It’s finally over. No more noise on the TV and radio. No more robocalls. No more junk mail. No more people knocking at the door. The election is over! Now life can return to normal – or can it? It wasn't even 24 hours after the results of the election were known when everyone’s attention turned back to Washington and to the “fiscal cliff”.
What is the fiscal cliff? In short, if Congress and the President can’t come to an agreement on budget matters, fiscal chaos could occur.
A little background is necessary. You may recall that during the summer of 2011, there was great resistance to raising the debt ceiling on U.S. debt. The House of Representatives would not agree to raise the debt ceiling unless there were serious cuts made to the budget. The Senate and White House did not agree. After much political drama, the Congress and the White House did agree to raise the debt ceiling with conditions that a “Super Committee” of Senators and Representatives would meet to work out a plan to cut the deficit. And if the super committee did not come up with a plan, then there would be across-the-board drastic and immediate budget cuts to both domestic spending and the military beginning January 1, 2013. However, some major domestic programs like Social Security, Medicaid, and the Children’s Health Insurance Program are exempted from the spending cuts. It has been estimated that all programs in all parts of the budget would be cut 8-10% creating a $1.2 trillion reduction of U.S. debt. And, effective the same date, temporary tax cuts will expire, making everyone’s taxes rise to 2001 levels.
The super committee could not come to an agreement and the drastic cuts and tax increases are now due to occur in just a matter of weeks; thus the term fiscal cliff. The primary issue that prevented agreement was whether debt reduction should be only cutting programs in the budget or whether there should be a balance between cutting programs and raising revenue (taxes) for the wealthy. That issue is still the stumbling block.
Now that the election is over, Congress and the President must deal with the issue. Actually, they have several choices. One, they could come to an agreement and it is done. Two, they could avoid the issue temporarily and move the fiscal cliff date to another time in 2013 (better known as “kicking the can down the road”). Three, they could do nothing and the cuts will kick-in and taxes will go up. In the current economic climate, the Congressional Budget Office and most economists have projected that if the country goes over the fiscal cliff, the economy will shortly go back into another recession.
So how can these actions affect the primary immunodeficiency community? There are many ways that the IDF community can be affected. In the past when there were discussions to reduce the debt, there have been proposals that will adversely affect our patients. For those on Medicare:
- The IVIG benefit could be moved from Part B (medical benefits) to Part D (pharmacy benefits). Doing this will subject patients with PIDD to specialty tier co-insurance costs where patients would have to pay a significant percentage of each IVIG or SCIG treatment.
- Supplemental insurance which pays for the 20% of medical benefits (Part B) that Medicare doesn’t pay could be banned. All Medicare beneficiaries could be forced to pay 20% of all their medical (not hospital) costs
The reimbursement rate for IVIG could be significantly reduced. Currently, there is a slight mark-up of the average sales price (ASP) of immunoglobulin in order to provide an incentive for manufacturers of the product to continue to make the product. The calculation of the ASP is such that without an additional charge, manufacturers would have to produce the immunoglobulin at a financial loss and thus jeopardize the supply and demand for immunoglobulin. There are more ways in which our community could be adversely affected such as reducing funding of research of primary immunodeficiency diseases by the National Institutes of Health and reducing the capability of the FDA to regulate the safety of drug products to name a couple. But there is too little time to discuss here.
So, pay close attention to this issue and get in touch with your elected leaders. Tell your Senators and Representative that they should work with each other and the President to come to a cooperative agreement that represents give and take from all sides to avoid going over the fiscal cliff.
Vice President of Public Policy