CQ TODAY ONLINE NEWS – HEALTH
June 28, 2011 – 2:26 p.m.
Lieberman-Coburn Measure Puts Down a Marker on Medicare Savings
By Joanne Kenen, CQ Staff
Two senators said Tuesday that they want to create a “bipartisan beachhead” to advance ideas to constrain Medicare costs, unveiling a bill to save $600 billion from Medicare over a decade by adapting recommendations of the president’s fiscal commission.
The legislation sponsored by Connecticut independent
But it would also limit how much most people would have to pay out-of-pocket in the event of catastrophic medical bills, based on a sliding scale with the wealthier paying more. It would also gradually raise the age of Medicare eligibility from 65 to 67 for future beneficiaries.
“We can’t save Medicare as we know it. We can only save Medicare if we change it,” Lieberman said.
The measure is not expected to garner significant support, but elements might become part of the discussion about how to pare health care entitlements either in the negotiations over the debt ceiling or the longer conversation about Medicare. Lieberman said he opposes Republican “premium support” proposals and stressed that his measure would preserve Medicare as a government entitlement program.
Majority Leader
Minority Leader
Some Democrats have said they cannot contemplate cutting health care spending for the poor and elderly while Republicans refuse to consider raising taxes.
Coburn, a member of the president’s fiscal commission, had been one of the toughest fiscal hawks in the “Gang of Six,” a bipartisan group of senators tackling deficit reduction, before withdrawing last month. He said he still wants to find areas for bipartisanship.
Some of the savings in the proposal would be used to reduce the federal deficit and some would extend the life of the Medicare trust fund, which covers seniors’ hospital bills, the senators said. An estimated $40 billion would go to a three-year extension of Medicare physician payment rates.
Eligibility Age
The age change from 65 to 67 would not affect current Medicare beneficiaries but would shift the age by two months each year, starting with people born in 1949.
The two lawmakers agreed the change would only take place if the 2010 health care law (PL 111-148, PL 111-152) remains in effect, so that 65- and 66-year-olds would be able to get insurance through the state-based exchanges, with federal subsidies if they meet the income thresholds. If the health care law were repealed or ultimately struck down by the courts, the eligibility age would remain as it is now, with people qualifying for Medicare when they turn 65.
Lieberman-Coburn Measure Puts Down a Marker on Medicare Savings
The plan would create one $550 annual deductible for both Parts A and B of Medicare, covering hospital stays, plus doctor and lab visits, to help reduce overuse of services. Deductibles now vary depending on whether someone is in a hospital or skilled nursing facility, how often, and how long. They can mount into the thousands.
In addition, supplemental “Medigap” coverage, which picks up many of the costs Medicare does not, would be revamped to establish minimal cost-sharing for all Medicare services to prevent unnecessary use of treatment. Those expenses would be capped at $7,500 a year for most beneficiaries, but would rise to $22,500 for seniors making more than $160,000.
The Medicare Rights Center, an advocacy group, said the $7,500 limit is way too high for the half of Medicare beneficiaries with annual income under $22,000. Very low income elderly get additional help from Medicaid, as well as from Medicare.
Seniors making more than $150,000 would also pay the full cost of their premiums for prescription drugs under the Lieberman-Coburn plan.
The plan would speed changes to home health payments that are already part of the 2010 health care law and phase out Medicare’s payment to hospitals to cover bad debts when the providers cannot collect deductibles and co-pays. The proposed cap on catastrophic costs may reduce that bad debt because people would have greater protections against huge bills.