How The Sequester Could Affect Health Care
MELISSA BLOCK, HOST:
Now more on how these automatic spending cuts would work and what impact they might have on one huge sector of the economy: health care. NPR's Julie Rovner is here to talk about that. Hey, Julie.
JULIE ROVNER, BYLINE: Hey, Melissa.
BLOCK: And first, Julie, let's talk about this $85 billion in cuts. Why don't you put that number in some perspective for us?
ROVNER: Well, according to the Office of Management and Budget, if Congress fails to reach a deal before March 1st, which is next Friday, it would be required to order agencies to cut that $85 billion by September 30th, which is the end of the fiscal year. That would be about a 9 percent cut for domestic programs like health care and a 13 percent cut for defense programs.
BLOCK: OK, 9 percent for domestic programs, 13 percent for defense - not a government shutdown, though, when spending for federal programs stops outright.
ROVNER: That's right. And it's an important distinction. Now, we could have a government shutdown at the end of March. That's when the temporary spending bill Congress passed last year runs out. But that's a fight for next month. And it's one of the reasons why some people think that it's likely that these cuts will happen because under a government shutdown, programs, well, shut down. In this case, programs can continue to operate just at a somewhat reduced level. This is sort of a brownout, if you will, compared to a blackout.
BLOCK: And if it's that brownout scenario that you're describing, big question is how will people feel the impact of those cuts?
ROVNER: Well, some people will feel it a lot, some people will feel it really not very much. Now, the administration has been trying to make it feel pretty dramatic. The Agriculture Department has been warning that cuts of this magnitude would require furloughs of inspectors at food processing plants. That could temporarily shut down those plants and cause disruptions in the food supply. Similarly, the Food and Drug Administration says it would have to forgo some 2,100 inspections of domestic and foreign food facilities due to the cuts. And many people who are getting government services now will simply not get them.
According to the Department of Health and Human Services, an estimated 800,000 fewer outpatient services would be provided by the Indian Health Service, 900,000 fewer people would be able to get care at community health center and 500,000 fewer people could get vaccines. Now, how terrible are all of these individual cutbacks? That's not at all clear, and it's not at all clear yet how the public would react to them.
BLOCK: Julie, what about the Affordable Care Act, which is now law; it's in the process of being implemented this year. How would that be affected by the sequester?
ROVNER: That's an interesting question. The administration doesn't seem to have a hard and fast answer, but it seems clear that many of the programs in the law are subject to these reductions even as the federal government and states are scrambling to get things up and ready for next January when most of the big parts of the law take effect. But the thing that many governors are most worried about, that the federal government won't pay its share of the Medicaid expansion, is not affected because Medicaid is one of the few programs that's actually exempt from these automatic budget cuts.
BLOCK: So Medicaid is exempted. What about Medicare?
ROVNER: Medicare patients are not subject to the cuts, but Medicare providers - hospitals, doctors and the like - would be cut by no more than 2 percent.
BLOCK: OK. NPR's health policy correspondent Julie Rovner. Julie, thanks.
ROVNER: You're welcome. Transcript provided by NPR, Copyright NPR.