CBO Emphasizes Need To Trim Medicare Spending

Peter R. Orszag Director of the U.S. Congressi...

Peter R. Orszag Director of the U.S. Congressional Budget Office (Photo credit: Wikipedia)

Topics: Health Costs, Medicare, Health Reform

Nov 09, 2012

The Congressional Budget Office also found that GOP proposals to change a provision of the health law that requires insurers to spend 80 percent of premiums on medical care would increase the federal debt. Proposals to repeal coverage provisions would save billions, but also leave 29 million people uninsured, it found.

The Hill: CBO: Federal Health Care Costs Skyrocketing
After an election in which both parties demonized cuts in Medicare spending, the Congressional Budget Office issued a reminder Thursday of the need to cut Medicare spending. Healthcare programs are quickly outgrowing their historical share of the federal budget, CBO said, and the cost of those programs will only grow faster as more Baby Boomers reach retirement and underlying healthcare costs continue to soar. CBO’s latest figures confirm what Republicans and Democrats acknowledge only selectively — that healthcare is a huge part of what’s driving federal spending and debt. Healthcare programs are eating up an ever-increasing share of the economy, while tax revenues and other domestic spending are holding relatively steady, CBO said (Baker, 11/8).

Modern Healthcare: CBO Outlines Impact Of Keeping Current Doc-Pay Rates
Maintaining the Medicare program’s current payment rates to physicians and eliminating the expected automatic cuts to nondefense spending early next year would increase federal spending by about $40 billion in 2013 and by $61 billion the following year, the nonpartisan Congressional Budget Office projected Thursday. As lawmakers prepare for intense deficit-reduction negotiations in Washington, the CBO released an analysis that details the consequences of not addressing the fiscal cliff, which describes a series of looming tax increases and spending cuts designed to reduce the nation’s federal budget deficit (Zigmond, 11/8).

The Hill: CBO: GOP Bill Revising Health Law Ratio Will Add To Deficit
A Republican bill altering the healthcare law’s medical loss ratio (MLR) will add about $1 billion to the budget deficit over the next decade, the Congressional Budget Office (CBO) said Thursday. The Obama administration frequently touts the MLR as a policy that helps consumers. It mandates that insurers spend no less than about 80 percent of their premium dollars on medical care rather than administrative costs or profits. The difference insurance companies must send back to policyholders, producing more than $1 billion in consumer rebates this year. Rep. Mike Rogers’s bill (H.R. 1206) would exclude insurance brokers’ fee from counting as administrative costs under the ratio. Agents say the MLR in its current state threatens their business by incentivizing insurers not to work with them (Viebeck, 11/8).

CQ HealthBeat: Change In Insurer Provision In Health Care Law Would Add To Deficit, CBO Says
Legislation that would change a consumer protection provision in the health care overhaul would increase the deficit by more than $1 billion over 10 years and reduce rebates for health plan enrollees, according to a Congressional Budget Office estimate. The bill, which was approved by the House Energy and Commerce Committee on Sept. 20, would amend the law’s medical loss ratio calculations to exempt agent and broker fees (Attias, 11/8).

Politico Pro: CBO: ACA Repeal Would Save Billions
Repealing the health care reform law’s insurance coverage expansion would generate the most deficit savings of any health initiative analyzed this year, according to the Congressional Budget Office’s deficit reduction report released Thursday. Repeal of the coverage expansion — while keeping the rest of the law in place including various taxes and provider payment changes — would generate $150 billion annually in 2020. It would also increase the number of people without health insurance by about 29 million in the same year. Repealing other pieces of the law would generate between $5 billion and $50 billion each in 2020 (Haberkorn, 11/8).

Alice Rivlin, former director of the Office an...

Alice Rivlin, former director of the Office and Management and Budget and founding director of the Congressional Budget Office (Photo credit: Talk Radio News Service)

This is part of Kaiser Health News‘ Daily Report – a summary of health policy coverage from more than 300 news organizations. The full summary of the day’s news can be found here and you can sign up for e-mail subscriptions to the Daily Report here. In addition, our staff of reporters and correspondents file original stories each day, which you can find on our home page.


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