This week, the House will consider their FY2013 Budget Resolution (H. Con. Res. 122) which aims to reduce the deficit over the next several decades – largely by making sweeping changes to Medicaid and Medicare, repealing the Affordable Care Act, and cutting non-defense discretionary spending to levels around $19 billion below those agreed upon in the Budget Control Act (BCA) passed last year. Based on numbers provided by Chairman Ryan and his staff to the Congressional Budget Office, CBO estimates the FY2013 budget proposal would reduce the deficit sharply over the next ten years, completely eliminating it in less than 30 years – but that’s assuming all of the legislative changes suggested within the budget proposal are adopted. However, CBO’s only available analysis of the proposal is based exclusively on the revenue and spending numbers provided by Chairman Ryan and his staff before the budget resolution was released. CBO has not yet published analysis or scores on the proposal under consideration on the House floor.
The Ryan proposal passed by a margin of one vote (19-18) in the Budget Committee last Wednesday with two Republicans voting ‘no’ largely because in their view the deficit is not reduced enough under the proposal and all Democrats voting no. The resolution is now scheduled for consideration on the House floor this week where it’s expected to pass with no Democratic support. The modified spending cap level is a major issue of contention between Members across both Chambers and parties as the change to the spending cap is a departure from last year’s agreement in the BCA.
The full report is over 200 pages long, but below is a short summary of the major proposed changes that would impact health centers and some of the programs we care about:
- Affordable Care Act (ACA): The ACA would be repealed in its entirety. Committee staff estimate that repeal of the exchange subsidies, premium credits and related spending would yield $800 billion in savings over the next ten years; the repeal of the Medicaid expansion and removal of federal mandates on State Medicaid programs would save an estimated $932 billion to the federal government; and $4 billion would be saved over 10 years by rescinding unspent health care-related funding from ARRA and ACA. CBO states in their analysis that they cannot estimate the full impact of these changes based on information provided, but the agency notes that under the Ryan budget there would be significantly more uninsured than there would be under current law or the President’s proposed budget.
- Medicaid: The proposal suggests converting the federal share of Medicaid spending into a block grant indexed to inflation and population growth. States would no longer be required to comply with enrollment criteria and program requirements for Medicaid. According to Committee staff this approach would cut an estimated $810 billion in federal spending from Medicaid and would enforce reductions to growth in Medicaid spending over time. CBO’s analysis states there is insufficient information to estimate the impact of these changes on health care quality, access, and state budgetary policy and suggests that as federal contributions to Medicaid decline states will either have to improve the efficiency of their Medicaid programs or make cutbacks.
- Medicare: Medicare won’t change for those 55 and older. For those who are currently 54 and younger, Medicare would change into a “premium support” program where future retirees would have a choice of private plans and the traditional fee-for-service Medicare program – all competing in a newly created Medicare Exchange – and Medicare would provide a premium-support payment to offset or pay for the cost of the Medicare recipient’s chosen plan. The proposal would “fix” the provider payment formula under Medicare for 10 years and enforce means testing for Part B and D benefits for high-income seniors. Committee staff estimates this would extend the life of the Medicare Trust Fund and CBO estimates Medicare’s costs per beneficiary will rise more slowly than under the President’s proposed budget.
It’s worth noting that this budget resolution is just the first step in Congressional deliberations around a FY2013 budget blueprint, and we are still awaiting a Senate proposal and, under normal budget processes, a bicameral conference to reconcile the two plans (although an agreement is not considered possible between the two chambers given their wide divide on many central issues and is not required to keep the government running). There are a lot of moving pieces to the federal budget process this year and we’re working hard to follow all of them so stay tuned to the blog for updates and developments.