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Just days after President Obama’s full-throated support of defending Medicare from structural reforms in his Inaugural Address, Senator Orrin Hatch (R-UT) yesterday threw down the gauntlet and maintained that reforms are needed in both Medicare and Medicaid in order to reduce the national debt. Hatch, the ranking Republican on the Senate Finance Committee, laid out five proposals that have enjoyed bipartisan support in the past and should be included in deficit reduction talks. They include raising the Medicare eligibility age, changing Medigap coverage, streamlining Medicare cost-sharing under Parts A and B and adding a catastrophic cap, competitive bidding in Medicare, and Medicaid per capita caps.
Inauguration Day in Washington is a blessedly nonpartisan event celebrating our messy yet peaceful democracy with great pomp. But President Obama, with renewed certainty, drew a hard line in his inaugural address against entitlement cuts that could fundamentally change Medicare and Medicaid. And in doing so he doubled down with Republicans in the next rounds of the deficit reduction cagematch.
I hate to have to say it, but the “fiscal cliff” debate/debacle last month is going to feel like a speed bump compared to what’s coming here in DC on the debt ceiling next month. At the height of its dysfunction right now, the relationship between the President and the Congress points to a near-inevitable government shutdown in the next 60-90 days. Which raises the question of what happens to Medicare and Medicaid when DC closes its doors. The answer? It depends on how long the shutdown lasts, but it ain’t pretty no matter what. If it goes longer than 30 days, it’s going to hurt, bad.
You’d never guess from what you see in the news, but the fiscal cliff negotiations are proceeding on two tracks and there is a deal to be done in the coming weeks. One track is public: the screeds in the media and parliamentary chicanery on the Hill, all with the goal of proving their ideological purity to their respective bases and beating the crap out of the guys across the aisle. Speaker Boehner last Friday: “There isn’t a progress report, because there’s no progress to report.” That piece has been depressing as hell to watch. Didn’t we do this with disastrous results last August? The two parties are like little boys with toys.
In a recent webinar we predicted that we would see $300-500 Billion in savings from Medicare and Medicaid in a deal to avoid the fiscal cliff. The shapes in the fog are becoming clearer and we’ll stand by it: Senate Majority Whip Dick Durbin said this morning on MSNBC’s “Morning Joe” that he’d like to see around $400 Billion in cuts from Medicare as lawmakers negotiate a deal to avoid the fiscal cliff.
It’s hard to argue this wasn’t a decisive victory for the President and Democrats in the Senate. What remains to be seen is whether intractable Congressional Republicans will come to the table to get stuff done.
GOP nominees Mitt Romney and Paul Ryan have big plans for Medicare reform, as we’ve written about here often. But health plans and other stakeholders need to start paying attention to their plans for Medicaid, which are game-changing, would affect millions more Americans, and would take effect much sooner: a recent Bloomberg report found that Romney/Ryan’s changes to Medicaid would lead to an estimated $1.26 trillion drop in federal funding from 2014 through 2022. Other analyses estimated that 14-27 million Medicaid beneficiaries could lose coverage if the campaign’s promise to block-grant the program became reality.