You’ve probably heard quite a bit about the “fiscal cliff” by now. It isn’t often that we hear about Congress having to work towards a decision during the New Year holiday. Here are the ways that various forms of insurance will be affected by the fiscal cliff deal.
There are a whole lot of details involved in the “fiscal cliff” and in the deal that was finally made in regards to it. Since this is the Insurance Blog, I’m going to focus on the portions of the situation that have an affect on various types of insurance.
In the days before the “fiscal cliff” deadline, there was concern that inactivity on the part of Congress would result in 2.1 million Americans losing their unemployment insurance benefits on January 1, 2013. The only way to avoid this disaster would be for Congress to vote to extend unemployment benefits.
Fortunately, Congress did, eventually, agree to extend emergency unemployment insurance for the 2.1 million Americans who are looking for work. This new law keeps the extended tier of benefits in place for one year.
Another important part of the deal involved Medicare. If we fell off the “fiscal cliff”, it would have lowered the amount of reimbursement that doctors received for treating patients who were covered by Medicare by a whopping 26.5%. The new law prevents that from happening in 2013. It is being referred to as the “doc fix”. According to the AARP, doctors are happy about the “doc fix”, but hospitals are not. The AARP says:
The bill would require that, over the next decade, hospitals pick up nearly half of the approximately $30 billion cost of stopping a 26.5% payment cut for Medicare physicians, scheduled to begin today.
Other items in the package that would finance the “doc fix” and Medicare extenders include rebasing bundled payments for end state renal disease (saves $4.9 billion), implementing competitive bidding for diabetic test strips purchased in retail pharmacies (saves $600 million), and reducing risk-adjusted payments to Medicare Advantage ($2 billion).
According to the AARP, seniors will see no changes in their benefits under sequestration. Medicare providers, however, will face $11 billion in cuts between now and September 30, 2013 (which is the end of the government’s fiscal year). Nancy LeaMond, AARP executive vice president, had this to say:
Millions of seniors in Medicare will have the peace of mind in knowing that they will still have access to their doctors.
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