Lawmakers Wrestle With Plans To Cut Medicare Costs

Democrats and Democratic groups are all up at arms over Republican plans to bring down Medicare costs by essentially privatizing the federal insurance program for seniors. But getting control of those costs is essential to balancing the budget.

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From NPR News, this is ALL THINGS CONSIDERED. I'm Michele Norris.

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And I'm Robert Siegel.

An ABC-Washington Post poll released this week shows most Americans want to keep Medicare just as it is. But if controlling the deficit is a priority, that is just not an option.

As NPR's Scott Horsley reports, policymakers wrestling with plans to slash the debt aren't debating whether to change the health care system for seniors but how it should change.

SCOTT HORSLEY: Tinkering with Medicare has always been politically risky. Just ask Republican House members who voted last week to make big changes in the plan for future retirees. Ten GOP lawmakers are already being targeted with radio ads like this one.

(Soundbite of radio ad)

Unidentified Man: It puts the squeeze on Wisconsin families and will end Medicare as we know it. Wisconsin families should all be squealing about what Sean Duffy is trying to do.

(Soundbite of squealing pig)

HORSLEY: The House Republican plan would dramatically change Medicare for people under 55. Instead of guaranteed health benefits when they retire, they'd receive a government subsidy to buy private insurance. Those subsidies would increase only at the rate of inflation. So if health care costs continue to go up faster, seniors themselves would have to make up the difference.

President Obama has criticized this proposal. But he's calling for his own changes to prevent Medicare from hogging more and more of the federal budget.

(Soundbite of squealing pig)

HORSLEY: Mr. Obama's plan relies heavily on an expert advisory board to keep Medicare costs from growing much faster than the overall economy.

Robert Reischauer, who used to direct the Congressional Budget Office, says if the government did that strictly by limiting payments to doctors, Medicare recipients might not notice - at first.

Mr. ROBERT REISCHAUER (Economist): The question is for how long? At some point, when you begin chipping away at the payments to providers, providers are going to be less and less willing to serve Medicare patients.

HORSLEY: Mr. Obama hopes to avoid that by giving the expert board the power to make bigger changes. Instead of just paying doctors less for the same work, doctors could be paid differently, with incentives to skip unnecessary procedures. Some health care economists see promise in this idea.

But Gail Wilensky, who advised both Congress and President Bush on health care, says many lawmakers are wary.

Ms. GAIL WILENSKY (John M. Olin Senior Fellow, Project HOPE): A lot of members of Congress are uneasy about delegating that much power and authority to a group that, once appointed, is not accountable to anyone.

HORSLEY: A third plan for addressing the deficit comes from the president's fiscal commission and serves as the starting point for a bipartisan group of senators known as the Gang of Six. The gang may release its own blueprint soon.

The fiscal commission's plan would revise Medicare's cost-sharing rules, so seniors pay more out of pocket for health care - as much as $7,500. That would not only cut the government's share of the cost, but, in theory at least, it would make seniors more invested as they shop around for health care.

Dr. AMAL TRIVEDI (Brown University Medical School): The idea behind seniors having more skin in the game is that they will become knowledgeable consumers and cut back on discretionary health services and still use all the services that are valuable in terms of improving health.

HORSLEY: But Amal Trivedi of Brown University Medical School says that's easier said than done. Trivedi and his colleagues looked at what happened to seniors in private Medicare plans when they faced higher co-payments for doctor visits. As expected, the seniors went to the doctor less often. But the savings were penny-wise and pound-foolish, because those seniors wound up hospitalized more often.

Trivedi says in health care, finding the fat is tricky, even for the smartest consumer.

Dr. TRIVEDI: You know, I'm a physician. And it's hard for me to figure out what's valuable and what is unlikely to help patients. I can't imagine a senior with multiple chronic conditions trying to figure out what's discretionary and what's valuable.

HORSLEY: But figuring that out is exactly the challenge the country now faces as it tries to preserve what's valuable about Medicare while cutting where possible to avoid breaking the bank.

The president, House Republicans and maybe the Senate's Gang of Six all have different ideas about who should make those choices and how.

Scott Horsley, NPR News, Washington.

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