Ten ways falling off the fiscal cliff could hurt your health

Friday, November 30, 2012 - 11:00am

If President Barack Obama and Congress cannot reach an agreement on the fiscal cliff, economic experts agree it would be devastating.

It would likely send the country back into recession, according to the Congressional Budget Office, and some 3.4 million jobs would be lost. And ultimately, it could hurt your physical and emotional health.

That's because the part of the government that handles health-related programs -- Medicare, veterans' medical benefits, food safety inspectors -- all would be automatically cut starting January 2 if there is no agreement on the Budget Control Act. If not amended in time, the move would abruptly remove $1.2 trillion from the federal budget.

The BCA essentially forces Congress and the president to reach a budget agreement before the end of the year. If they do not and they do not amend the BCA, the Office of Management and Budget estimates each government division would see about an 8.2% budget cut. Medicare would face a 2% cut.

Many, including health care economist Ken Thorpe, are anxious to see that scenario avoided.

"I hope they will reach agreement quickly and do it in a thoughtful way," said Thorpe, a professor of health policy and management at Emory University. "Then next year we can really work on these important structural issues to slow growth in these programs, rather than these across-the-board cuts that would arbitrarily make cuts. It's not the smartest way to do it."

Ellie Dehoney, vice president of public policy and programs for Research!America, said her group has been hard at work visiting as many members of Congress as possible to stop across-the-board cuts. Her nonprofit is particularly concerned about cuts in medical research.

"Across-the-board cuts would put so many vital medical research programs at risk," Dehoney said. Her organization brought a handful of Parkinson's patients to meet with congressional officials. The patients told the representatives how medical advances made through research funded by the National Institutes of Health gave them hope for a cure for their Parkinson's and how much more research was necessary.

"Many we met with were clearly moved by their stories," Dehoney said. "We have seen bipartisan support for medical research funding overall, but in a few offices we still heard about the need for more 'shared sacrifice.' That's why we are still working with such urgency."

The individual departments that will see their budgets cut aren't commenting on specifics. But clearly something would have to give if these departments have less with which to work.

"I don't think there is a lot of cushioning in these program's budgets to just move money around to cover all the demand for these services," said Ted Marmor, professor emeritus of public policy and management at Yale. "It is a real problem when you already have this serious buildup of pressure on state budgets and family budgets with the recession. A one-time sharp drop in the budget would be devastating for a lot of people who depend on these programs."

That means there would be a cut in health services, although it's unclear which specific services would be cut; agencies referred questions back to the OMB and its report.

What is known is the cuts would happen quickly, since under the law most budgets have to be cut in the first year of the act.

"You wouldn't necessarily see the impact right at first, but agencies like the CDC will have to prioritize. Something will have to give, so you'd see a lab close here and a monitoring program end here, so down the road they won't able to monitor, say, a disease outbreak nearly as well as they can now," said Indivar Dutta-Gupta, who works with the Center on Budget and Policy Priorities.

"The problem is, we already are seeing historic low spending on these types of programs, and even if the Congress and the president do reach an agreement and stop sequestration, the big worry is there may be even bigger cuts to these programs in the compromises they make."

If the country does go over the fiscal cliff and an agreement cannot be reached, here are general 10 ways it would hurt programs the government provides to help keep you and others healthy. The following budget estimates come from the latest OMB analysis:

Medicare

Some 50 million people rely on Medicare to cover their health care costs. The federal health insurance program, which is available to all people 65 and older and people with permanent disabilities, has seen a huge increase in people needing its help. Fewer companies offer retiree health benefits (down to only 25% of the population, according to the nonpartisan Kaiser Family Foundation).

Automatically, 2% would be cut from this program's budget. While this is less than the general 8.2% across-the-board cuts for other federal programs, it would amount to a budget reduction of around $554.2 billion. That would mean payments to doctors, hospitals, long-term care facilities and nursing homes could be reduced significantly.

Health care providers already complain that the Medicare reimbursement rate is too low. Ultimately, those facilities could stop taking Medicare patients.

"Or there would be a cost shift," said Julie Barnes, director of health policy at the Bipartisan Policy Center. "That means, ultimately, they might have to charge private patients more. What else can they do? They've got to meet their expenses."

Food safety

The number of foods recalled because they were bad or dangerous hit one of the highest levels in four years in the fourth quarter of 2011, according to the ExpertRECALL Index.

