Without the American Taxpayer Relief Act of 2012 (H.R. 8, the "fiscal cliff" bill), health care costs in the United States might have increased dramatically.
The House passed the Act late on the evening of New Year's Day, 2013, following overwhelming Senate approval. President Obama signed the measure into law on Wednesday. He had presented his budget, with its fiscal cliff proposals, in February of last year, but an ineffective 112th Congress delayed approval until the last minute.
Links to the complete text of the law and Congressional debate from January 1 are provided in an earlier article, which also presents the actual yes-or-no roll call votes of each Senator and Representative by name.
The Taxpayer Relief Act, largely hammered out last weekend by Vice President Joe Biden and Senate Minority leader Mitch McConnell, reduces the federal deficit to $737 billion by combining spending cuts and tax increases. Taxes will stay lower for the middle class (those earning less than $400,000), and the wealthiest will pay a fairer share.
The new law has two significant implications for health care in the United States:
- Postponement of Medicare reimbursement cuts to care providers, and
- Extension of unemployment insurance.
Both are temporary measures that extend the time the government has to solve the underlying problems.
Postponement of Medicare reimbursement cuts to care providers
The new law will avoid scheduled cuts to doctors with Medicare patients. Observers feared that if an adjustment was not made in fiscal cliff negotiations, more American physicians would stop taking new Medicare patients. Those who care for the nation's 47 million Medicare patients will be saved for another year by the new law from a large projected decrease in reimbursements.
The law also delays an automatic 2% cut in federal spending ("sequestration") for physicians and other Medicare providers that was scheduled to go into effect on January 2.
Because private insurers base their own reimbursement rates on the Medicare numbers, a proposed change in the law would influence more than government-provided care. The "doc fix," a rerun of over 20 previous political efforts during the past 10 years, will cost approximately $30 billion and will be achieved by making spending cuts. Hospitals will pick up nearly half of the cost. Other areas to be cut have not yet been determined.
Extension of unemployment insurance
The American Taxpayer Relief Act also extends Federal unemployment insurance for another year. Current recipients will continue to receive federal aid until their benefits run out. The extension will allow those who are unemployed for longer than 26 weeks to continue to cover their own health costs through private health insurance programs.
This provision averts the enormous impact of dumping on an already stressed health care system the potential expenses of two million unemployed people whose benefits would otherwise have expired on January 1.
Based in Chicago, Sandy Dechert recently covered health care issues in the Presidential race and mental and physical health over the holidays. She has also reported on Hillary Clinton's recent illness, the fungal meningitis outbreak, and the procedure that saved Good Morning America cohost Robin Roberts.
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