State of the Union address spotlights Medicare

White House photo

In last night's State of the Union address, which focused largely on the economy, President Obama dedicated his first minutes to the sequester, reinforcing the White House administration's priority to fixing the federal deficit.

The automatic budget cuts, including a 2 percent reduction in Medicare payments to providers, are set to hit March 1. Congress and Obama signed a 2011 deficit-reduction agreement that next month would trigger a trillion dollars' worth of automatic cuts to federal programs, particularly to defense.

Although he acknowledged rising healthcare costs are the biggest driver of long-term debt, Obama said cutting Medicare is an even worse idea than cutting defense programs, and that healthcare costs shouldn't be shifted to middle-class Americans.

The president didn't offer specifics on how to fix Medicare's insolvency, although he hinted at taxes on the wealthiest Americans and a bipartisan spirit toward a solution. He promised similar savings to the bipartisan Bowles-Simpson approach.

"Those of us who care deeply about programs like Medicare must embrace the need for modest reforms," he said.

The White House earlier this week rejected raising the eligibility age of Medicare beneficiaries from 65 to 67. With that off the table, pundits speculate Obama will call on "more from our wealthiest seniors," presumably an increase on Medicare premiums for higher-income seniors, The Washington Post reported.

"None of us will get 100 percent of what we want," Obama noted about the GOP.

Obama also supported pay for performance, rather than fee for service.

"We'll bring down costs by changing the way our government pays for Medicare because our medical bills shouldn't be based on the number of tests ordered or days spent in the hospital; they should be based on the quality of care that our seniors receive," he said.

As an emboldened second-term president, Obama reaffirmed his stance on supporting gay rights, raising the minimum wage, offering equal pay for women, reducing energy waste and urging gun control. Yet, Medicare is one issue that wasn't cemented with his reelection but instead left in the hands of Congress.

"Gay rights [were] settled in this election; social insurance [Medicare and Social Security] was unsettled in this election," Democratic pollster Anna Greenberg told Medicare News Group.

The one area Democrats and Republicans can agree on: Leaving it as is will lead to Medicare's demise.

"Anyone who is in favor of leaving Medicare exactly the way it is right now, is in favor of bankrupting it," Sen. Marco Rubio (R-Fla.) said in a follow-up address.

For more information:
- see the transcript of the address on ABC News
here's the Washington Post blog post
- read the Medicare News Group article
- check out the Rubio commentary from The Washington Post

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