Medicare sequestration can be a bit confusing.
Here we’ll explain what it is and if it affects you.
What is sequestration?
Sequestration is the automatic reduction or cancellation of certain federal spending. It is usually done at a uniform percentage. The sequester is a budget enforcement tool. It was established in the Balanced Budget and Emergency Deficit Control Act of 1985. Read more about it here.
What is Medicare sequestration?
- Medicare sequestration reduces government spending to reach budget goals
- Sequestration means that Medicare pays its providers two-percent less
- Medicare beneficiaries are not responsible for the cost difference
- Designed to prevent additional debt, but does not burden providers
It is 2% reduction in the case of Medicare.
Am I affected as a Medicare beneficiary?
As a beneficiary, you likely won’t see any changes, but the providers will. The provider will see a change in payments. You should not be charged as a result of sequestration and your coverage payments will be the same.
Through Medicare sequestration, roughly $85 billon was saved in 2013.