What Happens to Medicare and Medicaid If We Default, continued

The Bipartisan Policy Center tried this week to break down the daily cash flow in the days following the Aug. 2 deadline to give an idea of what could get paid.

On Aug. 3, a day when there will be a $20 billion shortfall, $2.2 billion in Medicare and Medicaid bills will vie with $23 billion in Social Security payments, $1.4 billion in payments owed to defense vendors, and $500 million in federal salaries and benefits. Health spending’s place in Accounts Payable at Treasury would change daily depending on what bills come due and the amount of revenue available.

States get their federal matching money for Medicaid in quarterly payments on the first of the month, so Sept. 1 would be the first big date for the program.

Amidst all this uncertainty, the only thing that’s clear is that the country would be in uncharted territory if there’s no deal before Aug. 2.