The new
deficit reduction plan proposed by President Obama [pdf] leaves out the worst Medicare benefit cut that had been the centerpiece of administration negotiations with Republicans earlier. Raising the Medicare eligibility age from 65 to 67 is not included in this proposal, and will thus hopefully stay out of the Super Congress negotiations.
It does include a few beneficiary-sided cuts, most notably increasing the income-related premiums beneficiaries with higher incomes pay under Medicare Parts B and D. It also would increase some out-of-pocket expenses through more cost-sharing in home health care, some Part B services, and it would create a surcharge for beneficiaries with Medigap policies that have "first-dollar" coverage—Medigap plans that don't require any copays or cost-sharing. This is intended to encourage seniors to use fewer "unnecessary" services. There are protections for those with low incomes and serious medical conditions. The home health cost-sharing, for instance, would be waived if the visits are associated with hospitalizations.
The most significant Medicare proposal, from a wonk perspective, is in larger drug rebates, requiring that the pharmaceutical industry reduce the price for prescription drugs for the government, using the same rebate rates used for Medicaid. It's not direct drug price negotiation, like the Veterans Administration employs, and which the administration proposes for the federal employees benefits plan in this proposal. That would be a massive cost-saving for Medicare, but it isn't in the cards yet. Most of the other Medicare savings are in the "waste, fraud and abuse" category, but also building on the Affordable Care Act's Independent Payment Advisory Board (the infamous "death panel") and having it implemented sooner.
It does include what appears to be a watered-down version of the "blended-rate" proposal for Medicaid that states and advocates have been fighting. The proposal would replace the various matching rates at which the federal government reimburses states for their costs in insuring people through Medicaid and CHIP with a single "blended rate" for each state. Originally they were talking about savings from this proposal as high as $100 billion, but in this proposal it is much smaller, accounting for just $15 billion in savings. How it was dialed down is unclear from this proposal, but the smaller amount is likely to be far less damaging to states' ability to provide Medicaid and CHIP coverage.
There are a handful of other health care related reforms, including prohibiting "pay for delay" agreements that delay generic and biologic drugs coming onto the market, stopping companies from entering into anti-competitive deals, and reducing the exclusivity period for generic biologics to encourage faster development and access to generics. The administration also proposes speeding up the availability of waivers to states so that states could start implement alternative health systems, like single payer, under the Affordable Care Act in 2014 instead of 2017, as under current law.
These are far more constrained health care policies than the Republicans will likely agree to. And it doesn't necessarily mean that the "single worst idea for Medicare reform", raising the eligibility age, is dead. There's still the Super Congress to contend with, and now that it's been floated, there's always the possibility that it will come back as a bargaining chip for tax increases. But the fact that the White House decided in the end not to endorse it definitely helps.