Proposals for Medicare Reform

Ryan-Wyden
Date December 2011 Similar to original Rivlin-Domenici proposal; transitions Medicare to a premium support contribution program in 2022; keeps traditional Medicare as a default option but with higher beneficiary premiums. Adapted as Ryans FY 2013 Path to Prosperity.

2013 U.S. Budget

February 2012

Burr-Coburn
February 2012

2013 Path to Prosperity

March 2012

Plan Summary Status Premium support/ Privatization Maintain traditional Medicare as default

In 2016, would introduce a The Obama administrations FY premium support option to 2013 budget proposes increased compete with the traditional premiums for high-income fee-for-service Medicare plan in a beneficiaries under Medicare competitive bidding process. Parts B and D. Otherwise, it relies Plans would be required to offer on reforms in the Affordable Care benefits actuarially or equal to the Act to take effect and cut costs. prior years Medicare benefits. Failed in House and Senate. Not introduced.

Based on the Wyden-Ryan plan released in December 2011, this proposal would transition the Medicare system to a premiumsupport model. Passed House; No Senate vote scheduled yet.

Beneficiary Payments

Program growth after 2022 could not exceed nominal GDP growth plus 1%. Low-income seniors would receive fully funded savings accounts to help offset increased out-of-pocket costs and assistance for wealthier seniors would be reduced.

All starting in 2017: Incomerelated Part B and D premiums would go up 15% until 25% of beneficiaries are affected. For new beneficiaries, Part B deductible will go up $25; a home health co-pay would apply in some cases and a premium surcharge would apply to certain Medigap plans.

The plan says that premium support payments would be tied to average bids but does not say exactly what tied to means; furthermore, the proposal does not include a spending growth cap for premium support beneficiary payments. Proposes an increase in the age of eligibility to 67 by increasing it by two months each year, beginning with those born in 1949. Senators Coburn and Burr estimate that their proposal would reduce Medicare spending by between $200-$500 billion over the next decade.

Beneficiaries would be issued a voucher to use toward purchasing insurance or remaining in Medicare fee-for-service. The voucher amount would equal the second-least expensive approved private plan or fee-for-service in the region. Starting in 2023, this plan increases the Medicare eligibility age by two months each year until it reaches 67 in 2034.

Age of Medicare Eligibility

Not mentioned.

Not mentioned.

Budget Deficit*

Not mentioned.

This plan would result in deficits amounting to $6.4 trillion from 2012 to 2022, or 3.2% of total GDP.

Budget deficits would be 2% of GDP or less from 2023 to 2050, and the budget would be nearly balanced by 2050. Cuts approximately $1.5 trillion by repealing parts of the Affordable Care Act. It also cuts Medicaid and other health programs by $770 billion. Doesnt include a plan to prevent the physician pay cut scheduled for 2013 or a fix for the SGR.

Reduces Medicare spending as a % of GDP, but CBO has not yet analyzed this proposal Health Care Spending* independently. Physician payments/ sustainable growth Not mentioned. rate (SGR)

Obamas 2013 budget would reduce Medicare expenditures by $276 billion from 2013 to 2022. Freezes physician payment rates at the 2012 level for the next 10 years.

Not mentioned. Freezes physician payments at the current rate for the near future.

Other

Reduces coverage of bad debt resulting from beneficiary non-payments to 25% for eligible providers over 3 years starting in Changes would not impact any 2013, which would save $36 senior at or above age 55 in 2011. billion over 10 years.

Repeals the Independent Payment Advisory Board. http://blogsimages.forbes.com/aroy/files/ 2012/02/Seniors-Choice-Act-Summary.pdf

Repeals the Independent Payment Advisory Board.

Link to Proposal

http://www.whitehouse.gov/o mb/budget/overview * Denotes estimates from the Congressional Budget Office (CBO) unless otherwise noted.

http://budget.house.gov/Uploa dedFiles/WydenRyan.pdf

http://budget.house.gov/fy201 3Prosperity/