Greg Sargent has more of the story about Tom Coburn’s unceremonious exit from the Gang of Six. We pretty much knew it had to do with Coburn seeking a global spending cap for Medicare. We didn’t know the details:
The “Gang of Six” talks on deficit reduction broke down after Senators Dick Durbin and Tom Coburn got locked in a heated yelling match over Coburn’s demand for extremely deep cuts in Medicare that Durbin thought would “destroy” the popular program, a Senate aide familiar with the talks tells me.
According to the aide familiar with the talks, the senators got into a heated argument on Monday night, after Coburn demanded an additional $130 billion in Medicare, in addition to the $400 billion in Medicare cuts recommended by President Obama’s fiscal commission, for a total of $530 billion in cuts for current recipients.
“Coburn came in on Monday and said, ‘I want $130 billion,’” the aide says. “The conservation was heated. There was yelling. Durbin said, ‘I am not doing this. That destroys Medicare. That goes even further than Paul Ryan. We’re not doing it.’”
I don’t know who this narrator is and what his or her motivations are. It’s a Durbin staffer for all I know. But we do know a few things from this:
1) They were using the Bowles-Simpson cat food recommendations for Medicare, which would have cut $400 billion from the program over a decade. That’s on top of the $500 billion in cuts, mainly from ending Medicare Advantage overpayments, in the Affordable Care Act. So what were those cuts? Here was the main briefing document from Bowles-Simpson. It includes:
Pay doctors and other providers less, improve efficiency, and reward quality by speeding up payment reforms and increasing drug rebates
Pay lawyers less and reduce the cost of defensive medicine by adopting comprehensive tort reform
Expand cost-sharing in Medicare to promote informed consumer health choices and spending
Expand successful cost containment demonstrations
Recommend additional health savings (illustrative examples to follow)
So Bowles and Simpson would establish a new payment system for Medicare with “modest reductions” for providers, and bargaining with pharmaceuticals for name drugs in exchange for letting them participate in Medicare Part D. But they also included that increase in “cost-sharing.” That means having program beneficiaries pay for more of Medicare. Bowles and Simpson wanted to eliminate first-dollar coverage in Medigap plans, and establish a universal deductible, a single coinsurance rate, and a catastrophic coverage cap in Medicare. Bowles and Simpson only got through half of this. Their final slide says “Identify an additional $200 billion savings in federal health spending,” meaning “you come up with it.” They would empower the Independent Payment Advisory Board to do that.
They also had a bunch of other ideas, like cutting federal spending on medical degree education, throwing dual-eligibles (for Medicare and Medicaid) into Medicaid Managed Care, and expanding other payment reforms. There were a host of non-Medicare health spending cuts they recommended too, mostly increasing co-pays for Medicaid, Federal Employee Health Benefits retirees and even Tricare. For the most part though not entirely, the Bowles-Simpson plan for health care was “make people pay for more of it.” That was the baseline of the Gang of Six. Everyone at the table was comfortable with that.
2) Coburn wanted to add an additional $150 billion of cuts on top of that. This, according to this account, would “destroy Medicare.” Above and beyond all the other cuts being made? How?
3) People believe that Durbin speaks for Obama in these negotiations. Then you have to say that Medicare will be a fundamental issue in the 2012 elections, as we’re already seeing. Dismantling the program or cutting it “too much” are the bright lines.
4) Coburn and his Republican colleagues like to say that current retirees “would not be affected” by the program. On the one hand, this means that, in order to reduce the burden of debt on our children and grandchildren, we’re going to increase the burden of health care on them. But looked at another way, this is nonsense. Coburn wanted immediate, near-term cuts on retirees.
So while the Gang of Six has basically been cashed, we can learn from this experience what Democrats were willing to give up, and what they weren’t. It’s not the prettiest of pictures.