Tags: Debt Showdown | Health Care

No Free Pass for Medicare Recipients in Debt Talks

Saturday, 09 July 2011 09:02 AM

WASHINGTON (AP) — A debt-busting deal on the scale that President Barack Obama and House Speaker John Boehner are seeking all but guarantees that people on Medicare would feel at least some of the pain.

Low-income people on Medicaid wouldn't escape totally, either. If a deal ultimately leads to overhauling taxes, workers and their families could be on the hook also, facing potential limits on the tax-free status of job-based health insurance.

Health care is a main ingredient on both the spending and tax sides of the elusive agreement that Obama and Boehner, R-Ohio, are trying to reach.

The president has scheduled a meeting Sunday with congressional leaders to keep pushing for a compromise that would reduce future deficits in exchange for lifting the $14.3 trillion cap on the national debt. Action is needed so the government can keep paying its bills beyond Aug. 2.

No decisions have been made. With Congress politically polarized and skittish about next year's elections, it's unclear whether there's any combination of Democratic and Republican votes to pass major deficit reduction that cuts benefit programs and raises revenue.

"This is a Rubik's cube that we haven't quite worked out yet," Boehner said.

But many of the health care options that negotiators are considering have been available for months. Proposals have come from the Obama administration, congressional advisers and bipartisan groups, such as Obama's debt commission.

For Medicare, possibilities include higher premiums for upper-income retirees and new copayments and deductibles that affect all but the poor. For example, seniors do not currently face a copayment for home care. That might change if there's a deal.

"It's difficult to imagine a $4 trillion-plus budget package that doesn't include significant measures affecting beneficiaries," said economist Robert Reischauer, one of two public trustees who help oversee Medicare and Social Security finances.

Obama's health care law already cut about $500 billion from projected payments to providers, and some experts say there's not much fat left there.

"It might mean more individual responsibility or a restriction of choices," said Sen. Mark Warner, D-Va., a member of a small bipartisan group that has been dealing with spending and taxes. An across-the-board increase in monthly premiums seems unlikely, Warner noted.

Still, the bigger a deficit-reduction deal, the more likely it is that older people will take a hit.

"We are particularly concerned that a broader deal could include cuts to Social Security benefits and higher costs for people in Medicare," said David Certner, AARP's legislative director.

Although Social Security previously had been considered untouchable, one measure under discussion would bring in close to $200 billion through a tweak that reduces benefits and increases the amount collected from payroll taxes.

A major proposal that would affect Medicare beneficiaries calls for changing the current cost-sharing rules, a hodgepodge of varying copayments and deductibles.

Older people would have to shoulder more of the expense of routine care. Under one version of the proposal, all but the poor would have to pay at least $550 of their annual medical bills.

The idea is to make people think twice before they schedule that test or exam that probably doesn't add a whole lot of information to what a doctor already knows.

But they would get a new benefit from the change. For the first time, Medicare would have an annual limit on out-of-pocket spending, protection against a catastrophic illness.

Further cuts to providers, including drug companies, hospitals, home health agencies and nursing homes also are possible. One proposal calls for seeking billions in rebates from drug companies for medications used by 9 million people covered under both Medicare and Medicaid.

Advocates for the poor are concerned about possible cuts to Medicaid, a federal-state partnership that covers low-income children and parents, the disabled, and many nursing home residents.

The administration has proposed replacing an assortment of formulas for the federal share of the program with a single rate for each state. Officials say that could save $50 billion to $100 billion over 10 years, much of it from reduced administrative costs.

Governors are highly suspicious. They see a cut lurking behind the technicalities. Most of the governors believe the rate talk is budget-speak for dramatic cuts, said Washington state Gov. Christine Gregoire, a Democrat who heads the National Governors Association.

Still to be fleshed out is how a debt deal would affect the tax deductibility of job-based health care for workers and their families. The details might be left for Congress to work out later.

So far, Democratic lawmakers don't see much that they can support from the information dribbling out of the budget negotiations.

The explosion in federal debt was caused by the recession, the George W. Bush-era tax cuts, and the wars in Iraq and Afghanistan, not by seniors or low-income Medicaid recipients, said Rep. Xavier Becerra, D-Calif.

"I would not vote for something like that," Becerra said of what he's heard so far. "At this stage, unless we learn otherwise, House Democrats are pretty clear we should not balance the deficit on the backs of seniors, Medicare, Social Security and Medicaid."

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WASHINGTON (AP) A debt-busting deal on the scale that President Barack Obama and House Speaker John Boehner are seeking all but guarantees that people on Medicare would feel at least some of the pain. Low-income people on Medicaid wouldn't escape totally, either. If a...
Debt Showdown,Health Care
Saturday, 09 July 2011 09:02 AM
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