By John Reichard, CQ HealthBeat Editor
At a time when some debt ceiling negotiators are considering charging wealthier Americans more for Medicare, two senators not directly involved in those talks unveiled a variety of suggested program changes that would involve affluent Americans paying more—raising the possibility that some of their ideas could find their way into a debt ceiling deal later this summer.
Senators Joe I. Lieberman, I-Ct. and Tom Coburn, R-Okla., want lawmakers to swallow the whole smorgasbord of changes they laid out last week. Their package projects savings of $600 billion over 10 years and, they say, would provide an additional 30 years of solvency for the Medicare hospital Part A Trust Fund. It also would mean a three-year postponement of any sharp cuts in Medicare payments to doctors.
The proposal is probably far too controversial to pass as a whole package anytime soon. But to the extent debt ceiling negotiators are influenced by the plan, they may sample here and there from its many components.
"We can't save Medicare as we know it. We can only save Medicare if we change it," Lieberman said at a press conference. The proposal does keep Medicare as a federal entitlement program. Lieberman opposes Republican "premium support" proposals that would privatize Medicare.
Coburn had been one of the toughest fiscal hawks in the Gang of Six, a bipartisan group of senators working on a deficit reduction proposal. He quit the group last month, expressing pessimism about the prospects of reaching a bipartisan agreement. Coburn also was a member of President Obama's deficit commission and voted for the group's proposal.
Lieberman and Coburn's plan is of particular interest in light of statements made by Sen. Jon Kyl of Arizona, a key Republican involved in debt ceiling negotiations. He expressed an interest in means testing Medicare benefits and in raising the Medicare eligibility age to match that of Social Security.
The Lieberman/Coburn plan does that, among a number of other things. Their package calls for:
The two senators say the plan also would block a 30 percent cut in doctor payments scheduled for Jan. 1, 2012 from taking effect for three years. The cost of that fix over the three year period would be $40 billion (although the 10-year cost would be $275 billion).
An advocacy group representing Medicare patients said the proposal would harm beneficiaries.
Medicare Rights Center President Joe Baker said "it's not over-utilization caused by patients that is the problem—it's the prices." Baker added that so-called benefits simplification proposals "are scary because the allure of an out-of-pocket limit could blind patients, their caregivers and policymakers to the facts: these proposals save the government money by making patients pay more or making care so unaffordable that they just don't get it in the first place."
Baker added in a statement that "the vast majority of Medicare consumers would never benefit from the out-of-pocket limit because it is set far too high—$7,500 in the Lieberman-Coburn proposal. In fact, for most people with Medicare, out-of-pocket costs would increase because cost-sharing would apply where none existed before, like for home health care, and they would lose Medigap coverage of portions of their coinsurance and deductibles. This increase in out-of-pocket health costs would be a financial tipping point into poverty for many older Americans and people with disabilities, who on average already spend 15 percent of their income on health care."