Talk of Medicare Changes Could Open Way to Budget Pact

New York Times

By JACKIE CALMES and ROBERT PEAR
Published: March 28, 2013

WASHINGTON — As they explore possible fiscal deals, President Obama and Congressional Republicans have quietly raised the idea of broad systemic changes to Medicare that could produce significant savings and end the polarizing debate over Republican plans to privatize the insurance program for older Americans.

While the two remain far apart on the central issue of new tax revenue, recent statements from both sides show possible common ground on curbing the costs of Medicare, suggesting some lingering chance, however small, for a budget bargain.

Mr. Obama assured House and Senate Republicans during recent separate visits that he could support specific cost-saving changes to Medicare and deliver Democratic votes, though only as part of a “balanced” package that had additional revenues.

Several changes are likely to once again be in his annual budget, which will be released on April 10, after Congress returns from its break. Mr. Obama also plans a dinner with Senate Republicans that night.

In particular, participants say, the president told House Republicans that he was open to combining Medicare’s coverage for hospitals and doctor services. That would create a single deductible that could increase out-of-pocket costs for many future beneficiaries, but also could pay for a cap on their total expenses and reduce the need to buy Medigap supplementary insurance.

Representative Eric Cantor of Virginia, the No. 2 House Republican, proposed much the same in a speech in February. “We should begin by ending the arbitrary division between Part A, the hospital program, and Part B, the doctor services,” he said. “We can create reasonable and predictable levels of out-of-pocket expenses without forcing seniors to rely on Medigap plans.”
While Mr. Cantor’s proposal got little attention at the time, its echo by Mr. Obama hints at a new route toward compromise — in contrast with the budget that House Republicans passed this month that has no chance of Senate approval.

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