Filed Under:Health Insurance, Medicare

Obama plugs Medicare payment reform

President Obama talked a little -- and just a little -- about Medicare Tuesday during his State of the Union address. (AP photo/Charles Dharapak, Pool)
President Obama talked a little -- and just a little -- about Medicare Tuesday during his State of the Union address. (AP photo/Charles Dharapak, Pool)

President Obama indicated that he might give some ground on efforts to cut Medicare spending, but not where that ground might lie.

Obama talked a little about Medicare, including Medicare payment reform programs, Tuesday during his 2013 State of the Union address.

"The biggest driver of our long-term debt is the rising cost of health care for an aging population," Obama said. "Those of us who care deeply about programs like Medicare must embrace the need for modest reforms -- otherwise, our retirement programs will crowd out the investments we need for our children, and jeopardize the promise of a secure retirement for future generations. "

But the country must ask the "wealthiest and the most powerful," including  the "wealthiest seniors," to do more to shoulder the burden of cutting the federal budget deficit if it is going to ask "senior citizens and working families" to shoulder part of the burden, Obama said.

Promoting broad-based economic growth and reducing the deficit will require the a combination of spending cuts and increases in revenue, Obama said.

"On Medicare, I’m prepared to enact reforms that will achieve the same amount of health care savings by the beginning of the next decade as the reforms proposed by the bipartisan Simpson-Bowles commission," Obama said.

Officials at Medicare already are trying to encourage health care providers to be more efficient by changing reimbursement strategies.

In the future, Obama said, "we’ll bring down costs by changing the way our government pays for Medicare, because our medical bills shouldn’t be based on the number of tests ordered or days spent in the hospital; they should be based on the quality of care that our seniors receive."

Obama then touched on Medicare and Social Security overhaul efforts.

"I am open to additional reforms from both parties, so long as they don’t violate the guarantee of a secure retirement," Obama said. "Our government shouldn’t make promises we cannot keep -- but we must keep the promises we’ve already made."

The White House suggested in a supporting document that the "sensible reforms" Obama would accept are the changes he already has proposed in connection with the fiscal cliff negotiations.

In December 2012, Obama said he was willing to reduce Medicare bills by "finding new ways to reduce the cost of health care."

"That kind of reform has to go hand-in-hand with doing some more work to reform our tax code so that wealthy individuals, the biggest corporations can't take advantage of loopholes and deductions that aren't available to most of the folks standing up here -- aren't available to most Americans," Obama said. "So there’s still more work to be done in the tax code to make it fairer, even as we're also looking at how we can strengthen something like Medicare."

Sen. Marco Rubio, R-Fla., the lawmaker who gave the Republican response to Obama's address, said that the tax increases and deficit spending Obama has proposed will do nothing to save Medicare and Social Security.

"The biggest obstacles to balancing the budget are programs where spending is already locked in," Rubio said. "One of these programs, Medicare, is especially important to me. It provided my father the care he needed to battle cancer and ultimately die with dignity. And it pays for the care my mother receives now."

Rubio said he would never support any changes to Medicare that would hurt seniors like his mother.

"But anyone who is in favor of leaving Medicare exactly the way it is right now, is in favor of bankrupting it," Rubio said. "When is the president going to offer his plan to save it? Tonight would have been a good time for him to do it."

Reactions

America's Health Insurance Plans (AHIP) did not immediately have a comment on Obama's speech.

Janet Trautwein, chief executive of the National Association of Health Underwriters (NAHU), said in a statement that NAHU was pleased that the president talked about the cost of health care and "modest reforms" of Medicare.

"Our goal is to help all Americans receive the coverage they deserve at a price they can afford," Trautwein said.

NAHU members certainly "care deeply" about Medicare, and they want seniors to be able to make informed decisions about coverage options that address their specific needs, Trautwein said.

Controlling the underlying cost of health care will be vital both to stabilizing public health programs and to making private health coverage affordable, Trautwein said. 

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