Listeria, botulism, E. coli, Salmonella -- deadly problems for the food supply -- have all been caught by government food inspectors. Yet even with those inspections, tens of millions of people get sick every year and more than 3,000 people die each year from food poisoning, according to the Centers for Disease Control and Prevention.

An 8.2% cut would slash the budget for plant and animal health inspections by $1.08 billion. The budget for the Food Safety and Inspection Service agency would lose more than a billion dollars from its budget. An additional $38 million would have to come out of the budget for inspectors who monitor the safety of our grain supply and stockyards. That could mean fewer inspectors -- and fewer inspections, which ultimately could mean a food supply that isn't as safe as it is now.

CDC

The Centers for Disease Control and Prevention's work touches many health aspects of daily life. Its nurses and doctors, epidemiologists and technologists work to prevent the spread of food-borne illnesses, to stop the spread of the flu and monitor disease outbreaks, to reduce the number of hospital-acquired illnesses, to increase immunizations and to create tools to help communities protect public health, among many other health-related efforts. It would lose $6.8 billion from its budget.

NIH

Ultimately, this cut would impact academic labs and research institutions in every single state. The National Institutes of Health funds a wide variety of medical research. It spends millions to help scientists discover the root causes and cures for childhood diseases, cancer, autism, diabetes, lupus and many other illnesses.

Spending on biomedical and health research and development was already lower than it has been in years, according to Research!America. Cuts now could have a severe, long-term impact on research, which could lead to fewer cures and therapies to fight common diseases. This department would lose more than $30.7 billion from its budget.

Food for lower-income families

The Women Infant and Children Supplemental Nutrition Program, known as WIC, helps feed families who are considered a nutritional risk because they can't afford to buy food. The program also teaches people about nutrition and provides referrals for health services.

Some 16.4% of the U.S. population is considered "food insecure," according to FeedingAmerica.org. That's more than 48 million people.

About $6.6 billion would be taken out of this program's budget.

Separately, child nutrition programs would be cut by $19.7 billion. Commodity Assistance would lose $263 million. Other nutrition programs would lose $139 million. And the Supplemental Nutrition Assistance program would lose $87.3 billion.

Maternal, Infant and Early Childhood Home Visiting Program

This is a home visiting program that helps pregnant women or women with children younger than 5 who may need additional help with maternal and child health issues. It also works to prevent abuse, neglect or child injuries because of an unsafe environment in the neighborhood or home.

Studies show this program reduces crime and incidents of domestic violence. It also increases a family's economic self-sufficiency. This program would see a $400 million reduction in its budget.

Office of Lead Hazard Control and Healthy Homes

Children in at least 4 million households are still being exposed to the dangers of lead, according to the CDC. Lead poisoning, which disproportionately hurts children, can curtail nervous system development, lead to behavioral disorders and cause headaches, anemia, seizures and even death.

The Office of Healthy Homes and Lead Hazard Control is a federal agency established to eliminate lead-based paint hazards in private homes and low-income housing. The Healthy Homes program also helps prevent disease and injuries that result from housing-related hazards such as radon, poor indoor air quality and even poor lighting that can lead to falls.

The CDC estimates more than 11,000 people die each year from preventable unintentional injuries, including falls, fires and poisonings in unsafe homes. This program would lose $120 million.

Department of Homeland Security, Office of Health Affairs

The Office of Health Affairs in the Department of Homeland Security is something Americans want to be fully operational if terrorists attack the country using chemical, biological, radiological or nuclear weapons. It serves as the department's authority for all medical and health issues. The office also provides experts to the department's leadership, builds national plans in case of terrorist attacks, helps first responders and protects the department itself from health threats. It would lose $167 million from its budget.

Veterans' health

An increasing number of people use services provided by the Veterans Health Administration. That's not a surprise when our nation has recently been involved in two major wars and Vietnam vets are at an age where they require more medical services.

About a quarter of the population is eligible for VA benefits and services. The VA managed some 80.2 million outpatient visits in 2010 alone. The department would lose $5.8 billion from its budget for Medical Support and Compliance and $45.5 billion for medical services. Some $581 million would be cut from medical and prosthetic research and $5.69 billion from its medical facilities budget. The Department of Defense-VA health care sharing incentive fund would lose $30 million.

Social Security

Since the start of the recession, there has been a marked increase in the need for federal disability insurance as provided by Social Security. According to the last available census data, more than 8 million people are considered too disabled to work and receive this benefit from the government.

Automatic cuts would dramatically reduce these services. The federal disability insurance budget alone would be cut $2.9 billion for discretionary spending, and $144 billion for mandatory spending.
 

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