Medicare and Deficit Reduction: What changes might be coming?by Denise Early on Aug. 05, 2011, under Health
Medicare dodged the bullet in the recent battle over deficit reduction, but the next fight will soon begin. The agreement that was reached to raise the debt limit and avoid default by the U.S. government requires leaders of both parties to appoint 12 members to a “Super Committee” that must come up with at least $1.5 trillion in spending cuts. The Committee must finish its work by November 23, 2011, and Congress must vote to approve or reject their proposals by December 23rd.
According to the Center for Medicare Advocacy, there have been many proposals for cutting Medicare, in addition to the Ryan plan for privatizing Medicare and turning it into a voucher program. Ideas that have received a better reception and might be part of the Super Committee’s final proposal include the following possible changes to Medicare:
- Raising the Age of Eligibility From 65 to 67
- Combining Part A and B Deductibles Into a Single Annual Deductible – Different proposals sought to create a deductible between $550 and $560, impose 20% cost-sharing on all Medicare services (including Part A services that currently require either no cost-sharing, or a set co-pay), coupled with a total annual out-of-pocket cap of between $5,250 and $7,500;
- Additional Means Testing of Medicare – Currently, higher income beneficiaries pay a larger share of their Part B and Part D premiums; one proposal sought to increase Part B premiums from 25% to 35% of program costs for those not already paying income-related premiums;
- Eliminating First-Dollar Medigap Coverage – This proposal prohibits Medigap plans covering the first $500 of cost-sharing and limits coverage to 50% of the next $5,000 (might include policies already held by individuals)
- Shifting Coverage of Persons Dually Eligible for Medicare and Medicaid (Dual eligibles) to Medicaid – This proposal gives Medicaid full responsibility for providing health coverage for persons dually eligible for Medicare and Medicaid, and requires Medicaid plans to place dual eligibles in Medicaid managed care plans.
Medicare and Social Security are exempt from large cuts.
If the Super Committee fails to agree on spending cuts to a long list of government programs, or Congress votes against the final proposal by the Super Committee, that will trigger automatic spending reductions across the board, with Department of Defense taking the biggest hit. But Social Security and Medicare would be exempt from large cuts, and any cuts that are made would be directed at providers rather than patients. Of course, if doctors take the hit, they can decide to stop seeing Medicare patients.
So the struggle continues and it will take place behind closed doors until November, when the public will find out who gets hurt the most from the large cuts that will be made in government spending.