KHN Morning Briefing

Summaries of health policy coverage from major news organizations

Gang Of Six Plan To Cut Deficit By $3.7 T Includes Doc Fix, Gets Boost From Obama

The 'Gang of Six,' a bipartisan group of senators, today unveiled a deficit-reducing plan that would:

--Starting in 2020, set target to hold the growth of federal health care spending to a formula linked to the Gross Domestic Product, plus one percent, for each beneficiary in Medicare. If spending exceeded that amount, some kind of action would be required by Congress and the president.
--Save $26 billion by curbing waste, fraud and abuse in entitlement programs like Medicare and Medicaid.
--Repeal the CLASS Act, a voluntary long-term care insurance program that was created by last year's health law.
--Require the Senate Finance Committee to quickly approve legislation that would stop statutory cuts in physician payments from taking effect - the so-called '"doc fix." 

For details, read KHN's copy of the plan's executive summary and accompanying charts

Here is a summary of today's coverage:

The Washington Post: "President Obama on Tuesday praised a new bipartisan plan emerging in the Senate, calling it 'broadly consistent' with the White House's approach to raising the debt limit and describing it as a 'very significant step.' The plan, drafted by a bipartisan group of senators known as the 'Gang of Six,' has been in the works for months. After struggling to reach consensus and apparently disbanding last week, the group now says it's nearing agreement on a proposal, which could offer an alternative strategy for pushing an increase in the debt limit through Congress before the Aug. 2 deadline" (Montgomery, 7/19).

The Hill: "According to an executive summary, the Gang of Six plan would stabilize the debt by 2014. ... It would involve two separate bills, one implementing $500 billion in immediate deficit cuts and another implementing larger reforms. ... On entitlements, the plan would fully pay for the Medicare 'doc fix' over 10 years, allowing doctors to avoid a drastic cut in Medicare payments under the law which is regularly avoided but never paid for. It also contains strong enforcement procedures. One of these would require a 67-vote supermajority in the Senate to circumvent spending caps" (Bolton and Wasson, 7/19).

Atlanta Journal Constitution: "The plan uses a two-step legislative process: (1) an initial bill that makes immediate cuts; and (2) a process for a second bill to enact comprehensive reform and put our nation on a stable fiscal path. The plan would ... Spend health care dollars more efficiently in order to strengthen Medicare and Medicaid, while maintaining the basic structure of these critical programs ... Fully pays for SGR (the 'doc fix') over 10 years." The plan also would repeal The CLASS Act (Dupree, 7/19).

Inside Health Policy: The plan "would repeal the controversial long-term care insurance program -- or the CLASS ACT -- included in the health care law as part of a $500 billion 'down payment' on an 'aggressive two-step' legislative process led by committees of jurisdiction to reduce the deficit by a total of $3.7 trillion over 10 years. According to a five-page outline, the plan would require the Finance Committee to permanently reform or replace the physician payment system" (Lotven, 7/19). 

The Wall Street Journal: "President Barack Obama on Tuesday backed a $3.7 trillion deficit-reduction plan after it gained fresh momentum from a bipartisan group in the Senate. Mr. Obama, speaking at a White House press briefing, praised the deficit-reduction proposal as "a very significant step" and said there's been progress generally in the protracted deficit discussions. He asked congressional leaders to begin crafting a final plan Wednesday. ... Mr. Obama's endorsement of a bipartisan Senate deficit-reduction proposal, however, could isolate conservative House Republicans who have yet to embrace the president's call for a deficit-cutting plan that includes tax-code changes" (Paletta and Favole, 7/19).

The New York Times: The bipartisan group of senators made their push "on Tuesday to win backing for an ambitious deficit-reduction proposal that includes new revenues as well as deep spending cuts. ... The group ... presented its plan to fellow senators as the House prepared to vote on a Republican budget plan. It would make deep spending cuts over time in domestic and military programs, including Medicare and Medicaid, and raise new revenues from closing myriad tax breaks and loopholes, while lowering tax rates across the board" (Calmes and Steinhauer, 7/19).

Los Angeles Times: "The proposal is based on recommendations from the bipartisan deficit commission that Obama commissioned last year, which he had initially been cool to. It includes entitlement reforms -- a major concern of Democrats -- and 'fundamental' tax reform, something that Republicans have been wary of throughout the debt negotiations. What was significant was the support it received, conceptually, from so many Republicans in the Senate – including Sen. Lamar Alexander (R-Tenn.), the third-ranking Republican in the Senate" (Memoli, Nicholas and Mascaro, 7/19).

Politico: "The House Republican leadership staff is reviewing the Gang of Six proposal, but has several concerns, according to aides. They are unclear how the plan gets to $3.7 trillion in savings, and want to see a more detailed plan, the aides say. From what they've seen of the plan, they Medicare and Medicaid proposals need to go further. And they're already branding the plan as having tax increases" (Raju, 7/19).

MSNBC: "But Obama says lawmakers are nearing the '11th hour' as an Aug. 2 deadline to raise the debt ceiling nears" (7/19).

This is part of the KHN Morning Briefing, a summary of health policy coverage from major news organizations. Sign up for an email subscription.