Bracing for More Medicare Cuts

Merrill Goozer

Posted 10/19/11 on Gooz News.

I attended a depressing forum this morning on cost-saving ideas for Medicare to present to the Congressional “Super Committee” charged with coming up with $1.2 trillion in budget savings by the end of the year. The tone was ominous, best summed up by Mark Smith, president of the California HealthCare Foundation. “In times of crisis, meat-axes are taken to whole sectors. If you don’t believe me, ask the people who used to work for Lehman Brothers,” he said.

Here’s the backdrop. President Obama in his mid-September budget reduction plan called for coming up with an additional $320 billion in Medicare savings over the next decade, which would be on top of the half trillion dollars in Medicare cost reductions contained in the Affordable Care Act. The president would get there largely by cutting payments to hospitals and other providers, although the president also called for higher premiums on wealthier seniors for physician and drug coverage.

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Medicare Policy And Politics: The Obama Debt Reduction Plan

Austin Frakt

First posted 9/19/11 on The Health Affairs Blog

Copyright ©2011 Health Affairs by Project HOPE – The People-to-People Health Foundation, Inc. 

Today, President Obama offered his plan to reduce the national debt by $3 trillion over 10 years, relative to current law. Most media attention will focus on his “Buffett rule,” the principle that millionaires should not pay average tax rates below those of the middle class, and on his ultimatum to “veto any bill that takes one dime from the Medicare benefits seniors rely on without asking the wealthiest Americans and biggest corporations to pay their fair share.” However, the plan also includes some proposed changes to health programs.

In broad terms, two important changes for Medicare policy and politics are included in the plan. They are (1) targeted cuts in provider payments (saving $224 billion over 10 years) and (2) 15 percent increases in income-related Parts B and D premiums and the fixing of thresholds so that, in time, one-quarter of beneficiaries are subject to a premium surcharge (generating about $20 billion in revenue over 10 years). The former is consistent with the spirit of the Affordable Care Act (ACA), which also cuts provider payments. The latter is consistent with the Buffett rule, which aims to make wealthy Americans pay a greater share of the cost of social programs.

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