KHN Morning Briefing

Summaries of health policy coverage from major news organizations.

Deficit Projections Likely To Reduce ‘Grand Bargain’ Pressure

The Congressional Budget Office reports the deficit is shrinking at a faster-than-expected rate this year. Medicare and Medicaid outlays are smaller than anticipated, and health care cost increases appear to have slowed. The numbers are expected to lessen the momentum to cut spending on Medicare and other entitlement programs.

The New York Times: U.S. Budget Deficit Shrinks Far Faster Than Expected
In revising its estimates for the current year, the budget office also cut its projections of the 10-year cumulative deficit by $618 billion. Those longer-term adjustments are mostly a result of smaller projected outlays for the entitlement programs of Social Security, Medicaid and Medicare, as well as smaller interest payments on the debt. The report noted that the growth in health care costs seemed to have slowed — a trend that, if it lasted, would eliminate much of the budget pressure and probably help restore a stronger economy as well. The C.B.O. has quietly erased hundreds of billions of dollars in projected government health spending over the last few years (Lowrey, 5/14).

Los Angeles Times: Federal Deficit Shrinks At Surprising Rate
Three major factors account for most of the long-term improvement: a better economy, a continued slowdown in the rate of medical inflation — which reduces the cost of Medicare and Medicaid — and higher taxes that Congress approved as part of the "fiscal cliff" deal in January, the budget office said. In addition, the automatic budget cuts that took effect this spring have reduced spending in the short term. … The numbers have an important political impact. Republicans have pushed for big reductions in government programs this year, arguing that the country could face a debt crisis if spending is not curtailed. The Obama administration and congressional Democrats have argued that big new reductions have less urgency because the budget picture is already getting better. The new figures from the budget office, which both parties rely on as a nonpartisan arbiter, will probably give more impetus to the Democrats' position (Lauter, 5/14).

The Washington Post: CBO Sees Brighter Economy With Budget Deficit To Plunge To $642 Billion This Year
After 2015, the CBO forecasts that deficits will gradually begin rising again as the baby-boom generation taps into Social Security and Medicare. Although borrowing will stabilize, the national debt will remain at historically high levels, the CBO said, stuck above 70 percent of the economy throughout the next decade. … Still, the improvement in the short-term forecast has removed the air of crisis that has hovered around the budget deficit since President Obama took office. On Tuesday, some analysts urged congressional Republicans to call an end to their fixation on budget cutting (Montgomery, 5/14).

The Wall Street Journal: Deficit Is Shrinking Quickly
A rapidly shrinking federal budget deficit is upending bipartisan talks to reach a federal budget deal, illustrating the conundrum Washington faces with an improving near-term fiscal outlook but continued longer-term pressures tied to aging baby boomers. … The White House and Republicans have been locked in a budget fight since 2011, leading to a number of piecemeal deals that have reduced the deficit by both raising taxes and cutting spending. White House officials have said they want more tax increases while Republicans have called for structural changes to Medicare and Medicaid, the two sprawling government health-care programs, while saying they won't back new tax increases. Earlier this year, a bipartisan effort was under way to lock in more deficit cuts, particularly later in the decade, but those talks have stalled in recent weeks, in part because of the shrinking deficit (Paletta, 5/14).

Modern Healthcare: CBO Projects Less Growth In Healthcare Spending
Noting the society-wide slowdown in healthcare spending, Congressional Budget Office analysts on Tuesday sharply lowered their projections for the next decade's outlays on Medicare, Medicaid and covering the uninsured under the healthcare reform law. The changes – sure to be welcomed by the White House and healthcare reformers – helped lower the CBO's overall projections for the government deficit by $618 billion through 2023 compared with estimates offered just three months ago (5/15).

National Journal: Are Health Care Costs Healing Themselves?
A mysterious shift in health spending patterns could have major implications for the fiscal policy debate—if only experts could figure out what’s behind it. The soaring cost of Medicare and other health programs is expected to be a key driver of the ballooning federal debt in coming years, thanks to the retirement of the baby-boom generation and fast-rising health costs (Chokshi, 5/15).

The Associated Press/Washington Post: Projected Lower Deficit This Year Could Further Slow Any Demand For Big Budget Deal
Now, the improving picture seems likely to make it more difficult for events to force Washington’s exhausted budget combatants closer to a deal. For starters, it means that the deadline for increasing the government’s borrowing cap has been postponed until October or November, the CBO said. It had been expected that lawmakers would have had to act this summer to increase the so-called debt limit, which could have been a catalyst for a broader budget deal (5/14).

The New York Times' Political Memo: For Republicans, Incentives To Strike A Budget Deal With Obama
Ask around the White House and the Capitol, and you will quickly find reasons to doubt that Republicans will compromise with President Obama on a budget deal that includes more tax increases and spending cuts in social programs. … Delaying steps to rein in Social Security, Medicare and Medicaid, the subjects of Republican doomsday warnings for years, means delaying significant attempts to curb the size of the government. The longer the delay, the sharper and more immediate the changes Washington must eventually make to ease the long-term fiscal squeeze (Harwood, 5/14).

Other CBO projections regarding the Medicare "doc fix" and health insruance coverage -

National Journal: Good News For Doctors And Budget Hawks
The price tag for repealing a flawed Medicare doctors' pay formula will remain near a recent record low, according to a new estimate from the independent Congressional Budget Office released on Tuesday. It's good news for the physicians and lawmakers who hope to see a permanent "doc fix" in 2013, and suggests the momentum behind achieving repeal is likely to continue this year. What's more, the CBO lowered its estimates Tuesday for Medicare spending between 2014 and 2023 by $85 billion (Hollander, 5/14).

Reuters: Two Million Fewer U.S. Uninsured To Gain Health Coverage: Congressional Researchers
President Barack Obama's landmark healthcare reform law will extend coverage to 2 million fewer uninsured Americans than expected only a few months ago, congressional researchers said on Tuesday. A new report from the nonpartisan Congressional Budget Office said 25 million people who currently lack insurance will obtain coverage through subsidized marketplaces or an expanded Medicaid program over the coming decade, down from a February CBO estimate of 27 million people (Morgan, 5/14).

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