The delay could give providers more time to push for consideration of their favored approaches to reducing the long-term deficit impact of the federal healthcare programs. For instance, the American Hospital Association is urging consideration of a number of cost-saving changes to Medicare, including increased use of generic pharmaceuticals, more beneficiary cost-sharing and increasing the FICA tax.
Much has changed in the past year. For example, at a hearing Baucus led a year ago on deficit reduction, he highlighted that Medicare and Medicaid expenditures were only 12.6% of total federal spending in 1991 but will grow to consume 33% of the federal budget by 2035, according to the Congressional Budget Office.
“For the continued health of Medicare and Medicaid—and the health of our budget—we must address this growth,” he said at that time.
Later that same year, as the senior Democrat on the failed deficit-reduction supercommittee, Baucus proposed a plan to eliminate $3 trillion in expected deficits over the next 10 years that included about $500 billion in total reductions from Medicare and Medicaid. The proposal was rejected by liberal Democrats on the committee, in part, because of its negative effect on the healthcare programs.
But last week, Baucus appeared to move toward the left wing of his party when he raised doubts about the need for large-scale changes to address the growth of the programs. His earlier concerns were recently reduced by the findings of the June budget outlook by the CBO that growth in per capita spending for healthcare programs will moderate from its past pace, regardless of what happens with federal laws.
“Healthcare costs on their own are starting to rise a little less quickly than they were earlier,” Baucus said at a hearing he called to discuss the Rivlin-Domenici deficit reduction proposal, which includes a Medicare and Medicaid overhaul. “If these CBO numbers are accurate and the current trend continues—trends never do, but if it does—that would seem to indicate that there is not quite the urgency to address entitlements with quite the same aggressive attack mode as you have indicated in your report.”
“All this proves is that politicians will grasp at anything, including false hope, which is what this is,” Joseph Antos, a scholar at the libertarian American Enterprise Institute, said in an interview.
Other recent data that appear to run counter to the hope of slowing healthcare inflation included the national health spending projections that the CMS actuary issued June 12. Those projections show national health spending accelerating well beyond inflation, even after the cost-saving provisions of the 2010 healthcare overhaul are implemented.
It is not clear to what extent Baucus' new second-guessing of healthcare entitlement reform reflects a larger shift among congressional Democrats against any major changes to the programs. In recent interviews and in their public comments on the issue, liberal Democrats appeared to remain committed to fighting any major changes to the programs and moderate Democrats were still open to changes.
For instance, Rep. Henry Waxman (D-Calif.) said in an interview that Baucus' questioning the need for major healthcare changes because of the historic and rising federal debt is closer to his long-standing position.
Both Baucus and Waxman said the 2010 healthcare reform law already has helped slow spending in those federal healthcare programs and will continue to do so. However, the ability of slowly ramped-up care delivery and payment reforms in the Patient Protection and Affordable Care Act to significantly alter the trajectory of Medicare and Medicaid spending increases has drawn strong doubts from budget experts across to political spectrum.
“No legislative action means very significant economic change, including greater and greater shares of our budget going for health and smaller and smaller shares going for other needs,” said Eugene Steuerle, a senior fellow at the liberal-leaning Urban Institute.