Dueling Healthcare Proposals Submitted to Super Committee

House and Senate committees submitted on Friday their recommended budget cuts and reforms for the Joint Select Committee on Deficit Reduction, which has until November 23 to develop legislation to cut a mere $1.2 trillion from the federal budget over the next 10 years.

I thought it might be useful to take a close look at the Democratic and Republican proposals for healthcare spending reform. This task contains an assumption that the parties’ positions would be clearly stated. My bad. What I found instead is a big mishmash of policy statements wrapped in political dogma.

The biggest surprise is how the Democrats make their case to the “super committee.” Republicans are all about the dollars—Medicare spending increased from $37 billion in 1980 to $514 billion in 2010, for example. The Democrats take a more touchy-feely approach, citing the potential loss of Medicare benefits to people who depend on the coverage. There’s nothing wrong with that argument, but let’s face it, the debt committee needs to find a lot of money fast to cut from the budget. The Republicans seem more than happy to help.

Here’s a brief look at how the two political parties would address cuts to some specific healthcare programs. Let’s start with an easy one—the Patient Protection and Affordable Care Act (ACA).

The Republicans on the Senate Finance Committee would like the super committee to strongly consider repealing “this flawed and partisan health law as an essential step in improving our nation’s future economic and fiscal outlook.” In making its point, the group cites a Senate Budget Committee report that pegs the full implementation cost of the ACA at $2.6 trillion over 10 years.

House Democrats on the Energy and Commerce Committee, which includes healthcare, think it would be premature for the committee to eliminate the ACA. They don’t assign dollar amounts to the bill, but they do tug at the heart strings, noting that “many of the proposals to reduce spending would undermine programs essential to the health and financial security of lower-income and middle-class families.”

Republicans want the eligibility age addressed. They note that in 1965, average life expectancy was 70 years and there were five workers paying the benefits for each retiree. Today life expectancy is 79 years, Medicare spending has increased 13-fold, and only three workers pay the benefits for each retiree. Republicans want more cost-sharing, especially for high-income seniors.

Democrats contend that raising the Medicare eligibility age will lead to higher overall health spending. They see the prescription drugs and uncoordinated care as cost drivers for Medicare and have asked the super committee to focus on those areas. They also want the government to reinstitute the rebate that drug manufacturers used to pay in return for the large volume of patients they access through Medicare. They note that cost-sharing does nothing to control healthcare costs.

For Republicans, Medicaid is a significant cost driver that currently consumes 22% of state budgets. They want the super committee to revamp Medicaid by giving states more leeway to change the benefits offered and the program’s financing. Democrats want no part of blended rates or anything that threatens the federal dollars that flow to the states in support of Medicaid.

Reading the policy recommendations provides insight on why 535 members of Congress have happily put this budget debacle onto the backs of just 12 of their members: It’s hard, thankless work. The odds are that no one will be happy with the outcome.

I have no particular insight on how the super committee is approaching its work. But I do suspect that, once the 12 have made their proposals, the rest of Congress will be happy to let the automatic trigger do the dirty work. The automatic trigger, built into the super committee’s creation, will cut every program except Medicaid and reduce Medicare provider payments by 2%.

But as the saying goes, nothing is ever final in politics. AsJosh Barro, a Manhattan Institute fellow, pointed out in the New York Times, pulling the trigger on healthcare still leaves the option of unpulling the trigger. Many of the automatic cuts wouldn’t even go into effect until 2013. That’s a lifetime in politics with plenty of time to gauge electoral opinion and make changes.