Paragon Health Institute Releases Proposals to Lower Health Care Costs

The Paragon Health Institute recently released a report highlighting 12 options to decrease federal health care spending. The report, titled “Turning the Tide on Red Ink: Commonsense Policies to Make Federal Health Programs More Sustainable,” compiles estimates from the Congressional Budget Office (CBO) and the Office of Management and Budget (OMB) of policies that would reduce spending on federal health programs.

Each proposal would save at least $10 billion over the next ten years, totaling $2.1 trillion in gross potential savings over the decade. The proposals include a number of ideas that have had bipartisan support in the past and are included in the Committee for a Responsible Federal Budget’s Fiscal Blueprint for Reducing Debt and Inflation.

Medicaid is one of the largest federal programs, and CBO projects spending on the program to increase from $539 billion in 2024 to $879 billion in 2033, over a 60 percent increase within the ten-year budget window. First, Paragon highlights elimination of the Medicaid provider tax safe harbor, which permits states to tax providers (up to 6 percent of their net revenue) to pay for Medicaid reimbursements and effectively increases payments to states from the federal government by making Medicaid costs seem higher than they actually are.

The full article can be found on the website of the Committee for a Responsible Budget.

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Paragon Health Institute (PHI) is a non-partisan, not-for-profit policy research institute. Any views, beliefs, or opinions expressed by PHI’s Public Advisors are those of its Advisors and do not necessarily reflect the official policies or positions of PHI or its employees. Any views, beliefs, or opinions expressed by PHI or its employees belong solely to PHI and do not necessarily reflect those of PHI’s Public Advisors.