Democrats face intra-party divide on changes to Medicare, other safety net programs

Nov 21 2012

A split is evident on proposals to raise Medicare's eligibility age and increase premium costs for wealthier beneficiaries as part of a 'grand bargain' on the deficit, according to media reports.

The Wall Street Journal: Entitlements Split Democrats
With deficit talks kicking off in earnest, Democrats are divided on the magnitude of changes they would accept when it comes to overhauling Medicare and other safety-net programs. The party is split between those who would agree to major adjustments, including increasing premiums for wealthier beneficiaries and raising Medicare's eligibility age, and those who rule out such moves altogether. In the middle is a group that would tolerate some cuts as long as they didn't hit beneficiaries directly (Bendavid and Hook, 11/19).

Politico: Democrats Have Own Fiscal Cliff Issues
Senate Majority Leader Harry Reid (D-Nev.) will have to find 60 votes to extend just the middle-income tax rates -; far from a given when a swath of the Senate's moderate Democrats are up for reelection in 2014. Reid and the White House will also need to navigate a hardening Democratic divide on entitlements. Progressives don't want any deep cuts that Republicans will insist on for a deal. But a Third Way poll of 800 Obama voters set for release Tuesday found that efforts to fix Medicare and Social Security enjoy broader support than liberals suggest (Sherman, Budoff Brown and Bresnahan, 11/19).

National Journal: Bold Medicare Reform May Require Going Beyond The CBO Score
Liberal Democrats would rather not see any cuts to entitlement programs -; period. Instead, they argue, the U.S. government needs to put policies in place that will bring down the costs of health care overall. Make care cheaper to administer, the argument goes, and Medicare and Medicaid won't cost the federal government so much. It's a beguiling idea with one big flaw: The Congressional Budget Office isn't always able to put a dollar figure on how much money Democrats' ideas would save. As Washington negotiators work toward a debt-reduction deal, Democrats want reducing the cost of care to be part of the conversation. But budget negotiators want to be able to talk in dollars. CBO's scoring rules "much too much embed the status quo. They require levels of certainty about the costs and benefits that defy many forms of innovation," said Donald Berwick, a Center for American Progress senior fellow and former administrator of the Centers for Medicare and Medicaid Services (Quinton, 11/20).

Meanwhile, the prospect of cuts unnerves providers and others within the health industry  -

Medpage Today: 'Fiscal Cliff' Bad For Health $$$ Either Way
If the country falls off the dreaded "fiscal cliff" -- a series of mandatory federal spending cuts and tax increases -- at the end of next month, Medicare will see nearly $12 billion in spending cuts and the National Institutes of Health will lose money for about 700 grants. And that's just in one year. But as dire as that outlook sounds, long-term support of federal health programs could be even worse as lawmakers try to avert the cliff, health policy experts said here last week at a briefing on the topic sponsored by the Alliance for Health Reform (Pittman, 11/19).

Politico: Medicare Cuts Give Health Providers Jitters
The $716 billion in Medicare "cuts" that got so much attention in the presidential election have already begun sinking their teeth into health care providers. And there are widespread jitters that any further cuts as part of a year-end deal to stave off sequestration or strike a "grand bargain" for a long-term fiscal deal would deeply gouge some providers, if not put them out of business (Norman, 11/20).

Kansas Health Institute News: Rural Hospitals Bracing For Change On Multiple Fronts
In small towns like this across Kansas, hospital administrators are paying close attention to federal deficit-reduction talks in Washington, D.C. that could lead to a 2 percent cut in Medicare spending, starting Jan. 1."Two percent may not sound like much," said Vicki Hahn, who runs the Wichita County Health Center in Leoti. "But we're a 'critical access hospital,' which means we're reimbursed for 101 percent of our Medicare costs. If 2 percent gets taken away, it would put us in the red on our Medicare patients. That wouldn't be good"… A cut in Medicare reimbursement, Hahn said, would force the hospital to ask the Wichita County Commission for help in offsetting the loss of federal support (Ranney, 11/19).

And Alice Rivlin offers her insights regarding prospects for success -

The Wall Street Journal's Washington Wire: Rivlin Sees A Two-Step Plan To Avoid The Fiscal Cliff
Alice Rivlin, who once led both the congressional and White House budget offices, says a two-step solution can get Washington past the so-called fiscal cliff at year's end and set the table for a long-term budget solution. … She also said she continues to favor finding ways to introduce more competition into the Medicare program. Under "premium support," the approach House Budget Committee chairman and Republican vice presidential nominee Rep. Paul Ryan has advocated, the government helps senior citizens pay the premiums on health policies they acquire on their own (Seib, 11/19).

Meanwhile, the man behind the GOP tax pledge is facing pressure too -

The New York Times: For Tax Pledge And Its Author, A Test Of Time
Next to the oath of office, it has been perhaps the most important commitment that Republicans in Congress can make. It is called simply "the Pledge," and its enforcer is such a fixture in the party that he is known simply by his first name, Grover. … But the pledge and its creator, Grover Norquist, a 56-year-old conservative lobbyist, have never before faced a test as they do now. The federal deficit stands at $1 trillion. The social safety net continues to grow -; and, in the case of Medicare and Social Security, remains hugely popular. And unless the two parties can agree on a fiscal plan before Jan. 1, hundreds of billions of dollars of tax increases will go into effect automatically, meaning that Congress does not even need to act for taxes to rise (Peters, 11/19).