Deficit Panel Tackles Health Care Costs

By Ricardo Alonso-Zaldivar, Associated Press

WASHINGTON (AP) — The health care cuts proposed by President Barack Obama's deficit commission would reach virtually every corner of society, making cost curbs in the new overhaul law look tame by comparison.

Workers with solid coverage on the job, seniors, drug companies, trial lawyers, hospitals, doctors, state governments and federal employees would all feel the effects. For Medicare recipients, the biggest change would be an increase in cost-sharing.

The proposals from commission co-chairmen Erskine Bowles and Alan Simpson were strongly criticized Wednesday by groups ranging from AARP to hospitals and labor unions. At the same time, there was recognition that drastic measures may be needed to confront spiraling health care costs.

The plan leaves in place the president's signature health care law expanding coverage to more than 30 million uninsured, but it would repeal a new long-term care program included in the legislation, calling it "financially unsound."

It would gradually phase out the federal tax break for job-based health plans, a change that would force workers and their families to seek out cost-conscious insurance. Labor unions, which have given up wage increases to secure better coverage, are adamantly opposed.

For the first time, the government would set — and enforce — an overall budget for Medicare, Medicaid and other federal programs that cover more than 100 million people, from Alzheimer's patients in nursing homes to premature babies in hospital intensive care.

Overall, the nation will spend about $2.6 trillion this year on medical care, and some experts believe a significant share of that is for procedures and tests that are of little benefit to patients. Americans are no healthier than citizens of other countries that spend much less.

The new health care law laid the groundwork for expanding coverage but dabbled around the edges when it came to curbing costs. That left a major piece of unfinished business that the deficit commission took on.

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