No Supercommittee Agreement; What Comes Next?

Last week the Joint Select Committee on Deficit Reduction, also known as the supercommittee, announced that its members were unable to agree on a package that would reduce the deficit by at least $1.2 trillion. With Medicare and Medicaid at the center of the supercommittee’s discussions, both programs would likely have faced difficult cuts had an agreement been reached. Ultimately, a major hurdle to agreement appeared to be the supercommittee’s lack of consensus on what proportion of deficit reduction should come from revenues compared to cuts.

As a result, as required by the Budget Control Act of 2011, aseries of automatic cuts known as a “sequester” will take effect in 2013, with reductions split evenly between defense spending and discretionary programs. Medicaid and Social Security are completely protected from the automatic cuts. Medicare is mostly protected, though the Medicare provider payment rates will be subject to a 2 percent cut. Other programs that remain at risk are those authorized by the Older Americans Act that provide services, including transportation and food assistance, to older Americans. Some members of Congress are already decrying the cuts to defense spending, but reducing them would result in deeper cuts to discretionary programs that provide needed services to older Americans.

While many of the proposals under consideration by the supercommittee, including raising the Medicare eligibility age and increasing Medicare cost-sharing, have not been included in the sequester package, they and similar proposals will continue to receive attention from policymakers in future deficit reduction and entitlement reform discussions.
Learn more about the Budget Control Act of 2011 and what happens now.

www.medicareinteractive.org.