U.S. healthcare cuts minimal, more pain looms
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Further, the breakdown in negotiations quashed hopes among doctors that the panel would eliminate an almost 30 percent cut in Medicare payments scheduled to go into effect in January under a 1997 balanced budget law.
A so-called permanent “doc fix” would have cost nearly $300 billion in lost savings, making it unlikely at a time of deficit reduction.
Analysts said the best healthcare providers can hope for is another short-term fix to stave off the payment reductions.
The automatic cuts would also reduce funding for insurers that participate in Medicare Advantage, a program segment that allows senior citizens to purchase private insurance.
PUNTING THE MAJOR CUTS
Analysts and lobbyists said the deeper pain for the healthcare sector is expected after the 2012 elections, when many expect Congress and the White House to face new calls to contain the deficit and the growing U.S. debt.
“There is no doubt that this will mean there will be enormous pressure in 2013,” said Ron Pollack of Families USA, a healthcare consumer advocacy group.
That could give new life to proposals to save more than $100 billion by raising copays, premiums and private insurance costs for beneficiaries of Medicare’s fee-for-service system.
Higher beneficiary costs could reduce the ability of millions of Americans to seek care from doctors, hospitals and nursing homes. But analysts say it could also benefit private insurers by making traditional Medicare less affordable.
If revived, a $135 billion proposal to extend Medicaid drug rebates to Medicare beneficiaries would mean a two percent to seven percent hit to drug company revenues, according to a recent report from Moody’s Investors Service.
Hospitals could again face $9 billion in cuts to Medicare spending for medical education and another $20 billion in reduced federal support for coping with bad debts.
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By David Morgan
WASHINGTON
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