Report predicts another 'Balanced Budget Act,' drastic Medicare cuts

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Growing federal deficits mean that a second Balanced Budget Act is becoming more likely, and that would mean deep Medicare cuts again, according to a respected research group.

"BBA-like cuts" could strip Medicare of $450 billion over 10 years, says a report released Tuesday by the PricewaterhouseCoopers Health Research Institute. Its analysts didn't forecast when Congress might tackle the problem, but they did say it would likely be a high priority.

If the second Bush administration does pursue deficit reduction, "hospitals will bear the brunt of it," said Jack Rogers, who directs health policy economics at PricewaterhouseCoopers. Under the Balanced Budget Act of 1997, nursing home operators were socked with cutbacks and had to scramble to protect bottom lines. Many cuts were offset with "giveback" measures or temporary add-ons, but huge ripples were still felt throughout the nursing home community.

The institute also predicted Congress would struggle over malpractice reform. Its report can be downloaded at