CBO identifies targets for health spending cuts

Trimming the group health deduction would be an easy way to cut federal spending by about $24 billion to $50 billion per year for 10 years.

Capping federal spending on Medicaid — the state-federal health program for poor people and for nursing home residents — could save about $10 billion to $60 billion per year, and adding an inexpensive “public plan” to the Patient Protection and Affordable Care Act (PPACA) public exchanges could save about $16 billion per year.

Converting Medicare to a flat-rate “voucher system,” or defined contribution system, and increasing premiums for the Medicare Part B physician services plan and Medicare Part D prescription drug plans could save about $30 billion to about $56 billion per year.