The bipartisan panel is charged with cutting at least $1.2 trillion over 10 years. If it can’t overcome the enormous political obstacles to a deal, automatic cuts would kick in as of 2013, half coming from defense, the other half from domestic spending. Congress laid out this scenario — dubbed “sequestration” in legislative lingo — when it created the committee in August as part of a deal to raise the debt ceiling and avoid the first U.S. default in history.
While the committee can chop Medicaid and Medicare as part of a negotiated agreement, automatic cuts would not affect Medicaid funding; there would be a 2 percent reduction in Medicare payments to hospitals and other providers. That would make the hit to many other programs all the more severe.
“I don’t know if a lot of people have appreciated how big a hit the discretionary health programs” could take if there are automatic cuts, said Richard Deem, senior vice president of advocacy for the American Medical Association. “I think a lot of people are going to wake up to that too late.”
At stake is federal money that, among other things, helps HIV patients pay for lifesaving medication, finances biomedical research and helps prevent and respond to food-borne illnesses and disease outbreaks.
Automatic reductions, for example, could translate into less staff to handle food contamination, said Georges Benjamin, executive director of the American Public Health Association. Recently, Colorado cantaloupes sickened 116 people in 25 states with listeria, killing 23, according to the Centers for Disease Control and Prevention. “Someone has to go into stores and make sure the stuff has been taken off the shelves. I am very worried about what [automatic cutting] does to the public’s capacity to be safe.”
If the full $1.2 trillion in automatic cuts go into effect, funding for non-defense discretionary programs in 2013 would face reductions of 7.8 percent, dropping each year to 5.5 percent in 2021, according to Congressional Budget Office estimates. Richard Kogan, a senior fellow at the Center on Budget and Policy Priorities, however, places the first year’s hit at more than 9 percent.
Health advocates say that deep cuts could harm the public by reducing services and investment in several areas, including:
●Public health. The CDC is particularly vulnerable because it was hit hard in the last round of budget cuts, Benjamin said. In fiscal year 2011, federal funding for the CDC declined by $740 million.
The agency plays an important role in detecting and responding to emergencies such as tornadoes, hurricanes, food-borne illnesses and infectious-disease outbreaks. It also helps fund state and local public health departments and labs, which Benjamin said is important as states struggle with massive budget deficits.
●Medical research. U.S. investment in biomedical research is beginning to lag behind some other nations, namely China and India, at a time when robust funding could help with job creation, National Institutes of Health Director Francis Collins said at a May hearing of the Senate Appropriations Subcommittee on Labor, Health and Human Services, Education and Related Agencies.
Congress in recent years has given NIH small increases that haven’t kept pace with medical inflation, advocates said. . Funding declined in 2006. Lawmakers are negotiating funding levels for fiscal year 2012, which began Oct. 1.
●HIV/AIDS. About 500,000 HIV-infected people currently get help with expensive care and lifesaving medication through the Ryan White HIV/AIDS Program. Ronald Johnson, vice president of policy and advocacy at AIDS United, said that automatic cuts would be devastating.
Ryan White help is a last resort for many people who are low-income, uninsured or underinsured. On average, a year’s worth of medication costs about $15,000 to $20,000, and total care for an infected person can run about $100,000, Johnson said.
●Disease prevention. Prevention funding in the health law is already under fire from both Democrats and Republicans. Republicans have pushed to repeal the funding, and President Obama said recently that he would support decreasing it by $3.5 billion over 10 years. The prevention fund has provided money for programs aimed at reducing obesity and tobacco use, among other public health priorities.
Reductions are short-sighted, said Jeffrey Levi, executive director of Trust for America’s Health. “The irony here is that there is so much focus on health-care costs, yet there is significant evidence that the kind of prevention programs that the [health law] is supporting can have a positive impact on health-care utilization and costs,” Levi said.
While lobbyists representing all sectors of the health-care system are pushing hard to protect their interests, many say they doubt that the committee of 12 lawmakers will be able to reach consensus on issues that have stumped Congress for decades, including overhauling the tax code and reining in fast-growing entitlement spending. The committee’s deadline for action is Nov. 23, after which Congress would have until Dec. 23 to approve any deal.
The committee’s task is made even harder by a divided Congress, ongoing battles about federal health program funding for fiscal year 2012, and a presidential campaign season that is already in full swing. Whatever Congress cuts this year could be restored in whole or part in the future.
Benjamin said lawmakers should look for acceptable savings in the big spending Medicaid and Medicare programs. If they don’t, “there will be all kinds of unanticipated and unintended consequences” from automatic cuts, he said. “The tradeoff will be having to cut something that you really don’t want to cut.”
Kaiser Health News, an editorially independent news service, is a program of the Kaiser Family Foundation, a nonpartisan health-care-policy organization that is not affiliated with Kaiser Permanente.