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Public Consulting Group Research

Media reports indicate that the recent debt-ceiling agreement may give rise to cutbacks in the Medicare program, especially affecting reimbursement to providers.  The new “super committee,” established by the legislation (S 365), needs to develop a “grand bargain” by November 23, 2011, which seeks to include $1.5 trillion in savings over the next decade.  Failure to achieve that goal will trigger a required $1.2 trillion cut that includes a 2 percent across-the-board reduction in payments to Medicare providers beginning in 2013.  While Democrats in Congress vowed to protect entitlement programs during the debt-ceiling debates, Washington policymakers suggest that Medicare, Medicaid, Social Security and possibly even the Affordable Care Act will be under consideration by the super committee as possible reduction targets.  One policy proposal being mentioned is to raise Medicare eligibility to age 67 and have those seniors no longer eligible for Medicare enroll in the new health insurance exchanges for premium subsidies under healthcare reform. 

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