Little savings seen from Medicare panel

Congressional watchdog says White House proposal for group to set fees would only save $2 billion by 2019.

EMAIL  |   PRINT  |   SHARE  |   RSS
 
google my aol my msn my yahoo! netvibes
Paste this link into your favorite RSS desktop reader
See all CNNMoney.com RSS FEEDS (close)

Who will benefit most from the Obama administration's proposed financial regulations?
  • Consumers
  • Banks
  • Regulators
Photos
Sick pay: 9 stories of health costs
From $10,000 deductibles to no coverage at all, CNNMoney.com readers and viewers reveal their battle with the rising costs of health insurance.

WASHINGTON (Reuters) -- A White House proposal to set up an independent council to set Medicare fees and other changes to the government health program for the elderly could save up to $2 billion from 2016 through 2019, the Congressional Budget Office said Saturday.

The nonpartisan CBO said, however, that the plan, if added to a sweeping healthcare reform bill, could also easily produce no additional savings because it lacks specific goals and proposes no "fallback" mechanism to ensure cost-reduction objectives are met.

"The estimated savings of $2 billion over the latter half of the 2010-2019 period represent a probabilistic assessment of a range of possible outcomes," CBO director Douglas Elmendorf wrote in a letter to House of Representatives Majority Leader Steny Hoyer and other congressional leaders.

President Obama and his Democratic allies have seized upon potential savings within the Medicare program in a bid to counter Republicans and fiscally conservative Democrats who say the reforms aimed at providing more health care coverage to Americans are too costly.

Elmendorf said it was unlikely an independent rate-setting council appointed by Obama would recommend actions that would add "substantial additional savings" to those already anticipated under the main healthcare reform bill.

He said the council might be weighted toward medical providers who might not be inclined to recommend deeper cuts in provider payments. Further savings also may be limited without more substantial changes to the structure of payments and incentives to medical providers -- something that would require politically difficult legislation.

Rep. Pete Stark, a critic of Obama's Medicare commission idea who chairs the House Ways and Means Health Subcommittee, said the CBO report showed little added benefit from creating an independent commission.

"CBO states HR 3200, the House health reform bill, controls long-term costs in the health care delivery system. CBO further contends that an independent commission for Medicare-IMAC would have a 'high probability' that there would be no long term savings," the California Democrat said in a statement.

The federal Medicare program insures some 44 million elderly and disabled Americans at an annual cost of about $450 billion, almost one-fifth of total U.S. healthcare spending.

More substantial savings could be achieved if that and other enhancements were approved, including the setting of specific, feasible goals and giving the president's council clear authority to recommend broad coverage changes to coverage, benefit design and payment systems.

Those savings could reach "several percent" of annual Medicare spending in the years beyond 2019 -- a level that would reduce Medicare outlays by tens of billions of dollars annually.

"Substantial additional savings from an Independent Medicare Advisory Council-type proposal would probably require significant changes in coverage, benefit design, and payment and delivery systems aimed at reducing the quantity and intensity of services provided," Elmendorf wrote.

His letter noted that total federal resources devoted to health care programs would still increase because of provisions in the Obama plan to make health insurance available to more people.  To top of page

Features
They're hiring!These Fortune 100 employers have at least 350 openings each. What are they looking for in a new hire? More
If the Fortune 500 were a country...It would be the world's second-biggest economy. See how big companies' sales stack up against GDP over the past decade. More
Sponsored By:
More Galleries
10 things I learned at the New York auto show Auto shows these days are about as relevant as a dashboard cigarette lighter. But a careful observer can still pick up a thing or two. More
Rebirth of America's dead factories Defunct factories around the country are in high demand as U.S. production once again revs up. More
50 years of the Ford Mustang Take a drive down memory lane with our favorite photos of the car through the years. More
Sponsors
Worry about the hackers you don't know 
Crime syndicates and government organizations pose a much greater cyber threat than renegade hacker groups like Anonymous. Play
GE CEO: Bringing jobs back to the U.S. 
Jeff Immelt says the U.S. is a cost competitive market for advanced manufacturing and that GE is bringing jobs back from Mexico. Play
Hamster wheel and wedgie-powered transit 
Red Bull Creation challenges hackers and engineers to invent new modes of transportation. Play

Copyright 2009 Reuters All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer LIBOR Warning: Neither BBA Enterprises Limited, nor the BBA LIBOR Contributor Banks, nor Reuters, can be held liable for any irregularity or inaccuracy of BBA LIBOR. Disclaimer. Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.