No ruckus about Medicare cuts in sequester - WFLA News Channel 8

No ruckus about Medicare cuts in sequester

Posted: Updated:
WASHINGTON, DC (WFLA) -

Hospitals, doctors and other Medicare providers are on the hook for a 2 percent cut under looming government spending reductions. But they're not raising a ruckus. Why?

The pain could be a lot worse if President Barack Obama and congressional Republicans actually did reach a sweeping agreement to reduce federal deficits.

Automatic cuts taking effect Friday - the "sequester" in Washington-speak - would reduce Medicare spending by about $100 billion over a decade. But Obama had put on the table $400 billion in health care cuts, mainly from Medicare. And Republicans wanted more.

"What people were really worried about was the prospect of a huge deficit bill that could target Medicare for $400 billion or $500 billion," said John Rother, president of the National Coalition on Health Care, an umbrella group that includes service providers.

"The health care industry fears the alternative more than they fear a predictable reduction in rates," said Dan Mendelson, president of Avalere Health, a market analysis firm. "They just do not want to roll the dice. That is why you do not hear as much of an outcry on Medicare."

The budget machinations come at a time when the threat that the government will be overwhelmed by surging health costs seems less immediate. Taking care of aging baby boomers is still a huge challenge, but health care inflation has slowed dramatically in the last few years, leading government number crunchers to scale back their estimates of future costs.

The nonpartisan Congressional Budget Office has reduced its 10-year projections of Medicare spending by $137 billion, a liability wiped off the ledger without the need to cut reimbursements to hospitals and doctors, or to raise premiums for Medicare's 50 million beneficiaries.

The health care portion of the automatic spending cuts was designed to try to avoid pain for individuals and families. Medicaid, the health care program for the poor, was exempted, as were the biggest subsidies under Obama's health care law, which starting next year will help uninsured people pay premiums.

The Medicare cut was intended to fall on providers: hospitals, doctors, health plans, drug companies and others. Once the sequester takes effect, Medicare will reimburse them at 98 cents on the dollar.

Seniors' benefits and premiums weren't touched. However, if the cuts go into effect and remain in place, beneficiaries enrolled in Medicare Advantage plans could see higher premiums over time, if private insurers decide to pass on the 2 percent cut.

Hospitals account for the lion's share of Medicare spending and will have to absorb most of the automatic cuts - about 40 percent of the total. They're followed by Medicare Advantage plans and doctors.

The American Hospital Association and other industry groups say some jobs will be lost if the automatic cuts are allowed to go through.

The Henry Ford Health System in Detroit started planning last year for a $20-million hit from the sequester. CEO Nancy Schlichting says they were able to minimize layoffs by leaving vacant positions unfilled and streamlining operations to reduce costs. The system, a network of hospitals and clinics that employs 24,000 people, also runs a health insurance plan.

It could have been worse, says Schlichting. Cuts considered during the last federal budget showdown late last year were definitely bigger than the sequester.

Those included changes to billing codes, reductions in special payments to teaching hospitals, and cuts in aid to hospitals that treat many uninsured and low-income patients. When they didn't happen, the Henry Ford system was left facing the more predictable 2-percent reduction.

"We don't take any of the cuts lightly," said Schlichting. "I don't think we're protected at this point, even with the sequester."

  • 8 On Your SideMore>>

  • Mortgage nightmare for Plant City couple

    Mortgage nightmare for Plant City couple

    Wednesday, April 16 2014 7:57 AM EDT2014-04-16 11:57:42 GMT
    Karl and Vicktoria Hanson thought their foreclosure nightmare was long over. It may be just beginning.
    Karl and Vicktoria Hanson thought their foreclosure nightmare was long over. It may be just beginning.
  • Bradenton massage therapist banned from contact with women by state

    Bradenton massage therapist banned from contact with women by state

    Tuesday, April 15 2014 5:03 PM EDT2014-04-15 21:03:21 GMT
    The Florida Department of Health says it served licensed massage therapist Kevin Joseph Holmes, 60, with an emergency order Tuesday morning that bans him from working with female clients.The Florida Department of Health says it served licensed massage therapist Kevin Joseph Holmes, 60, with an emergency order Tuesday morning that bans him from working with female clients.
    The Florida Department of Health says it served licensed massage therapist Kevin Joseph Holmes, 60, with an emergency order Tuesday morning that bans him from working with female clients.The order says Holmes "unrestricted practice as a massage therapist with female clients constitutes an immediate serious danger to the health, safety, or welfare of the public
    The Florida Department of Health says it served licensed massage therapist Kevin Joseph Holmes, 60, with an emergency order Tuesday morning that bans him from working with female clients.The order says Holmes "unrestricted practice as a massage therapist with female clients constitutes an immediate serious danger to the health, safety, or welfare of the public
  • State takes emergency action against Bradenton massage therapist after 8 On Your Side investigation

    State takes emergency action against Bradenton massage therapist after 8 On Your Side investigation

    Monday, April 14 2014 7:09 PM EDT2014-04-14 23:09:06 GMT
    Kevin Holmes, massage therapistKevin Holmes, massage therapist
    According topolice records Kevin Holmes, age 60, toldinvestigators the client he gave a therapeutic massage to last month"was an attractive girl, plain and simple."It turns out she was also an off-duty detective, and Holmes said what he did to her was "absolutely inapproriate."
    According topolice records Kevin Holmes, age 60, toldinvestigators the client he gave a therapeutic massage to last month"was an attractive girl, plain and simple."It turns out she was also an off-duty detective, and Holmes said what he did to her was "absolutely inapproriate."
Powered by WorldNow

200 South Parker Street, Tampa, FL 33606

Telephone: 813.228.8888
Fax: 813.225.2770
Email: news@wfla.com

Can’t find something?
Powered by WorldNow
All content © Copyright 2000 - 2014 Media General Communications Holdings, LLC. A Media General Company.