KHN’s Mary Agnes Carey talks with Jackie Judd about President Obama’s separate meetings with Senate leaders Mitch McConnell and Harry Reid in which the trio is trying to find common ground on Medicare cuts to help lower the deficit.

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Transcript:

JACKIE JUDD: Good Day, this is Health on the Hill; I’m Jackie Judd.

The debt-reduction talks moved into the Oval Office this week, where President Obama held separate meetings with Senate Majority Leader Harry Reid and Minority Leader Mitch McConnell. This was an attempt to rejuvenate the negotiations after House Majority Leader Eric Cantor dropped out of the talks led by Vice President Biden. To bring us up to date on all of this – and how Medicare fits into the picture – is Mary Agnes Carey of Kaiser Health News. Welcome, Mary Agnes.

MARY AGNES CAREY: Thank you.

JACKIE JUDD: What did you pick up in your reporting today on whether the ball was moved at all, especially in terms of what both sides may agree to regarding Medicare?

MARY AGNES CAREY: They seemed to have reached some basic agreements in non-controversial areas – on college aid, farm subsidies, federal worker retirement areas, perhaps some agreement there. But the bigger differences are over, of course, tax increases, which are a non-starter for Republicans.  So perhaps, the most recent set of meetings solidified the differences more than the agreements.

JACKIE JUDD: But what’s the table in terms of Medicare?  What ideas are being talked about?

MARY AGNES CAREY: Well, Paul Ryan, of course, who heads the Budget Committee in the House, has a plan to limit the amount that the government would contribute per Medicare beneficiary.  A lot of Republicans think this is the way to control entitlement spending; the Democrats really disagree with that.  And they’ve done very well running against Paul Ryan on this plan, and talking against it.  So I think that Democrats are going to be reluctant to make any major changes to Medicare.

JACKIE JUDD:  And yet, Democrats have hinted at the possibility that they might be willing to consider some changes.

MARY AGNES CAREY:  Well, obviously, provider cuts is one place they could go.  The hospitals are very nervous about this; they’ve launched an ad campaign against that.  They could look at, perhaps, more means testing — more income [testing] for the wealthier beneficiaries, to have them pick up a greater share.  But I really think that Democrats are finding it a very successful route for them to campaign against the Paul Ryan plan, and that’s why I think they just aren’t going to agree to anything major on Medicare.

JACKIE JUDD: Today in the Senate, Sen. Lieberman, an Independent, formerly a Democrat, and Sen. Coburn, a Republican, introduced a bill about Medicare – how to change it.  What are the parameters of that legislation, that proposal?

MARY AGNES CAREY: Some of its provisions include a gradual increase in the Medicare eligibility age by two years, from 65 to 67.  You would have wealthier beneficiaries pay all of their premiums for Part D and Part B.  You would have – and again these are different parts of the Medicare coverage – the contribution that beneficiaries would make for Medicare Part B, which is doctor’s visits and other out-patient services, would rise from 25 to 35 percent.  But he also has a three-year Medicare physician payment fix in that bill, which might be appealing to people.

JACKIE JUDD: Why did they introduce it?

MARY AGNES CAREY: Why not?  We’re at kind of a crossroads here where entitlement spending may be in the mix.  People are looking for ways to reduce federal spending.  We’ve got this whole conversation about what concessions have to be made to raise the debt ceiling, and I think they just want to put it out there and see what happens.

JACKIE JUDD: What is your prediction – if you don’t mind me asking that?  What do you think will happen with the future of the deficit reduction talks? There’s the deadline, of course, of August 2, by which time Congress needs to either approve or not act on raising the debt ceiling. So, there’s not that much time left – there’s about a month. 

MARY AGNES CAREY: I think due to the difficulties of the policy issues themselves and the difficulties of the politics and the pressure of the calendar, you might see a short-term increase in the debt ceiling.  Both sides might agree, in good faith: let’s keep talking, let’s the raise the debt ceiling – but just by a small amount, go out of town for the August break, and then resume discussions again in the fall for that ceiling increase.

JACKIE JUDD: That’s something that Mitch McConnell floated last week?

MARY AGNES CAREY: Right.

JACKIE JUDD: Of course, what makes it a little tricky is that every time Congress delays, they get a little bit closer to the election season – which makes all of this, while difficult in any environment, even more so.

MARY AGNES CAREY: Sure, votes to raise the debt ceiling are never popular, and then every time those votes are taken, each side can extract something from someone else.  But I think Republicans want to look as if they are negotiating in good faith; Democrats, the same.  So this might be an interim step, a short-term increase, just to get them over the hump to continue these talks, which I think are going to be long and involved.

JACKIE JUDD: And we will be talking about it again.

MARY AGNES CAREY: Absolutely.

JACKIE JUDD: Thank you, Mary Agnes Carey of Kaiser Health News. 

MARY AGNES CAREY: My pleasure.