President Obama’s budget for fiscal year (FY) 2016 has been released and it includes many provisions related to Medicare. The budget would take close to $400 billion over a ten year period from Medicare, Medicaid, and other programs. The President’s budget proposal would use federal savings and revenues to reduce the deficit, replace sequestration of Medicare, and other federal programs for 2016 through 2025.
Long-term care highlights include:
- Nearly 30% of the proposed savings are related to Medicare prescription drug spending.
- More than 34% of the proposed Medicare savings are a result from reductions in Medicare payments to providers of post-acute care.
- About 17% of the proposed Medicare savings is due to increases in:
- income-related premiums
- increases in prescription drug copayments to encourage the use of generic drugs
- an increase in the Part B deductible for new enrollees
- a new home health copayment for new enrollees
The President’s FY2016 budget would also repeal the Sustainable Growth Rate (SGR) formula.