Health Care Reform Today

• G. William Hoagland
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  G. William Hoagland

  

  G. William Hoagland

  Cigna's vice president for public policy and government affairs

The Super Commitee and Cigna

The Joint Select Committee on Deficit Reduction – the “Super Committee” – is charged with reporting legislation by November 23 to achieve $1.2 trillion in deficit reduction over the next decade. Reducing the federal debt held by the public by this amount would be a positive step in stabilizing debt, which is now nearly 70 percent of Gross Domestic Product , and placing the country on a more stable economic path going forward. All business sectors would benefit from this public debt reduction and the potential that it holds to help slow the rate of growth in health care costs.

However, the November 23^rd legislation is only a first step; additional action beyond the $1.2 trillion will likely be required. Fundamental reform to both the federal tax code and federal entitlement programs will be required to both stabilize and further reduce projected federal debt.

The major factor contributing to growing federal spending and deficit over the next decade centers on public health care programs; specifically Medicare and Medicaid.

Significant reform of these programs will be required if Federal spending growth is to be curtailed. How the Super Committee achieves this goal will determine if costs are merely shifted to private payers and individuals with private insurance – or whether structural changes to the public programs can result in both public and private savings over time. 

At this time, the Committee appears not to be engaged in discussions that would fundamentally alter federal health care programs, but rather is focused on limited and targeted benefit reductions.

The potential also exists that the Super Committee will not achieve its goal. Failure to meet the reduction amount would result in an automatic across-the-board reduction to many domestic programs beginning in 2013. However, those reductions would exclude Medicaid and limit reductions in Medicare to two percent.

Similarly, it appears that the committee will not address reform of the federal tax code to simplify and reduce marginal tax rates on both businesses and individuals while not adding to the deficit. However, the current debate has made tax reform a high priority item for the Congress’ second session next year. This could be a positive outcome for the country. 

Bill Hoagland is Cigna's vice president for public policy and government affairs.