On Medicare, Lieberman is a Gang of One

WASHINGTON — With his sweeping Medicare proposal, Sen. Joseph I. Lieberman has shown he maintains a knack for generating political buzz and drawing fire, from pundits and politicians.

First came the scathing column by the Nobel-Prize winning economist and New York Times columnist Paul Krugman. “Every once in a while a politician comes up with an idea that’s so bad, so wrongheaded, that you’re almost grateful,” Krugman wrote of Lieberman’s Medicare plan.

Then, there was the reaction from his colleagues on Capitol Hill.


Sen. Joseph I. Lieberman

“I think Joe is a fine senator, and it’s a terrible idea,” said Sen. Dick Durbin, D-Ill., the Senate’s No. 2 leader and a key player in the current congressional budget talks. “Could I be any clearer?”

Rep. Jim Himes, D-4th District, who has embraced the need for Medicare and Social Security reforms, said Lieberman’s proposed solution “raises more questions than it answers.”

Lieberman might be glad that other top lawmakers, including the chairmen of the Senate budget and finance committees, said they couldn’t comment because they had not read his outline yet.

Lieberman said Tuesday that he knew his ideas were going to be controversial, but he dismissed the suggestion that the initial reaction meant the measure would be dead before it was even formally introduced.

As it is, Medicare is at the center of a political firestorm over the nation’s annual deficits and accumulated debt. House Republicans have called for privatizing the health insurance program for seniors as a way to save billions of dollars. Democrats have blasted that idea and said Medicare should not be a part of the current budget and debt negotiations, which are being led by Vice President Joe Biden.

Lieberman said he’s aiming for the political middle with his new plan. The Connecticut independent unveiled his reform proposal in an op-ed published in the Washington Post on Friday.

“Congress has turned the Medicare funding crisis into another excuse for partisan pugilism,” he wrote in the Post op-ed. “It is enough to make you want to become an independent.”

Lieberman said he was still drafting the Medicare legislation, and he only spelled out his ideas in broad brush fashion. But the most contentious provision calls for gradually raising the Medicare enrollment age, now set at 65, starting in 2014; by 2025, the elderly would have to wait until they turn 67 to be eligible for the government health insurance program.

“When Medicare was created, the average life span in America was just under 70 years,” Lieberman said in an interview Tuesday. “Today it’s over 78 years.” And the average beneficiary, he added, receives significantly more in benefits paid out by Medicare than they’ve paid into the system over the course of their working life. “This is one way to try to keep the program alive, by slowly raising the eligibility age,” he said.

Critics say it could actually make Medicare more expensive. Krugman, among others, say that by pushing up the enrollment age, it could leave 65 and 66-year-olds with no insurance, increasing costs to the overall health care system and making those patients sicker when they are finally eligible for Medicare.

“What do people who retire at 65 do with a two-year gap?” asked Himes. “This is not your best-insured population. It’s older people with health care needs… It’s hard for me to believe that this in the long run it saves money.”

Rep. Joe Courtney, D-2nd District, echoed those concerns and raised others. He noted that the youngest Medicare patients are often the healthiest, so kicking them out would deprive Medicare of their co-pays and deductibles.

Lieberman’s idea is also “blind to the brutal environment in the [insurance] market for people 55 and above,” Courtney said, noting that private insurers aren’t eager to cover this potentially expensive population and price their products accordingly. “You always run into people who are literally counting the days until they turn 65 and can get their card,” Courtney said.

Lieberman responded to that criticism by pointing to federal health reform, saying that law will provide new insurance options all Americans, including elderly people who retire before they hit 67.

Health reform “will now be there for a lot of lower [and] middle-income people who don’t have insurance,” he said. “In some ways, they may get better coverage in the exchanges than they get now in Medicare.”

And some budget experts have come to his defense, saying that hiking the retirement age would save even more than Lieberman has estimated and would only have a modest impact on the uninsured.

The eligibility age provision was by far the most controversial element of Lieberman’s outline. But he sketched out several other elements that are likely to spark opposition as well.

Among the main elements of his proposal:

  • Adding co-pays for home health care services, lab work, and skilled nursing care, as well as creating a combined annual deductible of $550 and uniform 20 percent co-pay.
  • Raising premiums that seniors pay for physician visits, outpatient care, and other medical services so they cover 35 percent of the program’s costs.
  • Limiting supplemental insurance-called “Medigap” policies–that seniors often purchase in the private market to cover gaps in the government program. Critics say these policies lead to over-use of medical services, because seniors are then only liable for minor out-of-pocket health expenses so they have no incentive to limit their health care. Among other things, Lieberman’s measure would bar Medigap policies from covering more than half of a patient’s deductible.

But those ideas aren’t likely to get a favorable reception either, at least among Democrats.

Courtney said he didn’t see Medigap policies as a major cost-driver in the system.

Sen. Richard Blumenthal, D-Conn., said there were many other more productive ways to address over-use and inefficiencies the health care system, such as a greater focus on preventive care and reducing medical mistakes. Blumenthal said he’d like to see more specifics, but added, “on balance, I’m skeptical.”

Durbin, for his part, couldn’t even bring himself to address the other provisions in Lieberman’s plan, because he was so fixated on the enrollment age issue. “The notion of allowing people to be vulnerable for another two years of their life to me is totally unacceptable,” he said.

“We need a big conversation about Medicare,” Durbin conceded, “because it is not as strong as we want it to be. And the cost of health care makes it even more problematic. [But] I think raising the age on Medicare is a nonstarter.”

Lieberman said he fully anticipated such criticism. “There’s no way to fix Medicare for the long run without doing things that are going to make some people unhappy,” he said.

He said he intentionally put forward his proposal without seeking co-sponsors or allies.

“I have a certain liberty as an independent, and maybe because I’m not running again, to say our country is really heading for a terrible financial disaster unless we show some response,” said Lieberman, who is retiring at the end of his current term. “The end result is that Medicare’s going to go bust and the federal government is going to come to a catastrophic financial tipping point.”

Some of his colleagues would say that’s an overstatement. But Lieberman says the only way to enact needed changes is by making a bipartisan push that combines provisions anathema to both parties: cutting benefits and raising taxes. If the idea comes from a Republican or a Democrat, he said, “Everybody jumps on it.”

So he’s going solo, for now. As he finishes turning his plan into legislative language, he said, he’s going to write to all of his Senate colleagues. “I’m going to ask if anyone want to join me in offering this or … do they have other ideas?” he said.

He already has at least one nibble, although it’s not from the Senate’s best-known consensus builder. Sen. Tom Coburn, a hard-charging fiscal conservative from Oklahoma, said Tuesday that he and Lieberman were working on a Medicare proposal, although he was coy about the substance and goal of their talks.

Coburn was part of the so-called “Gang of Six,” a bipartisan group of senators who were working on a sweeping fiscal deal aimed at addressing the nation’s long-term budget problems. But he recently abandoned that group, saying they wouldn’t go far enough in cutting Medicare.

“Sen. Lieberman and I are working on a lot of things together on Medicare right now,” Coburn said Tuesday. Asked what he thought of Lieberman’s plan, Coburn responded: “I don’t want to comment on it. When we have an agreement, we’ll come together and we’ll announce what we have.”

Lieberman was similarly circumspect about any possible alliance with Coburn, who critics have dubbed “Dr. No” for his prolific use of the filibuster. Lieberman said Coburn’s staff called his staff after his op-ed appeared, and their offices have been informally talking since then.

“He seems interested,” Lieberman said. “It hasn’t gone further than that.”