As the Joint Select Committee on Deficit Reduction, commonly known as the “super-committee,” begins its deliberations, groups are beginning to make recommendations on cuts to the federal budget. The Healthcare Leadership Council (HLC), an organization comprised of chief executives from an array of health care companies including drug manufacturers, insurance plans and hospitals, released a set of recommendations that they say will contribute to deficit reduction without placing an unfair or disproportionate burden on patients.
The group’s recommendations would:
- create a new “Medicare Exchange” in which private plans would compete on the basis of costs, quality and value;
- gradually increasing the Medicare eligibility age from 65 to 67;
- reform Medicare’s cost-sharing structure; and
- implement medical liability reform.
HLC members acknowledged the proposed Medicare exchange would inevitably be compared to the Medicare reform concept contained in Congressman Paul Ryan’s (R-WI) proposed budget. Differences, however, include the fact that Medicare beneficiaries would have the option of staying in traditional fee-for-service Medicare and there would be a more generous inflation factor – growth in GDP plus one percent – for premium subsidies.
The proposal to increase the retirement age would mirror the increase in the Social Security retirement age and reflect today’s longer average lifespans. The increase would be implemented over roughly a decade, raising the eligibility age by two months annually.
One reform would involve making the Medicare Part A and Part B beneficiary cost-sharing uniform, with a reasonable deductible and co-pays as well as a cap on annual out-of-pocket costs. This would make Medicare costs more predictable and consistent for beneficiaries while also ensuring that seniors wouldn’t be devastated by catastrophic care costs or faced with limits on hospital stays. Other reforms include a requirement that individuals with annual incomes of $150,000 and up pay their full premium costs for Medicare Parts B (physician services) and D (prescription drug benefit). This would affect less than three percent of Medicare beneficiaries.
These reforms would generate over $410 billion in savings over 10 years, or about one-third of the cuts necessary to reach the super-committee’s target.
Senators Form Group
Senator Mark Warner announced that he has organized a bipartisan coalition representing more than one-third of the members of the U.S. Senate to encourage the members of the congressional “super committee” to seek the broadest possible bipartisan agreement to address the nation’s deficits and debt. This group of 36 Senators — 18 Republicans, 17 Democrats and one Independent — builds upon Sen. Warner’s yearlong efforts, along with Sen. Saxby Chambliss (R-GA), to craft a deficit and debt framework as the two co-founders of the Senate’s bipartisan “Gang of Six.”
The bipartisan group of Senators seeking a deficit reduction package that would:
- include enough deficit reduction to stabilize the debt as a share of the economy, and put the debt on a downward path, and provide fiscal certainty with a reasonable amount of cuts of at least $4 trillion, including previously enacted deficit measures;
- use the established, bipartisan debt and deficit reduction frameworks as a starting point for discussions;
- focus on the major parts of the budget and include long-term entitlement reforms and pro-growth tax reform;
- structure growth in the economy in the short, medium and long-term; and
- work to include the American public and the business community in a broader discussion about the breadth of the issues, challenges and opportunities facing us.
More to come as Health Wolters Kluwer continues to follow the super committee in the following weeks.