Entitlements safe in 1st stage of debt limit act

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Entitlements and Debt Limit Deal

Major programs for people with disabilities remain wholly intact after Congress approved a deficit-reduction deal Tuesday to raise the national debt limit, but the future for these programs remains murky.

The deal includes an initial round of budget cuts, totaling about $900 billion during the next 10 years, that exempts Medicaid and Medicare. However, the deal creates a new congressional committee to find $1.2 to $1.5 trillion in budget cuts over the same time period. Medicaid, Medicare and other health programs would not be exempt from potential cuts through the committee’s recommendations, which are due in November, according to an article by the Associated Press.

“While we are glad that the immediate crisis has passed and Medicaid survived the first round of budget cuts in Washington, this fight is far from over,” said Peter Berns, CEO of The Arc, in an article in Disability Scoop. “The Medicaid lifeline, along with other programs that help ensure inclusion of people with intellectual and developmental disabilities in society, are still at stake.”

If Congress does not approve the committee’s recommendations, budget cuts will be automatically triggered to cut the federal budget deficit by a similar amount. These budget cuts would include a two-percent reduction in fees to Medicare providers. To entice Congress to approve the committee’s recommendations, the trigger was designed to include major cuts to programs traditionally protected by each political party: defense for Republicans and Medicare for Democrats.

The initial stage of the deficit-reduction deal, however, contains an increase in the amount of money the Social Security Administration can spend on reviews for determining continued disability benefits through the Social Security Disability Insurance Program, which has a backlog of 1.4 million reviews, according to a Wall Street Journal article.

The agency is set to spend $623 million on eligibility review in fiscal year 2012, a figure expected to raise to $1.3 billion in 2017.

The agency conducted 850,000 review in fiscal year 2002, but only about 200,000 in 2007, a figure that has only slightly rebounded.

About 12 percent of these reviews result in the recipients losing their benefits. The agency says that for every $1 spent on reviews, the government saves $10 in Social Security, Medicare and Medicaid spending.

The insurance program, which paid out $124 billion in benefits last year, has 10.4 million beneficiaries, up from 6.9 million in 2001.