DSH cut delay surprise in POTUS budget
April 10, 2013 7 Comments
Sarah Kliff notes the surprising proposal in the President’s budget to delay the scheduled cuts to Disproportionate Share (DSH) payments that Medicare makes to hospitals based on how many uninsured patients they treat. The logic of cutting them in the ACA was that the number of uninsured would decline due to private insurance purchased in exchanges and Medicaid expansions. Of course, the Supreme Court made the Medicaid expansion voluntary and a good number of states are balking. The looming DSH cuts are one of the biggest realpolitik reasons for a skeptical (or downright hostile) state to expand Medicaid. If they don’t, they are essentially voluntarily redistributing money to other states under the default ACA.
The President’s budget proposes delaying these cuts, presumably to lessen the blow on hospitals in states who would otherwise have cuts to DSH payments without reductions in the uninsured.
This is a big surprise in that it it would give away political leverage to expand coverage. Of course, everyone is saying the budget is DOA, but I think there are nuggets of a potential White House/Senate deal in the President’s budget that could result in something passing the Senate that would pressure the House to vote on it. And something has to be done to raise the debt limit.
This surprise move (at least to me) implies to me that it is part of something that has already been discussed in the nascient White House/Senate negotiations and that along with chained CPI and more means-tested Medicare being put forth by the President in his budget, this item makes me think there is a chance of a ‘mini grand bargain’ of sorts. And I would think a whole lotta Republicans would love to vote for this, as they could then say ‘see we delayed Obamacare.’ The Speaker will say lets do it now and of course the President will say no, it is part of a bigger deal only.
Bottom line, I think there is a reasonable chance that between now and Labor Day that House Republicans come to regret pushing the Senate back into “normal order” and saying they no longer wanted to deal with the President directly.