KHN Morning Briefing

Summaries of health policy coverage from major news organizations

Obama Plan Builds On Health Law Policies To Further Curb The Growth Of Health Care Costs

In a speech today at George Washington University, President Barack Obama is offering a framework for what the administration has termed "shared prosperity and shared fiscal responsibility."

According to a White House fact sheet, the plan will build on policies put in place by the health law and would save an additional $340 billion by 2021, $480 billion by 2023 and at least an additional $1 trillion in the subsequent decade. It would "bend the long-term cost curve" by setting a target for Medicare cost growth per beneficiary to GDP per capita plus 0.5 percent beginning in 2018. This "framework" would increase Medicaid flexibility without transforming it into a block grant program. It also would address Medicare's "excessive" spending on prescription drugs.

House Budget Committee Chairman Paul Ryan, R-Wis., released the GOP proposal last week.

Kaiser Health News provides excerpts of the speech related to health care spending. 

The Washington Post: "President Obama unveiled a framework Wednesday to reduce borrowing over the next 12 years by $4 trillion - a goal that falls short of targets set by his deficit commission and House Republicans - and called for a new congressional commission to help develop a plan to get there. ... Obama proposed sharp new cuts to domestic and military spending, and an overhaul of the tax code that would raise fresh revenue. But he steered clear of fundamental changes to Medicare, Medicaid and Social Security - the primary drivers of future spending."  He did call "for a series of modest changes to Medicare and Medicaid to achieve greater savings, but did not embrace a policy that would limit the number of people eligible for coverage or the type of treatment they could receive" (Goldfarb and Montgomery, 4/13).

Politico: Obama's plan "calls for deep Medicare and Medicaid spending cuts, but through a stronger independent Medicare board and a new Medicaid funding formula rather than the structural changes Republicans want. The rest of his plan relies on a number of cost-cutting devices - some new, some old - that avoid asking for sacrifices from nearly all of the seniors and low-income people who rely on the health care entitlement programs." It would beef up the Independent Payment Advisory Board and "move to a single federal Medicaid matching rate for the states, a change with uncertain implications for states, which now receive a variety of different levels of federal help. ... Obama hopes to use the new Medicare and Medicaid plans to draw a contrast with the Republican budget plan outlined by Rep. Paul Ryan" (Nather, 4/13). 

The New York Times: "Mr. Obama made clear in his remarks that he will oppose the Republicans' proposals, which he said include unprecedented cuts to Medicare and could lead to millions fewer Americans with health care coverage and seniors paying thousands of dollars more. Mr. Obama offered an impassioned defense of the popular Medicare and Medicaid programs. 'We are a better country because of these commitments,' he says in the speech. 'I'll go further - we would not be a great country without those commitments'" (Shear, 4/13).  

The Wall Street Journal: "The initiative in Mr. Obama's speech that is likely to attract the most attention is the "debt failsafe" trigger he proposed. The across-the-board spending cuts and tax increases would kick in if, by 2014, budget projections show that the ratio of the country's debt-to-GDP hasn't stabilized and begun declining. Social Security, Medicare and low-income programs would be protected from any triggers. Mr. Obama does not support raising the Medicare retirement age, a senior administration official said Wednesday" (Lee and Paletta, 4/13).

Bloomberg: "The administration is aiming to provide a counterpoint to the budget plan released last week by Representative Paul Ryan, which relies on deep cuts in federal spending to trim the deficit. Obama will specifically reject the Wisconsin Republican's idea of a voucher-like system for future Medicare recipients" (Nichols and Runningen, 4/13).  

CNN: "The president claimed that by building on reforms in his health care overhaul, $480 billion would be saved by 2023, followed by an additional $1 trillion in the following decade. Growth in Medicare costs would be tightly constrained starting in 2018" (Silverleib, 4/13).

Marketwatch: "Obama's ideas contrasted sharply with Republican proposals to lower taxes for individuals and corporations; privatize Medicare and turn Medicaid over to states to administer. Raising any taxes is a 'nonstarter,' Republicans say. Trumpeting past agreements that asked for 'shared sacrifice,' Obama said that high earners like himself don't need a tax cut and that the United States wouldn't be a great country without programs like Medicare. ... The president's plans also include speeding up availability of generic drugs and prohibiting brand-name drug companies from entering so-called 'pay for delay' agreements with generic companies" (Schroeder, 4/13).

Fox News: "Obama ... positioned his latest spending plan as a more 'compassionate' alternative to one introduced last week by GOP Rep. Paul Ryan. He applauded Republicans for putting a plan on the table to address entitlements, but the praise stopped there. ... The president's proposal would deal with entitlements like Medicare and Medicaid, but avoid the major changes being pushed by Ryan. The president opposes turning Medicaid into a block-grant program for states and making Medicare seniors purchase government-subsidized insurance, as Ryan proposed. ... Obama vowed to make other changes he claims will extract more than $300 billion in savings from those Medicare and Medicaid over the next decade. ... The president is wading into a potential political thicket. Liberals fear he will propose cuts in prized Democratic programs like Medicare and Medicaid, the health care programs for older adults, the disabled and the poor, and in Social Security. Moderates worry that his plan could unravel bipartisan deficit-cutting negotiations. And Republicans already are poised to reject any proposal that includes tax increases" (4/13). 

CBS Political Hotsheet: Even before the speech, GOP leaders criticized the plan. "Republican leaders on Wednesday preemptively hammered President Obama for a speech he will make about reducing the deficit, specifically decrying his plan to raise taxes for wealthy Americans. ... House Speaker John Boehner called for taking "meaningful steps" toward lowering the nation's debt - but said raising taxes did not qualify." He also expressed his his support for Rep. Paul Ryan's 2012 budget proposal. 'I fully support Paul Ryan's budget - including his efforts on Medicare'" (Madison, 4/13).

Los Angeles Times: "As President Obama laid out his own deficit reduction plan Wednesday, House Speaker John Boehner was forging ahead with plans for his caucus to vote on Rep. Paul Ryan's sweeping blueprint to radically reshape Medicare and Medicaid-and he offered unswerving support for the proposal. ...Democratic operatives have been gleefully anticipating Friday's vote as a means to pin all House GOP members to Ryan's proposal, which would convert Medicare into largely a private insurance program and turn Medicaid into a block grant program administered by the states, while slicing almost $6 trillion from the federal budget over the next decade." During the speech, Obama "did some politicking of his own, suggesting the GOP plan would cause 'up to 50 million Americans to lose their health insurance'" (Oliphant and Hennessey, 4/13). 


KHN also has summarized earlier, advance reports of the speech:

The New York Times: Re-Engineering Of Medicare To Raise Tough Questions (Pear, 4/12).

The Wall Street Journal: Deficit Speech Will Be Lightning Rod (Lee and Paletta, 4/13).

The Washington Post:  Obama Risks Losing Liberals With Talk Of Cutting Budget  (Goldfarb and Wallsten, 4/12).

McClatchy: Obama's Grand Fiscal Plans Unlikely To Pass Pre-Election (Taley and Lightman, 4/12).

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