Congress should pass a bill to protect Medicare from automatic cuts required by federal budget laws that would take $53 billion out of the vital health program, AARP says in a March 18 letter to legislative leaders.
The cuts are scheduled for April 1 (2 percent reduction, or $17 billion) and October 1 (4 percent reduction, or $36 billion). The reductions will be triggered by the Budget Control Act and the Statutory Pay-As-You-Go Act. Both of these laws were designed to ensure that any new legislation did not increase the federal budget deficit or reduce any surplus. Passage of the American Rescue Plan Act — the latest relief package for COVID-19 — as well as provisions in the overall spending bill enacted in December 2020 would trigger across-the-board budget cuts in a number of federal programs, including Medicare.
In the past, each time such automatic cuts have been scheduled, Congress has enacted legislation to prevent them from taking effect. The U.S. House of Representatives is scheduled to vote on such a bill on March 19.
The Medicare reductions would affect reimbursements to providers. “While these automatic cuts to Medicare do not impact benefits directly, Congress should nevertheless prevent across-the-board program cuts that may affect access and service,” Nancy LeaMond, AARP executive vice president and chief advocacy and engagement officer, says in a letter to congressional leaders.
In her letter, LeaMond says the planned Medicare cuts “could have an immediate and lasting impact, including fewer providers participating in Medicare and reduced access to care for Medicare beneficiaries.” The cuts could also lead some private insurance plans, including Medicare Advantage and Part D prescription drug plans, to make up for their financial losses in the future by charging higher premiums or cost-sharing.