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WASHINGTON — For decades, those older than 65 have relied on Medicare.
But now the 47-year-old government health insurance program for seniors is straining under an onslaught of financial pressures that come with an aging population of baby boomers and expensive advances in medical technology.
What to do with the program is a potent campaign issue, and the two candidates vying for Nebraska's open U.S. Senate seat, Democrat Bob Kerrey and Republican Deb Fischer, have very different ideas about the best way forward.
He wants to make a slew of Medicare changes that would save the government more than $400 billion over 10 years, drawing from existing bipartisan proposals.
His plan includes setting a single annual deductible for hospital and doctor visits and requiring drug companies to provide the same rebates to people eligible for both Medicare and Medicaid as they provide people only on Medicaid.
The biggest item on his list would require using premiums to cover 35 percent of program costs for Medicare Part B.
That likely means higher premiums for beneficiaries.
“Still, you're only paying 35 percent of it,” Kerrey said.
She is resistant to changing what the program provides current seniors, saying the government must keep its commitments to seniors who lack the time and means to make alternate plans.
Fischer's short-term approach to the problem would be prioritizing the federal budget to make sure Medicare tops the list.
Pressed for specific offsets in the budget, Fischer pointed to only one proposal from Sen. Tom Coburn, R-Okla., which is aimed at cutting waste and fraud out of Medicare. Backers say that measure could save billions, but it's unclear exactly how much.
Medicare cuts in the new health care bill
He says keep the $716 billion in cuts. The idea is that hospitals won't need as much reimbursement because they won't have to provide care to as many uninsured patients, since millions of people will gain health insurance from the law.
Kerrey conceded that the cuts could have consequences.
“You can't cut spending and not have it affect somebody in a negative way,” Kerrey said. “But it does extend the life of the program.”
The Medicare trust fund was projected to be tapped out by 2016. The cuts in the health care law push back that date to 2024.
She wants to repeal the new health care law and restore $716 billion in Medicare spending cuts included in the new health care law. Those mostly involve reduced reimbursement rates for hospitals.
Fischer points out that Richard Foster, chief actuary for the Centers for Medicare & Medicaid Services, has estimated that 15 percent of medical service providers could become unprofitable as a result of the health care law's cuts, which could lead to hospitals going out of business or opting not to accept Medicare patients.
“That will affect seniors,” Fischer said.
Down the road
The combination of the $716 billion and his $400 billion in proposed savings still wouldn't fix the problem, he said. “All you're doing is extending the life,” he said. “It's a real challenge.”
He said other avenues to explore are promoting preventive care and starting the national discussion about what procedures are medically necessary.
Those younger than 40 know they need to adjust their expectations of Medicare and what it will provide, Fischer said. She floated raising the program's eligibility age from 65 to 68 or instituting means testing for those now younger than 40.
“It's going to be a different program that they're going to have, and Nebraskans know that,” she said of young people. “I've been talking about this for a year and a half. Nebraskans understand it. They know it's not sustainable the way it is and that changes have to be made.”
He said his starting point is to preserve the program and stem the tide of red ink. He said no candidate can be serious about balancing the budget without supporting serious Medicare reform. He has criticized Fischer for offering few specific proposals.
“There's only two sides of this thing — either you ask beneficiaries to pay more or you say to providers you have to take less,” he said.
She said it makes sense to wait and see the proposals on the table if and when Nebraskans send her to Washington.
“It's not dodging a question to say you need to wait until you have the proposals before you as a senator,” Fischer said. “That's when you can dig into it and look at it and see what the effects are.”