Today, the automatic, across-the-board spending cuts known as the sequester will go into effect, which include a 2% cut to Medicare payments to hospital and physicians. 
However, healthcare providers do not seem too concerned about the cuts. Their calm demeanor is partly due to the fact that the 2% cut in Medicare payments is not scheduled to go into effect until April 1, which gives lawmakers enough time to ink an alternative budget deal before cuts are made. In an interview with HealthLeaders Media , Adam Rogers, an attorney at DLA Piper’s Miami Health Care Practice, said many providers expect President Obama and Congress to reach a deal to prevent healthcare cuts by mid-March. “A lot of providers are used to hearing about the sky falling with the sustainable growth rate cuts and then at the last minute or retroactively it always gets patched,” Rogers said. But even if the cuts were to go into effect, some providers say they would be okay with it. In fact, many providers prefer the sequester’s Medicare cuts of $100 billion over a decade to some of the alternatives proposed by President Obama and Congressional Republicans. Obama previously suggested $400 billion cuts to healthcare spending, much of which would have come from Medicare. Dan Mendelson, president of Avalere Health, said in an Associated Press article, “The health care industry fears the alternative more than they fear a predictable reduction in rates. They just do not want to roll the dice. That is why you do not hear as much of an outcry on Medicare.” The sequester’s Medicare cuts will hit providers the most, particularly hospitals who will bear about 40% of the cuts. Seniors enrolled in traditional Medicare will see no change in their benefits and premiums, but Medicare Advantage patients may see an increase in premiums over time. The American Medical Association and American Hospital Association predict a loss of 500,000 health care sector jobs in the first year of the sequester.
However, healthcare providers do not seem too concerned about the cuts. Their calm demeanor is partly due to the fact that the 2% cut in Medicare payments is not scheduled to go into effect until April 1, which gives lawmakers enough time to ink an alternative budget deal before cuts are made. In an interview with HealthLeaders Media , Adam Rogers, an attorney at DLA Piper’s Miami Health Care Practice, said many providers expect President Obama and Congress to reach a deal to prevent healthcare cuts by mid-March. “A lot of providers are used to hearing about the sky falling with the sustainable growth rate cuts and then at the last minute or retroactively it always gets patched,” Rogers said. But even if the cuts were to go into effect, some providers say they would be okay with it. In fact, many providers prefer the sequester’s Medicare cuts of $100 billion over a decade to some of the alternatives proposed by President Obama and Congressional Republicans. Obama previously suggested $400 billion cuts to healthcare spending, much of which would have come from Medicare. Dan Mendelson, president of Avalere Health, said in an Associated Press article, “The health care industry fears the alternative more than they fear a predictable reduction in rates. They just do not want to roll the dice. That is why you do not hear as much of an outcry on Medicare.” The sequester’s Medicare cuts will hit providers the most, particularly hospitals who will bear about 40% of the cuts. Seniors enrolled in traditional Medicare will see no change in their benefits and premiums, but Medicare Advantage patients may see an increase in premiums over time. The American Medical Association and American Hospital Association predict a loss of 500,000 health care sector jobs in the first year of the sequester.
