Kaiser: Medicare Reform Ideas

There are 150 cost-cutting ideas, totaling $9.4 trillion in spending cuts over the next decade. Find them here, “Policy Options to Sustain Medicare for the Future,” summarized by Timothy Taylor:

  1. Raise the age of Medicare eligibility from 65 to 67 ($113 billion over 10 years)
  2. 10% coinsurance payment on all home health episodes ($40 billion over 10 years)
  3. Restrict first-dollar Medigap coverage ($53 billion over 10 years)
  4. Increasing premiums for Part B and Part D: for example, raise Part B premiums by 2% per year until they cover 35% of total Part B expenses ($231 billion over 10 years)
  5. Increase Medicare payroll tax by 1 percentage point for all workers ($651 billion over 10 years)
  6. Require manufacturers to pay a minimum rebate on drugs covered under Medicare Part D for beneficiaries receiving low-income subsidies ($137 billion over 10 years).
  7. Repeal provisions in the Affordable Care Act that would close the Part D coverage gap by 2020 ($51 billion over 10 years)
  8. Reduce and restructure graduate medical education payments to hospitals ($69 billion over 10 years)
  9. Rebase SNF and home health payment rates: for example, reducing payment updates for post-acute care by 1.1 percentage points ($45 billion over 10 years)
  10. Adopt traditional tort reforms at the Federal level ($40 billion to $57 billion over 10 years)
  11. Establish a combined deductible, uniform coinsurance rate, and a limit on out-of-pocket spending, along with Medigap reforms ($93 billion over 10 years)
  12. Set Federal contributions per beneficiary at the average plan bid in a given area, including traditional Medicare as a plan, weighted by enrollment ($161 billion over 10 years)


Comments (12)

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  1. Tyrus says:

    5.Increase Medicare payroll tax by 1 percentage point for all workers ($651 billion over 10 years)

    I’m very tired of policy solutions revolving around taxing me more!

  2. Joe S. says:

    Let’s do them all, except for raising taxes.

  3. Devon Herrick says:

    I’ve counted nine or 10 of these ideas that NCPA has supported or written about. There are more good ideas than that. However, some of these ideas are like micro-managing Medicare. A better way would be to allow (and reward) innovative ideas that hospitals and doctors come up with, like Geisinger when it offered a warranty to cardiac patients.
    All it wanted in return was a higher reimbursement to offset the cost of guaranteeing the results. We wrote about this in a study How Entrepreneurs Could Solve Medicare’s Problems

  4. Andrew O says:

    Seems like most of these solutions are only patching some of the wounds inside the broken system. Not sure how sustainable Medicare will be in ten years, even if these ideas were to materialize.

  5. Sadat says:

    I think people should be allowed to opt of retirement and be allowed to work as long as they want. Why should people who are still mentally sharp at the strong age of 65 be forced to retire; they can give a lot to society. Intellectual production can occur well into someone’s later years.

  6. Sadat says:

    I should add that I never want to retire.

  7. Natalie says:

    Here’s an idea: Tax the people who voted for Obama. They won’t mind helping, I don’t think.

  8. Lloyd says:

    With the rising costs of Medicare, Medicare spending cuts would be very welcome to lessen the impact on our economy over the next 10 years. That is at least a start in the right direction.

  9. Gabriel Odom says:

    I have long asserted that the minimum age of Social Security payments and Medicare benefits should be fixed to five years less than the mean life expectancy – adjusted to sex and race.
    This means that a white female (life expectancy of 81.8 years) will be eligible after her 77th birthday, whereas a black male (life expectancy of 71.4 years) will be eligible after his 66th birthday.
    The original system was designed to only support the last five years of life anyway – but increases in life expectancy were not taken into account.

  10. Gabriel Odom says:

    I forgot to cite my source. Bad scientist.


  11. PPS says:


    I wonder first if there is sufficient consideration of offsetting effects.

    Take for instance #8: “Reduce and restructure graduate medical education payments to hospitals ($69 billion over 10 years).”

    GME/IME payments are intended to counter-balance the costs to teaching hospitals for educating residents. If teaching hospitals are less likely to continue (or develop) a teaching program, are we encouraging residents to become bad doctors? If bad doctors make costly decisions, then is the purported saving offset by costs later?

    I add also that #10 posits a substantial reduction in malpractice costs while also claiming that relatively few persons injured by negligence file suits (p.95). If tort reform imposes limits on contingency fees or noneconomic damages, is it hard to envision attorneys encouraging lawsuits by persons who previously did not contemplate filings?


  12. PPS says:

    I should add that #11 proposes a limit on out-of-pocket spending. Since patients would be more likely to seek better services since the maximum would limit expenses anyways, why wouldn’t we expect costs to rise? Even though hospitals may be paid MS-DRG, would this cause the unintended effect of increasing outlier payments through higher charges?