On Tuesday, President Obama delivered his State of the Union address where he outlined his agenda for his second term. Obama called on Congress to avert the sequester set to begin on March 1, and laid out three proposals to alleviate Medicare spending:
1) Reduce taxpayer subsidies to prescription drug companies (i.e. require drug companies to provide drug rebates for low-income Part D beneficiaries);
2) Charge wealthy seniors more (i.e. means-test Medicare premiums); and
3) Change the way health care is delivered (i.e. move away from fee-for-service models towards a delivery system that pays for quality and efficiency).
Obama also added that he is prepared to enact other Medicare reforms which save the same amount of money as reforms laid out in the Simpson-Bowles deficit reduction commission in 2010. For reference, the Simpson-Bowles plan included $483 billion in Medicare savings from 2013-2022.