ACA-mandated cuts will not hit Medicare, official asserts

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LeadingAge President and CEO Larry Minnix
LeadingAge President and CEO Larry Minnix

Because Medicare's growth rate will not eclipse a certain threshold, the program will be spared from potential Medicare cuts called for in the healthcare reform law, a top government official said.

It comes as welcome news to providers, who are being called on to weather funding reductions on various fronts.

“Medicare has been innovating and this has slowed the growth of costs,” said LeadingAge President and CEO Larry Minnix. “We are very pleased there will be no additional Medicare cuts immediately.”

Under the Affordable Care Act, the projected five-year growth rate for Medicare for the period 2010-2015 cannot exceed a specified limit. The limit is based on the projected five-year growth rate of certain parts of the Consumer Price Index. If growth should exceed this target, the Independent Payment Advisory Board would be required to cut Medicare spending in 2015.  

According to projections in the Obama budget proposed in February, the Medicare growth rate will not pass the target, said Paul Spitalnic, acting chief actuary for the Centers for Medicare & Medicaid Services, in an April 30 letter to CMS Acting Administrator Marilyn Tavenner.

“Good news for our sector” is how AHCA President and CEO Mark Parkinson characterized the assessment.