Both proposals would undertake Medicaid and Medicare cuts, but Republicans have placed a particular emphasis on Medicaid cuts. The Democratic plan would derive about $400 billion in savings from Medicare, according to congressional sources, with the savings roughly split between providers and beneficiaries. Also, the plan's Medicaid cuts would range from
$50 billion to $100 billion and would come mostly through reductions to states. The GOP plan is more aggressive in cutting both programs, according to congressional sources, with about $500 billion coming from Medicare and $185 billion from Medicaid.
The exact form Medicaid cuts would take under the proposals was not specified by congressional sources, but several common options have emerged in recent leading deficit reduction proposals, including a blended federal medical assistance percentages rate, and limiting state use of provider taxes.
A proposed federal match to state Medicaid and Children's Health Insurance Program spending would aim to standardize the matching rate that now varies by state. Several deficit-reduction proposals have included such a measure, including President Barack Obama's recommendations to the supercommittee in September that would result in some states receiving a total of $14.9 billion less over 10 years.
The bipartisan agreement to cut both programs appeared to extend outside the 12-member deficit panel. Although not all Democrats on the panel supported the $3 trillion Democratic deficit reduction plan, House Minority Leader Nancy Pelosi withheld judgment last week on it while stressing that there were “no sacred cows” immune from cuts in the budget.
But Republicans are apparently readying a push for the inclusion of even larger savings from Medicaid.
House Speaker John Boehner (R-Ohio) said at a news conference that because the federal healthcare entitlement programs and Social Security make up two-thirds of the federal budget, much of the savings in the panel's final proposal would likely come from them. He explicitly called for more savings from Medicaid, while noting it is projected to cost the federal government more than $10 trillion over the coming 10 years.
“I just think there is a lot more room there to find common ground,” Boehner said about the Medicaid spending.
Such an emphasis may justify the increasing alarm that advocates for the poor and some state officials have sounded over Congress focusing on Medicaid in its effort to find deficit savings because of the perceived lower political involvement of its beneficiaries. Conversely, Medicare is perceived in Washington as much more politically sensitive, healthcare policy experts said, and many Democrats, including Obama, have publically pledged to oppose any beneficiary cuts in that program.
The inclusion of varying Medicaid cuts in Republican and Democratic supercommittee proposals, as well as Medicaid reductions in Obama's recommendations to the panel, may indicate bipartisan agreement in Washington to target the program, according to some experts.
“They may think that people with lower incomes are less powerful in the political process,” Ron Pollack, executive director of the influential liberal advocacy group Families USA, said in an interview.
Pollack and others have worked hard to counter that notion by pointing out that Medicaid beneficiaries include millions of middle-class nursing home patients, whose families would see the impact of large cuts to the program.
Governors also are fighting the momentum toward cutting Medicaid funds to achieve deficit goals. Republican governors wrote the supercommittee Oct. 24 to criticize proposals for a blended rate or limiting provider taxes as “unfair cost-shifting measures that increase the burden to states.”
Meanwhile, provider advocates have moved from highlighting the beneficiary impacts of any Medicaid cuts to detailing the economic fallout of any cuts. It's an argument that may have more traction among Washington politicians desperate to show action to reduce the nation's staggering unemployment rate.
The most recent example of this new approach was an Oct. 26 analysis by NAPH that concluded those facilities, which heavily rely on Medicaid funding, in turn contribute to more than 800,000 jobs nationally and circulated $120 billion into the economy.
It's an economic message that Alan Aviles, president of one of the largest public health systems, the New York City Health and Hospitals Corp., said his hospital representatives now are emphasizing as they lobby their congressional representatives.
He and other providers expect to learn the effectiveness of their efforts within the next two weeks, as congressional actuaries have indicated they will need any final plan near the beginning of November to provide savings estimates that meet the supercommittee's deadlines.