Medicare, Medicaid overhaul deal unlikely, lawmakers say

Congress is unlikely to reach a “grand bargain” to overhaul Medicare and Medicaid during the post-election lame duck session, according to two congressional budget leaders.

In successive appearances Tuesday at a deficit-reduction summit sponsored by the Peter G. Peterson Foundation, Reps. Paul Ryan (R-Wis.), chairman of the Budget Committee, and Chris Van Hollen (D-Md.), the panel's ranking member, agreed that any deal to enact long-term changes to the federal healthcare programs is more likely in 2013.

“In the lame duck, you'll see something to make sure we don't have a train wreck,” Ryan said when asked about entitlement overhaul in the post-election legislative session. “Does that mean we'll have permanent entitlement reform, a grand bargain that will fix every fiscal problem once and for all? I don't see that happening.”

Van Hollen agreed, based on the knowledge he gained about the complexity of the long-term funding challenges faced by the two programs as a member of last year's deficit reduction super committee.

Such an overhaul of the two largest federal healthcare programs—which both Ryan and Van Hollen said are leading drivers of the federal debt—is more likely to follow a six-month or longer extension of current policies during the lame duck session.

Otherwise, the two budget leaders cleaved to harshly partisan tones and touted their party's favored approaches to changing the two healthcare programs while disparaging the plans of the other side.

The Ryan-led Republican proposal for overhauling Medicare is organized around moving it from an open-ended benefit guarantee to an insurance premium subsidy model for future beneficiaries now younger than 55. The Republican plan would cap Medicaid spending and allow states more flexibility to change those programs without federal permission. Conversely, the Democratic plan would focus on accelerating pilot programs included in the 2010 healthcare overhaul that its supporters hope will lower costs for the two programs while increasing the health of their beneficiaries.