WASHINGTON — Sens. Tom Coburn and Joseph Lieberman have developed a plan to slash Medicare spending by $600 billion over 10 years through premium increases, gradually raising the eligibility age and other changes.
The senators plan to unveil the proposal Tuesday as a way to address one of the biggest drivers in government spending — health care for the elderly.
Coburn, R-Muskogee, and Lieberman, an independent from Connecticut, will push their proposal at a time when deficit reduction is the dominant issue in Washington.
Besides being one of the most expensive government programs, Medicare is also one of the most politically sensitive. A House Republican proposal to end Medicare as an open-ended entitlement and replace it with subsidies to buy private insurance has drawn relentless fire from Democrats.
The Coburn-Lieberman plan would make far more modest changes and preserve Medicare as a government-run health care program. But it would require many seniors — particularly those with higher incomes — to pay more for the services.
Monthly premiums for all enrollees in the Medicare Part B — which covers visits to doctors — would rise by 2 percent a year for five years, until the premiums were covering at least 35 percent of the program's cost. Current monthly premiums for Part B range from $115 to $369, depending on income, according to the federal Centers for Medicare and Medicaid Services.
That change would save $241 billion over 10 years, the Congressional Budget Office says.
Individuals making more than $150,000 a year and couples making more than $300,000 a year would have to pay the full Part B premiums, estimated at over $400 per month.
The proposal also would institute one deductible for both Medicare Part A, which covers hospitalization, and Part B, which covers physician office visits. The annual deductible for both parts combined would be $550.
Deductibles for hospitalization now vary depending on the length of stay, while the deductible for Part B is about $162 a year.
The senators also will propose increasing the age for Medicare eligibility from 65 to 67 by 2025. The eligibility age would rise two months every year, starting with people born in 1949. That would mirror the changes made decades ago for full Social Security benefits.
In an effort to force enrollees to pay more for the medical services they use, the senators' proposal would restrict the amount that supplemental insurance coverage — referred to as Medigap policies — could pay.
And it would require higher income enrollees to pay more of their out-of-pocket costs associated with hospitalization.
Their proposal also would stabilize for three years the payments to doctors who see Medicare patients, allowing time for Congress to devise a new system for paying physicians. The American Medical Association called Monday for reform of the current payment system, which requires periodic “fixes” to ensure reimbursements aren't reduced.
Coburn, R-Muskogee, a physician, has been warning about Medicare's financial problems for years and recently dropped out of bipartisan deficit-reduction talks because Democrats wouldn't accept the level of Medicare savings he believes are necessary.