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Archive for Tuesday, May 10, 2011

Obama, GOP both want Medicare limits

May 10, 2011

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— Unlikely as it may seem, President Barack Obama and Republicans in Congress actually share some common ground on the need to curb Medicare costs to fight the spiraling federal debt.

Although the House GOP plan to replace Medicare with a voucher-like system got shunted aside last week, that may not be the end of the story. Embedded in both the Republican plan and in Obama’s counter-proposal is the idea of putting limits on the growth of the half-trillion-dollar-a-year program — and then enforcing them.

High-level deficit negotiations resume today under the stewardship of Vice President Joe Biden, and tackling health care spending is critical to what could become the year’s most important legislation.

The two sides differ sharply on how that should be done. Obama says the GOP would leave frail seniors at the mercy of profit-driven insurance companies. Republicans say the president would empower unaccountable bureaucrats to ration care.

If they can meet in the middle on the idea of an enforceable limit, it could open the door for major changes. Over time, that could mean less money for hospitals, doctors, drug companies and other providers and higher out-of-pocket expenses for many retirees.

Health care costs of an aging American population are the biggest challenge facing Biden and the deficit negotiators. Tiptoeing around the politically volatile issue won’t impress financial markets that are nervous over the $14 trillion national debt. Red ink ballooned as a consequence of two wars, tax cuts and the recession, and the government now is borrowing about 40 cents of every dollar it spends.

Medicare is the largest single bill payer in the $2.5 trillion U.S. health care system. The way it works now, annual increases in the cost of care for 47 million elderly and disabled people basically get passed on to taxpayers. If spending surges in one part of the program, officials try to tamp it down in future years, like budgetary whack-a-mole.

Obama’s approach and the House GOP budget by Rep. Paul Ryan of Wisconsin would both try to limit the amount of taxpayer money going into Medicare.

It’s a tricky thing. If the limit is too tight, the welfare of millions of people could be jeopardized, to say nothing of the political careers of proponents. Too loose, and it’s meaningless.

“They are both saying Medicare has to be on a budget,” said economist Eugene Steuerle of the Urban Institute think tank. “But each of them is also saying it has to be my type of system on a budget, and not your type of system.”

Ryan’s plan would provide a fixed payment for everyone now 54 or younger to purchase a private insurance plan once they hit 65 and become eligible for Medicare. After getting an earful from constituents, GOP leaders backed away from pushing for Ryan’s overhaul, but still left it on the table.

Obama would keep Medicare a government program but give a panel of experts the power to force cuts if spending exceeded a certain target. His latest proposal would strengthen cost curbs that are already in the new health care overhaul.

Comments

Paul R Getto 2 years, 11 months ago

SL: Except for smoke and mirrors and the usual funny-money bookkeeping done by both parties, there is no easy way out. This will sort out over time. At least the Obama administration pushed a starter-kit program through Congress. After 100 years of debate, I'd say it's about time. Teddy Roosevelt was, I believe, the first president who brought this up. They should have gone for a single payer plan, but both sides lacked the political nerve.

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shadowlady 2 years, 11 months ago

Well, what do you all say now to the obama health care???

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Paul R Getto 2 years, 11 months ago

Hmmm.........this will get interesting. Reminds me of old William: perhaps the update is "Hell hath no fury like a sick old woman ( or man) scorned." It's good they are trying attack this. Without attending to medicare, social security, the military and our lust for borrowing, there is not much hope of balancing the budget. This effort will cause us all to take less and pay more. Get used to it....... Heaven has no rage like love to hatred turned, Nor hell a fury like a woman scorned," spoken by Zara in Act III, Scene VIII.[1] (This is usually paraphrased as "Hell hath no fury like a woman scorned") http://en.wikipedia.org/wiki/William_...

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