Healthcare Business News

Bowles supportive of raising Medicare age

By Jessica Zigmond
Posted: November 1, 2011 - 6:00 pm ET

The former co-chairman of the president's fiscal commission responded favorably to the concept of increasing the eligibility age of Medicare beneficiaries during a hearing of the Joint Select Committee on Deficit Reduction Tuesday.

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“We did not have that in our plan,” Erskine Bowles, former chief of staff to President Bill Clinton and co-chairman of President Barack Obama's National Commission on Fiscal Responsibility and Reform, said in the hearing's question-and-answer period. “As I have thought about it since that time, under the Affordable (Care) Act, we provide subsidies for people who have really chronic illnesses and people who have limited income so they can afford healthcare insurance in the private sector,” he said, adding that means people who are 65, 66 and 67 should be able to get insurance. “If I think about it, I could support raising the eligibility age for Medicare,” because other coverage is available.

In his opening remarks, Bowles cited healthcare as the biggest contributor to the nation's deficit problem. “We spend twice as much as any developed country on healthcare,” he said. “And, unfortunately, if you look at the outcomes, our outcomes don't match the outlays.” He listed defense spending, an ineffective tax system, and interest on the nation's debt as the other contributing factors.

Joining Bowles on the witness panel for the supercommittee's fourth hearing were former Sen. Alan Simpson (R-Wyo.), Bowles's former co-chairman on the commission; as well as Alice Rivlin, a former director of the Congressional Budget Office and of the Office of Management and Budget; and former Sen. Pete Domenici (R-N.M.). Rivlin and Domenici together led the Bipartisan Policy Center's Debt Reduction Task Force. The witnesses urged the supercommittee to use its full authority and go well beyond its goal of identifying $1.5 trillion in deficit reduction and instead aim for savings of at least $4 trillion over 10 years.

Rivlin highlighted the Domenici-Rivlin Protect Medicare Act, which aims to restructure the Medicare program through a “defined support” model. According to Rivlin and Domenici's testimony, the model would not abolish the current system and would achieve fiscal sustainability in three ways. First, it would create a federally run Medicare exchange that would provide a marketplace for beneficiaries to choose from among private healthcare plans and traditional fee-for-service Medicare. Next, through competitive bidding, the system would tie the federal contribution to the cost of the second-cheapest approved plan or fee-for-service Medicare in each area, whichever is cheaper. And an additional measure is expected to ensure savings by limiting the growth in per-beneficiary federal support to 1 percentage point faster than the growth of the economy, or “GDP plus 1%,” compared with the current projection of growth that is 1.7 percentage points faster than GDP. So, if costs rise faster than the limit, beneficiaries will have to pay higher premiums, while those whose Part B premiums are paid by Medicaid would not be affected.

The clock is ticking as the supercommittee faces a Nov. 23 deadline to draft a proposal.

“Every one of the four panelists said that revenues must be a part of the equation if we're going to have a balanced solution,” Rep. Xavier Becerra (D-Calif.), a supercommittee member, said after the hearing. “Very few people today would challenge that,” he said, adding that the sooner the panel comes to that conclusion, the sooner it will have a robust plan for the Congress and public to consider.

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