Cuts to Medicare, Medicaid Loom as Debt Ceiling Limit Nears

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As top Democrats and Republicans in Washington work to avert a government default, at least some cuts to Medicare and Medicaid payments appear imminent, and it seems everyone in the healthcare sector is crying afoul.

A list of proposed cuts released this week by House Majority Leader Eric Cantor (R., Va.) included reduced payments to rural hospitals and hospitals with large amounts of unpaid patient debt as well as cuts to state Medicaid funding. Beneficiary co-payments for lab tests and some home health services are also on the list, according to a New York Times report.

The American Clinical Laboratory Association called the co-pays a major administrative burden, since most tests run around $12-13, according to the report.

Numerous hospitals groups are opposing the cuts for their services, and even the National Governors Association warned federal lawmakers to not shift costs to states.

An article in today's Wall Street Journal asserts that while the cuts could reduce federal spending, they would not reduce overall healthcare costs because costs would be shifted to patients and states.

"These would just reduce payments without changing the dynamics of the system," said said Gail Wilensky, former head of Medicare under the first President Bush, in the report.

Related Articles on Federal Spending Cuts:
Obama's Plan to Reduce Deficit Will Preserve Medicare, Medicaid But Includes "Tough Cuts"
Deficit Negotiations Between Obama, House Speaker Boehner May Include Medicare and Medicaid Cuts, Tax Overhaul

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