Sequestration Impacts Health Care

Sequestration Impacts Health Care

How will sequestration impact health care? If no agreements are reached by March 1, 2013, sequestration cuts will impact health care in many ways.  The sequester cuts would remain in place for the remainder of the federal government fiscal year, which ends September 30. It is estimated that these cuts in health care would equal about 9% of the federal funding for these health care programs.

According to Department of Health and Human Services Secretary Kathleen Sebelius, the cuts would include:

1.  A reduction in services provided through the Indian Health Service, tribal hospitals, and clinics

2.  424,000 fewer HIV tests through grantees of the Centers for Disease Control and Prevention

3.  21,000 fewer facility inspections by the Food and Drug Administration of firms that manufacture food products

Medicare and Medicaid

Medicaid and CHIP (the Children’s Health Insurance Program) are exempt from the automatic cuts.  So is Social Security.

Medicare beneficiaries will not be subject to the cuts.

Medicare providers can see reductions in reimbursement up to 2%.  The health care industry is claiming that up to 500,000 health care jobs could be eliminated in the first year that sequestration is effective. That means that access to care could take longer because of limited resources (staff, etc.) being available.

Affordable Care Act

Interesting to note that funding for the Affordable Care Act is not exempted from the sequester.  Remember, states and the federal government are busy creating the healthcare exchanges for every state, to be in place and open for business by October 1, 2013.

What is not clear to me is what will happen with the implementation schedule of the Affordable Care Act if the sequester becomes effective and the funding is not available.

Pre-existing Conditions

Individuals with pre-existing conditions currently receiving insurance through their state insurance programs will continue to be covered for the remainder of the year.  New applications will not be accepted at this time in order to preserve the existing funds for current enrollees.

Remember, beginning January 1, 2014 everyone, whether or not they have pre-existing conditions, can obtain insurance through the state healthcare exchanges as part of the Affordable Care Act.


Once again, there appear to be more questions than answers with this looming deadline.  Do you think that Congress will allow the sequester to be fully implemented?  How long will the posturing in Washington D.C. continue?  If the sequester does occur, what will happen to the Affordable Care implementation timetable?

It seems certain to me that jobs will be eliminated, services will be reduced or discontinued, more people will be unable to receive health services and care as well as becoming angry with no solution on the horizon.  And that’s just in the health care area.  Other programs and agencies will also see dramatic budget cuts.

The sequester call for $85 billion in automatic cuts by March 1, 2013.  Beginning the following federal fiscal year, which begins on October 1, 2013, the sequester limits will rise to approximately $100 billion in automatic cuts.

Let’s hope that some compromise can be reached and the sequester does not remain beyond the March, 2013 budget discussions.  From what I’ve heard and read it was never supposed to get this far.  Then again, those making the decisions are not directly impacted; as their salaries and the President’s are apparently exempt from the sequestration.  However, their support staff are not faring so well.  How about we level the playing field: everything is on the table for consideration, no one is exempt, and everyone will utilize the same health care system, whether or not a government official.  That should make for some very interesting conversations and decisions.

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