KHN’s Mary Agnes Carey and Marilyn Werber Serafini talk with Jackie Judd about President Obama’s Wednesday speech outlining his details for reducing the deficit and hitting back at a Republican deficit plan. In it, Obama laid out his plans for preserving Medicare while cutting spending in the program, and he also rejected a Republican plan to give states block grants for Medicaid.
JACKIE JUDD: Good day, I’m Jackie Judd and this is Health on the Hill. President Obama delivered a much-anticipated speech today, describing in broad terms his proposals to reduce the nation’s federal deficit. He outlined some changes to Medicaid and Medicare and he slammed a House Republican budget proposal that would, among other things, provide older Americans with a set amount of money-premium supports – to purchase insurance.
President Obama video excerpt: Let me be absolutely clear. I will preserve these health care programs as a promise we make to each other in this society. I will not allow Medicare to become a voucher program that leaves seniors at the mercy of the insurance industry, with a shrinking benefit to pay for rising costs.
JACKIE JUDD: Here to take a closer look at what Mr. Obama had to say about the government’s health insurance programs are Mary Agnes Carey and Marilyn Werber Serafini, both of Kaiser Health News. Thank you both so much.
I know it was a lot to go through, the White House has not yet provided all the details. But tell us what you understand to be the proposed changes the president is making. First, Medicare.
MARILYN WERBER SERAFINI: Actually, what we know is that we still have a lot to know. The president did not talk in great detail today. But what he did, in Medicare, was talk about two basic things. One is he wants to get the cost of Medicare prescription drugs down by relying on some discounts that are already present in the Medicaid program, the health care program for the poor. The idea would be to apply perhaps, and again we don’t have a lot of the detail but to apply the same kinds of discounts to people who get prescription drugs in Medicare to people to people who are eligible for both Medicare and Medicaid, in other words, low-income seniors.
The second area in Medicare has to do with the Independent Payment Advisory Board, which was created in the health care overhaul law. This board is set with some targets to reduce spending in Medicare. What the president did was he proposed to give that board greater, sharper teeth so that it could achieve even greater savings in that program.
JACKIE JUDD: He also said that his philosophical approach to this is different from Republicans. He says where he wants to save money is by reducing the cost of health care services themselves vs. what he says the Republicans want to do, which is shift the cost burden to recipients.
MARILYN WERBER SERAFINI: Exactly right. Paul Ryan, the House Budget Committee Chairman, in his budget proposal proposed something called premium support. It would essentially change Medicare from being an entitlement program, which means currently the government pays as much as is necessary to care for seniors.
It would change the basic premise of that program so that there would be a set amount of money that the government would spend on each person. President Obama made very clear in his remarks that he calls it a voucher. There’s a lot of discrepancy right now whether you call it a voucher or premium support, but either way it would mean a set amount of money and President Obama has made it very clear that is not what he wants to do.
JACKIE JUDD: Let’s move to Medicaid now. The president probably spoke with even less specificity about what he wanted done with Medicaid. But tell us what you have figured out.
MARY AGNES CAREY: He definitely said he wants to work with governors to make the program stronger and more efficient. This has been a theme that President Obama has sounded for months now. As governors have complained about rising Medicaid costs, he wants to work with them, so he seems very open to their approaches.
He talked about having a single matching rate for Medicaid that would reward efficiency within the states, but also increase their funding from the federal government if there were a recession. So it’s a little unclear – there are Medicaid matching rates and then the Children’s Health Insurance Program is involved there, sometimes in reimbursement. So he seems to want to make some changes there. But, again, as Marilyn said, the devil is always in the details, a little unclear exactly what we’re talking about here.
JACKIE JUDD: The promised savings he described in his speech – $500 billion by 2023, this is all related to health care programs, a trillion in the decade following – is that on top of the promised savings from the overhaul law.
MARILYN WERBER SERAFINI: Yes, it is. It is meant to be additional savings to what has already been proposed. He’s talking about an extra $200 billion in Medicare, an extra $100 billion from Medicaid, and the total being close to – a little bit more than that. We’re not exactly sure where the remaining amount comes from. But it’s supposed to be a little bit more than $300 billion, so we’ll see where the rest of that is due to come from.
JACKIE JUDD: I think listening to the entire 45-minute speech, some people would walk away and say, the president, who announced his re-election plans last week, was much more forceful in denouncing what House Republicans are proposing than he was forceful in describing specifically what he wanted to do. So, was it as much a political speech as a policy speech?
MARY AGNES CAREY: Well, politics and policy, as we know, often intersect in Washington. So certainly, I think politics plays a part here. But also, he seemed very concerned about the rising deficit and how do we attack it. Republicans have their vision, and he said I have my vision, and he feels that for the good of the country and to get our spending under control, it’s very, very important to look at this and figure out different ways to work it.
The other thing we have to think about here is the debt ceiling. That is coming soon. We have to raise the debt ceiling. The president has to go to Congress and get their agreement. The Republicans in both the House and Senate have made it very clear they’re not going to vote for a debt ceiling increase unless they see some restraints on government spending. Now whether or not the president’s plan is going to suffice here is unclear. But I think that his play to Congress, if you will, to raise the debt ceiling was as much a part of this today as anything else.
JACKIE JUDD: And a final question to you, Marilyn. What has been the early reaction from the Republicans.
MARILYN WERBER SERAFINI: Well, the Republicans so far have very quickly come out with press releases and statements that try to turn the tables on President Obama by saying, look you’re talking about now reducing the budget deficit, when in your own budget you’re actually putting forth proposals that would increase the budget deficit. And also, the Senate Republican leader, Mitch McConnell, came out with a statement saying that you also did that in the stimulus spending. That everything you’ve done so far would increase the deficit, not decrease it. And they’re trying to really label him as talking out of both sides of his mouth.
JACKIE JUDD: I know I said that was the final question, but one more. And that is the timeline he laid out in here was to start talking about it with some depth, detail, seriousness in May, have a plan done by the end of June.
MARY AGNES CAREY: I just had someone on the phone offer to buy me a steak dinner if that comes out. And he is confident that he will not have to purchase that dinner. And I don’t think I’m getting a free dinner, either. It’s a very optimistic timeframe, but, of course, Washington works on deadlines. So if you say June, and it slips to July, perhaps that will work – or slips to August. Never hurts to aim high. I think that’s what the president is doing. But I can’t imagine that will happen. I guess we’ll see how it plays out.
JACKIE JUDD: Thank you so much both of you. Mary Agnes Carey, Marilyn Werber Serafini. I appreciate it.