NYT: Obama Leans on Cantor Plan for Medicare Reform

Friday, 29 Mar 2013 10:23 AM

By Sandy Fitzgerald

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President Barack Obama and Congressional Republicans may have found some common ground on controlling Medicare costs in recent meetings that could end up producing some significant savings along with some revenue-raising measures. 

Urgent: ObamaCare Is About to Strike — Are You Prepared?

Citing unnamed sources, The New York Times reported Friday that several changes are expected to be in Obama's budget proposal, which is scheduled for release April 10. The president is reportedly open to combining Medicare's coverage for hospitals and doctor services, the newspaper said.

While this would create a single deductible and increase out-of-pocket costs for beneficiaries, it could eliminate their need for supplemental insurance policies. The plan is similar to one proposed by House Majority Leader Eric Cantor in February.

The proposal would also put a stop to the voucher system contained in House Budget Committee Chairman Paul Ryan's recent bill that would give Medicare patients the option of purchasing private insurance. The privatization plan is opposed by Obama and Democrats.

Democratic Sen. Mark Warner of Virginia told the Times that combining Medicare coverage for hospital and doctor services is a newer idea that could cause the parties to stop their “stale arguments” over the budget and reforming the major healthcare system run by the government.

“You’ve got a whole lot of folks on the Republican side saying, ‘Well, we don’t really like what Ryan has done — premium support — but we want systemic reform,’” Warner said.

Many economists have also called for creating a single deductible for hospital and doctor services. The current separation reflects different pieces of legislation that came about when Medicare was created in 1965. The deductible for Medicare's Part A, which covers hospital care, is $1,184, while for Part B, covering doctor's care, the deductible is $147. Medicare recipients also have co-pays for many services.

Obama's proposal calls for increasing the Part B deductible and requiring beneficiaries to pay something for home healthcare, unless they have just been released from the hospital.

The president also is proposing a 15 percent surcharge on Medigap plans that cover all or most of a beneficiary's initial annual expenses.

Glenn Hackbarth, chairman of the Medicare Payment Advisory Commission, told the Times that the proposal is complicated because combining deductibles could increase costs for people who only use doctor and outpatient services, but would reduce costs for the 20 percent of recipients who end up in the hospital.

The Obama administration and Cantor started showing interest in restructuring Medicare back in 2011, when a deficit-reduction group headed by Vice President Joe Biden considered several proposals.

Last February, Cantor raised the possibility of overhauling Medicare by combining deductibles.

Urgent: ObamaCare Is About to Strike — Are You Prepared?

"We should begin by ending the arbitrary division between Part A, the hospital program, and Part B, the doctor services," he said. "We can create reasonable and predictable levels of out-of-pocket expenses without forcing seniors to rely on Medigap plans."

Cantor's proposal "got little attention at the time," the Times noted Friday. But "its echo by Mr. Obama hints at a new route toward compromise — in contrast with the budget that House Republicans passed this month that has no chance of Senate approval."

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