Limiting Medicare Benefits Worsens Gap Between Hill Democrats

“People won’t feel like there’s a membership for them. You are creating real divisions, ”said House Appropriations Chair Rosa DeLauro (D-Conn.).

The idea of ​​a means test resurfaces this week, in a series of demands that Senator Joe Manchin addressed to Senate Majority Leader Chuck Schumer in which he outlined his criteria for a $ 1.5 trillion package. While many Democrats reject the idea, health industry groups like the American Dental Association argue that limiting the scope of extension of coverage frees up funds for other party priorities in matters. health.

“If you have scarce federal dollars, this is where you want to put your money,” said Michael Graham, senior vice president of government affairs for the dental group, which is pushing Congress to offer the new dental benefit only to people. having an income below 300 percent of the federal poverty line – or about $ 39,000 per year.

Because traditional Medicare would pay dentists much less for services than private insurance, members of the group would lose money if Democrats did. tens of millions of seniors eligible for government sponsored plans.

Health insurance premiums are already tied to income, with richer seniors paying more for Part B and D coverage. But critics of Manchin’s approach argue that imposing higher income thresholds adds burdens to the middle class and affects more beneficiaries each year. Legislators weigh other cost controls, such as funding new benefits for just a few years or stagger their deployment.

Loren Adler, associate director of the USC-Brookings Initiative for Health Policy, said that while there are valid arguments for not subsidizing the wealthiest people, control over resources could end up limiting the new benefit to more patients. older and sicker – aggravating the risk pool and creating new financial constraints on the program. There is also the added administrative burden of verifying the incomes of seniors each year to determine their eligibility, and the likelihood that some low-income people may not know or be able to prove that they qualify.

“There is an element of simplicity in just giving everyone the advantage,” he said. “In retirement, your income fluctuates even more than when you work, and distributions from retirement accounts can be windfall profits. If you exclude people from the program and then allow them to reapply the next year, the amount of money you save might be so small that it doesn’t outweigh the added complexity.

The means-tested debate unfolds as Democrats struggle to incorporate a host of health care priorities into the Social Spending Bill, HR 5376 (117). With an overall cost likely to drop to $ 1.5 trillion over a decade, the arguments of the centrists grow stronger.

“Let’s have a targeted agenda for those who really need it,” said Rep. Kurt Schrader (D-Ore.), One of the many House lawmakers allied with Manchin. “We can’t afford, and it doesn’t make sense, to give money to people who make $ 400,000 or $ 500,000 a year.”

A means test for Medicare was repeatedly considered during tax clashes between former President Barack Obama and congressional GOP leaders, but was ultimately rejected. Indeed, no one in the 56 years of the program has ever been excluded from any wealth-based benefit.

Senate Finance Chairman Ron Wyden (D-Ore.) Confirmed, following Manchin’s demands, that there be active debate among Democrats in the upper house who have yet to finalize their own version of the package.

“We have colleagues who offer a variety of opinions on when [the dental, vision and hearing benefits] should start, who is covered and to what extent, ”he said.

The American Dental Association aims to have a leading role influencing the bottom line, buying digital ads, sending tens of thousands of emails to Capitol Hill, and hosting Zoom meetings with lawmakers and staff.

“We understand where the progressives are, and we are not likely to displace them,” Graham said. “We also understand where the Republicans are: they will vote against [the social spending bill] no matter what. So we focus on moderate Democrats. They tell us that our plan makes sense, but they are also waiting to see what the Senate does.

Adler compared dentists’ current struggle to the American Medical Association’s failed attempts to block the creation of Medicare more than half a century ago.

“Once a program exists for the long term, it is part of the status quo,” he said. “It’s the same basic principle. If this becomes a popular product for the elderly, it will become difficult for dentists not to take Medicare patients. “

Progressive lawmakers who have already reduced their ambitions for the spending bill argue that the Medicare test would be worse than some of the other cost-cutting ideas under consideration, including phasing in benefits over several years and the obligation for the elderly to pay a higher percentage. the cost of major dental procedures.

“None of them are good,” said Melissa Burroughs of the Families USA advocacy group. “The program that starts later is not ideal and cost sharing could be better. But we are better able to live with it than a terrible precedent for a resource test. “

Critics of the idea also argue that limiting the program to the poorest older people makes all of society less invested in sustaining the program, making it more politically vulnerable to downsizing or eliminating in years to come.

“Some things in our society should be universal,” Representative Ro Khanna (D-Calif.), A prominent member of the Progressive Caucus, told POLITICO.

Still, some Democrats on the fence may view resource control as a less painful option than rejecting other parts of the social spending program, like the extended subsidies for Affordable Care Act coverage.

“We need to make sure these programs are targeted so that they help those who need them most,” said Rep. Stephanie Murphy (D-Fla.).


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