Obama, Boehner Could Compromise To Address Looming Medicare Cuts

On Friday, President Obama and House Speaker John Boehner (R-Ohio) reiterated their willingness to work together to avoid the looming "fiscal cliff" of mandated spending cuts, which include cuts to Medicare provider payments, the Wall Street Journal reports (Lee/Hook, Wall Street Journal, 11/10).

The sequester involves about $1 trillion in across-the-board cuts, including a 2% reduction to all Medicare reimbursement rates in 2013 (California Healthline, 11/8).

During his first speech since winning re-election, Obama touted his plan to raise taxes on high-income U.S. residents to help reduce the deficit. He said, "[O]n Tuesday night we found that a majority of Americans agreed with my approach" (Rowland, "Political Intelligence," Boston Globe, 11/9). However, he added, "I'm not wedded to every detail of my plan. I'm open to compromise." According to the Journal, Obama also suggested that a deal could include changes to federal entitlement programs, such as Medicare and Medicaid (Wall Street Journal, 11/10).

Boehner on Friday said he would be open to a deal that raises tax revenue but not tax rates (Wall Street Journal, 11/10). As an alternative to Obama's plan, Boehner proposed "shoring up entitlement programs" and creating a new tax code with fewer loopholes (Vastag, Washington Post, 11/10).

Obama is scheduled to meet with Boehner and other congressional leaders on Friday to begin negotiations in earnest (Wall Street Journal, 11/10).

Congressional Leaders Still Divided Over Entitlement Reform

Meanwhile, lawmakers on Sunday illustrated that there still is a partisan divide over the role of entitlements in any debt deal, Modern Healthcare reports.

In an appearance on ABC News' "This Week," Sen. Saxby Chambliss (R-Ga.) said any deal to lower federal debt will need to include changes to Medicare and Medicaid. "Entitlements are choking us and we have to make the right kind of reforms to do it right and make sure we protect these programs," he said.

However, on the same show, Sen. Patty Murray (D-Wash.) argued against any debt solution that would raise copayments for Medicare beneficiaries, saying it "is not a fair and balanced way to get a deal" (Daly, Modern Healthcare, 11/11).

Medicare Changes Imminent, Experts Say

Former Senate Majority Leader Tom Daschle (D-S.D.) recently said there is little doubt "that entitlement reform will be a part of whatever new agreement is reached" on deficit reduction, MedPage Today reports. Daschle noted that cost-of-living adjustments for beneficiaries and a means test for Medicare are among potential cost-containment measures that could be considered.

Former Senate Majority Leader Bill Frist (R-Tenn.) agreed with Daschle that Medicare could be a source of cuts in any debt deal, adding that so could federal agencies -- including CDC, FDA and NIH. "That's a given," he said (Pittman, MedPage Today, 11/9).

Advocates Concerned That ACA Subsidies Are at Risk

In related news, health care advocates are concerned that lawmakers will seek to reduce the insurance subsidies offered through the Affordable Care Act as part of a larger deal to reduce federal spending, The Hill's "Healthwatch" reports.

Supporters of the law say such a deal could make the ACA less effective once it fully takes effect. Critics say the subsidies -- which are intended to help U.S. residents purchase health coverage -- are too large and should be scaled back (Baker, "Healthwatch," The Hill, 11/12).

Safety-Net Hospitals Also Express Concern

Although the Medicaid program is exempt from the looming mandated spending cuts under sequestration, safety net hospitals are concerned that Medicaid could be cut in the future, Modern Healthcare reports.

Shawn Gremminger -- assistant vice president for legislative affairs at the National Association of Public Hospitals and Health Systems -- said the Medicaid provider tax could be on the negotiating table as a cost-cutting measure. He noted that recent proposals have called for lowering the tax from 6% to 5.5%, which the Congressional Budget Office estimates would result in about $10 billion in savings over 10 years (Zigmond, Modern Healthcare, 11/10).