Health

13 Proposals For Reducing Health Care Spending That The Super Committee Could Consider

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Politico Pro’s David Nather offers this exhaustive menu of ideas to help the Super Committee — tasked with finding at least $1.2 trillion in spending cuts by Nov. 23 — get started. Below is my somewhat abridged version of his suggestions:

1) Crack down on Medicare fraud and abuse: As proposed by Obama’s fiscal commission, the idea is to give CMS more authority and more funding to track down fraud in Medicare payments.
What it saves: $9 billion over 10 years, according to the fiscal commission.

2) Raise the Medicare eligibility age: Gradually increases the eligibility age from 65 to 67.
What it saves: $124.8 billion over 10 years, according to the Congressional Budget Office.

3) Restructure Medicare benefits: Streamlines Medicare’s maze of co-pays and deductibles and saves money by doing it. Obama’s fiscal commission recommended setting one annual deductible of $550 for Medicare hospital and doctors coverage. Seniors would have to pay 20 percent coinsurance — that is, 20 percent of the costs — for any expenses above that.
What it saves: $110 billion over 10 years, according to the fiscal commission.

4) New rules for Medigap plans: Restricts how much the Medigap plans can cover, so seniors aren’t shielded from as much of the cost-sharing charges they’d have to pay otherwise. Obama’s fiscal commission suggested banning the plans from covering the first $500 in charges. And after that, seniors would have to pay half of the next $5,000 in cost-sharing fees.
What it saves: $38 billion over 10 years, according to the fiscal commission.

5) Fix the Medicare physician payment formula: Rewrites the current Sustainable Growth Rate formula, which has an enormous backlog of payment cuts that are about to hit doctors — because Congress postpones the cuts with a temporary legislative “doc fix” every time the cuts are supposed to happen.
What it saves: Ha ha! Funny. It’s going to cost money — about $358 billion over 10 years, according to CBO.

6) Raise Medicare Part B premiums: Seniors would have to start paying 35 percent of their premium costs, rather than the current 25 percent.
What it saves: $241 billion over 10 years, according to CBO.

7) Cut hospital payments for bad debts: Gradually gets rid of the Medicare payments that reimburse hospitals for unpaid co-payments and deductibles that they haven’t been able to collect from patients.
What it saves: $14 billion to $26 billion over 10 years, according to the Biden group.

8) Nursing homes/home health cuts: Charges higher co-payments or just cuts payments to skilled nursing facilities and home health care. The Biden group was looking at this option.
What it saves: $50 billion over 10 years, according to the Biden group.

9) Premium support pilot program: Obama’s fiscal commission proposed testing the idea of “premium support” — House Budget Committee Chairman Paul Ryan’s idea for reforming Medicare — by trying it out in the Federal Employees Health Benefits Program, which gives health coverage to federal workers. It would give these workers a subsidy for their coverage that grows slowly from year to year, saving money along the way.
What it saves: $18 billion over 10 years.

10) Medicaid block grants: Turns Medicaid from an open-ended entitlement into a block grant, with much more flexibility for states to decide what they will and won’t cover with it.
What it saves: Ryan’s version would have saved $750 billion over 10 years.

11) Medicaid “blended” matching rate: Obama’s idea for cutting Medicaid spending without restructuring the program is to change the federal matching formula. The proposal would replace a variety of different rates with a single “blended rate” for each state.
What it saves: $100 billion over 10 years, according to the target set by the Biden group.

12) Drug rebates for Medicare-Medicaid “dual eligibles”: Makes drug companies give rebates to people who are eligible for both Medicare and Medicaid — just as they already have to give rebates to people who get their drugs through Medicaid.
What it saves: $49 billion over 10 years, according to the fiscal commission.

13) Repeal the CLASS Act: Gets rid of the new long-term care insurance program created by the health reform law. It was one of the main recommendations of the Senate “Gang of Six.”
What it saves: So, funny thing — it costs $86 billion over 10 years.

Read Nather’s full report here.