The analysis from the nonprofit Committee for a Responsible Federal Budget shows most of the Medicare cuts the president proposed “come from policies which would reduce, not increase, premiums and other out-of-pocket costs for seniors, and would do so without reducing the benefit offered by Medicare.”
It estimates about 85 percent of the proposed Medicare cuts come from reductions in provider payments, and an additional 5 percent come from policies that would reduce overall healthcare costs (primarily medical malpractice reform). The committee estimates only 11 percent of the proposed Medicare cuts come from Medicare Part D reforms.
The analysis also notes that the amount of the proposed Medicare cuts is closer to $500 billion rather than the $845 billion that has been widely reported.
The $845 billion is a gross figure and represents the literal reduction in spending on Medicare, according to the committee. However, some of the reduction is from shifting Disproportionate Share Hospital and Graduate Medical Education programs from Medicare to other parts of the HHS budget.
After net savings from reductions in spending on Medicare are factored in, instead of counting budget shifts as Medicare cuts, total Medicare reductions are $575 billion, the analysis states. This includes effects on Medicare from medical malpractice reform and other non-Medicare policies.
The committee estimates direct Medicare reductions at $515 billion.
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