Looking beyond November


Signed into law by U.S. President Barack Obama in 2011, the Budget Control Act created a potential 2013 sequestration, a procedure where automatic spending cuts are triggered within the government. The Joint Select Committee on Deficit Reduction had to find these cuts by November, 2011 to prevent this sequestration from happening on Jan. 2, 2013.

Due to rigid bipartisan politics, the committee failed to reach a workable solution. Mandated by the Budget Control Act, the automatic sequestration is now upon us, representing a massive $1.2 trillion in spending cuts evenly divided between defense and non-defense spending. Cuts to Medicare providers (not beneficiaries) will be $123 billion in reimbursement. The approaching wave of what will happen Jan. 2, 2013 was introduced to the federal budget in 1985 by the Gramm-Rudman-Hollings Balanced Budget Act.

Hospitals have already agreed to $155 billion ($14 billion in Texas) in reimbursement reductions over ten years in support of the Patient Protection and Affordable Care Act (ACA). An integral part of the act is the needed Medicaid expansion beginning in 2014. Texas leads the nation with 27 percent of its citizens having no medical insurance. Many of these residents are known as the working uninsured, since they are employed in food service, agriculture and retail, oftentimes visiting hospital emergency rooms for primary care.

Tripp Umbach, the nation’s leading provider of economic impact research, designed a customized model to analyze the projected impact. This model estimates that nationally, during the first year of the sequestration, more than 496,000 jobs will be lost. By 2021 in Texas, approximately 50,000 jobs in the health care sector could be eliminated. This job reduction will impact our Texas economy.

We must reach a collaborative solution within our lame-duck Congress to prevent the sequestration cuts to Medicare providers slated for early 2013.