CBO report discusses smaller Obamacare subsidies, raising Medicare premiums

Medicare recipients and providers might be interested in a new Congressional Budget Office analysis of federal health care policy presented Jan. 29 to the Healthcare Leadership Council by CBO Director Doug Elmendorf. It acknowledges that “cutting federal subsidies for health insurance would help the budget but would leave affected people to bear higher costs.”

Nonetheless, the report advances possible federal policies that include repealing or narrowing the expanded eligibility for subsidies under Obamacare, reducing the size of exchange subsidies under that Affordable Care Act, raising the eligibility age for Medicare, increasing Medicare premiums, increasing Medicare cost-sharing, and reducing the tax subsidy for employment-based health insurance.

Changing the method for paying Medicare providers also could be a matter for study. Possible federal policies include shifting to new models of physician payments, and bundling payments for physician services, according to the analysis.

“Federal savings would be achieved only if providers were paid less in total than under current law, either because they would be delivering fewer and less complex services or because they would be receiving less money per service,” the analysis said.

Larger structural changes to federal health care programs could be considered. New federal policies might include a premium support system for Medicare, and capping Medicaid payments to the states, according to the analysis.


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