On Wednesday, November 13, 2013, the Congressional Budget Office (CBO) released a 318-page report outlining 103 various options for decreasing federal spending. CBO does not advocate for specific policy proposals; rather this document represents a compendium of the major proposals it recently has scored. These reports are helpful because in addition to providing current cost estimates, CBO generally will include some language discussing the pros and cons of the specific policy option. CBO also released a handy summary table of the options contained in the report.
In terms of health care savings, the report identified 16 options including:
- Overall savings for Medicare-related policies ranged from $230 billion to $869 billion over ten years. Included in the report are options related to converting Medicare to a premium support model ($22 to $275 billion), imposing restrictions on Medigap plans ($52 to $114 billion), increasing the age of eligibility for Medicare ($23 billion), increasing Medicare Part B and Part D premiums ($20 to $287 billion), imposing additional bundled payments on providers ($17 to $47 billion), and imposing rebates on prescription drug manufactures for Part D low-income beneficiaries ($123 billion).
- Overall savings for policies related to health insurance exchanges and employer-sponsored coverage ranged from $476 billion to $823 billion over ten years. Included in this report are options related to eliminating the subsidies for moderate-income individuals who purchase coverage in the health insurance exchanges ($173 billion), adding a “public option” to choices available in the health insurance exchanges ($37 billion), and reducing the tax incentives for employer-based health insurance coverage ($266 to $613 billion).
- Overall savings for veterans’ health care policies ranged from $99 billion to $150 billion over ten years. Included in the report were options related to adding out-of-pocket cost-sharing for TRICARE for Life ($31 billion), modifying TRICARE cost-sharing for working-age military retirees ($20 to $71 billion), and restricting Veterans’ Affairs (VA) Medical Care eligibility ($48 billion).
- The remaining policy options included block granting Medicaid ($105 to $606 billion), limiting medical malpractice claims ($57 billion), reducing funding for National Institutes of Health (NIH) ($13 to $28 billion), and increasing the cigarette tax ($37 billion).
This compendium will prove useful as Congress continues to look for offsets to pay for various priority issues (like permanently addressing the SGR). Of course, many of these proposals have been scored by CBO over the years (e.g., increasing the age of eligibility and imposing Medicare premium support model) and the prevailing wisdom thus far seems to be that such policies would be politically challenging to enact absent some grand bargain on entitlement reform.