WASHINGTON BUREAU — The new federal budget deal resolution may not refer directly to private health insurance, but it could have major effects on the health market, an analyst says.
The Senate voted 74-26 today to pass a motion approving the Budget Control Act of 2011, which was packaged in the form of House Resolution 384 — – a measure “providing for consideration of S. 365, to make a technical amendment to the Education Sciences Reform Act of 2002.”
The House voted 269-161 to pass the measure Monday.
The measure provides the legal authority the U.S. government needs to borrow more money and continue to make payments on government obligations.
In a television address to the nation immediately after the Senate vote, President Obama said he would sign the measure immediately. The debt ceiling deal passed by Congress is “an important first step for ensuring that as a nation we don’t live beyond our means,” Obama said in a statement.
Beth Mantz-Steindecker of Washington Analysis, Washington – a “buy side” research firm that serves hedge funds and institutional investors — says in a research note that the deficit control procedure created by the budget control measure seems likely to lead to “sequestration.”
Sequestration would create a wave of automatic, across-the-board cuts that would exempt some programs — such as Medicaid, Social Security and veterans programs – but hit Medicare hard, Mantz-Steindecker says.
Under one scenario, Medicare Advantage could face a 2% across-the-board starting Oct. 1, 2013, Mantz-Steindecker says.
The budget control measure requires a 12-member special commission established by Congress to deliver a 10-year, $1.5 trillion deficit reduction package to Congress by Thanksgiving.
The package would be subject to an up-or-down vote without amendment or filibuster.
If Congress fails to make $1.2 trillion in cuts, that would trigger a series of across-the-board cuts big enough to make up the difference between what Congress actually saves and $1.2 trillion.