Commission takes the knife to healthcare spending
Commission takes the knife to healthcare spending

Preliminary recommendations from a new commission gave long-term care providers a bit of a fright this week. And understandably so.

The National Commission on Fiscal Responsibility, a bipartisan group of 18 that President Obama created, offered some arguably radical solutions to pare down the deficit. Among its ideas: converting the federal share of Medicaid payments into a capped allotment; placing dual-eligible beneficiaries in Medicaid managed care; increasing nominal Medicaid co-pays; cutting Medicare payments for bad debt; cutting federal spending on graduate and indirect medical education; and expanding accountable care organizations, payment bundling and other payment reforms.

And this was only the long-term care portion. Commission co-chairs former Sen. Alan Simpson and former White House Chief of Staff Erskine Bowles hardly spared other segments of healthcare from their carving knives. To help offset the cost of the “doc fix,” for example, it asked doctors and other health providers, lawyers, and individuals “to take responsibility for slowing health care cost growth.” Such offsets include paying doctors and other providers less and adopting comprehensive tort reform.

To help save Social Security, it recommended increasing the retirement age by one month every two years after it reaches 67 under current law. The age would reach 69 by about 2075. It also would allow retirees the choice of collecting half their benefits early and the other half at a later age.

Outside of healthcare, the commission proposed slashing costs from White House budgets, the military and corporate taxes. (It also wants to reduce funding to the Corporation for Public Broadcasting. I have a personal problem with this one.)

The purpose of these reforms is to achieve “nearly $4 trillion in deficit reduction through 2020” while reducing “the deficit to 2.2% of GDP by 2015,” according to Simpson and Bowles.

The American Association of Homes and Services for the Aging offered a word of caution following the report’s release.

“We congratulate the National Commission for Fiscal Responsibility and Reform for tackling the important issue of our national deficit, but we are concerned about the proposed cuts to Medicare and Medicaid beyond those included in the Affordable Care Act,” said Larry Minnix, president and CEO of the American Association of Homes and Services for the Aging, in a statement.

Apparently he was not alone in his attitude. Some lawmakers swiftly attacked the plan.

“This is not a package that I could support,” Rep. Jan Schakowsky (D-IL), who is on the commission, reportedly said during a break in a private meeting by the commission.

Echoing her thoughts, liberal Sen. Bernie Sanders (I-VT) called the Simpson-Bowles deficit reduction plan “extremely disappointing and something that should be vigorously opposed by the American people.”

Others were more tempered in their criticism. Meanwhile, some Republicans may think the recommendations don’t go far enough.

Commission members Reps. Dave Camp (R-MI), Paul Ryan (R-WI) and Jeb Hensarling (R-TX) issued a statement that sounded neutral but did not support the report:

“This is a provocative proposal, and while we have concerns with some of their specifics, we commend the co-chairs for advancing the debate. We will continue to work toward solutions that help spur economic growth and restrain the explosive growth of government spending.”

The commission needs 14 of the 18 members to approve the report before it is sent to Congress. Something tells me that’s not going to happen until the commission takes a more realistic look at the cuts it is proposing. Even if it did, it would be hard to imagine Congress putting its stamp of approval on this.