WASHINGTON — Sen. Tom Coburn said that “nobody's going to like” the plan he and Sen. Joseph Lieberman unveiled Tuesday to save $600 billion in Medicare costs over the next decade, and House Democratic leader Nancy Pelosi and the AARP quickly rejected it.
But the two senators warned at a news conference that Medicare would only survive if changes are made soon to shore up its finances.
On a related matter, Coburn, R-Muskogee, told reporters that the $9 trillion deficit reduction plan he and his staff are working on would include about $1 trillion in new revenues, meaning higher taxes for some.
The Medicare proposal developed by Coburn and Lieberman, an independent from Connecticut, calls for higher premiums, an increase in the eligibility age from 65 to 67 and other measures to pare $600 billion from projected Medicare spending.
“We can't save Medicare as we know it,” Lieberman said at a news conference. “We can only save Medicare if we change it.”
About 50 million Americans receive Medicare benefits, and another 20 million are expected to join the health care program for the elderly in the next decade, Lieberman said, adding that the average person receives three times in benefits what he pays into the system through taxes and premiums.
“If we do nothing, Medicare will go broke and take our government down with it,” Lieberman said.
Acknowledging the tricky politics surrounding entitlement programs, Coburn said, “Nobody's going to like this plan; we understand that.”
He said, though, that the need to take immediate action overrode the politics of the issue.
Pelosi, D-Calif., called the senators' plan “unacceptable.”
“It is unfair to ask seniors to get less in benefits and wait longer to get onto Medicare — all while Republicans back tax breaks for Big Oil and corporations that ship American jobs overseas,” she said.
The AARP, the nation's largest lobby group for seniors, praised some elements of the proposal — including the $7,500 annual cap on out-of-pocket expenses and the stabilization of physician payments — but said the savings come from cost-shifting and reducing benefits.
AARP Executive Vice President Nancy LeaMond said, “Simply shifting the bill to seniors does nothing to improve health care quality or combat the real problem of rising costs.”
Coburn argued that some parts of the plan would reduce costs because people would be more reluctant to seek services if they had to pay out of pocket for them.
Part of plan
to reduce deficit
Coburn intends to include changes to Medicare, Social Security and Medicaid in the 10-year, $9 trillion deficit-reduction plan he has been working on for the past month. He told reporters Tuesday that he is still working on the details.
Asked how much would be new revenue, Coburn said, “It will be around a trillion.”
As negotiations continue over how to avoid a debt crisis in August, House and Senate Republican leaders have rejected any new taxes, including the elimination of tax breaks for individuals and businesses.
Coburn has said that new revenue would be necessary to deal with the nation's rapidly escalating debt, and he is expected to target numerous tax breaks while proposing lower overall rates. The president's fiscal commission, on which Coburn served, recommended last year about $1 trillion in new revenue over 10 years through modifying or eliminating tax breaks.