Democrats See
Perils on Path to Health Cuts
Published: September 13, 2011 - New York Times
WASHINGTON — As Congress opens a politically charged exploration of ways to
pare the deficit, President Obama is expected to seek hundreds of billions of
dollars in savings in Medicare
and Medicaid,
delighting Republicans and dismaying many Democrats who fear that his proposals
will become a starting point for bigger cuts in the popular health programs.
The president made clear his intentions in his
speech to a joint session of Congress last week when, setting forth a plan
to create jobs and revive the economy, he said he disagreed with members of his
party “who don’t think we should make any changes at all to Medicare and
Medicaid.”
Few Democrats fit that description. But many say that if, as expected, Mr.
Obama next week proposes $300 billion to $500 billion of savings over 10 years
in entitlement programs, he will provide political cover for a new bipartisan
Congressional committee to cut just as much or more.
And, they say, such proposals from the White House will hamstring Democrats
who had been hoping to employ Medicare as a potent issue against Republicans in
2012 campaigns after many Congressional Republicans backed a budget that would
have substantially altered Medicare by providing future beneficiaries with a
subsidy to enroll in private health care plans.
Representative Emanuel Cleaver
II, Democrat of Missouri and chairman of the Congressional Black Caucus,
said: “Ninety-eight percent of the president’s speech was excellent. The
Democratic caucus and the black caucus are fired up. But you will find that we
have some differences with the president’s plan as it relates to Medicare and
Medicaid. We would rather see some kind of increase in revenue as opposed to
cutting these programs.”
By offering such proposals, Mr. Cleaver said, the president “cancels out any
bludgeoning that Democrats might give the Republicans over Medicare and
Medicaid.”
Health policy experts and lobbyists see the situation in a similar way.
Julius W. Hobson Jr., a lobbyist who used to work at the American Medical
Association, said he viewed the savings to be proposed by Mr. Obama as “an
opening bid, the floor, the foundation for the kind of cuts Republicans want to
make.”
“Republicans will give a political answer: the president’s plan is not
enough,” Mr. Hobson said. “It may not be enough in their eyes, but they will
take it and build on it.”
The prospect of further cuts worries health care providers because it comes
on top of the new health care law, which reduced payments to most providers to
help offset the cost of extending coverage to millions of uninsured Americans.
While Mr. Obama has signaled a willingness to make health spending a top
source of budget savings in the current debate, he has not sent a similar
message on Social
Security, even though in budget talks with Republicans this year he
entertained the idea of changing the way annual increases in payments are
calculated. The president did not mention changes to Social Security in his
latest speech, a fact that could bolster Democrats who believe they may have a
new political opening on that program, given that Gov. Rick Perry of Texas, a
top Republican presidential candidate, has attacked the program as a
government-sponsored Ponzi
scheme.
But Mr. Obama has said that “health care cuts” need to be part of any deal,
and he has already given a preview of the cuts he is likely to propose next
week. In April, he unveiled a framework for deficit reduction that he said would
save $480 billion in Medicare and Medicaid by 2023.
In negotiations with Congressional Republicans in July, Mr. Obama went
further. He indicated that he was willing to consider a gradual increase in the
age of eligibility for Medicare and cuts in federal payments to states for
Medicaid.
Medicare and Medicaid account for 23 percent of federal spending this year,
and their costs are growing faster than the rest of the budget because of
increasing enrollment and medical inflation. Under current law, the
Congressional Budget Office says, the two programs will account for 28 percent
of federal spending in 2021.
Controlling these costs is a goal for Republicans on the powerful
House-Senate committee on deficit reduction, whose proposals are supposed to
receive up-or-down votes in both chambers before the end of the year.
“I give the president credit for identifying and recognizing the problem,”
Representative Jeb Hensarling, Republican of Texas and co-chairman of the
deficit reduction committee, said in an interview. “It’s a very, very hopeful
sign that the president would say this — that Medicare and Medicaid are the
major drivers of our long-term liabilities, and nothing else comes close.”
By contrast, Representative Frank Pallone Jr. of New Jersey, the senior
Democrat on the Health Subcommittee of the Energy and Commerce Committee, is
nervous about further health care savings to be proposed by the White House.
“Medicare and Medicaid cannot sustain additional cuts, whether in benefits or
provider payments,” Mr. Pallone said.
Representative Allyson Y. Schwartz, Democrat of Pennsylvania, said now might
not be the best time to consider changes in the health program. “We ought to let
the innovations in the new health care law take hold,” Ms. Schwartz said. “They
can save significant dollars in the long term by reducing medical errors and
complications and improving the quality of care.”
Democrats’ concerns are evident in a list of deficit reduction options
circulated in the last few days by Representative Sander M. Levin of Michigan,
the senior Democrat on the Ways and Means Committee.
The document criticizes the idea of raising the Medicare eligibility age to
67, from 65, and notes, “This policy idea was floated by the president near the
end of the debt
ceiling debate” in July. “This policy does nothing to control costs,” the
document says; “it simply shifts substantial costs from Medicare to other parts
of government and to private and public employers.”
In a separate memorandum, Mr. Levin said Democrats on the Ways and Means
Committee would soon have a private meeting to discuss “the case we will make
against cuts to entitlement programs.”
Kenneth E. Raske, president of the Greater New York Hospital Association,
said that further cuts in the growth of Medicare and Medicaid would not only
impair access to care, but also lead to job loss in the health care industry,
directly contravening the president’s goal of job creation.
“Health care could be sacrificed in favor of construction jobs,” Mr. Raske
said.
Nursing homes and teaching hospitals are making a pre-emptive strike to
forestall further cuts in Medicare and Medicaid.
“I understand the need for sacrifice,” says a nurse in a television
advertisement run by the American Health Care Association, a trade group for
nursing homes. “We’ve given our fair share, and more. As a nurse who cares for
her patients, I can tell you another round of deep cuts that target nursing
homes simply goes too far.”