TRAVERSE CITY — Munson Healthcare would have to endure an additional two years of Medicare sequester cuts under a deal unveiled by lead budget negotiators for the Senate and House.
Munson already faces a decade of 2 percent sequester cuts in Medicare, a government health insurance program for the elderly.
This deal would extend the cuts to 2023, two years beyond what was established in the Balanced Budget Control Act of 2011.
Munson’s top chief said it is too early to speak about employee or patient ramifications.
“There isn’t any specific legislation approved yet,” said Ed Ness, president and chief executive officer of Munson Healthcare. “When we get a specific impact to our various hospitals and start our budgeting process for next year in February, we’ll quantify these changes and look at building them into next year’s budget,”
Ness said that each year of the 2 percent sequester translates into a $3.5 million revenue loss for Munson, which has about a 55 percent Medicare patient population.
In addition to the sequester, Munson also must contend with $150 million in collective Medicare cuts over 10 years, triggered by the Affordable Care Act, Ness said.
“This isn’t new. Two years ago, we reduced expenses by $10 million and last year by $15 million, in large part because of these changes,” Ness said. “Our approach is to plan for this and be proactive, assuming it will happen. If we do it systematically, it doesn’t look like a big crisis where you have to do something dramatic.”
House Budget Committee Chairman Paul Ryan, a Republican, and his Senate counterpart, Democrat Patty Murray, announced the plan on Tuesday.
Top Republicans and President Barack Obama are lining up behind the modest U.S. budget agreement that restores about $63 billion in automatic spending cuts from programs ranging from parks to the Defense Department.
But $28 billion of those savings will be made up by the extension of the Medicare sequester cuts into 2023. The package would also raise the Transportation Security Administration fee on a typical nonstop, round-trip airline ticket from $5 to $10; require newly hired federal workers to contribute 1.3 percentage points more of their salaries toward their pensions; and trim cost-of-living adjustments to the pensions of military retirees under the age of 62.
The deal will set the stage for action in January on a $1 trillion-plus spending bill for the budget year that began in October.
Bipartisan approval is expected in both houses of Congress in the next several days.
Tuesday’s budget deal would have little impact on deficits, but holds the potential for avoiding politically charged budget clashes for the next year or two.
Conservatives are upset that the plan rolls back automatic spending cuts, known as the sequester. Democrats failed in their bid to include an extension of benefits for workers unemployed longer than 26 weeks. The program expires on Dec. 28, when payments will be cut off for an estimated 1.3 million individuals.
The ASSOCIATED PRESS contributed to this report.