The health care industry is bracing itself for some of the $85 billion in automatic spending cuts scheduled to take effect March 1, as a deal to avert the sequester remains out of reach. The automatic cuts involve nearly $1 trillion in across-the-board reductions, including a 2 percent reduction to Medicare reimbursement rates.

The FDA would face an 8 percent cut, which officials say could result in significant job losses or furloughs that could cause delays in the agency’s drug and medical device approval process. The CDC could face cuts up to 9 percent, reducing its $6 billion budget by an estimated $350 million over the next seven months.  Other health-related spending cuts under sequestration include:

  • An estimated $2.5 billion reduction in spending for medical research, resulting in about 20,000 fewer jobs at NIH;
  • $66 million cut to state health insurance exchange grants under the Affordable Care Act;
  • $76 million reduction in funding for the ACA’s public health trust fund; and
  • $120 million reduction to community health centers.