off the charts
BEYOND THE NUMBERS
BEYOND THE NUMBERS
Supercommittee Won’t Get Anywhere Near $600 Billion in Medicare Savings Without Harming Lower-Income Beneficiaries
The Committee for a Responsible Federal Budget issued a blog post November 4 contending that, contrary to a CBPP post last week, the Joint Select Committee on Deficit Reduction can get $600 billion in Medicare savings without harming low-income beneficiaries. CRFB listed seven proposals that it said would save $607 billion without adversely affecting those with low incomes. But these proposals would not get the job done.
- CRFB’s proposed large savings in drug rebates and provider payments are extraordinarily unrealistic from a political standpoint. Policymakers would have to substitute other cuts to reach the $600 billion target.
- CRFB’s proposed increases in cost-sharing would have a serious impact on sicker low-income beneficiaries unless accompanied by provisions to shield those beneficiaries, which would reduce the savings well below the amounts that CRFB shows.
- Contrary to CRFB’s claim, simply providing for cancellation of an increase in the Medicare eligibility age from 65 to 67 if Congress repeals the Affordable Care Act (ACA) is not adequate to protect lower-income 65- and 66-year-olds, who could be left uninsured if the Medicare age is raised but the new health insurance exchanges that the ACA establishes cannot function effectively as a result of a Supreme Court decision striking down the law’s “individual mandate,” state resistance, or other factors. (This is why policymakers should not consider this proposal until we know that the exchanges are indeed functioning adequately.)
- For the millions of beneficiaries who are sicker than average (but whose costs are not so high that they would be helped by the proposal’s out-of-pocket $5,500 cap on beneficiary out-of-pocket costs), the increase in costs could be substantial. For beneficiaries with low incomes, this could cause hardship and reduce access to needed health care.
- Current law provides relief from Medicare cost-sharing charges only for seniors and people with disabilities who have incomes below the poverty line, which is just $10,890 for an elderly widow or other single elderly or disabled individual. Since CRFB’s option wouldn’t alter that provision of the law, elderly and disabled people with incomes starting at $11,000 would be hit with the full brunt of the cost-sharing increases — which, as noted, could be substantial if these individuals were not in good health.
- Research shows that higher cost-sharing results in decreased use of both unnecessary and necessary care, with the problem of people forgoing necessary care the greatest for those with low incomes. Higher cost-sharing can cause lower-income people to forgo needed care and, consequently, become significantly sicker.
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