Committee for a Responsible Federal Budget

Returning to the Coburn-Lieberman Medicare Plan

Sep 5, 2013 | Health Care

Today, Senator Tom Coburn (R-OK) and former Senator Joe Lieberman (I-CT) sent a letter to House Ways and Means Chairman David Camp (R-MI) that submitted their 2011 proposal for the ongoing discussions of reforming Medicare. We praised their plan when it was first released and two years later, the Bipartisan Proposal to Save Medicare & Reduce Debt remains a strong proposal. With a new score from the Medicare Actuaries, we can clearly see the improvement.

An analysis done in April by Office of the Actuary (OACT) at the Centers for Medicare and Medicaid Services showed that the plan could save the federal government $536 billion over the next ten years. The plan would also extend the life of the Medicare Part A trust fund, which is due to become insolvent by 2026, to 2037.

The Actuaries' Report contains a wealth of information on how the plan would affect Medicare benefits and premiums, Medicaid, the health exchanges, and other related factors. Just one of the findings, the plan would actually decrease Medicare premiums compared to current law.

Savings From Coburn-Lieberman Proposal (in billions)
Provision2013-2022 Savings
Raise Medicare eligibility age$76.3
Reform cost-sharing rules (including Medigap)$262.2
Accelerate home health care payment adjustments$7.0
Reduce Medicare payments for bad hospital debts$23.4
Means test Part B and Part D premiums$46.6
Increase Part B premiums$217.8
Enact a three-year doc fix-$88.7
Additional Medicaid payments for dual-eligibles-$23.9
Net federal savings$535.9

Source: OACT

The plan is especially useful as it contains many policies that could be part of a "grand bargain." Cost-sharing reforms in particular have recieved bipartisan support and could help control the growth of health care spending. Likewise, raising the Medicare eligibility age has received support from both sides of the aisle, especially when included with a buy-in like in the Bipartisan Path Forward. Enacting a three-year patch for the Sustainable Growth Rate formula would also prevent one-year "doc fixes" while lawmakers work toward finding a permanent solution for the SGR.

Solving our debt problem will require lawmakers to go even further in entitlement reform, but the plan from Coburn and Lieberman is a great place to start. Medicare is a popular program, but as Coburn and Lieberman note in their letter, changes will need to be made to make it sustainable.

Click here to read the OACT's analysis.