President Obama Releases Deficit Reduction Plan - Medicare Cuts Included

On September 19, 2011, President Barack Obama released his latest deficit reduction package that he claims would decrease the deficit by an additional $3 trillion over the next 10 years through a combination of spending cuts and revenue increases. Among the spending cuts, the President proposes changes to the Medicare program that would contribute $248 billion toward deficit reduction.  

The President’s plan calls for “strengthening” the Independent Payment Advisory Board (IPAB), reducing Graduate Medical Education (GME) payments, as well as payments to certain rural providers.  Other changes could impact beneficiaries like increased deductibles and income-related premiums.  The plan assumes as part of the Medicare baseline that legislative action to permanently prevent reductions in Medicare physician payment rates – sustainable growth rate (SGR) cuts – will occur. 

ASA opposes the Independent Payment Advisory Board (IPAB) and has called for the full repeal of IPAB.  IPAB is an unaccountable and unelected board of bureaucrats with sweeping powers to mandate added across-the-board or other targeted reductions in Medicare Part B payments on top of SGR cuts created by the Patient Protection and Affordable Care Act (PPACA).

As part of the revenue increases,  the plan assumes the elimination of the Bush-era tax cuts and imposes a new “Buffett tax” on those individuals making more than a million dollars a year. 

Read a fact sheet put out by the White House on the health care portion of the plan.