CHART: Where Obama’s Health Savings Come From

The bulk of the $320 billion in health care savings in President Obama’s new deficit plan come from the pharmaceutical industry and other providers, including rural hospitals, teaching hospitals, and biotechnology firms. Beginning in 2017, some Medicare beneficiaries will also pay more for coverage: individual seniors with a Modified Adjusted Gross Income (MAGI) of more than $85,000 with an MAGI of more than $170,000 will see a 15 percent bump in their premiums for physician visits and drug coverage, while all new beneficiaries will be encouraged to use care more efficiently by paying a $25 deductible for doctor visits. Beneficiaries enrolled in Medigap policies that cover the cost sharing of Medicare Part B with also pay slightly more, as away to discourage over treatment.

Generally, the plan spreads the pain among all groups, but finds its greatest savings in drug rebates and modernizing provider payments to achieve greater efficiency: