Medicare recipients may lose in debt talks

Sunday, July 10, 2011

WASHINGTON -- A debt-busting deal on the scale that President Barack Obama and House Speaker John Boehner are seeking all but guarantees that people on Medicare would feel at least some of the pain.

Low-income people on Medicaid wouldn't escape totally, either. If a deal ultimately leads to overhauling taxes, workers and their families could be on the hook also, facing potential limits on the tax-free status of job-based health insurance.

Health care is a main ingredient on both the spending and tax sides of the elusive agreement that Obama and Boehner, R-Ohio, are trying to reach.

The president has scheduled a meeting today with congressional leaders to keep pushing for a compromise that would reduce future deficits in exchange for lifting the $14.3 trillion cap on the national debt. Action is needed so the government can keep paying its bills beyond Aug. 2.

No decisions have been made. With Congress politically polarized and skittish about next year's elections, it's unclear whether there's any combination of Democratic and Republican votes to pass major deficit reduction that cuts benefit programs and raises revenue.

"This is a Rubik's cube that we haven't quite worked out yet," Boehner said.

But many of the health care options that negotiators are considering have been available for months. Proposals have come from the Obama administration, congressional advisers and bipartisan groups, such as Obama's debt commission.

For Medicare, possibilities include higher premiums for upper-income retirees and new copayments and deductibles that affect all but the poor. For example, seniors do not currently face a copayment for home care. That might change if there's a deal.

"It's difficult to imagine a $4 trillion-plus budget package that doesn't include significant measures affecting beneficiaries," said economist Robert Reischauer, one of two public trustees who help oversee Medicare and Social Security finances.

Obama's health care law already cut about $500 billion from projected payments to providers, and some experts say there's not much fat left there.

"It might mean more individual responsibility or a restriction of choices," said Sen. Mark Warner, D-Va., a member of a small bipartisan group that has been dealing with spending and taxes. An across-the-board increase in monthly premiums seems unlikely, Warner said.

Still, the bigger a deficit-reduction deal, the more likely it is that older people will take a hit.

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