State of the Union Address

The President identified the rising cost of health care very early on in his Feb. 12, 2013 State of the Union speech as “the biggest driver of long term debt,” and singled out Medicare as an area where significant savings could be achieved.

He stated that modest changes to Medicare are necessary to help address the problem of high health care costs. While not giving specifics, the president identified three ways Medicare cost could be reduced to decrease health care spending:

• Changing the reimbursement system to a value-based purchasing methodology;
• Require added cost sharing on the part of wealthiest seniors; and
• Implement reforms to reduce taxpayer subsidies to prescription drug companies.

The president stated that he is “prepared to enact reforms that will achieve the same amount of health care savings by the beginning of the next decade as the reforms proposed by the bipartisan SimpsonBowles commission.” At the end of 2010, the Simpson-Bowles commission issued 18 recommendations to reform the health care system, estimating a savings of $400 billion over a ten-year period. Notably, the president did not commit to adopting those specific recommendations.

Contact: Patrick Cucinelli, pcucinelli@leadingageny.org, 518-867-8827