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Obama on Medicare reform

By Jennie L. Phipps ·
Wednesday, February 13, 2013
Posted: 5 pm ET

Medicare reform was a big part of President Barack Obama's State of the Union address Tuesday night.

The president called for "modest reforms" to Medicare, saying, "Those of us who care deeply about programs like Medicare must embrace the need for modest reforms -- otherwise, our retirement programs will crowd out the investments we need for our children, and jeopardize the promise of a secure retirement for future generations."

At the same time, he rejected anything that undermines the fundamental promise of the program. "We can't just cut our way to prosperity," he said.

Then the president outlined some reforms that he would encourage. Most of them were also included in his most recent budget proposals:

Reduce payments to drug companies. The administration's budget proposals specify making payments for prescription drugs match what drug companies are paid by the federal Medicaid poverty program.

Ask wealthier seniors to pay more. Right now, couples who have modified adjusted gross income or MAGI, plus nontaxable interest income together totaling $170,000 -- $85,000 for single taxpayers --  already pay more for Medicare, with their costs escalating as their incomes rise.

Changes to the way hospitals and doctors are paid, focusing on performance-related incentives. The president said in his speech, "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."

Obama left the door open to other cost-saving proposals. "I am open to additional reforms from both parties, so long as they don't violate the guarantee of a secure retirement. Our government shouldn't make promises we cannot keep -- but we must keep the promises we've already made," he said.

It all seems a little vague, but somewhat comforting to those of us who are doing retirement planning and who must rely on this vital health care program.

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Tony Ho
February 14, 2013 at 1:11 pm

Mr.President, you tell us that we cannot cut our way to prosperity. But look at your Medicare reform proposals, which include more "cutting" than anything else. If implemented, seniors will most likely pay more to keep their own doctors and the brand name drugs they prefer.

February 14, 2013 at 12:55 pm

I hear a lot of political animosity here. That's the reason why nothing gets done in Washington. Everyone wants to preserve their political Brand. Years ago, both parties had ample opportunity to fix Medicare and Social Security, but they all kicked the can down the road. Years ago, with minor financial adjustments, both systems could be on sound financial footing today. If you want to fix something, you have to leave your ego, and your party affiliation at the door. You have to sit down at the negotiating table and be reasonable, and do what's best for the American people, not what's best for your political party. Congress doesn't understand that.

February 14, 2013 at 12:29 pm

why doesn't medicare increase our coverage to 100% and charge an additional $75.00. right now i pay $150..0 for supplemental insurance which only cover s20%. i think that this would benefit everyone concerned. medicare would realize much needed income and i would save 75.00

February 14, 2013 at 12:21 pm

Beware Seniors. Healthcare in this country is on the decline. Thanks to Obamacare.

James R Allen
February 14, 2013 at 12:20 pm

The Free Market works everytime it's tried. When the goverment and attorneys stops stealing from patients and doctors. Then I could afford to pay for my own healthcare. Doctors could charge affordable fees and practice medicine according to the Hippocratic oath they take. I want the resposiblity for my own healthcare and the freedom to choose and pay for the best physicians and healthcare providers of my choice. Since when did burecratic academic healthcare administrators who have never seen or treated a patient in their lives earn the right to tell my doctor what is the best course of treatment in my situation.

February 14, 2013 at 12:20 pm

This TWO-BIT Jerk is nothing but a liar.

February 14, 2013 at 12:17 pm

While some of Medicare is paid for via a specific payroll tax, most is paid for through general tax revenues. It's interesting that the Veterans Administration is allowed to negotiate lower drug prices with the drug companies, but Medicare is not. On drug pricing alone, Medicare could save over $25B a year. Doctors and clinics need to abandon the fee for service profit model, which drives up costs. Clinics like Mayo pay their doctors a salary, which is not based on the number of patients seen or the number of tests ordered. Also, the AMA for years has recommended keeping a cap on the number of doctors in the field. So, now we will be facing a significant shortage, with many baby boomer doctors retiring. Let the free market determine the number of doctors required, not the AMA. There is no shortage of ideas on how to reduce medical costs, but congress is bought and paid for by the drug companies and the AMA.

February 14, 2013 at 12:04 pm

Yup, I agree. He has a gift of gab.

worried citizen
February 14, 2013 at 12:00 pm

His policies are the worst ever.

Pat Grieninger
February 14, 2013 at 11:47 am

Our President has a wonderful way of talking and saying nothing.
Nobody's giving seniors Medicare-they've paid for it-like another tax.