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What President Biden and Republicans are saying about funding Medicare


Now we want to turn our attention to President Biden's proposed budget, which he released this past Thursday. The $6.8 trillion budget contains a list of his priorities for the upcoming fiscal year, and of course, it covers all functions of the federal government from defense to the national parks. But we want to drill down on one thing - Medicare. That's the federal health insurance program for people aged 65 or older. President Biden made a point of emphasizing his commitment to the program in an op-ed for The New York Times, saying his plan will shore up the program's finances so no one need worry that it will be there when they need it. Now, Republican leaders insist that Medicare is off the table as negotiations over the debt ceiling are set to begin in Washington, but others in the party have floated the idea of making changes over time, including benefit cuts, saying that's going to be necessary.

We wanted to better understand what this is all about, so we've called Julie Rovner, a veteran health policy journalist. She's the Washington correspondent for Kaiser Health News, and she hosts their weekly health policy news podcast, "What The Health?" And she's with us now. Julie Rovner, welcome back. Thanks for joining us.

JULIE ROVNER: Thanks for having me.

MARTIN: Could - so could you just kind of frame the issue for us here? Like, why is President Biden making such a big deal out of his commitment to Medicare? And just - what is the issue here?

ROVNER: Well, I think that the way to think about this is that there's basically three ways to make Medicare cost less, and we do know that the - Medicare's trustee says that within six years, the trust fund is going to run out of reserves, and so it won't be able to pay all of the current benefits. So basically, in order to bring down the cost, you can make the people who are on the program pay more, you can make taxpayers who help support the program pay more, or you can pay health care providers - doctors and hospitals and all those folks - less. So those are your three options. Everybody considers any of those things, quote-unquote, "cuts," although paying providers less is usually only considered a cut to the providers.

MARTIN: Well, they matter.

ROVNER: Yeah, they do.

MARTIN: They matter if they stop providing.

ROVNER: I was just going to say, if the cuts get too big, and they say we'll walk away from the program, that's a problem too. But Medicare is very popular, and I think in the State of the Union, when the president said he wasn't going to do anything to Medicare, people sort of slapped back and said, but Medicare is going to go broke if we don't do anything. So in the budget, he said, well, here are a couple of things that we could do, none of which affect how much beneficiaries pay.

MARTIN: OK, so give us the top lines of what he's proposing.

ROVNER: It's actually fairly small. Last year, for the first time, Medicare was given legal permission to negotiate the price of drugs. There is a short list of drugs. This budget would make the list longer, and it would have those negotiations happen faster. It would also raise a tax on very high-income earners - those earning over $400,000. They'd raise that tax from 3.8% to 5%.

MARTIN: So the president says that the Republicans need to release their budget priorities. Republicans have said that they can balance the budget over the next decade, but they won't touch Medicare. Is that a credible stance?

ROVNER: It is, but only if they go after Medicaid, the actually larger program for people with low incomes, and the subsidies on the Affordable Care Act, which the president has now also said he won't go after. It is possible, but you would have to cut so much from the rest of the budget if you don't do anything about Medicare and Social Security. That's why we haven't seen a Republican plan yet. They're still trying to figure it out.

MARTIN: Senate Minority Leader Mitch McConnell has already said publicly that the Biden budget agenda, especially his plan to increase the Medicare tax on high earners, quote, "will not see the light of day," unquote. So what are we likely to see next?

ROVNER: Well, at some point, you know, the two parties are going to have to come together before the Medicare trust fund runs out of money. This is not the first time we've been within this close period where the trust fund could run out of money. It's happened several times in the past. Eventually, the parties do get together and figure out some way to shore it up. And I'm sure that will happen this time, too, but I suspect this year is going to be more of a fight leading up to the 2024 elections.

MARTIN: And as we said, the talks over the debt ceiling is approaching. The leaders of both parties have said that Medicare is off the table. But there is a caucus within the Republicans that are very eager to advance budget cuts somehow, or at least spending cuts somehow or spending caps somehow. Forgive me for asking you to speculate, but is it conceivable that Medicare won't be implicated at some point in these talks?

ROVNER: Oh, no. Of course Medicare is going to be implicated at some point in these talks. First of all, what Republican leaders say is not necessarily what all of the Republican rank and file will do. It's true of the Democrats, too, so it's hard to imagine that it won't be put on the table in some way, shape or form.

MARTIN: So what are you going to be paying attention to as these discussions continue over the next couple of weeks and months, really?

ROVNER: Yeah. You know what they - what the proposals are, as I say, they - something needs to be done to Medicare lest it run out of money. So I think that pretty much the entire federal panoply of health programs is going to be up for discussion, and that's what I'll be watching.

MARTIN: And before I let you go, what about the public? I mean, I think if you watch, you know, broadcast television - the people who still watch television that actually has commercials - you know, there's just been a flood of commercials around Medicare in recent weeks, at least, you know, where I live. And I'm just wondering, is this the kind of subject that the public really can focus on? But is this the kind of thing that the public can really get galvanized around?

ROVNER: It can and it can't. What we've seen recently in all the ads have to do with a payment issue within Medicare Advantage, which is the private alternative to Medicare that the government does help pay for. And basically, it's the managed care industry having an argument. But if - as you said at the top, if cutting back payments to managed care companies means that they'll have fewer benefits for the beneficiaries, then people really could get behind that, so the trick is, you know, how this gets negotiated and how it gets presented to the public as to whether it will actually affect their health care.

MARTIN: That was Julie Rovner. She's the Washington correspondent for Kaiser Health News and host of their weekly health policy news podcast, "What The Health?" Julie Rovner, thanks so much for sharing these insights with us once again.

ROVNER: Thank you.

(SOUNDBITE OF JAZZINUF SONG, "MOONSTONE") Transcript provided by NPR, Copyright NPR.