Cut, Cap and Balance Act Passed by House Would Mean Cuts to Medicare and Medicaid
This week, the U.S. House of
Representatives passed the Cut,
Cap and Balance Act, which, as a
condition of raising the debt limit,
would cap federal spending at
around 20 percent of GDP and
require over $100 billion in savings
over the next year. Analysis shows
that such a proposal would require
extreme cuts to programs such as Medicare, Medicaid and Social Security. The legislation constrains Congress’s ability to raise revenues without a supermajority in both the House and the Senate, increasing the likelihood that deep cuts to these programs would be necessary. According to the Center on Budget and Policy Priorities (CBPP), while the bill does not make immediate cuts to Medicare and Social Security or require an automatic cut if the set spending cap is exceeded, it would be impossible to achieve the bill’s goal without requiring cuts to these programs, and these cuts could potentially exceed those included in the recently passed House budget.
The Medicare Rights Center, along with over 200 other national organizations, signed a letter in opposition to the Cut, Cap and Balance Act. The letter highlights the unbalanced approach taken by the legislation and the effect that preventing revenue increases and closure of tax loopholes would have on the future of programs like Social Security, Medicare and Medicaid. Although the Cut, Cap and Balance Act passed the House of Representatives, it is unlikely to pass in the Senate.
Read the letter from national organizations opposing the balanced budget amendment.
Read Medicare Rights Center President Joe Baker’s statement on the Cut, Cap and Balance Act.
Balanced Approach Needed to Prevent Cuts to Medicare and Medicaid
Last week, the Medicare Rights Center, along with over 20 national organizations and over 20 New York State–based organizations, sent a letter to Congressional leaders calling for a balanced approach to deficit reduction. The letter favors proposals that would not reduce access to medical care or force individuals with Medicare and their families to pay increased costs. Specifically, the letter states that, in order to offset the need for deep cuts in programs like Medicare and Medicaid, any final package must include meaningful proposals to increase revenue. The letter also suggests several pathways for savings in Medicare that would not risk shifting costs to the people the program serves. Potential solutions could include building on delivery system reforms included in the Affordable Care Act (ACA); further strengthening fraud, waste and abuse prevention; and examining mechanisms to reduce Medicare drug costs. The best solutions would address the underlying cause of rising federal health spending, which is growing costs in the health care sector overall.
The letter highlights several proposals under consideration that may potentially save the federal government money by reducing access to care and shifting costs to beneficiaries and states, who are in a poor position to shoulder extra costs. One extreme example of a cost-shifting mechanism is the premium support model included in the House budget, which would double out-of-pocket costs for people with Medicare. However, there are other, smaller-scale proposals that could be problematic as well, such as increasing Medicare premiums or redesigning the cost-sharing structure of the Medicare and Medigap benefits.
Read the letter from national organizations.
Read the letter from New York State–based organizations.
* Please note the following correction to the letter. Half of people with Medicare have incomes below $22,000 per year. In 2006, nearly half of all beneficiaries (44 percent) had annual household incomes of $20,000 or less.
The health reform law created the Pre-Existing Condition Insurance Plan (PCIP). These plans are for people who have been denied health insurance because they have a health condition or illness that they were previously diagnosed with or treated for. You are eligible for one of these plans if you meet all of the following 3 criteria:
- You have not had health insurance for at least six months
- You have a pre-existing health condition or have been denied health insurance because of your health condition
- You are a U.S. citizen or legally reside in the U.S.
The PCIP covers doctor visits, specialty care, hospital care and prescription drugs. These PCIPs are administered by either the state or federal government. Check with your state to find out what plan options are offered in your area.
Learn more about the PCIP at www.medicareinteractive.org, and visit www.pcip.gov to find PCIP options in your state.