Summary of Health Provisions Offered in Alternative Budgets
Budget Offered by Sen. Pat Toomey (R-PA)
Medicaid Block Grant: Converts both Medicaid and SCHIP into a block grant. The block grant would be increased annually to reflect population growth as well as the growth of consumer prices; states would gain additional flexibility to manage their Medicaid programs in the way they see fit.
Health Care Law: Assumes repeal of the law’s coverage expansions scheduled to take effect in 2014. Also assumes repeal of the law’s tax increases. A CBO estimate released in February found that taxes will increase by $813 billion over the 2012-2021 period absent their repeal.
Repeals the CLASS Act, which HHS Secretary Sebelius has admitted is “totally unsustainable” as written in the health care law. Also repeals the Independent Payment Advisory Board (IPAB), a board of unelected bureaucrats empowered to enforce caps on Medicare spending that forms the centerpiece of the President’s attempt to reduce Medicare spending. In addition, the budget presumes the repeal of the drug discount program scheduled to close the Medicare Part D “doughnut hole” in 2020, and repeals $10 billion of the law’s cuts to Medicare Advantage by creating a stabilization fund to preserve private plan choices within Medicare. Retains most of the health care law’s other Medicare spending reductions, except as specified above.
Medicare “Doc Fix:” Adjusts the budgetary baseline to reflect a permanent fix to the sustainable growth rate (SGR) mechanism for Medicare physician payment.
Liability Reform: Assumes health care savings from enacting limits on medical liability suits. CBO previously estimated that such measures would reduce health expenditures by about 0.5%.
Medicare Bad Debt: Phases out Medicare payments to hospitals and providers covering bad debt (i.e., unpaid deductibles and co-pays), as recommended by the Fiscal Commission, saving at least $23 billion.
FEHB Reform: Assumes enactment of CBO Budget Option 14, which reforms the Federal Employee Health Benefits program into a defined contribution model, providing a fixed sum (indexed to consumer price inflation) for federal employees to purchase the health plan of their choosing. This reform would save $31.4 billion in mandatory spending over ten years, along with potential savings of $41.9 billion in discretionary spending.
Budget Offered by Sen. Rand Paul (R-KY)
Medicaid Block Grant: Converts both Medicaid and SCHIP into a block grant, with initial funding to states set at Fiscal Year 2008 levels. The block grant would be increased annually to reflect population growth as well as the growth of consumer prices; states would gain additional flexibility to manage their Medicaid programs in the way they see fit.
Health Care Law: Repeals all of the coverage expansions, tax increases, and Medicare provisions included in the health care law.
Fraud and Abuse: Assumes $25 billion per year in Medicare savings from waste, fraud, and abuse.
Statement of Medicare Policy: Includes non-binding language calling for authorizing committees to enact legislation ensuring Medicare’s solvency over a 75-year period while using free market solutions that encourage competition and “individual and family based plans.” Does not include assumptions about the Medicare “doc fix.”