Every year the Congressional Budget Office publishes a menu of options for reducing federal spending and the federal budget deficit. As in the past, this year’s compendium includes a number of options to reduce federal health care spending and raises federal revenue through health care initiatives.
The cost-cutting options include:
- establish caps on federal spending for Medicaid
- limit states’ taxes on health care providers
- reduce federal Medicaid matching rates
- change the cost-sharing rules for Medicare and restrict Medigap insurance
- raise the age of eligibility for Medicare to 67
- reduce Medicare’s coverage of bad debt
- consolidate and reduce federal payments for graduate medical education at teaching hospitals
- use an alternative measure of inflation to index social security and other mandatory programs
Options to raise additional revenue include:
- increase premiums for Parts B and D of Medicare
- reduce tax subsidies for employment-based health insurance
- increase the payroll tax rate for Medicare hospital insurance
Many of these proposals, if implemented, would be damaging for private safety-net hospitals.
Learn more about the CBO’s recommendations, how they might be implemented, and their potential implications in the CBO report Options for Reducing the Deficit: 2019 to 2028.