Liberal group outlines substantial Medicare cuts

Associated Press Modified: November 14, 2012 at 10:32 am •  Published: November 14, 2012
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Drugmakers would take the biggest hit, accounting for $160 billion, or about 40 percent of the proposed 10-year savings. Nearly all of that would come from requiring pharmaceutical companies to pay rebates on drugs provided to low-income Medicare beneficiaries.

Hospitals account for an additional $61 billion in cuts, or 16 percent of the total. Medical device manufacturers and insurance companies would be on the hook for about $20 billion apiece. Nursing homes are targeted for $16 billion in reductions.

The plan has two main proposals affecting Medicare beneficiaries.

It would revamp deductibles and cost-sharing in traditional Medicare so that upper middle-class and wealthy seniors pay at least their first $500 in medical costs in any given year, with exceptions for prevention and care for chronic disease. At the same time, it would protect beneficiaries with catastrophic costs by limiting total cost-sharing.

Although this proposal would not save the government any money, some seniors would pay more and others less.

Among seniors with Medigap insurance that covers medical costs from the first dollar, the well-to-do would have to pay the first $500 out of pocket.

But all Medicare beneficiaries would benefit from better protection against catastrophic costs. Overall, the idea behind the proposal is to discourage people from going to the doctor when they don't have to.

Upper-income seniors would also be affected by another part of the plan. Currently, seniors making at least $85,000 for an individual and $170,000 for a couple pay higher monthly premiums for outpatient and prescription coverage. The plan would gradually increase the share of seniors facing higher premiums until it comprises the top 10 percent of beneficiaries. It would also boost those premiums by 15 percent.

The center is also proposing to repeal a payment formula for doctors that has failed to contain costs, replacing it with an approach that rewards primary and preventive care while squeezing specialists. Unless Congress acts, doctors will face a nearly 30 percent cut in Medicare payments on Jan. 1.

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Center for American Progress plan: http://tinyurl.com/aqjkavp



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