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Simpson-Bowles health-care plan offers $600 billion in cuts, but few specifics

$600 billion in cuts to heath-care spending have been proposed as part of a $2.4 trillion deficit reduction plan Democrat Erskine Bowles and Republican Alan Simpson released Tuesday. But heath-care experts doubt that target could be reached without changes to Medicare and Medicaid.

A new bipartisan deficit-reduction plan to slash a massive $600 billion from US health-care spending over two decades has policy experts scratching their heads over how such an ambitious target can be reached.

顿别尘辞肠谤补迟听聽and Republican聽聽have yet to declare what they would do to wring savings from聽, Medicaid and other programs, according to analysts who provide the two deficit hawks with their facts and figures.

Those ideas will be laid out in a detailed plan due to be issued at some point over the coming weeks.

But policy experts say the latest Simpson-Bowles plan may call for politically unpalatable steps, such as an increase in the聽聽eligibility age and a phasing out of the tax protection for employer-sponsored health insurance plans.

The $600 billion savings target is one-quarter of a $2.4 trillion deficit reduction plan that Simpson and Bowles released on Tuesday, as pressure mounted on聽聽and the聽聽to find a way to avoid a package of automatic cuts known as the "sequester," due to take effect on March 1.

The plan also includes $600 billion in revenue from tax reform, $1.2 trillion from cuts in defense and non-defense spending and a shift to a slower inflation gauge for federal programs including Social Security.

"It might help聽聽do something right for a change. Slim hope, but it's all we have," said聽聽of the conservative聽.

The approach to winnowing back the $2.8 trillion U.S. health-care system appears at some level to split the difference between Democrats and Republicans. The spending reduction target is closer to larger Republican demands than to the $400 billion in savings offered by President聽.

However, much of the content appears to reflect Obama's priorities, from reining in the underlying health-care cost curve to encouraging new payment structures that reward improvements in quality and efficiency rather than volume of treatments.

For now, experts said the plan provided too few details to know who would be on the hook for the biggest sacrifices.

"They have not made final decisions about the exact numbers or specific policies they will include in the plan they release in the coming weeks," said聽, executive director of the聽, a Simpson-Bowles led initiative that released the deficit reduction plan on Tuesday.

POTENTIAL ISSUES ON BOTH SIDES

Some analysts worried that the detailed plan would pose problems for Democrats and Republicans alike.

For example, the聽聽recently rejected the idea of raising to 67 from 65 the eligibility age for聽, the federal health-care program for the elderly and disabled.

"It's impossible to get to $600 billion in health-care savings without raising the聽聽age," said聽, a former aide to the late Democratic Senator聽聽who helped draft Obama's health-care reform law.

"I don't think it's constructive for them to move the goal posts, because it emboldens Republicans to demand cuts that are really unrealistic," added Spiro, now an analyst with the Center for American Progress, a Washington think-tank with close ties to Democrats and the Obama聽.

Bowles last proposed $600 billion in health-care spending cuts in 2011 when he appeared before the so-called Super Committee, a bipartisan panel of lawmakers that ultimately failed to agree on a deficit reduction package that would have avoided the looming sequester.

罢丑别听, the think-tank that sponsors the聽, followed up his remarks with proposals that would cut $609 billion from health-care spending over a decade. This list included $175 billion in provider payments, $112 billion in rebates and $125 billion from raising the聽eligibility age.

In an emailed response to a Reuters query, Lorenzen said those savings proposals are "not necessarily" a good guide to what the latest Simpson-Bowles plan will look like.

But analysts noted that the two men on Tuesday spoke of聽聽payments cuts to hospitals, doctors and other providers who have already seen more than $700 billion in reduced pay increases under Obama's Patient Protection and Affordable Care Act. Some worry that further cuts could force certain providers to stop serving聽's 50 million beneficiaries.

"Right now, we're looking an unprecedented reduction in provider payments," said聽聽of the conservative聽. "If the current payment cuts are actually maintained, we will start to see a serious problems of senior citizens having access to care."

Simpson and Bowles also talked about "adjusting benefits to account for population aging," which analysts interpreted as a reference to the聽聽eligibility age. Moffit said such a move, along with further means testing for wealthy beneficiaries and changes in cost-sharing, would go a long way toward reducing the program's contribution to federal spending.

Reporting by David Morgan; Editing by Ros Krasny and Maureen Bavdek