'Modest' Medicare cuts from Conrad to draw contrast with GOP

Senate Budget Committee Chairman Kent Conrad (D-N.D.) is looking to strike a sharp contrast with House Republicans when he unveils his budget proposal in coming days.

Conrad told The Hill that he will suggest only modest cuts to Medicare to pay for the so-called doctors’ fix — the scheduled cuts to doctors’ Medicare payments that Congress delays annually.

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A Democratic source briefed on the proposal said the health savings in Conrad’s budget plan would offset the cost of a multi-year doctors’ fix. Conrad would not cut Medicare significantly to pay for deficit reduction, the source said.

“There are savings in Medicare, modest savings to pay for the doc fix,” Conrad told The Hill.

He said he would leave it up to Senate Finance Committee Chairman Max Baucus (D-Mont.) to decide the specific cuts.

“We don’t specify them because we don’t decide that, the Finance Committee decides that,” Conrad said.

A one-year freeze in scheduled cuts in doctors’ payments would cost $15 billion. A permanent fix would cost up to $300 billion over ten years. Those figures would vary depending on the new payment scheme put in place.

A lobbyist for a doctors’ trade association said he expected a ten-year fix but added that Conrad had refused to release details.

A senior Democratic aide said Conrad’s budget will draw a clear distinction with House Republicans on Medicare. 

“It’s important to have a contrast with the House Republican budget that ends Medicare to pay for more tax cuts for millionaires,” the aide said Friday.

The aide said Senate Democrats would pursue the vision for reforming Medicare that President Obama outlined in a speech at George Washington University last month.

Obama wants to curb the cost of Medicare by reducing the mounting cost of healthcare services. 

Obama called for reducing wasteful subsidies and erroneous Medicare payments; using Medicare’s purchasing power to negotiate better prices for beneficiaries; speeding generic drugs to the market to reduce seniors’ healthcare costs; and relying on an independent commission of doctors, nurses and medical experts to recommend ways to eliminate unnecessary Medicare spending. 

Conrad briefed his colleagues on the latest version of his budget outline during a midday meeting in the Capitol Thursday.

One lawmaker who attended the meeting said Conrad did not endorse empowering the secretary of Health and Human Services to negotiate drug prices on behalf of all Medicare beneficiaries.

Sen. Al Franken (D-Minn.), who earlier this year introduced legislation to that effect, argued in the meeting that giving the federal government authority to negotiate drug prices was an essential strategy for reducing government health spending, according to the source.

Franken’s spokesman declined to comment on discussions at a private meeting.

The lawmaker also said that Conrad would focus Medicare spending cuts on Part B of the entitlement program, which helps pay for physician services, outpatient care and home healthcare.

Conrad is hoping to unveil his budget plan this week but he still has to settle differences with liberal colleagues in his caucus.

He said the numbers in his budget plan were not finalized as of Thursday evening.

“Nothing is decided until everything is decided,” he said. “Not everything is locked down.”

A spokesman for Conrad signaled he would delay plans to mark up his budget plan early this week.

“While Chairman Conrad was hoping a mark up could take place as early as the beginning of next week, his discussions with colleagues are continuing,” the aide said.

Sen. Bernie Sanders (I-Vt.), a leading liberal advocate of protecting Social Security and Medicare benefits, said he has a fundamental disagreement with most of his colleagues after leaving Conrad’s briefing.

But he said while Democrats in Washington may be persuaded to support cuts, they will find it tough to push that argument outside the Beltway.

“This isn’t going to be won inside the Beltway, it’s going to be won outside the Beltway,” he said.

Another liberal member who attended the meeting said Conrad’s plan is “not as bad” as the plan laid out by House Budget Committee Chairman Paul Ryan (R-Wis.).

“It doesn’t voucherize Medicare,” the lawmaker said.

Ryan’s plan would create a premium support system to help seniors buy health insurance on the open market. Democrats estimate it would increase the out-of-pocket costs for an average beneficiary from $6,000 a year to $12,000.

Conrad took a hard line against Ryan’s Medicare reforms and rejected a similar premium support system endorsed by the former White House budget director Alice Rivlin and former Sen. Pete Domenici (R-N.M.).

“He has dramatic cuts in taxes for the wealthiest among us and finances that by draconian cuts to those of us who are dependent on Medicaid and Medicare," Conrad said of the Ryan plan last month.

Some Republicans appear to be backing away from Ryan’s plan in recent days.

House Ways and Means Committee Chairman Dave Camp (R-Mich.) said he does not plan to mark up legislation implementing Ryan’s Medicare reforms.

But House Republicans pushed back against reports that they are retreating from plans to reform Medicare.

Aides said Republicans would continue to advocate for the Ryan plan in the coming months en route to making it a big issue during the 2012 campaign.