Health Center Federal Policy

Fiscal Cliff Discussions: How Medicaid is in the Mix

by Alex Sange, MPP

As Congress and the White House continue to hammer out a deal to avert the so-called “fiscal cliff,” members of the House, Senate, and the Administration are voicing their ideas and opinions about changes to programs including Medicare and Medicaid.

The “fiscal cliff” refers to the combined impact of a myriad of tax and spending policy changes that will occur around January of next year:  we will again reach our debt ceiling and (again) require an increase, several broad-based tax cuts will expire, the annual decrease in the Medicare physician payment rates is set to take effect, and the “sequester” – the automatic across the board cuts included as a part of the deal to raise the debt ceiling last year – will take effect.   Congress and the President are working hard to come to a deal that includes enough revenue and savings to offset the impending policy changes, tax increases, and spending cuts.  As you would expect, efforts to find savings and cut programs have been far-reaching and have included discussion around entitlement programs.  What is not being talked about right now is a massive cut to the Medicaid program.

This is no accident – this is a deliberate and consistent choice made by Medicaid supporters to protect it from across-the-board cuts.  When the debt ceiling was under discussion last year, Congress designed a solution (the sequester) that was meant to impose automatic cuts to reach specified targets for spending and deficit reduction if Congress could not find a way to meet the mutually agreed upon targets.  The so-called Super Committee eventually failed to find a way to cut spending, and the sequester is now scheduled to happen January 2, 2013.  Fortunately, the Budget Control Act did recognize the critical role Medicaid plays in providing health care to the underserved and Medicaid is fully exempt from any automatic cut or reduction.  The force of this protection, and the rationale behind it, makes the most plausible cuts to the Medicaid program smaller changes around the edges – rather than the massive overhaul to the structure of the Medicaid program (such as block grants, for example).

This article from Politico provides a good outline of the Medicaid changes that may be under discussion.

While major changes to Medicaid appear to be off the table for now, we will continue to watch discussions very closely on behalf of health centers and their patients.  Stay tuned to the Health Centers on the Hill blog for updates on the fiscal cliff negotiation and any policy changes that impact health centers.


  1. How am I to understand the new CPT codes and DRASTIC cuts for mental healthcare? I am looking at almost a 40% cut in pay for providing therapy services to my Medicaid population…98% of my client base. I work mostly with children who have been traumatized in some way and have very sprcialized training that costs a lot to keep my license – and if I’m reading the new rates correctly, after I pay taxes (I am self employed as a contracted therapist)…I’ll now be making about minimum wage. It’s completely outrageous – and with NO warning. Someone please respond that can help me understand how to stop this.

Comments are closed.