Fiscal Cliff Bill Passes Congress

On New Year’s Day, the House of Representatives passed H.R. 8, the American Taxpayer Relief Act of 2012, to avoid going over the “fiscal cliff.” The final vote was 257-157, passing with 172  Democrats and 85 Republicans. (The bill passed the Senate at 2 am on New Year’s Day by a vote of 89-8.)

The final package included tax policies, a two month delay on the sequestration and a one year fix to the Sustainable Growth Rate.

Below are some documents on the package that passed Congress – including the bill, a Congressional Budget Office score, a summary and more.

 

American Taxpayer Relief Act Copy

One-Pager on America Tax Relief Act

Offsets Summaries – American Tax Relief Act

Extender Summaries – American Tax Relief Act

CBO Detail on SenateHR8-TitleVI

Joint Committee on Taxation – Estimated Revenue Effects of HR 8 the American Taxpayer Relief Act of 2012

White House Summary on Fiscal Cliff

Entitlement Reform: Possible Changes to Medicare & Medicaid

With all the talk in Washington about deficit reduction and efforts to craft a “grand bargain,” entitlement “reform” or changes to entitlement programs, such as Medicare and Medicaid, are on the table.  Taken together, Medicare, Medicaid, and the Children’s Health Insurance Programs are an estimated 21% of the federal budget while Social Security is approximately 20%.[i]  According to the Pew Research Center, beginning January 2011 and for the next 19 years, 10,000 people a day are turning 65 – making them eligible for entitlement programs, such as Medicare and Social Security.[ii]  In turn, this demographic reality will cause those slices of the federal budget pie to grow at break-neck speed, unless the Congress does something to stem the tide.  Hence, the growing bipartisan interest in discussing entitlement reform.

So, what does that really mean?  One usual favorite for reducing entitlement spending being touted is cracking down on “fraud, waste, and abuse,” which supporters say could potentially save billions each year (though the independent Congressional Budget Office (CBO) tends to think otherwise).  In addition to that old stand-by, here is a sampling of some of the other changes to Medicare and Medicaid currently under consideration:

–     Reforming Medicare cost-sharing rules

–     Restricting first-dollar coverage in Medicare supplemental insurance (Medigap)

–     Extending Medicaid drug rebates to dual eligibles in Medicare Part D

–     Cutting Medicare payments to hospitals for bad debts

–     Accelerating Medicare home health savings in health reform

–     Eliminating state Medicaid provider tax (a mechanism used by a majority of states to increase their federal Medicaid matching funds)

–     Placing dual eligibles in Medicaid managed care

–     Block granting the Medicaid program

–     Moving some or all of Medicare into a “Premium Support” program

–     Combining Medicare Part A&B deductibles

–     Expanding use of competitive bidding under Medicare

–     Bundling Medicare payments (e.g., moving away from fee-for-service)

–     Increasing the eligibility age for Medicare

–     Increasing means-testing for high-income Medicare beneficiaries