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What is Medicare sequestration?

Medicare sequestration can be a bit confusing.

Medicare health insurance

Here we’ll explain what it is and if it affects you.

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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.

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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.

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