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Medicare, Medicaid on the Table

8 cuts Congress's deficit committee might make

En español | Will Medicare and Medicaid benefits be cautiously trimmed or dramatically sheared by a "super-committee" looking for ways to cut federal spending?

See also: AARP rejects proposals that cut Medicare benefits.

That's the question as the committee, composed of six Republicans and six Democrats, tries to figure out how to slash $1.5 trillion from the national deficit in a new round of negotiations. The group must make its recommendations before Thanksgiving, and Congress is expected to vote on them by Dec. 23.

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Seniors react to proposed cuts in health and retirement benefits. — Photo by Melissa Golden

Everything's on the table, but here are eight changes to Medicare and Medicaid that the committee is expected to consider:

1. Replace the current Medicare program with a private voucher system.

A proposal to privatize Medicare for everyone currently under age 55 passed the House in April — and failed in the Senate. But Republican leaders have made it clear that the Ryan plan — named after its author, Rep. Paul Ryan of Wisconsin, chairman of the House Budget Committee — is still on the table despite strong popular reaction against it.

The plan would replace Medicare with vouchers to help buy private insurance for people who become eligible for Medicare after 2021. Experts predict that it would shift more costs to beneficiaries — both for younger ones using the vouchers and, ultimately, for older ones who stay in the current Medicare program.

2. Raise the age of eligibility for Medicare.

The super-committee could adopt a proposal from a bipartisan bill recently introduced by Sens. Joe Lieberman (I-Conn.) and Tom Coburn (R-Okla.). This bill — seen by some as a bipartisan model for deficit cutting — would raise the eligibility age from 65 to 67, but only if a provision of the Affordable Care Act goes into effect in 2014. That provision would guarantee Americans who are not old enough for Medicare the opportunity to buy private insurance regardless of health conditions — something they would have to do if the Medicare eligibility age is raised. Most Republicans in Congress have vowed to repeal the health care law.

Raising the eligibility age is estimated to save the government $124 billion over 10 years, but if the health care law is repealed, the burden would fall on people ages 65 to 67 trying to buy insurance and on state Medicaid programs and employers that provide health insurance. If the law is allowed to take effect, federal savings would be partly reduced because more low- and middle-income people would be eligible for government subsidies under the law.

Next: Raising the costs to beneficiaries. >>

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