Last week, the Obama Administration released the last budget of his presidency, accompanied by a near universal declaration the document was “DOA.” But is it?

Included in the thousands of arcane budget pages were Medicare savings totaling half a trillion dollars. Most of the savings – 32 percent – come from prescription drugs, like imposing Medicaid style rebates on drug manufacturers. Another 27 percent of the savings came from “rich” beneficiaries in the form of higher premiums, taxes and cost-sharing, with another 15 percent from cuts to Medicare Advantage.

So what are those proposals and whose ox could be gored? Horizon Government Affairs’sHorizon Government Affairs (HGA) has prepared a summary of the major health provisions included in the budget. The summary is available here.

While many of these changes won’t be enacted by Congress or the Administration, they might be tested. This is the first time in history that a departing Administration has the power to implement Medicare and Medicaid program changes without Congress’ assent. Medicare’s pilot program office, called the Centers for Medicare and Medicaid Innovation (CMMI), was created by the Affordable Care Act in 2009. CMMI’s statutory authority allows bureaucrats to waive almost any portion of the law to carry out a demonstration program. If the test lowers costs, improves outcomes or does no harm to either, the program can be implemented nationwide. How the Administration chooses to exercise this authority remains to be seen.

The last year of a presidency often is marked by aggressive rulemaking on controversial issues, as the exiting Administration attempts to accomplish through fiat what they were unable to realize through legislation. This year is no exception. But this year is unique in that the President might actually test some of the “DOA” budget ideas.

We hope you find this summary helpful. Please let us know if you would like to discuss the President’s budget in further detail.

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