California Healthline Daily Edition

Summaries of health policy coverage from major news organizations

Obama Starts Tour To Pitch Deficit-Reduction Plan as Benefiting Care

On Tuesday, President Obama launched a three-day, three-state tour to promote his new proposal to reduce the federal deficit, the Washington Post reports.

The plan would cut the deficit by $4 trillion over the next 12 years through a combination of spending cuts and tax increases on high-income U.S. residents (Wilson, Washington Post, 4/19).

The tour -- which incorporates town hall-styled meetings with voters -- began in Annandale, Va., and continues in Palo Alto, Calif., on Wednesday, before ending in Reno, Nev., on Thursday (Pace, AP/San Francisco Chronicle, 4/20).

Details of Obama's Plan

Under Obama's proposal -- which he announced during a speech on April 13 -- $480 billion would be cut from Medicare and Medicaid, but Obama promised that his plan would preserve the programs. The plan is separate from Obama's fiscal year 2012 budget proposal, which he unveiled in February.

Obama said his deficit reduction plan also would:

  • Reduce Medicare growth per beneficiary to the growth of gross domestic product per capita plus 0.5%. The federal health reform law aims to hold Medicare spending growth to GDP expansion per capita plus 1%;
  • Strengthen the Independent Payment Advisory Board -- created under the health reform law -- and require the board to make recommendations to Congress if spending exceeds the new limit;
  • Give IPAB more enforcement mechanisms, including an "automatic sequester" to cut spending; and
  • Make significant cuts to military spending and levy higher taxes on high-income U.S. residents to achieve more savings.

Obama's deficit-reduction blueprint also would direct the federal government to pay states a single "blended" rate for Medicaid and the Children's Health Insurance Program that would apply to current beneficiaries and those who will enroll following a program expansion in 2014. While the government currently pays up to five different rates for the two programs within any given state, Obama's plan would authorize the government to adjust its payments according to states' wealth.

Obama added that his plan would:

  • Implement stronger efforts to curb abuse and fraud in Medicare and Medicaid filings, as well as stronger incentives for hospitals to reduce medical errors and unnecessary readmissions; and
  • Encourage pharmaceutical companies to grant rebates to U.S. residents who qualify for both Medicare and Medicaid, known as "dual eligibles."

Finally, if the federal debt is not stabilized by 2014, Obama's plan includes a "debt failsafe" that would make spending cuts across most programs, with the exception of Medicare, Social Security or low-income programs (California Healthline, 4/14).

Criticizing Ryan's Proposal

During the tour, Obama -- as he demonstrated at the first town-hall meeting on Tuesday at Northern Virginia Community College -- is expected to push back against House Budget Committee Chair Paul Ryan's (R-Wis.) fiscal year 2012 budget resolution (H Con Res 34), which seeks to overhaul Medicaid and Medicare, according to National Journal (Madhani/Kaplan, National Journal, 4/19).

Ryan's plan would make $6 trillion in federal spending cuts over the next decade and attempt to repeal and defund the health reform law. The plan would provide Medicare beneficiaries with lump-sum vouchers to purchase private insurance and give states fixed annual block grants of $11,000 per Medicaid beneficiary to use as they choose. The House approved the plan on April 15. The Democrat-controlled Senate is not expected to approve the bill (California Healthline, 4/19).

Obama told the crowd of students and area residents at NVCC, "I think [the House GOP plan] is the wrong way to go," adding, "That would fundamentally change Medicare as we know it, and I'm not going to sign up for that" (Wolfe, USA Today, 4/19).

Democrats Launch First Advertisements Criticizing Ryan Plan

On Tuesday, the Democratic Congressional Campaign Committee launched an advertisement criticizing Ryan's proposal to overhaul Medicare, the Wall Street Journal's "Washington Wire" reports.

The 30-second ad -- featuring an elderly man who runs a lemonade stand, mows a lawn while pushing a walker, and works as an exotic dancer -- is designed to illustrate how the Ryan plan might force seniors to seek alternative sources of income to pay for their Medicare coverage (Yadron, "Washington Wire," Wall Street Journal, 4/19).

According to the Post's "The Plum Line," the DCCC hopes to raise $25,000 over two days to air the "lighthearted spot" in House Speaker John Boehner's (R-Ohio) district (Sargent, "The Plum Line," Washington Post, 4/19). A radio version of the ad also began airing in 25 Republican districts on Tuesday ("Washington Wire," Wall Street Journal, 4/19).

Poll Finds Voters Favor Tax Hikes Over Medicare, Medicaid Cuts

Meanwhile, a new Washington Post/ABC News poll released on Wednesday found that a majority of respondents oppose plans to reform entitlement programs and instead prefer proposals to increase taxes on high-income residents (Cohen/Balz, Washington Post, 4/20).

According to the poll, which surveyed 1,001 adults between April 14 and April 17, just 21% of respondents support proposed cuts to Medicare, and 30% support the reduction proposal for Medicaid. Meanwhile, 78% said they oppose the Medicare cuts, and 68% are against efforts to cut Medicaid. In addition, 72% of respondents said they favor Obama's proposal to raise taxes on individuals with annual incomes exceeding $250,000 (Epstein, Politico, 4/20).

Opposition Grows Toward IPAB

In related news, there is growing bipartisan opposition to IPAB, the 15-member panel of health experts charged with controlling Medicare spending that Obama is seeking to strengthen, the New York Times reports. Legislation to repeal IPAB is pending in the Senate (S 668), while similar legislation (HR 452) in the House has drawn bipartisan support (Pear, New York Times, 4/19).

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