Lawmakers Start Process for Selecting Debt Panel; Entitlement Cuts Likely
Congressional leaders have begun selecting 12 members for a bipartisan, bicameral panel charged with making additional spending cuts under the recent debt deal, the Washington Post reports (Kane, Washington Post, 8/8).
According to the budget agreement, House and Senate leaders will establish the panel to 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, 8/8).
Three members each will be chosen by House Speaker John Boehner (R-Ohio), House Minority Leader Nancy Pelosi (D-Calif.), Senate Minority Leader Mitch McConnell (R-Ky.) and Senate Majority Leader Harry Reid (D-Nev.).
The members must be announced by Aug. 16, but the leaders have not yet publicly identified any potential candidates (Washington Post, 8/8). Experts expect that the leaders will select "party loyalists," according to The Hill (Cusack, The Hill, 8/9).
Panel Likely Will Consider Entitlement Cuts
The panel likely will cut entitlement programs as part of additional deficit-reduction strategies, Politico reports. The committee could consider any of the following strategies for cutting Medicare and Medicaid costs:
- Strengthening efforts to curb Medicare fraud and abuse;
- Increasing the Medicare eligibility age from 65 to 67;
- Restructuring Medicare benefits in a way that simplifies copayments and deductibles;
- Restricting how much Medigap plans can cover;
- Fixing the Medicare physician reimbursement formula;
- Increasing Medicare Part B premiums;
- Eliminating Medicare payments to hospitals that have not been able to collect copayments and deductibles from patients;
- Charging higher copayments or cutting payments to skilled nursing facilities and home health care programs;
- Establishing a Medicare pilot program for "premium support" for federal employees, which would give workers a subsidy for coverage that increases annually;
- Converting Medicaid into a block grant program;
- Changing the federal matching formula for Medicaid;
- Forcing drug companies to provide rebates to people who are eligible for both Medicare and Medicaid; and
- Repealing the CLASS Act, the long-term care insurance program created by the federal health reform law, which is expected to cost $86 billion over 10 years (Nather, Politico, 8/8).
Obama To Recommend Deficit-Reduction Strategies to Panel
On Monday, President Obama said that he soon will send cost-cutting recommendations to the new debt panel. According to CQ Today, Obama wants to use the recent downgrade of the U.S. credit rating by Standard & Poor's to raise expectations for the committee.
White House press secretary Jay Carney said some of Obama's recommendations likely will reflect ideas from a plan he was working on with Boehner before the budget deal was reached, which included several strategies to reduce entitlement spending. However, Carney did not give any details on the recommendations (Schatz, CQ Today, 8/8).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.