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$11B in Looming Medicare Cuts Detailed by OMB

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   September 17, 2012

The healthcare industry's opposition to federally required sequestration cuts will likely grow stronger this week following Friday's report from the Office of Management and Budget that shows $11 billion in annual cuts to Medicare over the next decade.


The OMB released its report under pressure from Congress to detail how sequestration would affect federal programs. The 394-page report shows an overall federal budget reduction of $109 billion annually through 2021.

More than half of the cuts come from a $5.8 billion reduction to the Hospital Insurance Trust Fund. Prescription drug funding is slated to be cut by $591 million. The National Institutes of Health's 8% budget reduction results in a $2.5 billion drop in funding which, according to the OMB, means less "scientific research, including needed research into cancer and childhood diseases."

Some federal programs are exempt by law. For example, defense spending on war and military readiness would not be subject to sequestration. Medicare also has some protection with $1.7 billion in Health Information Technology Incentive Payments and $84 million for the program's Hearings and Appeals process will remaining funded at 2012 levels. 


Jacqueline Fellows is a contributing writer at HealthLeaders Media.

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