By Jeffrey Young The Hill Newspaper
Published: 02-20-08
The Bush administration will submit a bill to Congress Friday outlining a plan to raise Medicare premiums for higher-income beneficiaries enrolled in the Medicare prescription drug benefit a change that would reduce taxpayer spending on the program by $3.2 billion over five years.
Sen. John McCain (R-Ariz.) the likely GOP nominee for the presidency has long supported limiting federal subsidies for Medicare drug coverage to low-income beneficiaries while the two Democratic White House contenders Sens. Hillary Rodham Clinton (N.Y.) and Barack Obama (Ill.) have expressed support for expanding subsidies by lowering premiums to more people.
The administration’s actions set in motion a series of events that could lead to a full-fledged debate about the future of Medicare this summer just months before the presidential and congressional elections.
The Bush plan would reduce subsidies for single people with incomes greater than $82000 and married couples with incomes greater than $164000.
Democrats already unhappy with Bush’s proposal to cut $183 billion in the Medicare budget over the next five years gave the new proposal a cool reception.
Rep. John Dingell (D-Mich.) the chairman of the House Committee on Energy and Commerce criticized the new Medicare bill as a “scare tactic” that shifts more costs to seniors.
“This proposal shows us exactly where Republicans stand when it comes to helping seniors and people with disabilities” Dingell said. “The president’s idea for ‘improving’ the program is to stick the beneficiaries with more of the bill.”
In a conference call with reporters Health and Human Services Secretary Mike Leavitt outlined the administration’s proposed legislation as a first step toward restoring the Medicare program’s solvency.
“Without smart changes now Medicare can consume a growing and sustainable share of the federal budget” said Leavitt who described the proposal as a response to a statutory mandate requiring the president to present a bill to Congress reducing Medicare spending.
“Within 35 years Medicare would eat up every bit of our federal budget as we now know it” he added.
The so-called “Medicare trigger” kicked in last year when the program’s trustees projected for the second consecutive year that more than 45 percent of Medicare spending would come from general federal revenue as opposed to the Medicare trust fund. According to the trustees that level will be exceeded in 2013.
As recently as early this week speculation was widespread that the White House would decline to submit legislation in response to the trigger. In a signing statement accompanying the 2003 Medicare bill President Bush hinted that he had constitutional misgivings about a law mandating that a president submit a bill to Congress.
Bush no longer has such concerns according to Leavitt.
“The president feels that it’s necessary and important that not only he but future presidents take action on this” Leavitt said.
The proposal to reduce premium subsidies for relatively well-off beneficiaries on the drug benefit is certain to spark strenuous objections from congressional Democrats and advocates for the elderly and disabled.
In 2003 the Bush administration and the GOP-controlled Congress started moving the program in this direction by linking premiums for Medicare Part B physician coverage to incomes the first time any component of Medicare was means-tested.
In addition to charging some beneficiaries more for their drug coverage the bill also includes language mirroring medical malpractice liability reform legislation including caps on lawsuit awards passed numerous times by the GOP-controlled House. Another section of the bill contains provisions aimed at instituting electronic medical records and other information technologies providing beneficiaries with more information about the cost and quality of their medical services and linking payments to healthcare providers to improvements in quality.
A provision included in the 2003 law that created the Medicare prescription-drug benefit requires that when the trigger threshold is breached the president submit and the Congress debate legislation to stem the program’s spending. A member of each house must introduce the bill within the next three legislative days and the committees of jurisdiction have to report bills by June 30. If the committees fail to do so a vote of just one-fifth of the members of the House can force the bill to the floor.
Leavitt said the new proposal which was welcomed by the congressional Republican leadership should be enacted in conjunction with the president’s budget. Leavitt predicted GOP leaders would work with the White House to force Democrats to abide by the law and consider the new legislation.
“We broadly consulted with members of both the Senate and the House and we anticipate that the bill will be met at least by Republicans with great acceptance and interest” Leavitt said.
“Some of the Democrat members of Congress have made it clear that they prefer we not act but they were against the trigger in the first place” Leavitt said. Indeed the House Ways and Means Committee last year penned a bill that would have eliminated the trigger.
Republicans are not alone in Congress however in calling for a debate on the future of Medicare and other entitlements. For example Senate Budget Committee Chairman Kent Conrad (D-N.D.) with ranking member Judd Gregg (R-N.H.) has been pushing for the creation of an outside commission on entitlement reform.
Immediately after the conference call with reporters ended congressional Republican leaders began issuing statements of support.
“We should use this opportunity to show the American people we can work together to secure the future of the Medicare program while implementing reforms that decrease costs and improve coverage. This legislation can and should be a bipartisan accomplishment” said Senate Minority Leader Mitch McConnell (R-Ky.) who also said Gregg would shepherd the bill through the upper chamber.
Likewise House Minority Leader John Boehner (R-Ohio) praised the administration’s bill. “This proposal provides a fresh opportunity to begin making the decisions necessary to ensure the program remains viable for generations to come” he said.
