Earlier this week, a variety of Los Angeles organizations and community members, including Health Access California, met with CA Representative Xavier Becerra, who is one of the twelve members of the “SuperCongress,” the new committee dedicated to coming up with a deficit-reduction package.
Why this committee is different from the many commissions that have come before is that if they don’t come up with a package, certain automatic cuts are triggered. But what is the best outcome of these deliberations?
Chris Jennings, a prominent health policy consultant who staffed the Clinton Administration on these issues, has his take on the politics and the potential health impacts in the New England Journal of Medicine. It’s worth reading in its entirety, but here’s an excerpt.
[M]any health care stakeholders are concluding that the automatic cuts would be the lesser of the possible evils. How can that be?
First, Washington’s governing precept is that the devil you know is preferable to the one you don’t. Knowledgeable stakeholders — including consumer advocates, states, businesses, most health care providers, and pharmaceutical manufacturers — have a good sense of the implications and the liability exposure of policies that would emanate from the automatic cuts; in contrast, they have no idea what specific policies would emerge from the super committee. And particularly when it comes to the health care community, ignorance is not bliss; rather, it evokes fear.
Second, when they study the possible scenarios, health care stakeholders are beginning to conclude that any plan agreed on by the super committee would result in larger aggregate cuts and would have a greater negative impact. More specifically, they know that such a plan would almost inevitably include new and damaging Medicaid cuts (Medicaid is exempted from the automatic cuts) and more extensive Medicare cuts (beyond the $130 billion to $150 billion that would be cut through the fallback 2% cap on total Medicare spending)…
And third, although there might and should be some revenues (from the closure of tax loopholes) on the table to help allay the need for extremely large Medicare and Medicaid cuts, few insiders believe that those revenues will be substantial enough to limit the required health care savings to a tolerable level. Indeed, most observers are willing to take Republicans at their word that they will continue to reject all or virtually all options that raise net revenues.
Thus, a “strange bedfellow” health care coalition has plenty of reasons to prefer that the automatic cuts take effect. Patient groups have virtually no reason to want the super committee to act, since the automatic cuts explicitly exempt seniors and the lowest-income Americans from any increases in cost sharing. These groups are highly skeptical that an alternative “big” deal would be balanced and fair, believing that the elderly and the poor would be exposed to painful increases in out-of-pocket costs in an agreement that probably would not include higher taxes on the highest-income Americans. They do not understand the strategy of agreeing to such cuts and thereby removing any leverage with which to secure revenues in the future.
At a time of increasing needs and decreasing or limited revenue, the states also wonder why they should accept large Medicaid cuts and even some Medicare cuts that shift — rather than contain — costs in ways that harm their budgets, their citizens, and their economies…
Jennings begins to conclude in this way:
To be clear, a well-constructed compromise — which would include an array of policies to spur job growth and boost the economy, a thoughtful collection of payment and cost-sharing reforms to sustain and strengthen Medicare and Medicaid over the long term, a long-overdue fix for physician payment, and a reasonable deal on tax reform that closes loopholes and raises revenue — would almost inevitably be the better course of action for the economy and the nation. The question is whether such a balanced approach is possible in our polarized political environment. For the moment, most seasoned political and policy analysts are concluding that it is not.