Experts Worried About How Debt Deal Could Affect Reform Rollout

Some experts are concerned that the recent debt deal could complicate implementation of the federal health reform law, U.S. News & World Report reports.

They note that caps on discretionary spending established by the deal could reduce funding to various agencies charged with enacting parts of the law, such as HHS (Kim, U.S. News & World Report, 8/11).

Background on Debt Deal

According to the deal, House and Senate leaders each chose three members for a panel that will develop and pass by the end of November a package of $1.5 trillion in additional federal spending cuts over 10 years. Failure by Congress to enact further spending reductions at the end of this year would trigger a series of automatic cuts of as much as $1.2 trillion. If the triggers are engaged, Medicaid is exempted and Medicare is protected from deep spending cuts. However, the deficit panel is not bound by those stipulations (California Healthline, 8/11).

How Debt Agreement Might Affect Reform Law

Edwin Park, vice president for health policy at the Center on Budget and Policy Priorities, said, "To the extent that (the agencies) get less funding because of caps on discretionary spending, that could impede their ability to fully implement health reform as effectively as they otherwise would be able to" (U.S. News & World Report, 8/11).

Further, the deal gives the GOP additional opportunities to limit funding for the overhaul, including the spending caps, the agreement for additional deficit reduction or the automatic cuts that will kick in if the debt panel cannot agree on a deficit strategy.
Robert Reischauer, president of the Urban Institute, said the health reform law likely is a target for the GOP following the budget agreement. He said, "I think [the deal] puts pressure on it because close to the top of the Republicans' list will be to repeal the law, or some lesser variant of it like reduce the subsidies for low-income folks or eliminate the individual mandate."

However, some analysts predict that Democrats on the debt panel will be able to rebuff attempts to minimize the overhaul. According to experts, the health reform law might be affected by certain cuts to discretionary spending or a "sequester" of funds if the automatic reductions are triggered, but the cuts will not be substantial enough to force fundamental changes to the overall law (Reichard, CQ HealthBeat, 8/11).

Further Details of Debt Panel

On Thursday, House Minority Leader Nancy Pelosi announced the final three appointees to the bipartisan, bicameral debt panel created under the recent debt deal. She chose Reps. Xavier Becerra (D-Calif.), James Clyburn (D-S.C.) and Chris Van Hollen (D-Md.) (Kane/Sonmez, Washington Post, 8/11).

On Tuesday, Senate Majority Leader Harry Reid (D-Nev.) appointed Sens. Max Baucus (D-Mont.), John Kerry (D-Mass.) and Patty Murray (D-Wash.).

On Wednesday, House Speaker John Boehner (R-Ohio) and Senate Minority Leader Mitch McConnell (R-Ky.) unveiled their selections.

Boehner chose House Ways and Means Committee Chair Dave Camp (R-Mich.), House Republican Chair Jeb Hensarling (R-Texas) and House Energy and Commerce Committee Chair Fred Upton (R-Mich.).

McConnell picked Sens. Jon Kyl (R-Ariz.), Rob Portman (R-Ohio) and Pat Toomey (R-Pa.) (California Healthline, 8/11).

According to Politico, Clyburn and Van Hollen both took part in deficit negotiations with Vice President Biden earlier this summer, while Becerra served on a budget commission last year that recommended $4 trillion in cuts (Allen, Politico, 8/11). However, Becerra voted against the commission's recommendations. In addition, he -- along with Toomey -- opposed the creation of the debt panel (Krawzak, CQ Today, 8/11).

Pelosi said her appointees "must achieve a 'grand bargain' that reduces the deficit by addressing our entire budget, while strengthening Medicare, Medicaid and Social Security," adding, "Our entire caucus will work closely with these three appointees toward this goal, which is the goal of the American people" (Washington Post, 8/11). Despite Pelosi's pledge to protect entitlements, many experts believe the panel will cut entitlement spending to reduce the deficit (California Healthline, 8/11).

Ryan's Absence From Panel Could Affect Entitlement Debate

In related news, health policy observers note that by not appointing House Budget Committee Chair Paul Ryan (R-Wis.), congressional leaders have rejected deep cuts to entitlement programs (Kenan, CQ HealthBeat, 8/11).

Earlier this year, Ryan proposed overhauls of Medicare and Medicaid in a fiscal year 2012 budget resolution. He suggested changing Medicare from a fee-for-service program to one that would have beneficiaries purchase coverage on the private market and switching Medicaid to a block grant program (California Healthline, 6/14).

The analysts said that Ryan's absence from the panel could mean that House leaders are willing to compromise on entitlement cuts and might not suggest radical changes during their discussions (CQ HealthBeat, 8/11).

House Democrat Proposes $2T in Deficit Reduction

On Thursday, Rep. Mike Quigley (D-Ill.) submitted a budget plan to the debt panel that would cut the deficit by $2 trillion over the next decade, The Hill reports.

Quigley described the plan as "reinventing government" through a combination of program cuts and tax-revenue increases. Among other provisions, Quigley's plan would allow the government to negotiate drug prices for Medicare Part D (Lillis, The Hill, 8/11).