Medicare Trigger May Bring Political Headache

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The 2003 Medicare prescription drug bill had a hidden provision that's about to cause a huge political headache. If certain types of Medicare spending grow too fast, the provision calls for the administration and Congress to act to rein it in. Now, that action has been "triggered," with potentially devastating — and politically unpopular — cuts coming in the middle of an election year.

MELISSA BLOCK, host:

This afternoon, the Bush administration sent Congress legislation aimed at bringing down the overall cost of Medicare. But this is no routine Medicare bill.

As NPR's Julie Rovner reports, it represents the first move in what could become an election-year brawl on Capitol Hill.

JULIE ROVNER: Today's story actually began back in 2003, in a little notice section of the Medicare Prescription Drug Law. It was designed to force the president and Congress to take action if too much of Medicare spending was coming from general income tax revenues.

Secretary MIKE LEAVITT (U.S. Department of Health and Human Services): We call it the Medicare trigger.

ROVNER: That's Health and Human Services Secretary Mike Leavitt. The trigger requires the president to submit a bill to Congress to bring Medicare general tax spending back under 45 percent of the program's total.

In a conference call with reporters, Leavitt acknowledged that the administration had some doubts about whether to comply with the mandate that it send up actual legislative language. Some White House advisers wondered whether that was constitutional. But in the end, Leavitt said, the desire to deal with the growing cost of Medicare won out.

Sec. LEAVITT: The president feels that it's necessary and important that not only he but future presidents respond to this. And anything that can prompt, motivate, coax the Congress into dealing with this now while it's still solvable, is an important part of the law.

ROVNER: The bill the administration is proposing has three parts. One would give the HHS secretary authority to impose relatively non-controversial programs aimed at getting better value for less money, things like electronic medical records.

The second is a longstanding administration proposal to cap certain damages in medical malpractice lawsuits. The final piece would impose higher premiums for the prescription drug benefits for beneficiaries with higher incomes.

Texas Congressman Jeb Hensarling, chairman of the conservative Republican Study Committee, says that will appeal to his wing of the party.

Representative JEB HENSARLING (Republican, Texas): And the prescription drug benefit should have been geared towards those who needed it the most; those who did not have a benefit, those who are of low and moderate income.

ROVNER: Democrats, however, oppose the proposal. In fact, they oppose the budget trigger in the first place. And they were quick this afternoon to call the measure dead on arrival.

Part of the reason, says Richard Kogan, an economist at the liberal Center on Budget and Policy Priorities, is that the trigger just calls for moving money around. It doesn't actually do anything to lower overall Medicare spending.

Mr. RICHARD KOGAN (Economist, Center on Budget and Policy Priorities): It does nothing to address the fact that we have long-run budget problems including because of the rapid growth of health care costs in the society.

ROVNER: In fact, he says, the way the trigger law is written makes it easy to raise regressive taxes like the Medicare payroll tax to replace progressive sources of funding like the income tax.

Another thing the trigger does is make it easy to get this particular Medicare bill to the House and Senate floors. By law, the leaders of both houses must introduce the measure, and the relevant committees are required to act on it or a similar bill by specific dates this summer.

And if the Democrats refuse to bring the bills to the floor, there are special provisions that make it fairly simple for the Republicans to force a debate. Hensarling says he and his conservative allies plan to do just that.

Rep. HENSARLING: House conservatives would try to use every procedural tool that we have to ensure that the law, as we understand it, is followed and at least one plan that will comport with the original legislation is brought to the floor.

ROVNER: But in the end, it may be moderate Republicans who could pay the price for a messy Medicare debate just weeks before election day. Democrats need only vote no on the bill. Republicans, however, may end up torn between a desire for fiscal responsibility and one of the government's most popular programs.

Julie Rovner, NPR News, Washington.

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