Kaiser Family Foundation Outlines Budget Control Act, Medicare

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Medicare could be a major component of the forthcoming efforts to reduce the national debt as part of the Budget Control Act of 2011, but there are certain parts of Medicare that would and would not be affected, according to a recent Kaiser Family Foundation report.

The KFF released an issue brief outlining the overview of the law and how Medicare spending could be affected by changes proposed by the Joint Select Committee.

Highlights of the report include the following:

•    If the Joint Select Committee's proposal is not enacted by Jan. 15, 2011, or if the proposal saves less than the target of $1.2 trillion over 10 years, then sequestered amounts to ensure that savings total would be enacted.
•    The law limits the amount of savings that would be achieved through Medicare savings in the above scenario. Reductions would be capped at 2 percent of payments to providers and plans per year of sequestration.
•    Sequestration would not affect premiums under Medicare Parts B and D, cost-sharing for Medicare-covered services, Medicare premium and cost-sharing subsidies under Part D and revenues to the Medicare Part A trust fund.
•    Reductions in Medicare payments to providers and plans could affect beneficiaries' out-of-pocket costs. For example, Medicare Advantage plans could shift costs to beneficiaries by raising premiums or cost-sharing.

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