They include requiring wealthier seniors to pay a larger share of their Medicare Part B and D premiums and mandatory drug rebates for low-income seniors in Medicare Part D. The rebates, which are fiercely opposed by the pharmaceutical industry, would bring in more savings—$140 billion—than any other single change the administration would make to Medicare.That's a start, a small one, on pharmaceuticals. According to an analysis by HCAN, the biggest 11 pharmaceutical companies made $711 billion in pure profit in the last decade, a good part of in thanks to Part D, enacted in 2006. PhRMA will scream bloody murder, but they can more than afford to sacrifice a small part of their profit from the cash cow Part D has been.
The budget also proposes to discourage seniors from purchasing first-dollar Medigap insurance that covers co-pays and other cost-sharing requirements in the program.
It would cut bad debt and other payments to hospitals by $30 billion and post-acute care providers by $50 billion. The offer to Boehner includes another $120 billion in unspecified health savings.
On the other hand, the proposals for seniors aren't a positive move. At least Obama didn't include the hike in the Medicare eligibility age that he had previously offered to Boehner, but what he does include could be another hit for seniors, on top of the chained CPI. Cutting out Medigap policies would increase out-of-pocket costs for seniors. Those costs have been steadily and steeply rising [pdf] for seniors already over the past two decades. Adding more means testing to the program (wealthier individuals already pay higher premiums for Part B, the part that covers physician services and supplies) shifts the program further from from universal coverage and opens it up to more and more means testing, and toward a stigmatized and politically vulnerable poverty program.
Cheers for hitting PhRMA, and more of that. But adding in the cuts for Medicare beneficiaries—who have paid into this system in order to benefit from it—is just a gratuitous effort to prove "balance." Which is going to be rejected by Republicans as not enough, anyway.