Why the Fiscal Cliff Matters for Our Health CarePosted December 11th, 2012 by Ashley Wheeland
By Ashley Wheeland, Health Policy Attorney at the Colorado Consumer Health Initiative
We are all getting tired of hearing about the “fiscal cliff.” Probably even more so for our U.S. Congressional members. But the deal Congress and the President come up with could impact what American families pay for our health care, and who gets to have health coverage.
So what is this fiscal cliff? It’s a deadline at the end of this year when a bunch of cuts and tax increases are set to take effect to reduce the federal budget by $503 billion. Congress and the President agreed to the deal last year when the US was reaching the debt ceiling. To get a deal to increase the debt ceiling (and prevent another recession) the Congress gave themselves more time by creating the “fiscal cliff” to guarantee general budget cuts if they could not come to an agreement on specific cuts. So here we are – reaching the end date (January 1, 2013) and no deal. But don’t worry – the dealing is definitely going on. And we worry what any deal could mean for health care in Colorado.
To get to a compromise before the fiscal cliff goes into effect Congressional members are furiously recommending where cuts can be made. One such place suggested by more conservative members of Congress is our public health programs – those that provide coverage like Medicaid and Medicare. Should we hit the fiscal cliff as planned though, the Medicaid program is excluded from cuts because of its important role as a safety-net health care program. But some more conservative members of Congress want to put Medicaid back on the table. And Medicare, which is a vital source of coverage for America’s seniors, already has cuts in the fiscal cliff plan and even more cuts are being considered in negotiations to avoid it. This could mean less seniors having health care coverage.
But cutting Medicaid or Medicare would not be a good deal for us taxpayers. It’s merely a shifting of how we will all pay for our health care system. And it could result in less Americans having health coverage and using other ways to get health care like emergency rooms, as well as putting off health care they need until it is dire and costly.
For example if the negotiations result in increasing the age people become eligible for Medicare from 65 to 67 years – where will those seniors get their coverage and how will they afford it? Most have not saved to pay for health insurance after 65 – they thought they would get Medicare. And most of their employers are not prepared to offer it (if they are still working). So we will all pay for them in other ways if they do not have Medicare coverage. According to Kaiser Family Foundation if this idea was put in place by 2014, it would result in $5.7 billion in net federal savings, but $11.4 billion in higher health care costs to individuals, employers and states.
Another idea being discussed by some in Congress is to cut funding for the Medicaid program. Medicaid helps states cover the costs of caring for around 50 million vulnerable Americans, including children, people with disabilities, low-income seniors and pregnant mothers. It is estimated Medicaid provides approximately one-third of revenue at public hospitals nationally, and it is the largest payer for community health centers. These resources are invaluable in supporting thousands of jobs across the country, as well as providing health care to those millions who need it.
On a final note, some Congressional members recommend cutting programs in the Affordable Care Act, like state-based health exchanges and the new Medicaid program for low-income Americans. According to the Kaiser Family Foundation an estimated 17 million Americans are expected to gain coverage from the ACA’s expansions of the Medicaid and Children’s Health Insurance Program. (Learn more about the ACA’s new Medicaid program) An additional 25 million Americans may potentially gain access to health coverage in the new state exchanges. Any cuts to these programs could leave millions of Americans without access even as our country moves forward on health care reform. (See this Kaiser Family Foundation Map of Coverage Expansions because of the ACA.)
We at the Colorado Consumer Health Initiative hope the Congress understands the importance of protecting access to health coverage as the Congress negotiates the federal budget. We believe keeping Americans covered will benefit our economies – at home and nationwide. Health coverage means healthier employees and communities. It means less debt and bankruptcies and ER use.
Americans understand this. That is why the polls show Americans support public health coverage like Medicaid and Medicare. Our seniors, people with disabilities and working families deserve access to services that they pay for.
Congress, please do not cut the programs that can truly help America recover its economic health, and keep the doors open to all Americans to get the care they need, when they need it.