Expert Advice on Finding Medicare Savings

Tax sugary drinks. Savings: $50 billion

A 3-cent tax on sugar-sweetened beverages, the drinks that health experts have been urging Americans to cut back on for years, would raise $50 billion, the CBO said. Since obesity triggers a number of expensive medical problems, this tax also might help with health care costs, says Marc Goldwein, policy director of the nonpartisan Committee for a Responsible Federal Budget.

Reduce payments to health care providers. Savings: $140 billion

While hospitals and other providers agreed to cuts under health care reform, "there are still areas where we are overpaying," says Goldwein. The bipartisan commission proposed reducing funds to teaching hospitals, saving $60 billion. It advised Medicare to stop reimbursing providers for deductibles and copays they failed to collect from beneficiaries, saving $23 billion. The commission also advised speeding up changes in home health care payments, saving $9 billion. The CBO suggested that Medicare clamp down on payments to health care providers in areas where costs are 10 percent more than the national average, saving $48 billion.

Require drug companies to offer Medicare rebates. Savings: $112 billion

This option is the least painful to beneficiaries, say many liberal and moderate experts. Drug firms now must provide a significant refund for drugs purchased by Medicaid. If that same discount were to be applied to all low-income Medicare Part D beneficiaries, the CBO says, $112 billion could be saved.

Expand savings in health care law. Savings: unknown

The law, which the CBO has already calculated will reduce the deficit by $210 billion, includes new pilot programs to cut Medicare health care costs, which the commission says should be rapidly expanded. It also created the Independent Payment Advisory Board to limit the growth of spending. The CBO did not estimate savings from either measure. "There are savings in the law that have not yet been realized … let the law prove that savings can be had without pain," says Max Richtman, president and CEO of the National Committee to Preserve Social Security and Medicare.

Also of interest: Drugmakers hike prices of meds. >>

Bara Vaida is a Washington writer who covers health policy issues.