Healthcare Business News

Medicare to play role in upcoming debt talks

By Jessica Zigmond
Posted: November 10, 2012 - 12:01 am ET

Sweeping reforms to the Medicare program are now unlikely, but experts say the program will undoubtedly play a role in the upcoming deficit-reduction talks between the re-elected president and congressional leaders.

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Addressing healthcare providers after the election, former Senate Majority Leaders Tom Daschle (D-S.D.) and Bill Frist (R-Tenn.) said they think the premium-support design that would turn Medicare into a voucher program—championed by Republican presidential nominee Mitt Romney and his running mate, Rep. Paul Ryan (R-Wis.)—is off the table for the time being.

But Daschle and Frist agreed that entitlement reform can't be avoided as Congress and the White House seek a solution to fix the nation's ballooning federal deficit. House Speaker John Boehner said late last week that as thousands of baby boomers retire each day, “Everything on the revenue side and the spending side has to be looked at” in the looming negotiations.

Even though experts say Medicare certainly will be addressed, they do not envision drastic changes to the decades-old program any time soon.

The changes, rather, are likely to “nibble around the edges,” said Chris Condeluci, an attorney at law firm Venable and a former Republican staff member on the Senate Finance Committee as lawmakers drafted the Patient Protection and Affordable Care Act. “Changing the retirement age, for example,” he offered. “There are other changes to the Medicare payment process that have some dollar savings, but they are not significant.”

Daschle—the president's initial choice for HHS secretary in 2009—struck a similar note at an event hosted by the Institute for Healthcare Improvement. The South Dakota Democrat said “there's no question” that entitlement reform will be discussed in the talks, but the changes, he speculated, would be minor ones, such as a cost-of-living readjustment or a “means test of some kind.”

Meanwhile, continued implementation of the healthcare reform law means the $716 billion in Medicare payment reductions—primarily to providers—will continue as planned.

“This does affect the ability of providers in the Medicare system,” said Robert Moffit, a senior fellow at the Heritage Foundation. Moffit said the Medicare payment cuts to providers will worsen with the advent of the law's Independent Payment Advisory Board in 2015, a provision he said remains vulnerable to political attacks.

That was confirmed when House Majority Leader Eric Cantor (R-Va.) sent a letter to his GOP colleagues about priorities for the 113th Congress. “There are some issues I suspect Sen. (Harry) Reid will have a difficult time compelling his members to oppose outright,” Cantor wrote a day after the election. If Republicans “make the case publicly,” Cantor wrote, a bill eliminating IPAB is one they could get to the president's desk.

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