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
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.