CQ TODAY ONLINE NEWS
May 28, 2011 – 6:11 p.m.
Tackling Medicare a Step at a Time
By Joanne Kenen, CQ Staff
With the two parties increasingly at odds over how to secure Medicare’s fiscal future, a series of small-bore fixes could be the approach taken to ease financial pressure and still allow both sides to declare a partial victory.
The four Democratic and two Republican lawmakers participating in the deficit reduction negotiations with the White House are keeping quiet on the issue. But experts say the elements of a potential deal are already part of the public debate — and many of those ideas are far less politically divisive than the House Republican plan to remake Medicare.
A list of policy choices was included in the deficit reduction proposals that have circulated in Washington for the last few months, including the report by the National Commission on Fiscal Responsibility, known as the Simpson-Bowles commission.
Those choices include setting spending growth targets; changing the way doctors are paid to encourage value, instead of volume, of care; having Medicare negotiate drug prices or having a government-run option added to the Medicare Part D prescription drug program; changing co-pays or deductibles to discourage overuse of nonessential health services; and gradually raising the eligibility age to 67 from 65.
“One solution alone is not going to do it,” Cori Uccello, senior health fellow at the American Academy of Actuaries, said at a Capitol Hill briefing May 27. “We’ll need a couple of them.”
Another way out of the impasse is for negotiators to avoid making policy changes to Medicare by the time debt ceiling is expected to expire — currently Aug. 2 — but agree instead on a number. In other words, they would set a Medicare spending target or trigger or similar device. The details of what the policies should be to avoid pulling that trigger could come later.
Health analyst Gail Wilensky, who ran Medicare and Medicaid under President George Bush, said some variant of a spending target is a realistic scenario.
“I’d be astounded” by a comprehensive policy agreement, she said. “Nothing that the House is going to be interested in is going to be of interest to the Democratic Senate or the White House, and vice versa.”
The political divisions are deep: Republicans insist that cuts to entitlement programs, including Medicare, be part of any deal to raise the debt ceiling.
Senate Minority Leader
“All this silly talk about how Medicare is not going to be part of the solution is nonsense,” McConnell said May 27.
Democrats say they would consider cuts only if they are part of a “balanced” plan that includes tax increases and only if the health care program for the elderly and disabled remains largely intact.
“What can we agree on? We take very different approaches,” said Rep.
Tackling Medicare a Step at a Time
For their part, Republicans accuse the Democrats of grandstanding by charging that the GOP is trying to tear apart the social safety net. “The Democrats don’t have an answer [for Medicare solvency],” said Sen.
The nonpartisan actuaries organization warns that the longer lawmakers delay, the worse the problem will get. The actuaries noted that last year’s health care law did contain “provisions designed to reduce costs, increase revenues, and develop new health care delivery system and payment models that improve health care quality and cost efficiency.” But they say those changes won’t be enough to address the entwined problems of rising health care costs, revenue gaps and the coming wave of baby boomers reaching Medicare age.
The Committee for a Responsible Federal Budget recently compared four major budget and spending blueprints — those of the House Republicans, the White House, the fiscal commission and the bipartisan task force led by retired Sen. Pete Domenici, R-N.M., and former Clinton White House budget director Alice Rivlin — and found that there was in fact about $1 trillion in overlap.
The overlap was not primarily in health programs, and the areas of agreement are broad, not detailed. That’s short of the $4 trillion some on Capitol Hill are calling for, but it’s still $1 trillion.
“They are not going for home runs here, they are going for a single, but a single could still be a trillion dollars,” said Marc Goldwein, policy director of the committee, who also served as associate director of the Simpson-Bowles panel.
While much of the conventional wisdom is that neither party will make big concessions on Medicare before the 2012 elections, both sides have an imperative to make some progress now, Goldwein said.
“Republicans know they can’t go back [to constituents] without some real savings,” he said. “And for Democrats, the motivating factor is the debt ceiling.”
The only thing both sides seem to agree on, however, is that the Biden group, working quietly out of the public eye and apart from most of the political rhetoric, may be making some headway.
“I still have some hope,” said
Paul M. Krawzak contributed to this story.