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Simpson-Bowles health-care plan offers $600 billion in cuts, but few specifics

$600 billion in cuts to heath-care spending have been proposed as part of a $2.4 trillion deficit reduction plan Democrat Erskine Bowles and Republican Alan Simpson released Tuesday. But heath-care experts doubt that target could be reached without changes to Medicare and Medicaid.

By David MorganReuters / February 24, 2013

Health and Human Services Secretary Kathleen Sebelius accompanied by Philadelphia Mayor Michael Nutter, speaks about the federal health-care overhaul during a news conference at City Hall in Philadelphia Feb. 20. As part of a deficit-reduction plan, Democrat Erskine Bowles and Republican Alan Simpson have proposed $600 billion in cuts to heath-care spending, but have offered few specifics.

Matt Rourke/AP/File

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A new bipartisan deficit-reduction plan to slash a massive $600 billion from US health-care spending over two decades has policy experts scratching their heads over how such an ambitious target can be reached.

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Democrat Erskine Bowles and Republican Alan Simpson have yet to declare what they would do to wring savings from Medicare, Medicaid and other programs, according to analysts who provide the two deficit hawks with their facts and figures.

Those ideas will be laid out in a detailed plan due to be issued at some point over the coming weeks.

But policy experts say the latest Simpson-Bowles plan may call for politically unpalatable steps, such as an increase in the Medicare eligibility age and a phasing out of the tax protection for employer-sponsored health insurance plans.

The $600 billion savings target is one-quarter of a $2.4 trillion deficit reduction plan that Simpson and Bowles released on Tuesday, as pressure mounted on Congress and the White House to find a way to avoid a package of automatic cuts known as the "sequester," due to take effect on March 1.

The plan also includes $600 billion in revenue from tax reform, $1.2 trillion from cuts in defense and non-defense spending and a shift to a slower inflation gauge for federal programs including Social Security.

"It might help Congress do something right for a change. Slim hope, but it's all we have," said Joseph Antos of the conservative American Enterprise Institute.

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