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Obama 'Willing to Look' at Medicare Eligibility Age, Means Testing

By John Reichard, CQ HealthBeat Editor

July 15, 2011 -- President Obama confirmed in his news conference that he is willing to consider raising Medicare's eligibility age and adopting provisions that would charge wealthier Americans more for the program.

"We've said that we are willing to look at all of those approaches" Obama said after he was specifically asked about charging the wealthy more and increasing the eligibility age. Lawmakers have proposed gradually raising the Medicare eligibility age from 65 to 67.

"You know, you can envision a situation where for somebody in my position, me having to pay a little bit more on premiums or copays or things like that would be appropriate,'' Obama said. "And again, that could make a difference."

Obama added that he wants to protect current Medicare beneficiaries as much as possible and that "we should look at the out years" to make revisions.

Over time, "modest modifications can save you trillions of dollars," he said.

The president also suggested that there is room to wring Medicare savings out of the program's payments for pharmaceuticals.

Raising the eligibility age to 67 over time would match an approach taken by the Social Security program. When a reporter circled back to ask Obama specifically about the eligibility age he declined to elaborate, saying "I'm not going to get into specifics."

Although a grand bargain seems unlikely, Obama continued to make the case for a sweeping agreement that lawmakers say would save about $4 trillion over 10 years. "I am still pushing for us to achieve a big deal," he said.

In opinion polls, most Republicans favor a "balanced" approach that involves revenue increases, he said. Republicans from previous administrations also favor that way forward, he added. Now it's time for Republicans in Congress to listen to the American people, Obama said.

"What we're not willing to do is to restructure [Medicare] in the ways that we've seen coming out of the House over the last several months, where we would voucherize the program and you'd potentially have senior citizens paying $6,000 more," Obama said.

House Republicans are saying that they will vote on a package with $2.4 trillion in cuts that includes a balanced budget amendment.

But, Obama, said "if you're trying to get to $2.4 trillion without any revenue, then you are effectively gutting a whole bunch of domestic spending."

"That is going to be too burdensome and is not going to be something that I would support," he said. "You know, just to be very specific, we've identified over a trillion dollars in discretionary cuts, both in defense and domestic spending." That essentially means a freeze in spending.

"And when I say "freeze," that means you're not getting inflation, so that these are programmatic cuts that over the course of 10 years, you'd be looking at potentially a 10 percent cut in domestic spending. Now, if you then double that number, you're then at that point really taking a big bite out of programs that are really important to ordinary folks."

"You're talking then about students accumulating thousands of dollars more in student loan debt every year. You're talking about, you know, federal workers and veterans and others potentially having to pay more in terms of their health care."

Many observers think lawmakers are moving toward a debt ceiling agreement that will give the president unilateral power to raise the debt ceiling, and that such a deal will include spending cuts. It's unclear, however, whether such a package might include Medicare and Medicaid cuts or how large they would be.

After Obama's news conference, an administrative official clarified what Obama meant when he answered the question on means testing.

"Currently, Medicare premiums for doctors and for prescription drugs are already means tested, meaning that couples making over $170,000 or singles over $85,000 (about 5% of Medicare beneficiaries) already pay somewhat higher Medicare premiums,'' the official said in an email. "What the President referenced today was his openness, as part of a potential big deal, to asking Medicare recipients over those high-income thresholds to pay modestly higher premiums. At no point did the Administration express openness to raising premiums on Medicare beneficiaries below those income levels."

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