White House adviser: Obama willing to cut Medicare, but not Medicaid

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Sperling’s comments indicate the White House has come around to the position held by staunchly liberal members of Congress — including retiring Sens. Jay Rockefeller (D-W.Va.) and Tom Harkin (D-Iowa) — who said Medicaid should be the higher priority in budget negotiations.

“We have come to believe that it is not the time to make even those savings,” Sperling said, referring to the cuts the White House had proposed. “Not when this is the critical moment in implementing the Affordable Care Act.”

The White House’s upcoming budget proposal will reflect those priorities, Sperling said.

Medicaid has long been seen as an easier political target than Medicare, because Medicare serves older Americans. Although congressional Republicans support dramatic cuts in Medicare benefits, the party has also hammered President Obama for reducing payments to doctors and insurance companies by roughly $716 billion.

But the administration has decided to accept a fight over Medicare in order to protect Medicaid, Sperling said.

“It means we’re going to have to look harder for Medicare savings, and those savings may be more difficult politically because of he choices we’ve made,” Sperling said. “If you decide you are going to protect Medicaid more, it means you’re going to have to make some tough choices in other places.”

The push to prioritize Medicaid over Medicare is a result of the Supreme Court’s decision last year upholding the Affordable Care Act as constitutional. The decision gave states the ability to opt out of the law’s Medicaid expansion, which was set to provide about half of the law’s coverage expansion before the court’s ruling.

The federal government will initially cover the entire cost of the expansion, but some Republican governors don’t entirely trust Congress to follow through on those funding commitments. The White House is taking its Medicaid cuts — some of which would have shifted costs to the states — off the table to send a message to governors.

Governors who accept the expansion “should do so with the understanding that the rug will not be pulled out from them,” Sperling said Thursday.