Reflex: September 19, 2011

Obama to unveil plan for $3 trillion deficit reduction plan, writes Jeanne Sahadi. He intends to call for higher taxes on persons making more than $1 million per year as well as on corporations, and Sahadi reports that he will say today that he won’t consider cuts to Medicare without an increase of taxes on upper income persons of some sort. Don’s commentthe $3 trillion figure is around the size of the deal the President and the Speaker discussed in July. Obviously this is a bid in a negotiation and not a final deal, though his advisors say it is a broad range route to a sustainable budget future. If it is to be that, it will take some serious health policy steps that will have to be approved by the Republican House. The health policy proposals of the Fiscal Commission show ideas that garnered some bipartisan support in the past.

Obama’s plan expected to include cuts to Medicare providers and additional means testing of the program. Austin’s comment: Last night, I posted a round-up of some early media reports on how his deficit reduction plan would affect Medicare. AARP is on record as against means testing, though it has been part of the program since 2007. Providers are on record as against additional payment cuts, preferring to increase the Medicare eligibility age. If the cuts in Obama’s plan are greater than those that would occur under the trigger that would be pulled if the supercommittee fails ($123 billion), that’s another reason the health care industry might object.  

Officials opposed to U.S. health-care law seeking interstate compact, reports Guy Gugliotta. “State governors and legislators opposed to the federal health-care law are eyeing a novel approach to escape its provisions: joining an “interstate compact” that would replace federal programs — including Medicare and Medicaid — with block grants to the states.” Aaron’s Comment: This is a new tack. Trying to merge resistance to forming exchanges with Medicaid block grants. This is dangerous on a number of levels, because block grants may not be a magic bullet and states who don’t form exchanges may cede control to the feds.

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