Friday, November 16, 2012

What Will Democrats Be Offering on Medicare? Not Much.

Most of the discussion since the election has been on the parties' respective positions on taxes.  This is an important debate to have, but to get to a deal on taxes, it would appear that there needs to be a discussion on the spending side as well, since Republicans are not going to agree to increases in revenues without additional cuts to spending.  And many are forgetting that besides the so-call fiscal cliff, we are bumping up against the debt-limit ceiling again as well.  Voters have returned to power pretty much all the members of the House of Representatives who simply would not vote to increase the debt limit without agreements to cut spending.  There was bipartisan consensus on the campaign trail against the defense cuts that have been proposed in the "sequester" and Democrats are certainly not going to cut domestic spending any further if defense is taken off the table -- so the only place to get real spending cuts is on health care entitlements.

What are Democrats willing to do on this?  It appears, not much.  Check out this interview of Debbie Wasserman Schultz, chair of the DNC, on Morning Joe (click once, sorry about the ad):

Now, it is clear that Schultz did not want to start negotiating on Morning Joe.  But her obvious discomfort even talking about real cuts to Medicare, leads one to believe that Democrats have barely even begun thinking about what they are willing to do on the entitlement spending side.  Running against "voucher care" was an easy lift for them.  But modernizing the program, finding ways to lower costs, having beneficiaries contribute even a bit more to their care seems to be ideas that Democrats have either firmly rejected, or barely begun to consider.  

For better insight, we can look to a recently issued proposal by the Center for American progress, the Senior Protection Plan.  The plan is offered as an alternative to lowering the retirement age, increasing beneficiaries' contribution through a premium support program (the Ryan plan), increased cost-sharing, and Medicaid cuts.  CAP claims that the plan will lead to $385 million of savings over the next 10 years and would generate $100 billion in new revenues.  The plan's features are:

  • Enhance competition based on price and quality
  • Increase transparency of price and quality information
  • Reform health care delivery to provide better care at lower cost
  • Repeal the Sustainable Growth Rate mechanism
  • Reform graduate medical education and the workforce
  • Reform Medicare premiums and cost-sharing
  • Reduce drug costs
  • Bring Medicare payments into line with actual costs
  • Cut administrative costs and improper payments
  • Reduce the costs of defensive medicine
  • Reform the tax treatment of health insurance
  • Promote better health
  • These look like the ideas the Obama Administration might be willing to put on the table in negotiations with Republicans.  It is hard to believe that this would be sufficient reform to garner many Republican votes and that Obama might have to do a hard sell on his side to get many to go even this far.  Medicare is going to make the tax side of the equation look easy.  

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