Bipartisan Policy Center Releases Health Care Cost Containment Plan
On Thursday, the Bipartisan Policy Center released a health care cost containment plan that would reduce the federal deficit by about $560 billion over the next decade, including about $300 billion in Medicare savings, Kaiser Health News' "Capsules," reports (Carey, "Capsules," Kaiser Health News, 4/19).
The report was compiled by former Democratic and Republican congressional lawmakers and health care experts, including former Senate Majority Leader Tom Daschle (D-S.D.), former Congressional Budget Office Director Alice Rivlin and MIT economist Jonathan Gruber.
According to CQ HealthBeat, the plan offers a variety of recommendations to change health care delivery and how it is financed (Reichard, CQ HealthBeat, 4/18). For example, the report suggests prominent Medicare changes, such as a plan to eliminate the sustainable growth rate formula at a cost of $138 billion.
Further, health care providers in areas that have not received a rural exemption from HHS would not receive an increase in their fee-for-service payments. According to Modern Healthcare, the fixed payments plan was proposed in an effort to drive providers into new "Medicare networks," which build upon the Affordable Care Act's accountable care organizations (Daly, Modern Healthcare, 4/18).
Rivlin described the networks as ACOs "on steroids" ("Capsules," Kaiser Health News, 4/19). According to BPC staff, the proposal is expected to expand the 250 existing ACOs in order to enroll about 40% of all Medicare beneficiaries within the first 10 years (Modern Healthcare, 4/18).
The networks would be offered as a third option for Medicare beneficiaries, alongside traditional fee-for-service and Medicare Advantage. The plans would offer enrollees lower premiums and cost-sharing, while providing financial incentives to providers, hospitals and other health care providers to better coordinate care ("Capsules," Kaiser Health News, 4/19). However, the plan would equalize office visit payments, regardless of the site of care, which would save about $8.7 billion over 10 years (Modern Healthcare, 4/18).
In addition, the BPC's plan would combine deductibles for Medicare parts A and B into a single $500 annual deductible, with a $5,315 cap on beneficiary out-of-pocket cost sharing. Further, the report proposes expanding cost-sharing assistance to Medicare beneficiaries with annual incomes of up to 150% of the federal poverty level, or $17,235 for an individual.
The proposal also would replace supplemental Medigap insurance policies with plans that have a deductible of at least $250 and cap beneficiary out-of-pocket costs at no less than $2,500 ("Capsules," Kaiser Health News, 4/19).
Other proposed changes would:
- Alter MA provider reimbursements so payments are no longer tied to spending in the fee-for-service program;
- Change Medicare fee-for-service reimbursement levels to a more competitive bidding process and bundled payments;
- Eliminate the ACA's 40% excise tax on high-cost health plans, which is scheduled to take effect in 2018 (CQ HealthBeat, 4/18);
- Limit the tax exclusion for employer-provided coverage to the 80th percentile of single and family employer-sponsored premiums in 2015 ("Capsules," Kaiser Health News, 4/19); and
- Loosen the scope-of-practice rules to expand those who could provide primary care (CQ HealthBeat, 4/18).
The report's authors say the recommendations have been well received by congressional lawmakers and White House staff.
Daschle said he hopes the report can help President Obama, Democrats and Republicans reach a compromise on tax revenue and entitlement spending. Daschle said, "The signs are good here that we've got a product that both sides can feel comfortable beginning a dialogue," adding, "It's too early to predict just how far this can go" ("Capsules," Kaiser Health News, 4/19).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.