000 and those ages 30 to 49 expressed greater concern about tax increase than about entitlement cuts, according to the poll (Goldmacher, National Journal, 12/10).
Medicare Savings Must Be Long Term, Experts Say
Although experts on both sides of the aisle agree that a resolution to Medicare's long-term spending problems is necessary, such an agreement might not materialize during the fiscal cliff negotiations, USA Today reports.
According to USA Today, the Affordable Care Act contains provisions targeting long-term Medicare spending, such as proposed changes to the delivery system and the creation of the Independent Payment Advisory Board. However, experts say the changes outlined in the law are hard to quantify, and Republicans have strongly opposed IPAB as a form of health care rationing. One proposal that could receive bipartisan support involves increasing the Medicare eligibility age from 65 to 67 (Kennedy, USA Today, 12/10).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.