Congressional Budget Office: Options for Deficit

Congressional Budget Office: Options for Reducing the Deficit

Angela Edwards

MHA / 516

11/4/2019

Dr. Midge Elkins














Introduction

There is a huge financial deficit that has rose due to the fees and the costs associated with health care in the United States. There are many different health plans that are available to the American people to try to help every person have medial insurance. One of these plans is known as Medicaid which is a federal and state programs that is offered to lower income families and individuals to help pay for the costs associated with medical treatment. With the Medicaid plan the state will pay out of pocket the fees and costs associated with the plan and then the federal government will reimburse the state for a percent of the costs that the state has paid ("Options For Reducing The Deficit: 2017 To 2026", 2016).

Proposed Plan for Providers

The proposed plan that I feel would help in the elimination of the United States deficit is to limit state taxes on healthcare providers. Provider taxes are an integral source of Medicaid financing governed by long-standing regulations ("States and Medicaid Provider Taxes Or Fees", 2017). If the safe-harbor threshold was lowered this would reduce the amount of taxes that the states could collect from the providers without incurring reductions in federal payments. With the proposed plan the states would have to decide whether to continue to spend the same amount or whether to cut the spending by the difference between the old and the new thresholds that are set in place. With the new threshold this is projected to lower the threshold from 5 percent to 4 percent starting October 2017, and the Congressional Budget Office estimates that capping the threshold would reduce mandatory spending by $40 billion over the period from 2017 to 2026.

Conclusion

As revenues decline and Medicaid enrollment grows, states increasingly are turning to taxes on hospitals, nursing homes and other health care providers to generate funds to pay for their Medicaid programs ("Provider Taxes: A Revenue Source For Health Care ", 2010). In the United States it is safe to say that every party involved when it comes to the options to reduce the economical deficit are in agreeance with needing to find a solution to the problem. I am not going to say that every single option seems to be the correct option to reduce the deficit, however, there are areas within the federal spending and the insurance programs that can use some altering to help in the reducing of the deficit. There needs to be stricter guidelines that need to be followed to help the United States see light at the end of the tunnel and this is not going to happen overnight it will be a lengthy process but it has to be done.














Reference

Options for Reducing the Deficit: 2017 to 2026. (2016). Retrieved from https://www.cbo.gov/sites/default/files/114th-congress-2015-2016/reports/52142-budgetoptions2.pdf

Provider Taxes: A Revenue Source for Health Care . (2010). Retrieved from http://www.csg.org/policy/documents/CR_ProviderTaxes.pdf

States and Medicaid Provider Taxes or Fees. (2017). Retrieved from https://www.kff.org/medicaid/fact-sheet/states-and-medicaid-provider-taxes-or-fees/