ICYMI: POLITICO: 'What a debt ceiling breach could mean for health care'

Today, Politico reported on the extreme consequences the first-ever default would have on Medicare and Medicaid recipients, as well as veterans, writing that "A short-term breach could disrupt Medicare and Medicaid payments, and a long-term breach could severely harm health systems, potentially making providers reluctant to see Medicare and Medicaid patients."

The report notes that if Congress doesn't act to prevent a default, health care premiums could skyrocket for those using the Affordable Care Act marketplace for their coverage if default occurs. Care for veterans could also be dramatically undermined by staffing shortages.

President Biden's budget would reduce the deficit by nearly $3 trillion over the next decade while ensuring Medicare would be solvent through 2050. There is no reason to threaten Americans' health care in the name of fiscal responsibility.

Read the full story below:

POLITICO: 'What a debt ceiling breach could mean for health care'
[Kelly Hooper, Daniel Payne, 5/22/23]

DEBT CEILING DOOMSDAY — Health care experts warn that the impact of the U.S. breaching the debt limit could be stark, your host reports.

A short-term breach could disrupt Medicare and Medicaid payments, and a long-term breach could severely harm health systems, potentially making providers reluctant to see Medicare and Medicaid patients, Moody's Analytics predicts.

"This is like dropping a nuclear bomb on the health care system," said Sara Rosenbaum, emerita professor of health law and policy at George Washington University.

Debt ceiling talks broke down over the weekend, but House Speaker Kevin McCarthy said he and President Joe Biden will meet today to try to close the distance on negotiations and avoid a looming debt default, which the Treasury said could come as early as June 1.

Here are some key areas of health care that would be affected by a debt limit breach:

Medicare/Medicaid: Many providers' revenues come from federal programs — Medicare accounted for about 26 percent of national hospital spending in 2021. If the federal government suspends funds, providers might have difficulty meeting their obligations, experts said.

Because many providers are unhappy with Medicare's and Medicaid's administrative burdens and low reimbursement rates, said Moody's Analytics economist Bernard Yaros, "this could just be another reason for many of these providers to stop seeing Medicare and Medicaid patients."

Affordable Care Act: Insurance companies that participate in the Affordable Care Act might have some reserves they can dip into to keep paying claims if government funding stops. But for people getting their health care through the ACA marketplace, "they would instantly see their premiums go up" if the Treasury can no longer fund subsidies, said Frederick Isasi, executive director of Families USA, a health care advocacy group.

Veterans Affairs: One of the biggest impacts of a sustained debt limit breach would be on the department's ability to keep its staff, experts said.

That begs the question of whether veterans' hospitals could remain open and whether veterans could access the care they need, said Bill Hoagland, senior vice president at the Bipartisan Policy Center.