Lieberman, Coburn unveil Medicare plan

Sens. Joe Lieberman (I-Conn.) and Tom Coburn (R-Okla.) acknowledged that there's something in their Medicare plan for just about everyone to dislike. But they say it's necessary to bring the program under control.

"Nobody's going to like this plan. We understand that," Coburn said at a press conference Tuesday as he and Lieberman rolled out their proposal.

Most of the plan's savings would come from some form of benefit reductions or shifting costs to seniors — a stark contrast to the Medicare cuts believed to be on the table in talks over the debt ceiling. Negotiators there are looking at cuts to healthcare industries after Democrats drew a line in the sand over benefit cuts.

But Lieberman and Coburn's proposal includes several politically risky benefit changes, such as making seniors pay more for their prescription drugs. It also would raise the eligibility age for Medicare.

"The sooner you take the strong medicine, the sooner you will get healthy again," Lieberman said.

He said he hopes the proposal will create a "bipartisan beachhead" on Medicare after years of acrimony and rotating partisan attacks. Both senators said they had to compromise: Lieberman gave up an income tax hike that he previously said would be part of his proposal. And Coburn signed on to a plan to make wealthier beneficiaries shoulder more of their costs.

"This has some pretty progressive parts to it," Lieberman said, "I mean, we're asking wealthy Americans to pay more."

The proposal would cap seniors' out-of-pocket costs depending on their income. The maximum would be set at $7,500 for people making less than $85,000 per year. Seniors with twice as much income would pay three times more in out-of-pocket Medicare costs.

Wealthy seniors also would pay more for their prescription drugs. Premiums only cover about 11 percent of the total costs for Medicare Part D, the senators said. They would require seniors to pay the full cost of their drug coverage. They said the change would free up between $5 billion and $10 billion in tax money.

The plan also would increase premiums for Medicare Part B, which covers drugs that are administered by a doctor. Part B premiums are more than $400 per year, and taxes currently cover only about a quarter of that cost. High-income seniors would have to pay the full cost of their Part B premiums under the Lieberman plan.

Both the changes to Part D and Part B premiums would only apply to seniors making more than $150,000 per year or couples making more than $300,000.

"While it includes some much needed reforms to the Medicare program that achieve significant savings, we are opposed to additional cuts to patient care services provided by hospitals given all of the reductions we are already being asked to absorb," said a spokesperson for the American Hospital Association.

The plan hasn't been evaluated by the Congressional Budget Office, but it estimated that it would save $600 billion over 10 years. The proposal also includes a three-year patch to the formula that Medicare uses to pay doctors.

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