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Restructure Medicare & Medicaid: Variables in Restructuring Medicare & Medicaid to Reduce Material Impact on USA Inc.’s Expenses Mathematical Illustrations* Slide 273-274 1) Medicare benefits — reduce them by 53% (or cap them)? or 2) Medicare tax rate — increase it by 4 percentage points? Policy Options Slide 275-328 1) Combination of mathematical illustrations — reduce benefits and/or increase taxes? and/or 2) Isolate and address the drivers of medical cost inflation? and 3) Improve efficiency / productivity of healthcare system? and 4) Reduce services for some Medicaid beneficiaries? and 5) Consider / implement CBO’s 26 policy options that could reduce annual budget deficit by up to 38%?** and/or 6) Consider / Implement National Commission on Fiscal Responsibility and Reform’s medium- and long-term policy options*** Note: *Each mathematical illustration would bring Medicare Part A into long-term (75-year) actuarial balance. There is no mathematical illustration for Medicaid or Medicare Part B & D as there’s no ‘dedicated’ funding. “See: CBO, “Budget Options, Volume 1: Health Care,” 12/2008. KP ***See: National Commission on Fiscal Responsibility and Reform, “Co-Chairs’ Proposal,” 11/10/10. www.kpcb.com USA Inc. | What Might a Turnaround Expert Consider? 271 Restructure Medicare & Medicaid: Mathematical Illustrations* Mathematical Illustrations* 1) Medicare benefits — reduce / cap them? or 2) Medicare tax rate — increase it? Note: *For mathematical illustrations, we simply calculate how big a revenue increase AND / OR expense decrease each major entitlement program needs to reach financial break-even. These calculations are merely mechanical illustrations and are not meant to portray realistic solutions. KP www.kpcb.com USA Inc. | What Might a Turnaround Expert Consider? 272 HOUSE_OVERSIGHT_020977