Read all about @JebBush‘s new entitlement plan that saves $2.7T over the next 20 years: https://t.co/bRWAuricap pic.twitter.com/h0I7SsXvtH
— Loren Adler (@LorenAdler) October 28, 2015
Loren Adler has a deficit reduction fetish that is a bit creepy as he and his group prioritizes no debt without looking at either value of what is being bought with debt or larger macro-economic reasons for changes in the debt to GDP ratio. However they can do basic budget math and summarize policies well.
They have summarized the major planks of the !Jeb! Bush Medicare policy.
Let’s look at the major planks for distributional purposes:
- Premium Support — This only saves the federal government money by decreasing the growth rate of Medicare expenditures. The plan would be to tie the premium support to some combination of traditional Medicare and Medicare Advantage plans and then also to tie that to a growth rate that is the general economy plus a small kicker. The Ryan plans tied the premium support growth rate to nominal economic growth plus one percent. Health care costs have been rising at a much faster rate than that for my entire life. Distributionally this kicks older seniors in the ass if the premium support values are not age adjusted. If they are age adjusted, healthier seniors are better off than sick seniors but they are all worse off then under current policy as they will be either choosing lower actuarial value coverage, or narrower networks.
- Means testing of Medicare premiums — this is an expansion of current policy on Medicare Part B premiums. More people will be paying higher Medicare premiums, so this would be touching upper middle class seniors.
- Modify CMS management and fee schedule payments for interaction effects — I would want to read more, but these could be distributionally neutral. Dropping fees slightly hurts people with complex medical conditions as slightly fewer providers will be available for complex appointments, but this is probably minor.
- Allow more seniors to have tax free HSAs — This benefits upper income retirees as they are the ones with the taxable cash that can be sheltered/hidden in HSAs. Someone making $21,000 per year won’t be able to sock away $2,500 in an HSA while it is fairly easy for someone who is pulling in $75,000 or more.
So the three major distributional changes are a severe kick in the nuts to lower income seniors (premium support), and then a rough wash for upper income seniors (-Means testing + HSA).