President’s FY2016 Budget Set to Reduce Net Medicare Spending
- By BSTQ Staff
The president’s FY2016 budget proposal released in February by the Office of Management and Budget would reduce net Medicare spending by $423 billion between 2016 and 2025 and is estimated to extend the solvency of the Medical Hospital Insurance Trust Fund by approximately five years. Highlights of the budget proposal include:
- reductions in Medicare payments to providers, most of which affect providers of post-acute care (34 percent of proposed cuts)
- a requirement by drug manufacturers to provide Medicaid rebates on prescriptions for Part D Low Income Subsidy enrollees, a proposal that was also included in the president’s FY2014 and FY2015 budgets (30 percent of proposed cuts)
- increases in income-related premiums and prescription drug copayments for low-income enrollees to encourage the use of generic drugs, an increase in the Part B deductible for new enrollees and a new home health copayment for new enrollees (17 percent of proposed cuts)
- a repeal of the Sustainable Growth Rate formula and $54 billion in new Medicare spending
