Rivlin On Medicare And The Debt: ‘We Know What To Do’

Whoever ends up controlling the White House next year – Barack Obama or Mitt Romney — will have to make compromises if they are to solve the nation’s current budget and health care crises.

“I think we know what to do,” Alice Rivlin, a former director of the Office of Management and Budget, said Friday afternoon as part of a Brookings Institution panel about how the next president could curb spiraling health care costs.

Rivlin, now a senior fellow at Brookings, wrote in a paper published Friday that the “federal budget is on an unsustainable path” and Medicare reform is “essential” to addressing these dire fiscal straits. She gave the concept of “premium support” a nod, offering this approach as a means of moving toward debt reduction. Her primary example was the bipartisan Domenici-Rivlin plan, which she drafted with former Sen. Pete Domenici in 2010. She also mentioned the Ryan-Wyden Medicare plan, advanced by House Budget Committee Chairman Paul Ryan, R-Wis., and Sen. Ron Wyden, D-Ore.

Placing traditional Medicare in competition with private insurers is “not a risky, pernicious thing,” Rivlin said during the panel. While much of this year’s election will focus on contrasting views over premium support, tax revenue and other areas, Rivlin expects bipartisan progress early next year.

Panelist Thomas Mann, also a Brookings senior fellow, argued that bipartisan consensus is not possible – “it’s a pipe dream,” he said, underscoring comments from his own paper. Given the Republican party’s “ideological extremism and non-negotiable demands,” Mann wrote it would be better “to accept the reality of today’s intense and asymmetric polarization and challenge each party to make its best case in the election campaign.”

Speaking generally about premium support models for Medicare, Mann said, “it’s possible it could work,” but he first wants to see if health insurance exchanges will help empower consumers to make smart choices. He was not enthusiastic about the Ryan-Wyden plan.

If the health law is upheld by the Supreme Court, Rivlin  wrote that the health law “should be fine-tuned but not repealed,” pointing to provisions – like the exchanges – that should go forward regardless of who controls the White House. In addition, the law’s Independent Advisory Board “should be strengthened,” she said. The board would help control costs, but has become a flashpoint for Republicans and an increasing number of Democrats.

Rivlin added that a “sensible tort reform provision” should be added to the law. This might include a push for medical practice guidelines or caps on payments. And if the individual mandate is struck down by the Supreme Court, “the president should work with Congress to find a constitutional way to ensure that almost everyone has health insurance and is in a risk pool.”

Ross Hammond, another Brookings fellow, responded to Rivlin, calling for “a renewed focus by the next president on obesity prevention.” Chronic disease costs could be brought down through investing in public health research and improving coordination among government agencies, Hammond wrote.