TO: Chief Executive Officers, Chief Financial Officers and Advocacy Task Force members

The President signed the debt limit legislation yesterday: a two-part agreement, which would raise the debt ceiling by $900 billion – $400 billion immediately and $500 billion in September, following a presidential request – and enact cuts of $917 billion over 10 years. Medicare and Medicaid would not be impacted by the initial cuts.

The second part of the agreement then calls for the formation of a 12-member, bipartisan congressional committee that would be tasked with making recommendations for $1.2-1.5 trillion in additional savings by Nov. 23. The committee’s recommendations would be subject to a simple up-or-down vote before Dec. 23. If the recommendations pass, the president could request an additional increase in the debt ceiling of $1.5 trillion. If Congress fails to either act on the committee’s proposal or send a balanced budget amendment to the states before the end of the year, automatic across-the-board spending cuts totaling $1.2 trillion would go into effect. The cuts would apply to both mandatory and discretionary spending programs beginning in 2013. Medicaid would not be subject to the cuts, but Medicare provider payments would face a cut of no more than 2 percent over nine years (2013-2021). The president would then be authorized to request an additional increase in the debt ceiling of $1.2 trillion.

We told our NH congressional delegation last month when we met with them that any further cuts to Medicare and Medicaid are not acceptable because of the great harm they would cause hospitals and the health care system. Hospitals already pledged shared sacrifice under health reform and NH's hospitals are facing severe challenges with the state's budget for FY 12 & 13.

The special 12-member committee could consider many things – including blended rates for Medicaid, elimination of provider taxes, and reductions in Medicare graduate medical education payments and DSH funding. We must keep the pressure on Congress to oppose blunt cuts and changes to Medicare and Medicaid. That means Medicare should be exempt from automatic cuts. And we need to continue pushing for rational, workable, and thoughtful approaches to reform Medicare and Medicaid to ensure that our health care system can be sustained and transformed in the years ahead.

Members of our congressional delegation will be home soon to meet with constituents. Please tell them to spare Medicare and Medicaid from further reductions