Congress Takes a Short Breather From Budget Battles

Before Congress left town for a two-week spring break, which ends April 8, lawmakers approved several budget matters. They passed a continuing resolution to avert a government shutdown at the end of this month, and the House and the Senate passed widely divergent spending blueprints for 2014.

The continuing resolution, which the president is expected to sign, funds day-to-day operating budgets of every Cabinet agency through Sept. 30, the end of the current fiscal year. It leaves in place the automatic spending cuts to domestic and defense programs, including the 2 percent reduction in Medicare payments to health care providers, mandated by the sequestration law.

With Medicare sequestration left intact, clinical laboratories, whose Part B fee schedule payments were cut by 2.95 percent as of Jan. 1, will experience a further cut of 2 percent, for a total of 4.95 percent, from April 1 and through Sept. 30.

The measure does allow certain agencies to shuffle the sequestration cuts, in particular to continue funding meat inspections and tuition assistance for military personnel. And in a last-minute reprieve from sequestration, community health centers got a $300 million increase, enabling them not to curtail services for the rest of this fiscal year.

The budget blueprints for fiscal year 2014, which begins this Oct. 1, were passed by the House on March 21 and by the Senate on March 23. Both are not binding but establish a framework for future negotiations.

The House plan, authored by Budget Committee Chairman Paul Ryan (R-Wis.) and approved mostly along party lines (221-207), is the more radical of the two. It would turn Medicare into a premium support program, transform Medicaid into a state block grant program, cut food stamps, and repeal large parts of the Affordable Care Act (though retaining some of the taxes associated with the act as well as the $716 billion in Medicare cuts it contains). Overall, it would cut federal spending by $4.6 trillion over 10 years and balance the federal budget.

The Medicare overhaul, beginning in 2024, would impact individuals born in 1959 and later. When they become eligible for the program at age 65, they would be offered a voucher that could be applied either toward the purchase of private health insurance or Medicare coverage.

The Senate blueprint, crafted by Budget Committee Chairman Patty Murray (D-Wash.) and passed 51-49 with all Republicans and four Democrats voting no, would not make structural changes to Medicare or Medicaid, would leave the Affordable Care Act intact (but reduce Medicare spending by $275 billion over 10 years by relying on reforms initiated under the act), and while calling for close to $2 trillion in spending cuts, would not produce a balanced budget. It also would ax further sequestration requirements in fiscal 2014 and beyond.

On one point a bipartisan majority of senators did agree. They called for repeal of the 2.3 percent medical device excise tax levied under the Affordable Care Act. This amendment, sponsored by Finance Committee ranking member Orrin G. Hatch (R-Utah) and Sen. Amy Klobuchar (D-Minn.) and co-sponsored by 21 other GOP and Democratic senators, passed by a 79-20 vote. Hatch and Klobuchar have introduced legislation to repeal the tax, the Medical Device Access and Innovation Protection Act (S. 232).

The tax was intended to generate about $30 billion to help pay for health care reforms, but the medical device industry has argued that it will lead to job losses and impede innovation. The tax has raised nearly $200 million since its inception in January, according to industry representatives. The Senate amendment includes a deficit-neutral reserve fund to allow for a payment offset if the tax is eliminated.

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