Is the Debt Limit Crisis Really Over?

This across-the-board cut would affect the federal subsidies to buy insurance on PPACA-mandated, state-level online exchanges, as well as the tax credits small businesses may get for health insurance.

“We recognize that this isn’t an idea that has been recently discussed, but it could be mentioned,” she said.

“Therefore, this could result in fewer purchasers of health insurance via the exchange or, at a minimum, could change the plans that would have been bought,” she said. “Both would impact those diversified insurers weighing participation in the exchanges,” she said.

Mantz-Steindecker bases most of her assumptions of cuts on the work of the so-called “Gang of Six” in the Senate that worked on a budget cut proposal that failed to pass, and on the Deficit Commission proposals of late last year.

Under those scenarios, she said, cuts in Medicare Advantage plans and PBMs “are at low risk.”

Mantz-Steindecker also suggested that Medicaid HMOs could benefit via increased enrollment.

Ideas that the special commission established to propose the changes include reducing the federal government’s contribution to Medicaid via a blended match rate, or reducing the amount state provider taxes can count in the Medicaid contribution.

“Both would further intensify states’ fiscal pressures and could even further encourage expanded use of Medicaid HMOs,” Mantz-Steindecker said.

“Other savings ideas that may be considered involve making it easier for dual eligibles to be enrolled in Medicaid managed care plans, or even mandating their enrollment,” she said.

Under the bill being considered by the Senate today, a bipartisan special commission on deficit reduction would be formed.

Under the bill, by Thanksgiving, the 12-person bipartisan special commission must present a $1.5 trillion deficit reduction package that would be subject to an up-or-down vote without amendment or filibuster.

Under this scenario, all of the same Medicare, Medicaid and healthcare savings proposals discussed in past months (Bowles-Simpson, the Biden group, Gang of Six, etc.) are back on the table, Mantz-Steindecker said.

“The makeup of that commission’s members is important, as it could increase the odds for savings ideas that had less support in the past, such as a dual eligible rebate in Medicare Part D, medical malpractice reform, or reducing the size of federal subsidies for eligible individuals to buy insurance on the exchange,” Steindecker said.

“Raising the age of eligibility, indexing incomes for purposes of cost sharing, restricting first dollar coverage in Medigap and increasing Medicare cost sharing are all serious contenders for savings,” Mantz-Steindecker said.