Fiscal Commission on Health Policy

Word is that the President will endorse the Fiscal Commission approach in a speech tomorrow. It is not clear what that means exactly, but I guess we will have to read the speech. A quick overview of some of the key (and most concrete) health policy attributes of the report.

  • It assumes the implementation of the Affordable Care Act.
  • It moves to accelerate several aspects of the ACA that could slow health care cost inflation. It addresses the tax preference of employer paid health insurance in 2014, instead of waiting until 2018 to do so via the excise tax on high cost health insurance plans. It expands the focus of the Independent Payment Advisory Board (IPAB), most notably by ending the hospital exemption of the board’s work from 2014-2021.
  • Suggests ~$400 Billion in Medicare and Medicaid cuts beyond those in the ACA over the next 10 years (see pg. 37-40). Some of these offset other spending suggested by the Commission. I think it is a ~$200 Billion net cut in Medicare and Medicaid over 10 years over current law (but complicated to determine exactly until it is put into legislative form).
  • It calls for repeal or significant reform of the CLASS provisions.
  • Proposes medical malpractice reform along the lines outlined in the October, 2009 CBO letter to Senator Orrin Hatch (reduce the deficit by $54 Billion over 10 years).
  • Mandates moving dual eligibles (Medicare and Medicaid) into Medicaid manage care.
  • Directs CMS to develop new physician payment system by 2015; suggests physician pay freeze through 2013 and 1% cut in 2014 in interim. A list of specific Medicare cuts are noted to offset the cost of this ‘doc fix fix.’
  • Sets a federal cap target for health care growth starting in 2020 of GDP growth + 1% (but there are numerous details of how this would work that need to be sketched out). Note, this includes all federal spending on health care: Medicare, Medicaid, the Children’s Health Insurance Program, FEHB, TRICARE, the exchange subsidies, and the cost of the tax exclusion for health care – starting in 2020, with the target of holding growth to GDP plus 1.

A comprehensive set of proposals. 4 of the 6 members of the bipartisan gang of six in the Senate have already voted for this as members of the Fiscal Commission. If the President gets behind the Commission report full speed ahead, who knows what might happen.

Update: added Medicaid to clarify proposed cuts.

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