Healthcare Business News

House passes bill that cuts health programs while sparing defense

By Jessica Zigmond
Posted: May 10, 2012 - 6:45 pm ET

Despite a veto threat from the White House, the House of Representatives passed legislation that would prevent $78 billion in defense spending cuts next year and supplant them with steep cuts to domestic programs, including Medicare, Medicaid and the Children's Health Insurance Program.

House members voted 218-199 to approve the Sequester Replacement Reconciliation Act of 2012 (PDF), a bill that the House Budget Committee passed earlier this week in an attempt to avoid the across-the-board cuts to both defense and nondefense programs that will take effect Jan. 2, 2013.

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On Wednesday, the American Public Health Association sent a letter to House members that urged lawmakers to vote against the bill, which includes provisions to repeal the healthcare reform law's Prevention and Public Health Fund; reduce funding for both Medicaid and CHIP; and cut about $36 billion from the Supplemental Nutrition Assistance Program, which the association said would eliminate benefits to about 2 million Americans.

Rep. Henry Waxman (D-Calif.), ranking member of the House Energy and Commerce Committee, said in an interview that the Republican-led effort was wrong for cutting entitlement healthcare programs that would disproportionately impact low income Americans.

“Certain things were supposed to be held harmless, like Medicaid,” Waxman said. “But Republicans decided they were going to cut Medicaid, anyway.”

“They seemed to do this whole bill for the purpose of protecting the wealthy from higher taxes and making sure we put money back in the military at the expense of health programs, safety net programs—programs that are vital for the middle class and people with low incomes,” he said.

Meanwhile, Rep. Phil Gingrey (R-Ga.), a physician who co-chairs the GOP Doctors Caucus, applauded the bill’s passage in a statement that noted the legislation would save about $328 billion over 10 years.

“Preserving funding for our servicemen and women is of paramount importance,” Gingrey said in the statement. “This legislation achieves that goal while simultaneously enacting necessary and strategic reforms to a number of mandatory programs. These measures will better ensure those most in need of government assistance receive it, instead of individuals who game the system.”

Gingrey wrote two provisions that were folded into the bill, including one that would implement medical liability reform and another that offers states flexibility to address fraud and abuse in the Medicaid program.

A statement of administration policy from the White House (PDF) noted that this bill address just a part of the sequester set to take place next year.

“The bill would break the agreement on discretionary spending made in last summer's budget agreement; advancing the House Budget Resolution's approach to increase defense spending and reduce nondefense spending relative to the levels agreed to in the BCA,” the statement said. “Moreover, it would do nothing to address the reductions in discretionary spending and sequesters in mandatory programs after 2013.”

—with Rich Daly

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