150 Ways to Cut $9.4Trillion From Medicare

Published on February 14, 2013 by arothstein

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Medicare is a huge driver of our debt.  The impact of the baby boomers will only increase the demand on the federal budget. What can be done to lessen health care costs?


The Kaiser Family Foundation has recently released a proposal for Medicare reform.  The document is 216 pages long and is available online here.  The proposal suggests 150 policies that could cut $9.4 trillion in Medicare spending over the next 10 years.

For health care policy followers, the list of options isn’t terribly surprising. The approaches break down into five broad categories: eligibility, doctor payments, delivery system reform, program structure and, last but not least, administration.

Some of the suggested policies include:

  1. Increase the age of Medicare eligibility from 65 to 67 ($113 billion over 10 years)
  2. 10% coinsurance payment on all home health care episodes ($40 billion over 10 years)
  3. Restrict first-dollar Medigap coverage ($53 billion over 10 years)
  4. Increasing premiums for Part B and D: for example, raise Part B premiums by 2% per year until they cover 35% of total Part B expenses ($231 billion over 10 years)
  5. Increase Medicare payroll tax by 1 percentage point for all workers ($651 billion over 10 years)
  6. Require manufacturers to pay a minimum rebate on health care drugs covered under Medicare Part D for beneficiaries receiving low-income subsidies ($137 billion over 10 years).
  7. Repeal provisions in the Affordable Care Act that would close the Part D coverage gap by 2020 ($51 billion over 10 years)

The Kaiser Foundation spent a year reviewing literature and talking to dozens of health care policy experts on both sides of the political spectrum to build the report. They did seem to find agreement on the fact that Medicare spending is a problem.  We will have to see if there is agreement about doing something about it.

Health care management students and graduates at Broadview University stay on top of the latest news in their industry.  Critical thinking and problem solving skills are stressed and will be needed in the health care industry.

Jerry Lovrien has held positions of Chief Executive Officer at health and behavioral health facilities in Minnesota and Washington State. He served successfully as State Director/Commissioner of Health and Behavioral Health in Georgia, West Virginia and Minnesota. Jerry has taught high school through graduate courses and is currently an Instructor with Broadview University.

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