WASHINGTON ? Soon enough, Democrats will have to identify new Medicare cuts they can support.
But don?t expect them to come this spring, not after the Medicare plan put forward by House Republicans became the centerpiece of the Democrats? strategy to recover from disastrous 2010 midterm elections. Last week?s Democratic victory in a special House election in Buffalo ensured that.
The fat target on the Republican plan, drafted by Representative Paul D. Ryan, chairman of the House Budget Committee, is only one reason for Democrats to hold back. Why offer benefit cuts now, Obama advisers ask, after Republican leaders attacked their previous ideas for Medicare savings ? and still won?t bend on the need for tax increases in any grand deficit-reduction bargain?
?That would be crazy if we did,? said Neera Tanden, a former health policy aide in the administration. In the current deficit-reduction talks led by Vice President Joseph R. Biden, the Medicare cuts under discussion fall into the modest ?waste, fraud and abuse? category that no one opposes.
But reticence can only be a short-term tactic. It?s not a long-term answer to the staggering spending projections that Mr. Obama, his Democratic predecessor Bill Clinton, and every policy analyst acknowledges will require further changes to Medicare.
?It is fair for Democrats to be asked to make additional contributions to cutting costs,? said Andrew L. Stern, the former head of the Services Employees International Union, who served on Mr. Obama?s deficit reduction commission last year.
Democrats have some answers. And their attacks on Mr. Ryan?s option, over time, will bring escalating pressure to specify them.
A Start, But ?
The Democrats? first answer, Medicare spending cuts contained in Mr. Obama?s health care law, won?t satisfy partisan adversaries who see the law as a budget-busting monstrosity.
The Congressional Budget Office predicts spending on Medicare will nearly double in 10 years for two reasons. One is the increase in beneficiaries as baby boomers reach their golden years; the other is health care cost inflation that continues to outpace economic growth.
There?s no stopping the former. But the new health care law seeks to restrain the latter through steps to overhaul payment practices and service delivery: better information on effective treatments, improved coordination among doctors, financial rewards for the quality of treatment rather than the quantity.
?This is not airy-fairy stuff,? said Peter R. Orszag, Mr. Obama?s former budget director. If an independent Medicare advisory board works as its advocates envision, its success in wringing out excess will ripple through the entire health care system, or so the thinking goes.
Some leading Republican policy experts agree that potential long-term savings from the law could be significant. ?They?ve done a lot,? said Mark McClellan, who ran the Medicare program under President George W. Bush.
But ?there?s a lot more? cost-cutting that needs to be done, Mr. McClellan added. ?They?ve only got a partial plan.?
Option No. 2
The Democrats? second answer: ratchet up the savings mechanisms in the health care law.
Mr. Stern says Democrats should guarantee the law?s $500 billion worth of specified savings from reduced Medicare payments to health providers and insurers ? by accepting a ?trigger? for further cost-cutting if those savings don?t materialize.
Mr. Obama has proposed further strengthening the Medicare advisory board. One possibility that would have an immediate impact would be to end the 10-year exemption hospitals were granted from the advisory board?s jurisdiction.
But after raising the specter of ?death panels? in the original health care debate, Republicans are sure to object to an increase of power for unelected bureaucrats, even in the name of reducing costs. That means that in any bipartisan compromise, the endgame would be cuts directly affecting beneficiaries ? which Democrats have sought to avoid as energetically as Republicans have resisted tax increases.
The Congressional Budget Office has enumerated a series of options. For example, curbing subsidies for beneficiaries to buy supplemental ?Medigap? insurance could save $92 billion by 2021.
Increasing premiums that beneficiaries pay for Medicare doctors? coverage so they cover 35 percent of the program?s costs, instead of 25 percent under current law, would bring in $241 billion. Raising the eligibility age for Medicare to 67 from 65, a step also recommended by Mr. Ryan, would save $124 billion.
For Republicans, the core appeal of Mr. Ryan?s ?premium support? plan is the cap it places on Medicare outlays. That?s also what makes it vulnerable to criticism from Democrats, who argue that it simply shifts costs from the government to the elderly ? nearly $6,400 per beneficiary in 10 years, Mr. Obama says.
Yet increasing the level of Medicare spending per beneficiary at a faster rate than under Mr. Ryan?s plan could produce significant savings without burdening the elderly nearly as much.
A bipartisan panel headed by the former Republican Senator Pete Domenici and a Democratic budget expert, Alice M. Rivlin, said such an approach could save Medicare $2 trillion by 2030. Which suggests that in a genuine long-term budget fix, probably after next year?s elections, Democrats may end up doing business with Mr. Ryan after all.
