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What the Fiscal Cliff Means for Health Equity Advocates

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Congress has twelve days to reach a budget negotiation deal before going over the fiscal cliff, which could trigger across the board cuts to government spending. But what does this all mean for health equity advocates?

Alison JohnsonThis week, HJCT spoke with Alison Johnson, an independent public policy consultant, who puts the fiscal cliff into context for health equity advocates and explains a course of action.

In layman terms, please explain the fiscal cliff.

The fiscal cliff is a combination of expiring tax exemptions and large new spending cuts that would take effect on January 1, 2013. Although it is being portrayed as an extreme event, in some ways it is more of a “fiscal slide,” because not every single dollar would disappear in January, and matters can be remedied by Congress after the deadline. (Here’s a simple look at the fiscal cliff)

Is the Patient Protection and Affordable Care Act (ACA) part of these cuts?

The legislation that is part of the ACA would not be impacted, but designated revenue ($25 billion) that supports provisions of the ACA would be at risk. There was a special tax that was passed for high income earners to support elements of the ACA, and that money would not be available if we go over the fiscal cliff.

If Congress fails to reach an agreement, what are the implications for health equity?

There are some health care programs that are exempted from funding cuts, and some that are not. While Medicaid is currently exempt from the cuts, other important programs that support the work of health equity are not safe. For example, funding for community health centers is at risk, and there would be a 2% reduction in reimbursements for Medicare providers. The magnitude of the cuts – $54.7 billion in one year, coming from the non-defense spending side of the budget, means that many, many smaller programs would see serious cuts in funding.

What are the potential risks if Congress does reach an agreement?

Whatever agreement Congress reaches, they must agree to reduce the deficit. This means if policymakers are not cutting Medicaid, they are cutting elsewhere. For example, they could potentially cut family planning, which provides affordable and preventive care for low-income women. The need to resolve the deficit is so large that it will divert attention from many pressing concerns, which makes it more difficult for advocates to get their voices heard on health equity related issues. We’re looking at a tough fight regardless if an agreement is reached.

There’s a lot of uncertainty ahead, what should advocates in Connecticut be doing?

For Connecticut in particular, estimates show we would be subjected to an $85 million reduction of federal support for non-defense spending. Most health, income security and social services, and transportation related programs are exempt from sequestration; however, the estimates include the following reductions in funds coming from Washington: $8 million in health spending, $9 million in social services, $25 million in income security and $30 million in education.

Advocates need to follow this issue closely and continue to articulate all the services they are providing and why they are important. The argument needs to include economic value in addition to human value.

Any last comments?

I have hope that Congress and the President will reach an agreement, and sadly the tragedy in Newtown may have helped change the dynamic. The incident has brought a different tenor to the conversation and I am hopeful our country will be less divided as a result.




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