Time for Democrats to Offer Medicare Reforms

Friday, 03 Jun 2011 11:26 AM

By Lanny Davis

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As a liberal Democrat, I was happy with the results of the New York 26th congressional district special election, in which Democrat Kathy Hochul defeated Republican Jane Corwin by emphasizing her opposition to Rep. Paul Ryan’s, R-Wis., budget proposal and her Republican opponent’s support of that plan.

The fact is, Hochul received only 47 percent of the vote, and together, Corwin (43 percent) and the Tea Party candidate (9 percent) garnered 52 percent. That means Corwin’s victory wasn’t exactly a resounding triumph for Democrats and a clear mandate against Ryan’s proposal.

But there is no doubt that this Republican district — famous for having many times elected and re-elected conservative icon Jack Kemp — would have stayed Republican but for Ryan’s proposal.

So now what do the Democrats do? If you watch MSNBC and its hosts and guests, who are almost exclusively liberal Democrats, the answer is clear: Pound the Republicans on Ryan and scare seniors into voting for Democratic candidates.

Part of me — the partisan Democratic part —agrees.

But, as usual, the progressive voice of the center-left who won two terms as president, Bill Clinton, the man who inherited a $300 million deficit and eight years later left George W. Bush a $1 trillion surplus, caused me to rethink my partisan instincts.

Clinton got it right when he said on May 24, in a whispered comment picked up by a backstage microphone, to the very same Paul Ryan: “I’m glad that we won this race in New York, but I hope that the Dems don’t use it as an excuse to do nothing on Medicare.”

So when Nancy Pelosi was asked what is the Democrat alternative to the Ryan plan, and her answer, reportedly, was, “We have a plan — Medicare, Medicare, Medicare” — I would respectfully disagree, and agree with Clinton. It’s time for Democrats to get into the solutions business.

Sooner or later, the GOP will learn how to soften the Ryan proposal, as some of its presidential candidates already appear to be doing, into something resembling the proposal of former Clinton economic adviser Alice Rivlin.

My understanding is that Rivlin has endorsed a similar, Ryan-like premium subsidy system to pay for private insurance qualified plans on a national exchange, but would still provide for a Medicare option, albeit with reforms.

Democrats do have an alternative spelled out for them — in the Simpson-Bowles Deficit Commission report — one that received more than 60 percent bipartisan support among commission members (but was opposed by Ryan, a commission member).

Here is a brief summary of the seven Medicare reforms proposed by the commission that would result in an estimated savings of $33 billion in the next three years and $298 billion by 2020.

1. Better enforcement of fraud and abuse — $10 billion in savings by 2015, $9 billion by 2020;

2. Reformed Medicare cost-sharing rules, bringing cost awareness for senior Medicare beneficiaries — a deductible of $550 for hospitalization and 20 percent co-pay for physician services, with caps for catastrophic coverage ($10 billion savings by 2015, $110 billion by 2020);

3. Same requirement of deductibles for “Medigap” supplemental insurance policies ($4 billion, $38 billion);

4. Required drug company rebates for prescription drugs already required for Medicaid, to be applied to Medicare ($7 billion by 2015, $60 billion by 2020);

5. Subsidies more closely tied to hospitals for medical resident education to resident salaries ($6 billion in 2015, $60 billion in 2020);

6. Cut Medicare payments for hospital bad debts (from unpaid deductibles and co-pays — similar to private-sector experience; $3 billion in 2015, $23 billion in 2020); and

7. Accelerated home healthcare cost reductions in Obama’s Affordable Care Act ($2 billion — $9 billion in 2020).

These ideas are just the beginning of the honest “conversation” Democrats should be having with voters on Medicare reform — solution based, not fear-mongering. It is the best politics, too.

Sooner or later, the independent voter — who determines elections — as well as many seniors will reject Democratic negativism and demand that they put up positive alternatives — or lose their credibility on the great moral issue facing our nation, the unsustainable $14 trillion-and-growing national debt.

Lanny Davis is the principal in the Washington D.C. law firm of Lanny J. Davis & Associates. He served as President Clinton’s Special Counsel in 1996-98 and as a member of President Bush’s Privacy and Civil Liberties Oversight Board in 2006-07. He is the author of “Scandal: How ‘Gotcha’ Politics Is Destroying America” (Palgrave Macmillan, 2006). He can be found on Facebook and Twitter (@LannyDavis).



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