WASHINGTON BUREAU — The heads of the federal Budget deficit commission are recommending that the commission call for repealing or restructuring a new federal long term care benefits program and possibly for reducing the group health exclusion.
The co-chairmen of the 18-member National Commission on Fiscal Responsibility and Reform — Erskine Bowles, a Democrat who served as White House chief of staff under former President Bill Clinton, and former Sen. Alan Simpson, a Republican – have included those recommendations along with many others in a draft of the “Moment of Truth,” a budget-cutting proposal released today.
An earlier draft appeared Nov. 10.
The full commission is supposed to vote on the recommendations Friday.
In addition to the LTC program recommendation and the group health exclusion recommendation, Bowles and Simpson have proposed redesigning Medicare deductible rules and other Medicare cost-sharing rules; expanding efforts to improve coordination of Medicare enrollee care; and giving the Pension Benefit Guaranty Corp. the authority to increase pension insurance premiums.
Bowles and Simpson also have recommended that the government consolidate and replace a number of existing federal retirement programs, including the saver’s credit. The co-chairmen are suggesting that tax-preferred contributions be capped at the lower of $20,000 or 20% of income, and that the saver’s credit be expanded.
Bowles and Simpson do not seem to refer directly in the draft to 401(k) plans, individual retirement accounts or annuities, and they mention the estate tax only in passing.
The Affordable Care Act, the federal legislative package that includes the Patient Protection and Affordable Care Act (PPACA), includes a provision that is supposed to impose a 40% excise tax on relatively high cost “Cadillac plans” starting in 2018.
Bowles and Simpson provide a chart outlining an example of an “individual tax reform plan.” In that example, the co-chairmen suggest reducing the Cadillac plan excise tax to 12%.
They also call for reducing the current exclusion for employer-provided health coverage “at the 75th percentile of premium levels in 2014, with a cap frozen in nominal terms through 2018 and phased out by 2038.”
Bowles and Simpson write in more depth about the Community Living Assistance Services and Supports (CLASS) Act component of the