Debt panel proposals target health costs

Dec 3 2010

The Associated Press: A White House-appointed commission's deficit-taming proposals would affect "every corner of society. ... Workers with solid coverage on the job, seniors, drug companies, trial lawyers, hospitals, doctors, state governments and federal employees would all feel the effects. For Medicare recipients, the biggest change would be an increase in cost-sharing." The plan would phase out tax breaks for people who get insurance from employers and cap Medicare and Medicaid spending, among other things. "The new health care law laid the groundwork for expanding coverage but dabbled around the edges when it came to curbing costs. That left a major piece of unfinished business that the deficit commission took on" (Alonso-Zaldivar, 12/2).

KHN published an excerpt of the report that concerned health spending:  Text: Fiscal Commission's Recommendations On Health Care Spending

NPR's Shots Blog: "Panel co-chairmen, former Wyoming GOP Sen. Alan Simpson and former Clinton White House Chief of Staff Erskine Bowles, presented what seems like a simple, sensible idea. 'Why not merge Medicare's two annual deductibles? That would scrunch $1,132 for Part A, which covers hospital and other inpatient costs, and $162 for Part B, which covers doctor visits and other outpatient costs. The new, combined deductible would be $550 annually.' But, to the dismay of seniors, the proposal would bar so-called Medigap plans, which pick up what Medicare doesn't cover, from paying the first $500 of that deductible, and more than 50 percent of the next $5,000 in cost-sharing. That means more out-of-pocket costs for Medicare patients (Rovner, 12/1).

The Fiscal Times: "Second on the Commission's Medicare to-do list: repealing part of President Obama's signature health care reform bill, including eliminating the Community Living Assistance Services and Supports (CLASS) act, which creates a long-term care insurance program run by the government. ... CBO weighed in on CLASS during the health care reform debate at the request of Sen. Kay Hagen, D-N.C. Using the initial premium of $65 a month starting when a person turns 55 and a payout of $75 a day for incapacitated seniors needing long-term care, CBO chief Douglas Elmendorf estimated the program would exhaust the reserves built up in its first decade sometime beyond 2019" (Goozner, 12/2). 

Modern Healthcare quoted American Hospital Association President Richard Umbdenstock: "While we appreciate the commission dropping cuts to the DSH program that provides funding to hospitals that serve a large population of poor and uninsured patients, we are very disappointed that a number of problematic provisions remain." A provision that would subject hospital payments to a health law cost-cutting panel called the Independent Payment Advisory Board "flies in the face of congressional intent and removes lawmakers from decisions that will affect healthcare in their community," he added (Zigmond, 12/1).

PBS Newshour: While it's unclear whether the panel will get the 14 of 18 possible votes needed to send the proposals to Congress, co-chairman Bowles said, "It will be anything but a wasted exercise. The path we're on is unsustainable. I think this is the moment of truth." He added, "Paul Ryan, who is head of the Budget Committee in the House, has already said 85 percent of what we recommend will be in his budget" (Woodruff, 12/1).

Earlier, related KHN story: Deficit Reduction Plans Would Squeeze Medicare (Carey, 11/29)