A Half-Trillion from Medicare/Medicaid in Fiscal Cliff Deal?

In a recent webinar we predicted that we would see $300-500 Billion in savings from Medicare and Medicaid in a deal to avoid the fiscal cliff.  The shapes in the fog are becoming clearer and we’ll stand by it: Senate Majority Whip Dick Durbin said this morning on MSNBC’s “Morning Joe” that he’d like to see around $400 Billion in cuts from Medicare as lawmakers negotiate a deal to avoid the fiscal cliff.

“I think that’s something we should start working with, I think that’s a good indication of where we could go. But when we sit down with revenue on one side and entitlements on the other, that’s when we get specific.”

Durbin suggested a few ways to help achieve those cuts: more means testing, possibly a separate prescription drug program with a low-cost option (?) and encouraging the development of ACOs.  Later, during a speech to the Center for American Progress, Durbin, a member of the 2010 Simpson-Bowles Commission, discussed raising the Medicare eligibility age.  He’s got plenty of “savers and raisers” up his sleeve: “There were some 20 options that were given to us, and I supported a number of them.”

Durbin took a welcome poke at some of his Democratic colleagues who oppose reforming Medicare and Medicaid: “Some say don’t touch entitlements, I don’t think that’s a responsible approach,” Durbin said. “Untouched, unchanged, Medicare runs out of money in 12 years — 12 years.”