Long-term impact of debt deal could hurt seniors

August 3, 2011 at 12:00a.m.

McClatchy Newspapers

WASHINGTON

Washington policymakers demanded more savings from hospitals, doctors and other medical providers in the debt deal President Barack Obama signed into law Tuesday, a move designed to protect seniors and others who rely on Social Security and Medicare.

But the budget-cutting may end up hurting some of the neediest seniors as the federal cuts take a disproportionate toll on family physicians with many elderly patients and on hospitals that serve them.

Medicare is among many government programs, including the military, that could face significant cutbacks as a result of the debt compromise.

Advocates for the elderly say the Medicare cuts, though relatively small, could force critical medical providers to scale back services, or even stop serving them entirely.

“These kinds of cutbacks do build, and you are always wondering if this is the straw that breaks the camel’s back,” said Joe Baker, president of the Medicare Rights Center, a New York-based advocacy group.

The debt compromise will not impose any immediate cuts in Medicare spending. But if Congress does not come up with a plan by the end of the year to reduce the deficit by $1.5 trillion over the next decade, the plan requires the federal government to impose a 2 percent across-the-board reduction in payments to Medicare providers starting in 2013.

That is one of several so-called triggers that would also slash domestic discretionary spending and cut hundreds of millions of dollars from the defense and homeland security budgets if Congress fails to pass a deficit-reduction plan.

The Pentagon is potentially facing cuts of $850 billion, including $500 billion if the trigger is tripped.

Pro-defense lawmakers in both parties and the White House are signaling that they will resist such deep cuts. “There is no scenario in the second phase of this proposal that does not turn a debt crisis into a national security crisis,” said House Armed Service Committee Chairman Howard McKeon.

The Obama administration and its Democratic allies have billed the Medicare trigger as a relatively benign way to control federal health care spending by forcing the health care industry to come up with the savings.

In the past, that approach has usually shielded seniors from big jumps in co-pays and deductibles. It was used most recently in the health care law enacted last year.