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Bipartisan panel issues debt reduction recommendations

November 17, 2010

The Bipartisan Policy Center today issued a proposal for reducing the federal deficit, including recommendations to control health care spending. Among other health care proposals, the plan would phase out the tax exclusion for employer-sponsored health insurance; raise Medicare Part B premiums from 25% to 35% of program costs; revise Medicare's benefit package and co-payment structure; bundle Medicare payments for post-acute care into the payment for inpatient care; require Medicare fee-for-service beneficiaries to pay an additional premium if federal spending per enrollee rises more than 1% faster than gross domestic product; create a Medicare exchange for enrollees who choose a private health plan; remove barriers to managed care options for beneficiaries dually eligible for Medicare and Medicaid; slow Medicaid cost growth by one percentage point per year; and provide federal financial incentives for states to cap medical liability damages. The recommendations were developed by a task force co-chaired by former Senate Budget Committee Chairman Pete Domenici (R-NM) and former White House budget director Alice Rivlin, who served during the Clinton administration. In a statement, the AHA said the proposal "rightly rejects the inclusion of further payment reductions to hospitals," and that liability reform "would greatly add to the nation's efforts to control health care spending." The association expressed concern about the proposal to make the bundling pilots for acute and post-acute services permanent with the requirement of producing savings, and serious reservations about an artificial cap on the Medicaid program.