1. United States
2. N.C.
3. Letter

The following discusses the potential impact of the proposed US budget on Medicare funding, highlighting significant concerns regarding cuts due to sequestration and the rising federal deficit. • Sequestration Cuts: The reconciliation bill could trigger mandatory Medicare cuts of approximately $500 billion from 2026 to 2034 due to an anticipated $2.3 trillion increase in the federal deficit over ten years. • Impact on Providers and Patients: The proposed cuts pose challenges to Medicare's viability, potentially leading to reduced access to care, overwhelmed emergency departments, and financial stress on healthcare providers, especially in rural and safety-net hospitals. The current budget proposal contains several concerning elements that could lead to significant Medicare funding cuts: • The reconciliation bill, if enacted as proposed, would trigger mandatory cuts through sequestration under the Statutory Pay-As-You-Go Act of 2010 • These cuts would amount to approximately $500 billion in Medicare reductions from 2026 to 2034 • The cuts are necessitated by the bill's projected increase in the federal deficit by $2.3 trillion over ten years • Physician Payment Updates While there are some positive changes proposed: • The budget includes the first permanent update to baseline Medicare rates since MACRA 2015 • It proposes tying Medicare physician payment to 75% of the Medicare Economic Index • A 2.25% increase in Medicare physician payment is projected for 2026 Potential Impact of Cuts Healthcare Access The proposed cuts could have severe implications: 1. Provider Impact: • Financial stress on Medicare providers, particularly: o Safety net hospitals o Rural hospitals • Potential facility closures • Reduced access to care for Medicare beneficiaries 2. Quality of Care: • Emergency departments may become overwhelmed as safety nets • Reduced access to care for complex conditions • Strain on remaining healthcare providers The cuts pose significant challenges to Medicare's long-term viability: • Medicare currently accounts for 21% of national health spending and 10% of the federal budget • Spending is projected to increase due to: o Rising healthcare costs o Increased enrollment from aging population o Higher payments to Medicare Advantage plans Healthcare policy organizations and medical associations have proposed several solutions: 1. American Medical Association (AMA) Recommendations: • Support for Medicare payment updates in the current bill • Advocacy for ensuring Medicare payments keep pace with inflation • Reforms to the payment schedule for stability 2. Policy Solutions: • Tying Medicare payment updates to the Medicare Economic Index • Implementing reforms to ensure payment sustainability • Addressing the inadequacies in the current Medicare payment system