Proposals

for Medicare Reform

Rivlin-Domenici
Date
November 2010

Rep. Ryan's FY2012 Budget

April 2011

Ryan-Wyden
December 2011

Romney
December 2011

Burr-Coburn Proposal
February 2012

Budget Control Act

August 2011

Plan Summary Premium supprt / Privatization Maintain traditional Medicare as default

In 2018, transition Medicare to a premium supportsystem that gives beneficiaries payments to purchase Eliminate traditional Medicare in private insurance on a regulated "Medicare Exchange"; maintain 2022; Replace it with a "premium traditional Medicare as default option. support" system.

In 2016, the plan would introduce a Premium Support option to compete Similar to original Rivlin-Domenici with the traditional FFS Medicare proposal. Transition Medicare to a Similar to original Domenici-Rivlin "Implement a sequester to plan in a competitive bidding proces. "premium support" contribution Proposal. Transition Medicare to Medicare payments to providers Plans would be required to offer program in 2022; maintain traditional a "premium support" program in benefits actuarially equal to the and plans, if by 2014 the debt-to- Medicare as a default option, but with 2022; maintain traditional GDP ratio is projected to exceed prior years Medicare benefits.

higher beneficiary premiums.

Medicare as a default option.

2.8% for 2015-2019." NA NA

The plan says that premium support payments will be tied to average bids, but does not say exactly what tied to means; furthermore, the proposal does not include a cap spending growth for premium support beneficiary payments. Proposes an increase in the age of eligibility to 67, by increaseing the age by two months each year, beginning with people who were born in 1949.

Beneficiary Payments

Premium support will be set at the same initial level and will grow by the annual rate of GDP growth per capita +1% - both for individuals entering the Exchange and for those who remain in traditional Medicare.

Program growth after 2022 could not "Premium Support" payment for 65 exceed nominal GDP growth plus 1%. year olds in 2022 is specified to be To achieve this, low-income seniors $8,000; payments increase each year would receive fully funded savings by an amount that reflects both the accounts to help offset increased out- increase in the consumer price index of-pocket costs and assistance for (CPI-U) and the effects of aging. wealthier seniors would be reduced. Starting in 2022, the age of eligibility for Medicare would increase by two months per year until it reached 67 in 2033.

Unclear

NA

Age of Medicare eligibilty

Not mentioned

Not mentioned

Unclear

NA

Budget Deficit*

Reduce federal budget deficits over the Budget deficits under the proposal 2011-2020 period by about $280 would be around 2 percent of GDP in billion; the total effect in 2020 would the 2020s and would decline during be a reduction in the deficit of the 2030s. The budget would be in approximately $90 billion. surplus by 2040.

Unclear

Unclear

The super committee's failure to reduce the deficit by at least Senators Coburn and Burr estimate that their proposal will $1.2 trillion triggers a 2% across the board cut to Medicare in reduce Medicare spending by between $300-$500 billion over 2013, which translates into about $123 billion over the next decade. the next decade.

Health care spending* Physician payments / sustainable growth rate Assumes a permanent fix to the SGR mechanism for physician payments. (SGR)

Reduce federal health care spending to Reduce federal health care spending around 6% of GDP in 2020, 8% in 2030 to around 6% of GDP in 2030-2040 and 10% of GDP in 2050. and 5% of GDP in 2050.

Reduces Medicare spending as a % of GDP, but CBO has not yet analyzed this proposal independently.

Unclear

Not available, as the proposal has not yet been evaluated by the Congressional Budget Office. Freeze physician payments at the current rate for the near future.

Not mentioned

Not mentioned

Unclear

Other

Fradually raises premiums for Medicare Part B from 25% to 35% of program costs over 5 years.

Change applies to people turning 65 beginning in 2022; beneficiaries who turn 65 before then would remain in traditional Medicare with option of Changes wil not impact any senior at converting to the new system. or above age 55 in 2011.

Link to Proposal * Denotes estimates from the Congressional Budget Office

http://wyden.senate.gov/issues/issue http://www.bipartisanpolicy.org/proje budget.house.gov/UploadedFiles/Path /?id=ab82bb35-a617-4d66-b6e2- cts/debt-initiative/about ToProsperityFY2012.pdf c9f9b4758c59

Repeal the Independent Payment Advisory Board. http://blogs- images.forbes.com/aroy/files/20 http://www.gpo.gov/fdsys/pkg/PL Not yet officially released (as of 12/02/Seniors-Choice-Act- AW-112publ25/pdf/PLAW- December 2011) Summary.pdf 112publ25.pdf