Medicare, Medicaid on the Table

3. Raise costs for most beneficiaries.

The federal government currently pays 75 percent of the cost of Medicare Part B, which covers doctors' services and outpatient care, with beneficiaries paying the remaining 25 percent through Part B premiums. Beneficiaries' share could be increased — for example, to 35 percent by 2019 under the bipartisan Lieberman/Coburn proposal, saving the government about $241 billion.

This plan also would change the annual Part B deductible (currently $165) and the Part A deductible for hospital stays (currently $1,132 for each hospital benefit period) into a combined annual deductible of $550. Since the vast majority of Medicare beneficiaries do not become hospitalized every year, this proposal would cost most people more money, but save Medicare an estimated $130 billion over 10 years. The super-committee also could increase copayments for some services so that beneficiaries pay a greater share of the cost.

4. Raise costs more for wealthier beneficiaries.

People with incomes over a certain level already pay higher premiums for Part B services and Part D prescription drug coverage. The super-committee could reduce these income levels so that more people pay the surcharges. Or it could require the wealthiest to pay premiums for Part A (hospital insurance), which has always been premium-free for everyone who has qualified for Medicare.

The Lieberman/Coburn plan raises costs for higher-income people in a different way. It creates an annual out-of-pocket spending limit of $7,500 for most beneficiaries, but wealthier people, depending on their income, would have to pay between $12,500 to $22,500 in deductibles and copays in a year before hitting their out-of-pocket cap.

5. Reduce help from medigap supplemental insurance.

This proposal has surfaced from time to time in the past. It's based on the idea that the 9 million people who buy private medigap policies to cover their Medicare deductibles and copays are insulated from the true cost of their care and therefore use more services. The Lieberman/Coburn plan would require policyholders to pay the first $550 of their annual out-of-pocket costs and would further limit medigap coverage.

Next: Reducing Medicaid assistance. >>