M Paquette
Moderator Emeritus
The actual bill is to be introduced next week. The Congressional Budget Office did a preliminary analysis last November. I suspect there may be some political interest in the bill, so I'm starting this thread here rather than let it run amuck in the Health & Early Retirement Forum.
www.cbo.gov/doc.cfm?index=11966 (6 page PDF document)
Key Features of the Proposal
MEDICARE
People who turn 65 in 2021 or later years would not enroll in the current Medicare program but instead would receive a voucher with which to purchase private health insurance.
Although the voucher system would not be implemented until 2021, the amount of the voucher would be calculated by taking the average federal cost per Medicare enrollee in 2012 (net of enrollee premiums) and growing that amount at the annual rate of growth in GDP per capita plus one percentage point.
Starting in 2021, the age of eligibility for Medicare would increase by two months per year until it reached 67 in 2032.
Eligibility for the Medicare program would not change for people who are currently 55 or older; as a result, the average age and costs of enrollees remaining in the current Medicare program would increase over time. However, enrollee premiums under Medicare would be adjusted to equal what they would be under current law.
The proposal would modify Medicare’s cost-sharing provisions and change the amount of the cost-sharing requirements that can be covered by supplemental insurance provided through Medigap policies. All of the amounts specified below are for 2013 and would be indexed in subsequent years to growth in spending per beneficiary for services covered by Parts A or B of Medicare.
Starting in 2013, the federal share of all Medicaid payments would be converted into a block grant to be allocated among the states. The total block grant would increase annually along with currently projected growth in the Medicaid population and with growth in GDP per capita plus one percentage point.
The federal government would fund the incremental costs of the Medicaid expansion that was enacted in March through 2020 as under current law (CBO estimated that those costs would total roughly $500 billion over that period); in 2021, those costs would be added to the block grant amount and the block grant would subsequently grow at the same rate specified above.
OTHER PROVISIONS
Several changes would be made to laws governing medical malpractice, including limits on noneconomic and punitive damages; those changes (and their effects on the federal budget) are described in CBO’s October 2009 letter to Senator Hatch.
The CLASS program for long-term care insurance would be repealed. (Because the program will collect premiums in excess of benefits payments during the 2011-2020 period, repealing this provision would increase deficits during the first 10 years.)
www.cbo.gov/doc.cfm?index=11966 (6 page PDF document)
Key Features of the Proposal
MEDICARE
People who turn 65 in 2021 or later years would not enroll in the current Medicare program but instead would receive a voucher with which to purchase private health insurance.
Although the voucher system would not be implemented until 2021, the amount of the voucher would be calculated by taking the average federal cost per Medicare enrollee in 2012 (net of enrollee premiums) and growing that amount at the annual rate of growth in GDP per capita plus one percentage point.
- While the voucher program is being phased in, the voucher amount would be adjusted downward to reflect the fact that eligible individuals would be younger and less costly than the average Medicare enrollee.
Starting in 2021, the age of eligibility for Medicare would increase by two months per year until it reached 67 in 2032.
Eligibility for the Medicare program would not change for people who are currently 55 or older; as a result, the average age and costs of enrollees remaining in the current Medicare program would increase over time. However, enrollee premiums under Medicare would be adjusted to equal what they would be under current law.
The proposal would modify Medicare’s cost-sharing provisions and change the amount of the cost-sharing requirements that can be covered by supplemental insurance provided through Medigap policies. All of the amounts specified below are for 2013 and would be indexed in subsequent years to growth in spending per beneficiary for services covered by Parts A or B of Medicare.
- Cost-Sharing Rules — Beginning in 2013, modify cost-sharing rules: Establish a single deductible of $600 for services covered under Parts A or B;
- After satisfying the deductible, impose 20 percent coinsurance for all services covered under Parts A or B; and
- Establish a catastrophic cap (zero cost sharing) after accruing $6,000 in cost-sharing obligations for A&B services (the $600 deductible counts toward the $6,000).
- Medigap Changes — Beginning in 2013, restrict Medigap coverage of cost sharing by:
- Requiring the beneficiary to be subject to a $500 deductible;
- Requiring the beneficiary to spend at least $2,750 before being subject to a catastrophic cap; and
- Limiting coverage of cost sharing between the deductible and a catastrophic cap to 50percent of Medicare’s cost-sharing requirement.
Starting in 2013, the federal share of all Medicaid payments would be converted into a block grant to be allocated among the states. The total block grant would increase annually along with currently projected growth in the Medicaid population and with growth in GDP per capita plus one percentage point.
The federal government would fund the incremental costs of the Medicaid expansion that was enacted in March through 2020 as under current law (CBO estimated that those costs would total roughly $500 billion over that period); in 2021, those costs would be added to the block grant amount and the block grant would subsequently grow at the same rate specified above.
OTHER PROVISIONS
Several changes would be made to laws governing medical malpractice, including limits on noneconomic and punitive damages; those changes (and their effects on the federal budget) are described in CBO’s October 2009 letter to Senator Hatch.
The CLASS program for long-term care insurance would be repealed. (Because the program will collect premiums in excess of benefits payments during the 2011-2020 period, repealing this provision would increase deficits during the first 10 years.)