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Bipartisan Senate plan, like IPAB, requires Congress to tackle Medicare costs
A bipartisan deficit-cutting plan unveiled Tuesday would require lawmakers to keep Medicare costs from growing faster than a target rate, not unlike a provision of the healthcare law that Republicans have denounced as a "rationing board."
The proposal by the Senate's so-called Gang of Six is part of a plan to cut the deficit by $3.7 trillion. Similarly to the healthcare law's Independent Payment Advisory Board (IPAB), the proposal would require Congress and the president to take action if federal healthcare spending grows faster than GDP plus 1 percent per beneficiary.
The health law's 15-member IPAB would recommend Medicare provider cuts if the program grows faster than a target rate; Congress would have to propose savings of the same magnitude or the IPAB proposal would become law by default. The board was created as a stopgap to force lawmakers to control Medicare spending, something they have historically failed to do.
• Require the Senate Finance Committee to "permanently reform or replace" the Medicare Sustainable Growth Rate formula, which requires deep cuts to physician payments that get pushed back every year. The panel would be required to offset the $298 billion cost of the fix and find billions more in additional health savings while maintaining "the essential health care services that the poor and elderly rely upon;"
• Require the Senate Health, Education, Labor and Pensions Committee to find another $70 billion in savings;
• Reform the tax treatment of health benefits; and
• Save $26 billion by curbing fraud and abuse in entitlement programs.
The proposal also calls for the elimination of the healthcare law's long-term-care CLASS program as part of a $500 billion down payment on deficit reduction. However, the Congressional Budget Office estimates that the CLASS Act actually saves the government $70 billion through 2019 because people with disabilities would have to pay in for at least five years to qualify for benefits.
