Debt deal may impact Medicare

WASHINGTON (AP) - A debt-busting deal on the scale that President Barack Obama and House Speaker John Boehner had talked about would have all but guaranteed that people on Medicare would feel at least some of the pain.

But on Saturday evening, Boehner said he wouldn't seek the $4 trillion deficit reduction deal, but would seek $2 trillion in reductions.

The exact effects of that shift by Boehner weren't immediately clear.

Low-income people on Medicaid wouldn't have escaped totally under a major deal, either. If a deal ultimately led to overhauling taxes, workers and their families could be on the hook also, facing potential limits on the tax-free status of job-based health insurance.

Health care was a main ingredient on both the spending and tax sides of the elusive agreement that Obama and Boehner, R-Ohio, had been trying to reach.

The president has scheduled a meeting today with congressional leaders to keep pushing for a compromise that would reduce future deficits in exchange for lifting the $14.3 trillion cap on the national debt. Action is needed so the government can keep paying its bills beyond Aug. 2.

With Congress politically polarized and skittish about next year's elections, it's unclear whether there's any combination of Democratic and Republican votes to pass major deficit reduction that cuts benefit programs and raises revenue. Boehner's shift Saturday suggested there was not.

But many of the health-care options that negotiators were considering have been available for months. Proposals have come from the Obama administration, congressional advisers and bipartisan groups, such as Obama's debt commission.

For Medicare, possibilities included higher premiums for upper-income retirees and new copayments and deductibles that affect all but the poor. For example, seniors do not currently face a copayment for home care. That could have changed if there had been a major deal.

Obama's health care law already cut about $500 billion from projected payments to providers, and some experts say there's not much fat left there.

The smaller deficit-reduction deal, could reduce the likelihood that older people will take a hit.

Although Social Security previously had been considered untouchable, one measure under discussion would bring in close to $200 billion through a tweak that reduces benefits and increases the amount collected from payroll taxes.

A major proposal that would affect Medicare beneficiaries calls for changing the current cost-sharing rules, a hodgepodge of varying copayments and deductibles.