Senators Propose Raising Medicare Entrance Age to Cut Costs

Tuesday, 28 Jun 2011 04:17 PM

Two U.S. senators known for having independent streaks are proposing to overhaul Medicare by raising the eligibility age by two years and requiring the wealthy to pay more out of pocket for care.

Senators Tom Coburn, the conservative Oklahoma Republican known for objecting to legislation, and Joseph Lieberman, the Connecticut independent and former member of the Democratic caucus, introduced their proposal today. The government projects Medicare, the U.S. health insurance program for the elderly and disabled, will run out of funds to pay full benefits in 2024.

“We can’t save Medicare as we know it,” Lieberman said in a statement. “We can only save Medicare if we change it.”

Their proposal would save $600 billion in a decade, the lawmakers said in an e-mailed release in advance of announcing their plan.

The two are the latest of several groups of lawmakers to attempt to trim Medicare spending as part of a broader congressional effort to trim the U.S. budget deficit on the way to a deal to raise the country’s statutory borrowing limit.

The top Democrat in the U.S. House, Representative Nancy Pelosi of California, quickly rejected Coburn and Leiberman’s plan. “This proposal is unacceptable, especially for struggling middle-class Americans,” she said in a statement. “It is unfair to ask seniors to get less in benefits and wait longer to get onto Medicare,” she said.

Pelosi’s Solution

Democrats in the House and Senate are pushing to end corporate tax breaks to raise revenue, which Pelosi said would be a more fair solution.

Along with raising the eligibility age, Leiberman and Coburn’s plan would put a three-year halt to scheduled cuts to Medicare’s payment rates for physicians.

Proposals to fix Medicare won’t be viable without support from the Obama administration, said Senator Charles Grassley, the Iowa Republican.

“I respect people that want to do things to Medicare, a lot of things have to be done to Medicare,” Grassley said in an interview. “If the president isn’t going to sign it, you’re spinning your wheels. That wouldn’t be true of 99 out of 100 things that we’re doing. But on entitlements, it’s important,” Grassley said.

Coburn and Leiberman would also cap the amount Medicare beneficiaries have to pay for care in the event of a serious illness. Medicare currently requires people in the program to pay a share of the costs for each hospital stay, amounts that can rise quickly with long-term illness or the need for intensive care.

Private Policies

About 90 percent of Medicare beneficiaries already buy private insurance policies to protect against those sorts of cost-sharing requirements, according to the Menlo Park, California-based Kaiser Family Foundation. The supplemental policies are sold by insurers led by Minnetonka, Minnesota-based UnitedHealth Group Inc. and Indianapolis, Indiana-based WellPoint Inc.

An e-mail to Robert Zirkelbach, spokesman for industry trade group America’s Health Insurance Plans, was not immediately returned.

The senators’ proposal would limit the scope of those policies, though insurers would now have a new market of people ages 65 and 66 years old to sell coverage.

Lieberman proposed a similar plan on June 10.

--Editors: Adriel Bettelheim, Steve Walsh

To contact the reporter on this story: Drew Armstrong in Washington at darmstrong17@bloomberg.net;

To contact the editor responsible for this story: Adriel Bettelheim at abettelheim@bloomberg.net.

© Copyright 2015 Bloomberg News. All rights reserved.

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