Simpson-Bowles offers updated deficit plan

AHA News Now

The former chairmen of the president's bipartisan National Commission on Fiscal Responsibility and Reform today offered an updated deficit reduction plan calling for $2.5 trillion in savings through a combination of spending cuts and tax changes. The 10-year plan by former Sen. Alan Simpson (R-WY) and Erskine Bowles, President Clinton's former chief of staff, would reduce Medicare and Medicaid spending by about $585 billion. Among other proposals, the plan calls for enacting delivery system and payment reforms; reducing payments for graduate medical education, bad debt and rural hospitals; reducing various payments to post-acute care providers; and gradually increasing the Medicare age while implementing a “buy-in” program with income-related premiums and subsidies for lower-income seniors. In addition to the $2.5 trillion in savings, the plan also includes options for longer-term reductions to entitlement programs. One proposal would, beginning in 2018, limit the growth of the net federal commitment to health care at the rate of the gross domestic product per beneficiary, and require Congress and the president to enact further reductions if costs are growing faster than the targets.

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