Policy Documents

Medicare Savings: 5 Steps to a Down Payment on Structural Reform

Robert E. Moffit, Ph.D. and Rea S. Hederman, Jr. –
April 11, 2013

In this Issue Brief for Heritage, the authors contend that Medicare savings embodied in President Obama’s Fiscal Year 2014 budget proposal—mostly from provider payment reductions—are inadequate. Given the urgency of addressing the nation’s deepening fiscal crisis, there is no reason why Congress and the Obama Administration cannot take more decisive steps toward comprehensive Medicare reform and larger savings. Variations on these proposals have attracted bipartisan support in the past.  Based on the Center for Data Analysis (CDA), there are potential savings:

  1. Reduce taxpayer subsidies for wealthy seniors, tighten income thresholds and index them to inflation, and phase out taxpayer subsidies for the wealthiest recipients entirely.
  2. Raise the normal age of eligibility for Medicare and index the eligibility age to longevity.
  3. Gradually raise the beneficiary’s premium contribution to Medicare Part B and Part D premiums from 25 percent to 35 percent.

There are other savings listed.  Read the entire report in the pdf attached.