Decoding Deficit Reduction and Medicare

Decoding Deficit Reduction and Medicare                   

There has been much discussion over the past year about "deficit reduction," but the complexity of the topic and the jargon that is used make it difficult to understand the impact that deficit-reduction proposals would have on real people. Over the next few weeks, the debate will intensify as Congress considers budget legislation that may incorporate or trigger many of these proposals.
                   
Most discussions about deficit reduction go hand in hand with discussions about how to slow spending in "entitlement programs" such as Social Security, Medicare and Medicaid. However, there is a difference between slowing spending, as the Affordable Care Act attempts to do through delivery system reforms, and achieving savings by cutting the funding for these programs and shifting higher costs to consumers. Many of the deficit reduction proposals do exactly that, and while proponents use terms such as "flexibility" and "reform" to describe them, many would result in higher costs for consumers, fewer benefits and decreased access to care. This is especially problematic for people with Medicare, nearly half of whom have annual household incomes of $20,000 or less, and who already spend about 16.2 percent of their annual incomes on health care.
                   
The following materials act as a guide to the deficit reduction debate and serve to help readers interpret the terms that will be used in the coming months. While some proposals sound promising in name, in reality they would have serious effects on Medicare consumers' access to quality, affordable health care, and some would even replace the current Medicare program altogether.