Failure of Super Committee To Have Little Impact on Health Care

While the failure of the congressional “super committee” to reach an agreement triggers a 2% across-the-board cut to Medicare, this is thought to be far less than the $500 to $700 billion lawmakers on the panel were discussing prior to their deadline. Physicians and hospitals will feel the impact but the $123 billion that will need to be cut over the next 10 years is minimal compared to cuts imposed by deficit reduction legislation enacted in recent years.

About a fourth of all Medicare spending goes to physicians and clinics while hospitals currently receive nearly half. Some of the remaining automatic cuts will impact insurers that participate in the Medicare Advantage program that allows seniors to obtain private coverage.

The real problem lies in projections from the Government Accountability Office, which estimates that if nothing changes, Medicare, Medicaid and Social Security will swallow up to 100% of all existing tax revenues by the year 2047.

How Might The Supreme Court Actions Affect You?

Just as employers and benefits professionals spent months contemplating how their world might change if health care reform legislation were to become law, you can bet that plenty of time is being wasted worrying about how the Supreme Court might rule when they hear cases challenging the constitutionality of the PPACA.

Three of the five challenges brought by the 26 states and the NFIB will be heard, with the individual mandate undoubtedly being the hottest topic. If the Supreme Court were to strike down the individual mandate requiring that the American people buy health coverage, the part of the law requiring insurance companies to guarantee issuance of a policy could result in people only buying insurance after they became sick or injured. While several parts of the law have become popular among the general public, the individual mandate is not one of them.

Until the applicability of the law is determined by a Supreme Court ruling, expected in mid 2012, employers have no choice but to continue addressing compliance issues and state exchanges to prepare for operations beginning in 2014. We will keep you informed in future newsletters and special bulletins as needed.

To view other articles from the SIP Winter Newsletter, please click here.

In cooperation with NAEBA

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